Omicron Pummels Airline Operations
The quick spike in Covid-19 cases linked to the Omicron variant got the better of many airlines’ operations over the holidays. According to FlightRadar24, airlines globally cancelled nearly 101,000 flights, or 8 percent of their schedules, from December 20 through January 2. While not as bad as some media portrayals made it out to be, a 92 percent completion rate is still far lower than the normal more-than 99.5 percent completion factor for the industry.
The cause of many of the flight cancellations were Covid-19 cases and the required quarantines for staff after they tested positive. U.S. airlines successfully lobbied the Centers for Disease Control and Prevention (CDC) to shorten its recommended quarantine period to five days from 10 on December 27, but that has not proven enough for the wave of Omicron cases. Both Alaska Airlines and JetBlue Airways have proactively trimmed schedules with the former cutting departures by 10 percent to “reset” its operations, and the latter cutting 1,300 flights through January 13 to achieve the same. Other U.S. carriers have yet to make similar moves, though both Spirit Airlines and United Airlines are offering pilots extra pay to fly during the month.
And the issues aren’t limited to the U.S. Canada’s Transat has cut its schedule by 30 percent through February 25, and Air Canada will suspend flights to at least 14 Caribbean destinations citing the pandemic “context” from January 24 through April 30.
MKM Partners analyst Conor Cunningham wrote that he expects the operational challenges from Omicron to continue into February. However, he also forecasts that 2022 will be the year that the industry puts the Covid-19 pandemic behind it, not because the virus goes away but because it becomes endemic and both airlines and the public adapt to life with it.
And continue they have. Globally, airlines racked up another nearly 43,000 flight cancellations from January 3-7, FlightRadar24 data show. And in the U.S., just over 15,281 flights were cancelled during the period, though severe weather was a contributing factor.
U.S. Wireless Companies Agree to Delay 5G Rollout
AT&T and Verizon have agreed to delay their 5G wireless network rollout by two weeks, defusing for now a interagency fight that pits the wireless and technology companies and their regulator against the Transportation Department (DOT) and the airline and aerospace industries and their unions.
The 5G networks were expected to go live on January 5, but Verizon and AT&T agreed to the delay in order to allow DOT to study the effect the technology could have on avionics. Transportation Secretary Pete Buttigieg, in a December 31 letter, asked for the delay so that the FAA could identify airports where interference could pose a problem and for the agency to issue new guidelines for airlines and pilots. Without the pause, the air transport system could be snarled by additional delays, on top of those caused by winter weather and the Omicron variant.
“Failure to reach a solution by January 5 will force the U.S. aviation sector to take steps to protect the safety of the traveling public, particularly during periods of low visibility or inclement weather,” Buttigieg wrote. “These steps will result in widespread and unacceptable disruption as airplanes divert to other cities or flights are canceled, causing ripple effects throughout the U.S. air transportation system.”
“At Secretary Buttigieg’s request, we have voluntarily agreed to one additional two-week delay of our deployment of C-Band 5G services,” an AT&T spokesperson said in a statement. “We know aviation safety and 5G can co-exist and we are confident further collaboration and technical assessment will allay any issues.”
“We’ve agreed to a two-week delay which promises the certainty of bringing this nation our game-changing 5G network in January, delivered over America’s best and most reliable wireless network,” added Verizon spokesman Richard Young.
“It’s clear that this irresponsible rollout of 5G wasn’t ready for takeoff, and that’s why U.S. Transportation Secretary Buttigieg, ALPA and others frontline aviation workers and stakeholders had called for a delay in implementation,” Air Line Pilots Association (ALPA) President Joe DePete said. “We are hopeful that this delay will enable the wireless industry and the broader aviation community to work together on effective solutions that will ensure that every passenger and cargo flight arrives safely without severe disruptions to aviation operations.”
Buttigieg’s letter elicited a furious response from Brendan Carr, commissioner on the Federal Communications Commission (FCC). “This is a highly irregular request and one that deviates from the clear, statutory process specified by Congress for regulating the provision of wireless service,” Carr wrote to Buttigieg. “Your request for delay is not backed up by the science, engineering, or law.”
The FCC, which regulates the wireless industry, approved the 5G networks last year, and the agency agreed to delay the deployment by one month from December 5, 2021 to January 5. “The DOT and aviation stakeholders had a lengthy and fair opportunity to participate in the relevant regulatory process. And they did. The FCC then adjudicated and resolved all of the issues consistent with the process established by Congress,” Carr wote.
The DOT and aviation groups requested the delay out of concerns that the C-Band frequency used by the 5G networks could interfere with aircraft radio altimeters. The FAA late last year issued an airworthiness directive warning of potential interference and said it could recommend “further mitigation” measures, which could include restricting low-visibility landings at certain airports.
But the FCC and the wireless companies argue that the FAA and the aviation industry had plenty of time to address these issues. “Inexplicably, the FAA and the aviation industry apparently did nothing following the February 2020 order or even after the C-Band auction closed in January 2021. In fact, it was not until November 2, 2021 that the FAA even issued a notice to begin collecting data about altimeters from the aviation industry,” AT&T CEO John Stankey and Verizon CEO Hans Vestberg wrote in a sharply worded January 2 letter to Buttigieg.
“Now, on the evening of New Year’s Eve, just five days before the C-Band spectrum will be deployed, we received your letter asking us to take still more voluntary steps — to the detriment of our millions of consumer, business and government customers — to once again assist the aviation industry and the FAA after failing to resolve issues in that costly 30-day delay period, which we never considered to be an initial one.”
The issue has united a broad coalition of aviation industry groups, including Airlines for America, the Aerospace Industries Association, the Aircraft Owners and Pilots Association, Airports Council International – North America, IATA, and several U.S. airline unions, including ALPA and the Association of Flight Attendants.
The coalition, as well as the DOT, argue that other countries that have deployed 5G networks have used lower-power transmitters and have restricted the networks around busy airports. They have identified several airports, which include all of the New York-area and Los Angeles-area airports and most of the busiest airports in the U.S., where the planned 5G networks could interfere with radio altimeters.
The two-week delay affords FAA time to address potential interference issues at these airports. “During this time, the FAA will review information relating to the size of the buffer zone around critical airports and will seek to reduce the size when safely able based on data from aviation manufacturers,” Buttigieg said in his letter.
“We appreciate the leadership of Transportation Secretary Buttigieg, Federal Aviation Administration (FAA) Administrator Dickson and National Economic Council (NEC) Director Deese in reaching the agreement with AT&T and Verizon to delay their planned 5G C-band deployment around certain airports for two weeks and to commit to the proposed mitigations,” Airlines for America President Nicholas Calio said.
In Other News
- Philippine Airlines (PAL) has emerged from U.S. Chapter 11 bankruptcy protection, after its creditors — including all its lessors — approved its restructuring plan, which got the greenlight form a U.S. bankruptcy court last month. The carrier unveiled an ambitious recovery plan, which highlights its position as the country’s only domestic full-service carrier and one that, even with pandemic route reductions, serves the most international destinations. PAL also pointed to its new cargo business as a strength when freight has bolstered many airlines, particularly in Asia.
But recall that PAL’s troubles far pre-date the pandemic. It consistently lost money during much of the last decade and has struggled since it was privatized in the 1990s, and it last exited bankruptcy in 2007. Meanwhile, homegrown rivals, like Cebu Pacific, have been eating its lunch. With its restructuring, PAL promises to be leaner and meaner, and expects to be profitable by next year.
- Thai Airways sold its remaining stake in budget airline Nok Air in December. The carrier, which is implementing a rehabilitation plan under the supervision of Thailand’s Central Bankruptcy Court, disclosed the sale and that it had received “full payment from the buyer,” in a restructuring update covering the three month period ending December 14. In addition, Thai Airways amended terms on leases for 12 aircraft during the period. Talks with lessors on leases covering another 45 aircraft continue.
- Korea’s antitrust regulator said it would “accelerate” its review of the proposed Korean Air-Asiana merger, local media are reporting. The antitrust regulator recently sent Korean Air a report outlining conditions the carrier must meet before the government approves the acquisition. Korean has said it is reviewing the report’s recommendations.
- United continues to cut regional routes amid pilot staffing constraints at its regional partners. The carrier will suspend service to Destin-Fort Walton Beach, Fla., in March, and has dropped plans to resume flights to Halifax, Nova Scotia, in April, according to Cirium schedules. In addition, United will suspend flights between Newark and Northwest Arkansas from February through September. In November, United CEO Scott Kirby said the airline had parked 100 regional aircraft due to a pilot shortage, and it has since exited at least eight smaller destinations and suspended 14 routes to its Washington Dulles hub.
- Gol is one step closer to acquiring Brazilian regional carrier MAP Transportes Aéreos under a deal that will expand its presence at São Paulo’s congested Congonhas Airport. Brazil’s national competition regulator CADE signed off on the acquisition on January 3; approval from the country’s National Civil Aviation Agency (ANAC) is still pending.
- At long last, Norse Atlantic got its wings, or its permission to fly. Norway granted the start up an air operators certificate at the end of the year. With its new AOC in hand, the carrier says it is “on track” to start flights between Norway and the U.S. in the spring. The U.S. Transportation Department has yet to issue a foreign air carrier permit and exemption to serve the U.S., but that process couldn’t start until Norse got its AOC.