Nascent Recovery Ushers In Era of Change

Airlines Begin to Emerge From the Crisis to New Competition and Remade Markets

Pushing Back: Inside the Issue

Welcome back! The airline industry is making its usual summer-to-fall transition in a very changed world. Leisure travel demand soared in many regions during the summer, as the pent-up demand all airline leaders predicted burst forth with people taking their summer holidays. But now in the Northern Hemisphere, schools are reopening and people are going back to work.

But not necessarily back to their offices, and that is proving to be a puzzle the airlines have yet to work out. On the one hand, some airline leaders believe corporate travel, which usually ramps up from September-November, will be like in years past, although not quite at 2019 levels. Others are more cautious, saying the booking curve remains too short to predict accurately what the trends will be. Complicating all of this is the fact that travel restrictions continue to change as countries react to new variants of the virus, and planners of trade shows and conferences still are weighing whether to hold in-person, virtual, or hybrid events for the fall.

So it is in this landscape that several airlines are re-emerging. Avianca, still in Chapter 11 bankruptcy protection, is changing up its route network to offer more point-to-point flights that bypass its hubs as it faces increased competition from budget airlines. Norwegian Air, fresh out of restructuring, is plotting a much smaller, more Nordic future, going up against SAS, a new startup, and European budget airlines. South African Airways ends its 18-month hiatus and insolvency with six routes. Meanwhile, long-ailing Philippine Airlines is just starting that journey and filed last Friday for Chapter 11 bankruptcy protection in New York. And Canada's Porter plans to launch its first flights since March 2020 just as Air Canada announces it is returning to Porter's Billy Bishop Airport base.

We trust all of you had a restful summer. Hold tight. It could be an eventful autumn.

The Airline Weekly Lounge Podcast

This week on the 'Lounge, Edward Russell and Madhu Unnikrishnan head to South Africa, where South African Airways recently testified before a parliamentary committee as it exits bankruptcy and restarts flights after an 18-month hiatus. The two also discuss why Aeroflot's domestic market is hot, Norwegian's first earnings report in a year, and why so many new entrants are trying to crack the low-cost longhaul market after so many have failed. For a full archive of the podcast, go here. A new episode drops every week.