Issue No. 808

European Airlines' Summer of Recovery Remains Hazy

Will the Recovery Actually Happen When the Weather Warms Up?

Pushing Back: Inside This Issue

Almost exactly a year ago, as the world was shutting down in the face of a terrifying new disease and as we watched news reports out of Italy and New York with growing horror, airline CEOs the world over were looking ahead to the crucial summer travel season and assuming travel would be at a standstill. But by May last year, many thought the lockdowns and quarantines had slowed Covid's relentless onslaught and spoke of "green shoots" (remember those?) as people yearned for their summer holidays. And traffic did return, but so did the disease.

Here we are a year later, and there's fresh talk of green shoots. Last week, we reported on U.S. airline CEOs' bullishness on the upcoming summer season. This week, we're reporting on their European counterparts, many of whom think the pace of vaccinations will let people really start traveling again. Are they right? It's too soon to tell. More vaccines are getting into people's arms. But the coronavirus also is surging as people let down their guard.

Elsewhere in this issue, and reflecting that hope for the summer, U.S. airlines are scrambling to add as many leisure routes as they can as the weather warms. Another airline retires the iconic Boeing 747. And airlines all over the world are tapping the capital markets to raise money.

Verbulence

"We’ve been locked up for essentially the last 12 months, people have been home schooling, they’re desperate to go back to the beaches of Europe — they’re desperate to begin enjoying family life again as normal on the back of a successful Covid vaccine program."

Ryanair CEO Michael O'Leary

The Airline Weekly Lounge Podcast

New episodes drop every week and are available wherever you get your podcasts and on AirlineWeekly.com. In the latest podcast, Edward "Ned" Russell and Madhu Unnikrishnan wonder if Europe's airlines will see demand return or if it will be a cruel, cruel summer and talk about why Wall Street is bullish on airlines. Listen to the episode.

Weekly Skies

Germany’s largest leisure carrier Eurowings has big ambitions to expand its presence across Europe, as discounters scramble to capture market share following the coronavirus pandemic market upheaval.

The Lufthansa Group-subsidiary is expanding its Palma de Mallorca base on the back of strong leisure demand for Mediterranean holidays as Southern Europe slowly reopens. But that is just the beginning Eurowings CEO Jens Bischof said last week, the airline plans to expand service to Egypt, Greece, Italy, Morocco, Spain, Tenerife and Turkey this summer.

“Eurowings has a pan-European ambition,” he said during an Aviation Week webinar. “We want to grow the business in the short- and medium-haul segment.”

This summer, Eurowings will add its first routes to the UK from a point outside of Germany: Mallorca to both Birmingham and Manchester. The airline is also opening a new base at Berlin’s Brandenberg airport with an eye on capturing some of the many holidaygoers to the German capital, many of whom fly market leaders EasyJet and Ryanair.

Outside of Germany, Eurowings has four bases: Mallorca; Pristina, Kosovo; Salzburg; and Vienna.

The European ambitions are quite the about face for Eurowings. The airline entered 2019 losing money in the face of increased competition from other discounters. The Lufthansa Group slashed its capacity growth plans to zero that year with an aim to return Eurowings to solid financial footing. Then, the pandemic hit.

The Covid-19 crisis allowed for a needed reset at Eurowings. It closed the higher-cost Germanwings operation and streamlined flying on a single operating certificate, ended pricey aircraft wet leases, and slashed overhead costs by 33 percent in 2020. The adjustments came as the Lufthansa Group reported a €6.7 billion ($8.1 billion) net loss for the year.

Those savings coupled with Eurowings leisure-focus in the Lufthansa Group set it up to grow out of the crisis. The carrier plans to fly roughly 80 Airbus A319 and A320 aircraft — it has 102 aircraft — and about 80 percent of 2019 capacity this summer.

“We believe we’re going to see a very strong rebound, especially in tourism travel,” said Bischof. “The rebound will be very, very steep.”

Capacity at Eurowings will be about half of 2019 levels during the second quarter, according to Cirium schedule data. Third-quarter capacity will be about 70 percent; however, that is likely to change with many schedules being adjusted up until around 30 days out.

Bischof’s optimism gave no hint of concern for the current rise in Covid-19 cases in parts of Europe. In just the past week, France, Greece and Italy have all reported rising infection rates.

“There will be summer demand, but travel will be fraught with obstacles and this will prevent meaningful outperformance,” wrote Bernstein analyst Daniel Roeska, citing the rising case counts in a report last week.

Rising case counts or not, Bischof said Eurowings continues to see strong bookings. For example, reservations for flights between Munich and Mallorca jumped as much as 700 percent — albeit over a very low base — during certain periods in the past few weeks. This prompted the airline to add additional frequencies in the market.

In addition to Eurowings’ European ambitions, Bischof shed some light on the Lufthansa Group’s plans for the new long-haul leisure brand Eurowings Discover. The airline will use the Eurowings name to leverage brand familiarity in the German market but is an entirely separate carrier with its own operating certificate. In addition, its operations will focus on Frankfurt and Munich, rather than Eurowings traditional bases in secondary cities.

“The reason for doing this, and reorganizing this, is of course that the hubs have a better feed,” said Bischof referring to Lufthansa’s main Frankfurt and Munich hubs.

Edward Russell

EasyJet and Ryanair Diverge on European Summer Travel Outlook

The leaders of Europe’s largest budget carriers, EasyJet and Ryanair, have distinctly different takes on the outlook for the coming summer travel season.

Both EasyJet CEO Johan Lundgren and Ryanair Group CEO Michael O’Leary are hopeful for an uptick in flyers come June as vaccination rates rise and travel restrictions ease across the continent. But that is where the similarities end, with Lundgren vaguely and cautiously optimistic for the period when asked during an Aviation Week webinar. Conversely, O’Leary touted a recent “surge” in bookings and significant pent up demand for Ryanair’s plans to fly up to 80 percent of its 2019 capacity this summer.

“We’ve been locked up for essentially the last 12 months, people have been home schooling [and] they’re desperate to go back to the beaches of Europe — they’re desperate to begin enjoying family life again as normal on the back of a successful Covid vaccine program,” said O’Leary. Ryanair anticipates travel within Europe will resume safely and with few — if any — restrictions by June.

Keeping with his summer optimism, Ryanair unveiled 26 new routes primarily between the UK and southern Europe. They include a return to Belfast City airport with eight routes, as well as new service between London Stansted and Preveza, Santorini and Zakynthos in Greece, and Rodez in France. Ryanair previously served Belfast City from 2007 to 2010, Cirium schedules show.

Lundgren was a distinct contrast to O’Leary. After declining to provide any guidance for the summer, he did say that 85 percent of EasyJet’s 342-aircraft strong Airbus A320-family fleet were in “fight-ready conditions” for the travel recovery. In addition, staff have been kept certified to be ready to go when needed.

“The travel sentiment and the bookings are so reactive of the daily news flow,” said Lundgren. “People are really, really waiting to see what the roadmap is going to be, and what’s going to happen in terms of restrictions.”

What happens with travel restrictions within Europe could go any way. Governments in at least Germany, Greece, Spain, Italy and the UK have begun or talked about beginning reopening measures aimed at restarting their economies. However, a recent increase in Covid-19 infections — even as vaccination programs shift into high gear — in parts of Europe has some worried of a third wave on the continent.

O’Leary brushed aside concerns over another wave of infections and Covid variants, emphasizing his bullishness on vaccines. He touted the UK’s target of vaccinating 80 percent of adults, and the EU’s aim for 70 percent of adults by the end of June for his optimism.

According to the latest data from the UK, 55 percent of adults had received at least one dose of a Covid-19 vaccine as of March 24. However, only 5.3 percent had received two doses.

O’Leary is not alone in his optimism. Eurowings CEO Jens Bischof said he expects a “very, very steep” rebound in leisure travel this summer (See story above). The budget carrier plans to expand its presence outside of its core German market, including new nonstops between Mallorca and the UK.

Lundgren’s caution may be well placed. If the pandemic has taught the industry anything, it is that Covid-19 is a wily adversary. A spike in travel last summer was followed by a second wave of infections that fall and winter, and a second cull in flights. For the first quarter, European airline capacity will be down 74 percent compared to 2019, according to Cirium. EasyJet, Eurowings and Ryanair have all similarly slashed schedules by between 88 and 90 percent.

But from the bottom of a crisis many say the only way one can go is up. Budget carriers are widely expected to do just that when the recovery arrives.

“The key changes to the market — more short-haul, more leisure, more expensive competitors — all point towards a growing opportunity set for airlines who focus on leisure short-haul traffic,” wrote Bernstein Research analyst Daniel Roeska in a report last week.

Edward Russell

Domestic Market Buoys Aeroflot’s Budget Carriers

Having a home market that spans 11 time zones is a good thing now, when domestic airline markets are recovering and international aviation remains moribund. So it was for Russia’s Aeroflot Group, but the benefits were not spread equally among the company’s airlines.

Primarily domestic leisure carrier Pobeda, for example, saw its February traffic, measured in revenue passenger kilometers (RPKs), rise more than 16 percent year-over-year. And the carrier operated almost 20 percent more capacity on 26 percent more flights. International traffic was down, however, by almost 70 percent. This brought the total number of RPKs down by almost 6 percent compared with last year.

Similarly, Rossiya’s domestic RPKs were up 19 percent in February. Load factors on domestic flights rose by 7 points to 81 percent. The carrier’s capacity was up more than 8 percent compared to last year. International traffic at Rossiya was down by 95 percent, bringing the carrier’s total traffic down 48 percent in February compared with 2020.

At Aeroflot, meanwhile, February domestic traffic was off by 31 percent from the year before, and international traffic fell by 84 percent. Of the group’s carriers, Aeroflot was the only one to report all numbers that were significantly lower than last year, with the total number of RPKs down by 67 percent, year-over-year.

The traffic figures are no surprise. Domestic leisure is rebounding the world over, and Russia benefits from having a vast home market. Russians increasingly are taking their holidays at home or venturing to near-international destinations. Aeroflot, the group’s premium and intercontinental brand, has had to retrench as international traffic dried up due to travel restrictions and lack of demand.

The group’s 2020 financial results were stark. Revenues fell by more than 55 percent from 2019, and groupwide, traffic fell by more than 50 percent in the year.

Madhu Unnikrishnan

Good Times Roll for Lufthansa Cargo

Lufthansa Cargo is having a banner year, CEO Dorothea von Boxberg said during an Aviation Week webinar. The cargo carrier is using every last freighter it has to its “maximum” capacity. But with long-haul passenger flights operating at a fraction of their 2019 levels, “there is still a lot of cargo capacity missing,” she said.

Early in the pandemic, Lufthansa Cargo carried a lot of electronics and tech gear as people in most of the world set up home offices. Laptops, which usually go by surface transport, were reaching their destinations on air freighters. Now, goods are more varied but air freight is being supercharged by e-commerce as homebound populations increasingly shop online, von Boxberg said. Automotive parts are a growing sector now, as is industrial demand as companies restock inventories.

Pharmaceuticals have been stable throughout the year, even with the shipments of Covid vaccines, which account for only a small percentage of Lufthansa Cargo’s pharmaceutical traffic. Before the vaccines were developed, von Boxberg said the conventional wisdom was that air freight would play a critical role. And it does, but most vaccines are being shipped via road transport from distributed manufacturing centers. As vaccinations pick up in more remote places in Africa and Asia, far from vaccine manufacturing sites, airlines will play a larger role, she said.

Maritime cargo has remained constrained, first by overwhelming demand — a spillover that air cargo lines benefited from — and now by a worldwide shortage of shipping containers, she said. The vast majority of the world’s cargo goes by sea. If airlines peel off a tiny percentage of maritime cargo’s volumes, it’s significant, she said.

In addition, the on-going blockage of the Suez Canal is expected to add to the constraints facing maritime cargo.

These benefits, though, won’t last forever. Maritime transport will recover, and as economies stabilize, restocking will be less urgent. But for now, and through year’s end, Lufthansa Cargo sees a very bright near-term future, von Boxberg said.

Madhu Unnikrishnan

British Airways Downsizes London HQ

It’s not just the big technology companies like Microsoft and Twitter adopting remote work policies permanently; the travel industry isn’t far behind either.

British Airways is now considering selling its Waterside headquarters in the UK, which is located next to Heathrow Airport. There are also reports Amadeus has put its data center in Germany up for sale, while Accor is still hunting for a buyer for its iconic Paris HQ.

British Airways’ decision to look at selling the 9,000-square-metre site comes as carmaker Ford prepares to redesign its own offices for a mix of hybrid workers. In North America, its 30,000 employees will be given a chance to work remotely if they don’t have site-dependent work to complete.

IAG, the parent company of British Airways, has been dealt a devastating blow by the pandemic. On March 18, it said it planned to raise about $1.2 billion through a bond issue, strengthening its finances to help it survive the pandemic in case the travel downturn lasts longer than expected.

But the official line for the HQ disposal is a shift towards flexible working.

“The global pandemic has shown us that many of our colleagues enjoy working remotely and want to continue, and this has accelerated our approach to offering more agile and flexible ways of working,” a spokesperson said.

“Our aim is to find a hybrid working model that suits our business, blending the best of office and remote working for our people. We’ve also restructured our business to emerge from the crisis and are considering whether we still have the need for such a large headquarters building.”

Matthew Parsons

Punitive Taxes in Latin America Will Stifle Airlines, Economic Recovery, IATA Says

Argentina’s recent upping of its departure tax from $51 per ticket to $57 is a sign that many Latin American governments still see aviation as a “cash cow” and not an economic engine, Peter Cerda, IATA regional vice president for the Americas, told reporters last week.

Although IATA is encouraged by Argentina’s gradual reopening, the departure tax will dampen demand and could nip the airline’s — and the economy’s — recovery in the bud, Cerda said. Too many governments in the region have levied punitive taxes on airlines and their passengers, and even though demand has “fallen through the floor” in the region, this trend shows no sign of abating, he said.

Airlines also are challenged by the patchwork of differing restrictions throughout the continent. Mexico, for example, has remained almost completely open. Other countries, like Chile, Peru, and Uruguay, have had more restrictions. This lack of coordination makes it difficult to plan routes.

In 2020, demand across the region fell 66 percent compared to the year prior, with traffic at levels unseen since 1998 and revenues since 1993, Cerda said. Still, he stressed that airlines should not aim to return to 2019’s revenues, noting that the region’s airlines have been losing money since 2017. It is imperative that governments work with airlines as partners and to invest in infrastructure both in the air and on the ground, added Cerda. Latin America, unlike Europe and North America, does not have a viable surface-transport alternative to air transport.

Governments in the region also have not invested in their airlines during the pandemic. While carriers have received more than $225 billion worldwide in state support during the pandemic, less than 1 percent has come from governments in Latin America, Cerda said.

Although countries in Latin America are slowly reopening, there have been some recent setbacks. Brazil, for example, saw domestic traffic rise to almost to pre-pandemic levels at the end of the year, before slowing down again recently as the country has struggled with fresh Covid outbreaks.

IATA is urging governments worldwide, not just in Latin America, to implement more testing and to accept digital health passports to screen and admit vaccinated passengers. Governments should shoulder the responsibility of testing and not make airlines collect test fees, as Venezuela is doing, Cerda said. Governments need to accept a single standard, IATA has said.

Madhu Unnikrishnan

In Other News

  • The U.S.-UK open skies agreement entered into force last week, formally cementing the rules of the air transport industry between the two countries. The two countries signed the agreement in November and began implementing the agreement on Jan. 1. The UK had been included in the U.S.-EU open skies deal, but Britain’s exit from the bloc required a new air transport agreement with the U.S.
  • In another cargo development, maritime traffic in the Suez Canal backed up when an enormous container ship ran aground and blocked the critical waterway. Shipments from Asia to Europe were delayed. Time will tell if air freight ticked up while the Suez remained clogged.
  • Beleaguered Mexican carrier Interjet is expected to file for administration this week. The carrier essentially halted operations at the end of the year and before that was down to a handful of Sukhoi aircraft. It returned its Airbus fleet last year. The carrier’s operations toward the end of last year were becoming more sporadic as reports emerged that it had difficulty paying its fuel bills, and Interjet’s employees have not been paid in months, Mexican news reports say. Under Mexican law, the carrier will apply for bankruptcy and must have its reorganization plan approved by the courts.
  • The world’s airlines are in a tricky spot, IATA reports. Balance sheets have been battered by the pandemic, but hope is on the horizon. That’s a double-edged sword for airlines. Increasing economic optimism is leading fuel prices to rise — but before travel has recovered. This could complicate airlines’ return to financial health, IATA said.

Madhu Unnikrishnan

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Sky Money

  • American Airlines and Sun Country Airlines have paid back their CARES Act loans from the U.S. government, even as additional payroll support continues to roll in from President Joseph Biden’s $1.9 trillion stimulus bill. Keeping with their recent financing commitments, American repaid the $550 million it borrowed from the U.S. Treasury with proceeds from its recent record $10 billion AAdvantage financing. Sun Country repaid its $45 million Treasury loan with proceeds from its IPO earlier in March.
  • Investment firm Aimia unveiled plans to sell its 20 percent stake in AirAsia‘s loyalty program BIGLIFE for roughly $25 million worth of shares in the Malaysian low-cost carrier. At close, Toronto-based Aimia will hold a 3.1 percent stake in AirAsia Group, which includes airline subsidiaries across Asia as well as digital properties. Aimia, which owned Air Canada‘s loyalty program Aeroplan until 2019, maintains a stake in Aeromexico‘s loyalty program Club Premier.
  • Saudi Arabian Airlines has put together $3 billion in financing to partially fund the purchase of 73 Airbus and Boeing aircraft. The orders include 65 A320neo family jets, including 15 A321XLRs, and eight 787-10s. The deal supports Saudia’s ambitions to expand its presence in the leisure and pilgrimage travel markets in coming years. HSBC Saudi was agent on the transaction along with six Saudi banks.

Edward Russell and Ruthy Muñoz

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Routes and Networks

Southwest Airlines and United Airlines went on a summer route expansion spree last week. The carriers unveiled a combined total of 59 new routes, some year-round and others seasonal, with the dominant theme connecting either beach or outdoor destinations to larger cities that cooped-up Americans may want to escape.

Dallas-based Southwest is going big with 30 new routes, including 10 from new destination Myrtle Beach — one of 17 cities it has added to its map since the coronavirus pandemic began. The discounter will connect the South Carolina beach city to Atlanta, Baltimore/Washington, Chicago Midway, Columbus, Dallas Love Field, Indianapolis, Kansas City, Nashville, Pittsburgh and St. Louis in phases beginning May 23.

But that’s not all for Myrtle Beach. Never a large carrier in the southeast, United plans 26 new non-hub routes to Charleston, Hilton Head and Myrtle Beach in South Carolina, plus Pensacola, Fla., and Portland, Maine, beginning May 27. The airline will connect the cities to Cincinnati, Cleveland, Columbus, Indianapolis, Milwaukee, Pittsburgh and St. Louis for the summer. Many of the routes will be flown with dual-class Bombardier CRJ550s, an aircraft United introduced in 2019 to attract more business travelers but — with the return of corporate road warriors still unknown — is pivoting to leisure markets where travelers are flying.

It’s not only southern beach destinations — and Portland, Maine — that will feel Southwest and United’s presence this summer. The former is also going into full defensive mode following American Airlinesexpansion in Austin, and Delta Air Lines‘ decision to double down on its “focus city” there. Southwest will add seven new routes between Austin and Burbank, Destin-Fort Walton Beach, Miami, Minneapolis/St. Paul, Orange County, Sacramento and Salt Lake City beginning in phases on May 9. Alaska Airlines, Hawaiian Airlines and Spirit Airlines have also unveiled new routes to the Texas capital in recent months.

But that’s not all, folks. Southwest plans another 13 new new summer routes connecting cities across its U.S. map, including recent additions Bozeman, Destin-Fort Walton Beach, Miami and Sarasota-Bradenton. In addition, United will connect its Chicago O’Hare hub to Nantucket; Houston Intercontinental hub to Kalispell, Mont.; and Washington Dulles hub to Bozeman.

Despite all the route announcements, neither Southwest nor United plans to back to their full 2019 capacity this summer — and maybe not this year. Neither airline has firmed their third-quarter schedule yet, but both are expected to be down by double digits compared with two years ago.

Edward Russell

Route Briefs

  • It’s wagons, err, airplanes east in Canada. Air Canada and WestJet are set to resume flights to cities in Eastern Canada that they suspended during the worst of the crisis. Air Canada will resume flights to Charlottetown, Fredericton, Moncton, Saint John and Sydney, Nova Scotia, on June 1. WestJet will follow with flights returning to Charlottetown, Fredericton, Moncton, Quebec City and Sydney between June 24 and June 30. The resumptions come as both airlines hope Canadian federal and provincial governments ease travel restrictions as more people are vaccinated ahead of the the summer.
  • IAG-owned Aer Lingus will make its debut in the transatlantic market from the UK this summer. The Irish carrier will begin service between Manchester and both New York JFK and Orlando on July 29, Barbados on October 20, and Boston next summer. The routes come months after Aer Lingus received the green light to join the transatlantic joint venture of American, British Airways, Finnair and Iberia. The airline will fly new Airbus A321LRs on the Boston and New York flights, and Airbus A330-300s on the Barbados and Orlando flights.
  • Delta is returning to Iceland this summer after a year-and-a-half hiatus during the pandemic. The carrier will launch new seasonal Boston-Reykjavík flights and resume Minneapolis/St. Paul-Reykjavík and New York JFK-Reykjavík service in May. The additions come on the heels of the country announcing it will reopen to any fully vaccinated traveler after April 1.
  • The surge in new seasonal, leisure-oriented routes this summer continues with Hawaiian. The Honolulu-based carrier will offer seasonal service between Kahului on the island of Maui and Phoenix from May 21 through August 15. The new route follows the additions of Austin, Ontario, Calif., and Orlando to its map this spring.
  • Airlines have repeatedly touted visiting friends and relatives traffic as among the first to come during during the crisis. Keeping with this, Viva Aerobus will add new service between León/Guanajuato and San Antonio on May 1. The Mexican discounter is the rare pandemic recovery story having resumed its full 2019 capacity by last November.
  • WestJet is flying both east and west this summer. In addition to resuming flights to five eastern Canada cities, it will add 11 routes connecting destinations across western Canada already on its map. Additions include Edmonton to Kamloops, Nanaimo and Penticton; Toronto to Comox and Fort McMurray; and Victoria to Ottawa, Saskatoon and Winnipeg. The new flights launch from June 6 to June 26.

Edward Russell

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State of the Unions

The new administration is receptive to labor’s requests and has been a refreshing change for the Air Line Pilots Association (ALPA), union President Joe DePete said in a media roundtable last week.

The first of its requests recently passed Congress and was signed into law by President Joseph Biden: a $14 billion extension of the federal payroll support program for airline workers through September. But now, ALPA is pressing lawmakers and newly installed Transportation Secretary Pete Buttigieg on other policy recommendations.

Among these is changing regulations governing flight and rest time for cargo pilots. Currently, pilots operating passenger flights and those helming cargo flights are subject to different flight and rest regulations, which DePete said needs changing. ALPA is urging Congress to pass the Safe Skies Act, which would bring cargo pilots under the same rules as passenger pilots.

Another priority for ALPA is ensuring that airspace modernization, a multi-year project commonly known as “NextGen,” is finally implemented. New aircraft will be outfitted with the necessary equipment to comply with NextGen, but DePete stressed that the in-service fleet also should be retrofitted with NextGen-capable equipage.

ALPA also wants labor considerations to play a more important role in U.S. evaluations of airline joint ventures, as well as for the federal government to withhold foreign air carrier permits from what DePete called “flag of convenience” airlines. When asked about Norse Atlantic Airways, the new venture planned by several former Norwegian Air executives, DePete said Congress and the Transportation Department needs to examine the carrier’s labor practices before issuing a permit.

This issue came to a head a few years ago when Norwegian Air International applied for a foreign air carrier permit for flights between the UK and Ireland to the U.S. “This was forum shopping at its worst,” DePete said. “It was a corporate Frankenstein monster put together with a bunch of dead parts.”

“I am glad to see NAI collapsed under its own weight,” he said, adding that ALPA welcomed “fair competition.” ALPA, along with several other unions and airlines on both sides of the Atlantic, sought to stop NAI’s permit, alleging that the carrier violated the U.S.-EU open skies agreement by basing itself in Ireland to avoid tougher Norwegian labor laws. Ultimately, the U.S. granted it a permit. Norwegian recently said it was retrenching from the longhaul, low-cost model to focus on its home market and shorthaul European flights, primarily for financial reasons.

Turning to the dustup between Hong Kong and the U.S. over pilot quarantines, DePete applauded the Transportation Department’s recent ruling that Hong Kong airlines file their flight plans seven days in advance. Hong Kong’s quarantines put U.S. cargo carriers at a competitive disadvantage and are a hardship for pilots, who must quarantine in “deplorable” conditions, DePete said.

The Hong Kong regulations don’t require Cathay Pacific pilots to quarantine after a flight from Anchorage, while U.S. pilots arriving from anywhere else in the U.S. must. ALPA has asked U.S. carriers not to lay over in Hong Kong until the issue is resolved, DePete said.

Madhu Unnikrishnan

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Fleet

  • Southwest Airlines has officially ended its flirtation with Airbus by ordering 100 Boeing 737 Max 7 aircraft. Unveiled Monday, the carrier ordered 100 737-7s, converted 70 737-8s to the -7, and added 155 737 Max options to its orderbook. The firm order is worth roughly $10 billion at list prices, though Southwest almost certainly received deep discounts from Boeing to keep it in the 737 fold. In total, the Dallas-based carrier now has firm orders for 200 737-7s with the first 30 due in 2022, 149 737-8s, and 270 Max options.
  • The last passenger Boeing 747 flight at China Airlines flew off to that big graveyard in the sky last week. After operating multiple variants of the venerable jumbo jet continuously since 1976, its last passenger 747-400 flew a final 5-hour-and-40-minute ceremonial flight from Taipei, around Mt. Fuji in Japan and back to the Taiwanese capital. The airline continues to operate 18 747-400 Freighters, while its passenger fleet will center on twin-engine widebodies: Airbus A330s and A350s, and Boeing 777s.
  • Airbus will up the range of the A220-300 by roughly 200 nm with a maximum takeoff boost this summer. The additional capability comes with a 1 ton increase in MTOW to 70.9 tons, FlightGlobal reported. The improvement is part of a 2019 plan to up the MTOW of the jet, with the latest increase more than previously anticipated. The full range of the A220-300 will extend to roughly 3,400 nm with the improvement. Airbus has orders for 539 A220-300s — 99 were delivered at the end of February — including large commitments from Air France, Breeze Airways and JetBlue Airways.
  • Lufthansa Cargo retired its remaining MD-11 freighters. Even though it could use the freighter capacity at a time when freighters are seeing “maximum utilization,” the remaining subfleet of three aircraft proved too costly to maintain, CEO Dorothea von Boxberg said. The cargo carrier now is a single-fleet airline, operating Boeing 777Fs.
  • Nordic airlines continue to take a paper lead when it comes to electric commercial aircraft. Following Widerøe‘s partnership with Tecnam and Rolls-Royce on the electric P-VOLT, Finnair has signed a letter of intent for up to 20 Heart Aerospace ES-19 electric aircraft. The airline, which did not provide a delivery timeline, plans to use the 19-seat props on short-haul regional routes.

Edward Russell & Madhu Unnikrishnan

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Landing Strip

  • Historically low flight numbers expenses did not result in air traffic control savings for European airlines. New data from Eurocontrol show that the cost of air traffic management across the 25-state bloc held steady at €6.8 billion ($8.1 billion) in 2020. However, Eurocontrol’s traffic index — defined as the number of flights plus a measure of the length and weight of flights — collapsed to 81.4 from more than 195 in 2019. A good reminder that there is no free lunch for air traffic safety.
  • Airlines have signed off on funding for the first phase of terminal modernization work at Pittsburgh International Airport. Approval of the $182 million works allows site preparation to begin on the new facilities this year. The project was put on hold when Covid-19 hit a year ago. The overall $1.4 billion modernization will replace Pittsburgh’s existing terminal and underground train with a new headhouse directly connected to the satellite midfield concourse. The layout adapts facilities that were designed for US Airways’ former hub that closed in 2004 into ones for a primarily O&D airport.
  • Traffic at Montreal-Trudeau International Airport fell by 73 percent last year, to just 5.4 million passengers, according to the airport’s operator, Aeroports de Montreal (ADM). Revenues declined about 60 percent from 2019, buoyed in part by the stability of cargo revenue at the facility. “The year 2020 was truly one to be forgotten for ADM, as shown by our financial results,” CEO Philippe Rainville said.

Edward Russell & Madhu Unnikrishnan

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