Issue No. 837

The Leisure Travel Lifeline

With Road Warriors Still Largely Sidelined, Holidaygoers Save Airlines' Results

Pushing Back: Inside The Issue

Leisure, leisure, leisure. If this pandemic has taught us anything, it's that almost everything we knew about the airline industry is no longer true. Everyone has a guess on when business travel will return, but no one has a crystal ball (or, at least, not one that actually works). In the meantime, as concerns over the Delta variant recede and vaccination rates rise, holidaygoers are keeping airlines in the air. And in fact, they're literally taking business travelers' seats, with more airlines reporting that vacationers, not road warriors, are sitting up front.

Meanwhile, Delta and United are stepping up flights in New York — is this to capitalize on surging demand, or is it "slot squatting" now that the FAA is restoring its use-it-or-lose-it requirements at the area's constrained airports? And manufacturers are in the hot seat. Airbus is allaying analysts' fears and says its supply chain will be ready for its planned massive ramp up in production. It has to keep those lines humming, with its almost-7,000 aircraft backlog. On the other hand, the best thing that can be said about Boeing's quarter is that it narrowed its loss; the U.S. airframer is struggling with all kinds of regulatory, production, and delivery woes with three of its marquee aircraft programs.

In the week ahead, the European carriers continue reporting their earnings, and the story is likely to be similar to what we've heard: Leisure is king. Although no one seems to know when business travel will return (or if it will return at the same level), consensus is building that the air transport system will look like what we knew in 2019 by the end of 2024.

The Airline Weekly Lounge Podcast

This week in the Lounge, Ned Russell and Madhu Unnikrishnan chew over why JetBlue is so optimistic, and why the best thing that can be said about Boeing's quarter was that it narrowed its losses. Later, Avianca had its day in court. Listen to the episode here. And a full archive of the Airline Weekly Lounge can be found here.

Skift Aviation Forum, November 17

Join us at the Skift Aviation Forum, which is coming online on November 17. Airline Weekly members can register for free now. Speakers include Air Lease Corp.'s Steven Udvar-Hazy, American's Doug Parker, KLM's Pieter Elbers, and more. Sign in and join us

Weekly Skies

Transavia was far and away the leader at Air France-KLM in the third quarter. The discount subsidiary produced margins near 2019 levels and is set to grow beyond its pre-crisis scope next year as the group looks to a continued recovery.

Transavia in the Netherlands and Transavia France together reported an operating profit of €105 million ($122 million) in the third quarter, and a 20 percent margin that was “approaching” levels last seen two years ago, as Air France-KLM CEO Ben Smith put it during the group’s third-quarter earnings call. That result exceeded every other business segment in the group — including cargo that has been a bright spot through the crisis — by double digits. Though, despite its outperformance, Transavia makes up just a small fraction of the group: 11 percent of total revenues in the September quarter.

The performance of Air France-KLM’s budget arm exemplifies the strength of leisure travel in the recovery. Both of Transavia’s operations pivoted to flying more leisure-oriented routes, particularly to Greece, Portugal, and Spain, as intra-European travel reopened to those with their Covid-19 jabs in the third quarter. That shift produced a “great result,” said Group Chief Financial Officer Steven Zaat, and contributed to the 2019-level financials on just 85 percent of the capacity.

“This to me is proof that the vaccinated travel policy of the EU is working and boost[s] our demand,” Zaat said of Transavia’s third-quarter performance.

Other European discounters have made similar moves. Eurowings, EasyJet, Ryanair and Wizz Air all boosted flights to leisure destinations in Greece, Portugal, and Spain by, for the most part, double digits in August compared to the month before, according to Cirium schedules. While they still flew less capacity to these countries compared with 2019 — Wizz Air was the lone exception — it was down far less than their systemwide reductions.

Air France-KLM will continue to grow Transavia France in 2022. The airline will become its dominant operator in the domestic French market and particularly at Paris Orly where it is replacing Hop, which has been integrated into Air France. Transavia France will add 13 Boeing 737s to the 48 it flew at the end of September for 61 by Summer 2022. Prior to the crisis, the discounter operated 40 737s.

Current plans call for Transavia to recover to 2019 capacity levels next year, and Transavia France to grow along with its fleet expansion.

Outside of Europe, Air France-KLM saw an “incredible” increase in transatlantic demand following the announcement that the U.S. reopen to vaccinated travelers, said Smith. The change will occur on November 8 and is widely expected to be a boon to year-end holiday bookings as Europeans travelers take long-delayed trips. However, Smith cautioned that it is too early to say whether the demand that is comparable to 2019 levels will be sustained into 2022 after the holidays pass.

The network carriers also benefit from the uptick in premium leisure travel — or holidaygoers who fly in the first, business, or premium economy cabins — that several airlines have reported. Prior to the crisis, half of premium flyers on Air France and KLM were already traveling for leisure, and the group expects this percentage to increase in the recovery, Smith said. Air France also benefits from its Paris base being one the largest leisure destinations in Europe. However, to adjust for potential fluctuations in premium demand, Air France is adding “quick change” cabin capabilities to all of its widebody aircraft in order to quickly adjust premium seat layouts.

Executives said little about the business travel recovery, a segment that Air France-KLM and many of its legacy competitors rely on for their financial future. Smith only said that leisure travelers continue to return at a faster pace than their corporate counterparts.

In terms of its balance sheet, Air France-KLM has reached terms with its lenders to repay the €4 billion in state aid it received from the French government. Instead of a bullet maturity in 2023, the group will repay €500 million in the “coming weeks,” another €800 million in May 2023, and a further €1.3 billion in both May 2024 and 2025, said Zaat.

The group had €10.4 billion in cash or available borrowing capacity at the end of September. This is ample liquidity to get the carrier through the recovery and repair its balance sheet, said Zaat.

Air France-KLM posted a €192 million net loss in the third quarter. Earnings before interest, taxes, depreciation and amortization (EBITDA) at €796 million was positive for the first time since the crisis began, though it was half of what it was in 2019. Revenues decreased 40 percent to €4.6 billion year-over-two-years. Air France-KLM’s operating margin was 2.9 percent, and the group flew 66 percent of 2019 capacity.

“We will be EBITDA positive for the full year,” Zaat said, forecasting a positive number in the fourth quarter. The group plans to fly 70-75 percent of the capacity it flew two years ago during the period.

In 2022, capacity at KLM could recover to 2019 levels and Air France to 90 percent of three years ago by the middle of the year based on current plans, Smith said. Both forecasts are dependent on demand and the reopening of more Asian countries that have lagged behind Europe and North America.

Edward Russell

JetBlue: Northeast Alliance Brings Needed Competition to New York

JetBlue Airways came out swinging in defense of its Northeast alliance with American Airlines, which the U.S. Justice Department has sued to stop. The New York-based carrier says, contrary to Justice’s complaint, that the alliance only enhances competition and breaks up what is essentially a Delta Air Lines and United Airlines duopoly in the New York metropolitan region.

“New York has historically been dominated by two carriers,” Robin Hayes, JetBlue’s chief executive, told analysts during the company’s third-quarter earnings call. “Our commitment to competition and low fares is steadfast, and we are fully committed to this alliance.”

JetBlue’s Northeast Alliance with American allows the two airlines to sell tickets on each other’s flights, reciprocate loyalty program benefits, and coordinate schedules, among other benefits. JetBlue noted that since it entered the alliance, the airline has added 58 new routes to its schedules from New York and Boston, and it plans to add up to 18 international destinations next year. For better connections on American’s network, JetBlue also plans to expand at New York LaGuardia and is adding routes to New Orleans, Nashville, and Portland, Maine, next year.

Crucially, the alliance gives JetBlue, which has focused on leisure travelers for most of its 20-year history, access to American’s rich vein of high-value corporate customers. Before the pandemic, business travel accounted for about 20 percent of JetBlue’s revenues, compared with the industry average of 30 percent. The carrier believes the alliance will boost that percentage in line with its peers in the industry.

Moreover, JetBlue’s network is primarily domestic, and its international routes — with the exception of recently added and hard-fought routes to London — centers on leisure destinations in Latin America and the Caribbean. With the alliance, JetBlue can connect onto American’s much larger and global international network, positioning JetBlue better to attract corporate accounts.

But the Justice Department has other ideas. In a September suit in federal court, the agency alleged the alliance was tantamount to a merger and would significantly harm competition, particularly in the New York region. “The United States and plaintiff states bring this action to prevent the hundreds of millions of dollars in harm to consumers that will occur if these two rivals are permitted to maintain this modern-day version of a nineteenth century business trust,” Justice said in its complaint. Both American and JetBlue fought back, with American CEO Doug Parker saying of Justice, “They are wrong.” Hayes at the time stressed that the two airlines would not coordinate on pricing.

In fact, Hayes on Tuesday said the alliance allows both carriers to operate up to 500 daily flights next month, with 300 of those flown by JetBlue. The pact will result in $800 million in annual consumer benefits, he said. JetBlue plans to maintain its low-fares and leisure focus, but will gain from American’s more business-focused network. “The Northeast Alliance brings a viable third competitor to the [New York] region,” added JetBlue President Joanna Geraghty. “It allows JetBlue to compete in a way it never could.”

JetBlue got a lot of attention over the last two years with its plans to enter the crowded transatlantic market. The flights launched over the summer, and Hayes said he is pleased with their progress and anticipates bookings to spike after the U.S. lifts its restrictions on inbound passengers from the UK next month. The carrier is seeing interest from the UK rise, despite not having done much marketing of the flights in that country. Hayes admitted that press reports have fueled much of the interest and brand awareness in the UK. The carrier plans to expand its transatlantic offerings, although executives declined to elaborate where it might next fly. Access to London Heathrow is strictly limited by the airport’s capacity, and landing slots there are highly coveted.

But although the London flights got a lot of media attention — arguably more than the Northeast Alliance or the federal lawsuit — transatlantic flights comprise less than half a percent of JetBlue’s flights, Geraghty said.

Like its peers, JetBlue saw demand spike in July and August, with travel approaching 2019 levels. But, also like its peers, it saw demand fall off in September as the Delta variant of the coronavirus spread. But the airline has hopes for the holidays. Bookings for December travel are starting to pick up and are “about even” with where the airline was in October 2019, Geraghty said.

But one advantage JetBlue has over its competitors, the airline’s executives believe, is that its network always has been structured for leisure and visiting friends and relatives (VFR) traffic. While other, more business-travel focused airlines have had to pivot to capitalize on leisure and VFR demand, JetBlue already had the infrastructure in place. This leaves it in good stead to capture a healthy share of holiday traffic, particularly out of New York and Boston.

But in the near term, the outlook isn’t as rosy. In usual years, leisure and VFR traffic fall off in September as schools reopen and families return from their summer holidays. Business travel usually offsets that decline, and in normal year rises to 25 percent of JetBlue’s revenues. This year is different, as companies delay recalling employees to their offices and business cancel planned trips to meetings and conferences. Corporate travel now accounts for only 5-10 percent of JetBlue’s revenues this fall, Geraghty said. This uncertainty led to JetBlue forecasting that its revenues will be down between 8-13 percent compared with 2019.

But the carrier is hopeful that next year will mark when the recovery begins in earnest. JetBlue is hoping to realize more benefits from the Northeast Alliance. By the second half of next year, it expects fuel prices to stabilize and to reap the benefits of its new hires, after they complete the training process. JetBlue will enjoy a “juniority” benefit, with many of its new hires entering the company at a lower wage than the employees who left the company during the pandemic. So far, the carrier has not reported the same difficulties in hiring as many of its competitors.

JetBlue reported a $130 million net income for the third quarter, up from a $393 million loss last year. Revenues quadrupled to $1.9 billion, compared with $492 million in 2020. During the quarter, JetBlue carried 9 million passengers, or 322 percent more than it did in 2020.

JetBlue forecasts that it will break even in the fourth quarter, as higher fuel prices and lower business demand take their toll. The carrier expects to fly between 4-7 percent less capacity than it did in 2019.

Madhu Unnikrishnan

Hawaiian Sees ‘Pieces Falling Into Place’ For Recovery

Hawaiian Airlines’ long-idled international network is taking its first steps to restarting, with the planned resumption of Sydney flights toward the end of the year. But the big prize Hawaiian is waiting to claim is Japan, far and away the carrier’s most lucrative international market.

When those flights will resume remain an open question, but CEO Peter Ingram is encouraged by the vaccination rates in Japan and moves the government is making to reopen the country. Vaccination rates in both Japan and South Korea — another key international market — have outstripped the U.S. mainland, and although Ingram did not speculate on when restrictions in those countries may ease, the carrier is preparing for a resumption early next year. “The pieces are falling into place,” he said during the company’s third-quarter earnings call.

Hawaiian expects demand to be robust when it returns. The carrier delayed the delivery of its 10 Boeing 787s on order to next year, with the presumption being that the airline still would be scaling back. “As we saw recovery, we decided we did not want to shrink in 2022,” Ingram said. Instead, Hawaiian will use the first of those aircraft for growth and has extended the leases on two of its Airbus A330s. It may extend leases on more A330s, given the favorable lease rates for the type now, if demand warrants, giving it more flexibility in adding or reducing capacity.

But that is next year and the present isn’t as rosy. Like the rest of the U.S. industry, Hawaiian had a busy July and August, but by the latter part of August and into September, bookings fell off as the Delta variant began to spread. Hawaii’s governor reimposed restrictions and publicly asked tourists not to come to the islands. “The Delta variant has dampened our near-term performance,” Ingram said. “The Delta variant interlude will be remembered as a short term setback on the road to fulsome recovery.”

July demand actually topped pre-pandemic demand, but began to drop through the middle of September. Fourth-quarter bookings are softer than the carrier anticipated, and as a result, Hawaiian plans to fly between 18-21 percent less capacity in December than it did in 2019. Still, Ingram noted the trajectory of the pandemic is in the right direction. “Just a year ago, it was impossible to travel to Hawaii without a 14-day quarantine,” he said. “The base case expectation is for a full recovery to 2019 levels in the back half of 2022.”

The carrier will be overstaffed for its December capacity. It has no plan to pare staff or delay incoming flight attendant and pilot classes, because it expects international and domestic demand to rebound quickly in the new year. “People want to travel, especially for leisure,” Ingram said.

And more of these people want to travel in the front of the aircraft, a trend that many airlines, including Delta and United, have observed. Premium-cabin unit revenues were stronger in the third quarter than in 2019, by double digits, although Hawaiian did not specify just how strong the growth was.

The interisland network is roughly 72 percent the size it was before the pandemic due to ongoing travel restrictions as the Delta variant surged. But Hawaii’s population is 71 percent fully vaccinated, which gives the carrier hope that the interisland network will recover quickly. Booking trends for interisland travel are strengthening, executives said.

Hawaiian expects fourth-quarter revenues to be down 32-37 percent from 2019. But the carrier plans to restore its full 2019 capacity by the middle of next year.

And when it does, Hawaiian expects the state travel infrastructure to be ready. During the summer, when the pandemic had begun to recede but before the Delta variant started to spread, rental cars and hotel rooms were scarce in Hawaii, with stories of tourists renting moving vans getting national attention. Ingram said the pause in demand during the latest surge gave hoteliers, short-term rental hosts, and rental car companies time to regroup and prepare for tourists’ return.

Hawaiian reported a third-quarter adjusted loss of $49 million. Revenues were $509 million, up 570 percent from last year, but down 33 percent from 2019. Traffic in the quarter was up 1,600 percent from last year, when quarantines were in force.

Madhu Unnikrishnan

Allegiant Reports Profit, Vows to Fix Operational Problems

Allegiant Air pulled off a rare pandemic-era feat: It is among the only U.S. airlines to report more revenue compared with the third quarter of 2019, and it turned a profit. But it wasn’t all clear skies for the leisure-focused airline. Allegiant discovered the hard way that restoring flights after the cuts of 2020 is easier said than done.

“This industry ran like a Swiss watch in 2019,” CEO Maurice Gallagher told analysts during Allegiant’s third-quarter earnings call. “But it’s almost like we’ve forgotten how to handle disruptions.” During the summer peak in demand, Allegiant, like Delta, Southwest Airlines, and American, cancelled hundreds of flights and left passengers stranded all over the country.

The main issue was labor. Many of the airports Allegiant flies to are in smaller metropolitan areas. Airports weren’t staffed up top handle 2019-levels of traffic, and nor was Allegiant. Pilots and crews often were in the wrong city or bumped up against their federal duty-time limits, with no reserve crews to relieve them. Smaller crew bases couldn’t keep up with demand. As much as 30 percent of the carrier’s staff took Covid-related or other leaves of absence when the Delta variant began to surge. “We thought it would be like turning on a switch,” Gallagher said. “We need to make sure we don’t over schedule the airline,” he added.

The snafus cost Allegiant a pretty penny. Disruptions cost Allegiant $28 million to put right, for ferry flights to put crews back in the right positions and other expenses, including $15 million in refunds to customers whose flights were cancelled. Because of this, Allegiant’s costs excluding fuel were higher than expected. “We’re learning as we go,” Gallagher said.

Allegiant is not immune to the labor shortage plaguing the country. The company is paying signing bonuses — a rarity for front-line airline employees — to attract talent. By the end of the summer, it had enough staff on hand to handle demand. In addition, Allegiant has pushed up the start dates for 300 pilots, flight attendants, and maintenance technicians to get ahead of anticipated holiday and 2022 demand.

The carrier and the International Brotherhood of Teamsters ratified the mechanics’ first collective bargaining agreement on Wednesday, bringing to a close almost more than two years of negotiations for a contract. The mechanics chose representation by the Teamsters in 2018.

These issues are not isolated to the Las Vegas-based airline. Supply-chain disruptions and labor shortages are on the level “none of us have ever seen before,” Gallagher said. “The irony is that everyone in this business is hiring, but we’re not back up to full capacity.”

Compounding Allegiant’s problems is the fact that there has been something of a land grab for leisure travelers. Airlines, like United Airlines and Delta that before the pandemic focused on business travelers are now rushing to fill their planes with vacationers. Almost half of Southwest’s flights now touch Florida every day. This is a remarkable change to Gallagher, who has led Allegiant since 2003. “We are seeing a substantial shift in the way airlines operate,” he said.

“All airlines wanted to plant the flag for leisure travelers,” Gallagher said. Leisure-focused airports, particularly in Florida, were busier than they could handle. Meanwhile, airports in major business centers saw a fraction of their 2019 passenger volume. “I like to call it ‘leisure destination overload,'” he said. TSA staffing at smaller facilities remains a concern, calling into question whether these facilities can handle anticipated demand. But Allegiant is focused on getting its operations back on track. “We’re back, and we’re getting a handle on it,” Gallagher said. “We know that we can show up every day and fly the airplanes with the people who’ll get the job done.”

Allegiant has long been known for its nimbleness in reacting to demand, quickly adding or reducing flights depending on how the market is behaving. And this summer was no different. July and the first half of August were busy, with demand in some cases exceeding the summer of 2019, as people took long-delayed vacations. And the airline reacted accordingly, with mixed results. As the Delta variant began to spread in August, Allegiant was fast in pulling down its schedule. Demand has begun to return, and advance bookings for holiday-season travel are on pace with historical norms.

The airline plans to fly 12-16 percent more scheduled capacity in the fourth quarter, compared with 2019. Part of that is because it’s a larger airline: Allegiant will end the year with eight more aircraft than it did in January, and larger, 186-seat aircraft will comprise a bigger part of its fleet. The carrier expects to grow in the low double digits next year as it adds 19 more aircraft, for a total of 127 planes by end-2022. The main constraint will be rising fuel costs, which Gallagher said could put a “damper” on anticipated growth. Allegiant also is preparing for another surge in Covid, and is factoring that possibility into its fourth quarter and 2022 planning. “This climbout has not been a straight climb,” Gallagher noted.

Allegiant is pressing ahead with its Sunseeker resort in Florida. Construction halted in 2020 when the pandemic began but resumed in the second quarter. Allegiant has secured $350 million in financing for the project from Castelake. It will start taking reservations in the first quarter of next year, with the first phase of the project expected to open later in 2022. The golf course and second phase are expected to be completed in 2023. Allegiant anticipates the resort will cost $510 million, but expects the costs to rise by 10-15 percent, due to construction-labor shortages and the rising price of raw materials.

Allegiant reported a third-quarter profit of $66 million, a sharp improvement from a $33 million loss last year, but down from a $72 million profit in 2019. Revenues rose 126 percent from last year and 5.3 percent from 2019, making it one of the few airlines to both report a profit this year and larger revenues than 2019.

“We’ve run to the beat of our own drum,” Gallagher said. “We will lead this industry out of the abyss.”

Madhu Unnikrishnan

Spirit Faces Third-Quarter Setbacks

The recovery got the better of Spirit Airlines in the third quarter. The surge in Covid-19 cases and its own staffing-related operational issues in August dragged the discounter down and forced it to scale back its recovery plans, including reclassify 2022 as yet another “recovery” year.

“The direct and indirect impacts of the pandemic have lasted longer than anyone could have predicted,” said Ted Christie, CEO of the Miramar, Florida-based carrier, during a third-quarter earnings call. While every U.S. carrier felt the negative effects of the Delta variant, Spirit’s own staffing challenges and subsequent August meltdown when it cancelled more than 2,800 flights over 10 days cost it $50 million in revenue and forced it to completely reevaluate its recovery plan.

And that plan, prior to August, was rosy. The leisure-first recovery played to Spirit’s strengths as a holiday-destination oriented airline with more than half of its schedule touching Florida. The airline planned to grow capacity in the “mid-teens” compared to 2021 and return its fleet of Airbus jets to full utilization — or more than 12 hours a day per aircraft. And for investors, it targeted a return to its pre-crisis financial metrics that were long among the best in the industry.

Now, those plans are out the window. Spirit has pulled back on capacity growth with the fourth quarter now forecast to be up just 11 percent compared to 2019; an almost 12 point cut from previous guidance. Half of the capacity reductions will occur in Fort Lauderdale where staffing challenges are the worst. In addition, Spirit has delayed plans to return its fleet to full utilization by six months or more, or until late 2022 or early 2023, which cements 2022 as another recovery year for the airline.

Spirit is “taking our foot a little bit off the gas here so that we can … see the hiring come in,” said Christie. “Let’s build the base to get ready for the summer of next year.”

Incoming Southwest CEO Bob Jordan has also described 2022 as another “transition” year for the carrier following Southwest’s own operational and workforce challenges. American and Delta have also faced some staffing-related operational issues since the beginning of the year.

Even with Spirit’s foot off the metaphorical gas, the airline is still larger than it was two years ago. It has added eight new destinations to its map this year, including a large 30-route expansion into Miami in October, Cirium schedules show. However, Spirit has also dropped five cities, including Asheville, Niagara Falls, and Managua, Nicaragua.

Notably absent from Spirit’s comments was much color on travel demand. Commercial Chief Matt Klein described demand as “very strong” during the summer before the variant hit, and said that it generally “continues to improve.” With little corporate travel business, his comments reflect the leisure and visiting friends and relatives (VFR) market that other airlines have described as fully recovered from its pandemic trough.

The U.S. labor shortage, or perhaps more appropriately a shortage of workers willing to risk of Covid-19 exposure for a low-wage, entry-level job, has hit companies across the economy. Speaking at the Skift Global Forum in September, Jordan said the issue is so acute that, aside from Southwest’s own hiring challenges, he was given a job application with his food at the Texas burger chain Whataburger recently. And the situation is the same for hotels and other sectors on down to trucking companies.

Spirit faces its biggest challenges in Fort Lauderdale. The airport is the largest in its system and touches nearly a quarter of all of its flights on a daily basis, thus compounding any local issues across its network. Entry-level positions, particularly ground handlers and ones managed by third-party vendors, are the most challenging, said Spirit Chief Financial Officer Scot Haralson.

As a result of the meltdown in August, the airline is undertaking a top-to-bottom review of its operations to avoid similar disruptions in the future. The result of this could be “network design changes,” or changes to how aircraft and crews flow across Spirit’s map, including new crew bases across the U.S., said Christie.

Spirit has seven bases today: Atlantic City, Chicago O’Hare, Dallas-Fort Worth, Detroit, Fort Lauderdale, Las Vegas, and Orlando — the latter being its newest having opened in 2018. All but Atlantic City rank in its top 10 for departures in October, according to Cirium. The four cities in the top 10 without bases are Atlanta, Houston Intercontinental, Los Angeles, and Newark, with the latter two seeing the most growth compared to 2019.

The design of Southwest’s network, compounded by similar staffing issues, were cited in the carrier’s own meltdown earlier in October.

Spirit forecasts at least $300 million in additional labor expenses — a jump of more than a third compared to 2019 — to alleviate its staffing issues in 2022.

In the third quarter, Spirit reported a wider loss of $75 million loss, excluding the benefit of federal aid, compared to the three months before. Revenues decreased 7 percent to $907 million while expenses increased nearly 5 percent to $909 million versus to 2019. Passenger traffic decreased 5 percent on a 3.5 percent increase in capacity year-over-two-years.

The airline forecasts continued losses as well as rising expenses driven by labor and fuel in the fourth quarter. Spirit anticipates paying an average of $2.54 per gallon for fuel during the period, an at least 19 percent increase from the third quarter. Spirit is scheduled to take delivery of five Airbus A320neos through the end of December.

MKM Partners Analyst Conor Cunningham described Spirit’s outlook in a report as “less bad” than was expected, but even then it was still “nothing spectacular.”

Edward Russell

Australia’s Latest Startup: Bonza

Australian startup Bonza is taking a lot of bets. It bets that domestic capacity growth has been artificially capped by the two dominant airline groups — Qantas Group and Virgin Australia — over the past two decades leaving ample demand for market stimulation by a “independent” low-cost carrier. And it bets that the country’s population growth outside of its largest cities is underserved when it comes to nonstop flights to leisure-oriented destinations. Put together, the airline led by industry veteran Tim Jordan and backed by U.S. private equity firm 777 Partners has designs on becoming something of the Allegiant Air or Jet2 of Australia.

And those are big bets. Australia has long been a two-airline market: originally split between Ansett and Trans Australia Airlines (TAA), which was absorbed by Qantas in the 1990s, and more recently between Qantas and Virgin. Competition has come in the form of Jetstar, which is wholly-owned by the Qantas Group, and Tigerair, which Virgin acquired in 2013 and shut in 2020. That split has persisted despite population and traffic growth: the Australian population has grown by more than a third to 25.7 million today compared to 2000, while airline traffic has doubled to about 60 million passengers annually. But Jordan thinks there’s more demand for flights out there.

“The lid is being held on the market to a certain degree,” said Jordan referring the past 20 year period. This opportunity existed before the Covid-19 pandemic and has only grown during the crisis that saw Virgin retrench and Tigerair close. But that opportunity is not taking on Qantas and Virgin, and now Rex Airlines, on Australia’s busiest routes between Brisbane, Melbourne and Sydney. The opportunity is in low-frequency, point-to-point services connecting second-tier cities with beaches and other holiday-oriented destinations. Asked for examples of these destinations, Jordan cited the Gold Coast and Sunshine Coast in Queensland, as well as Tasmania’s mountains and outdoor attractions. Bonza estimates there are 45 airports it could serve with more than 30 already expressing interest, said Jordan.

The startup will operate a fleet of two or three new Boeing 737-8 jets, said Jordan. The aircraft will be leased from investor 777 Partners, which he said gives Bonza added flexibility to flex up or down its fleet as demand warrants. The private equity firm has outstanding orders for 30 737 Maxes, according to Boeing data. 777 Partners has delivered eight 737-8s to its other airline investment: Canadian startup Flair Airlines.

Bonza is in the process of securing an air operators certificate from Australian authorities and, if all goes according to plan, hopes to begin revenue flights in the second quarter of 2022.

Edward Russell

In Other News

  • The big three Chinese carriers racked up more losses on improving revenues in the third quarter. China Southern did the best overall during the period with a 1.4 billion yuan ($219 million) net loss on a 2 percent year-over-year increase in revenues to 26.9 billion yuan. Air China led on revenue growth with a 5.2 percent year-over-year increase to 19.8 billion yuan, though it posted the largest net loss of 3.5 billion yuan. And China Eastern sat in the middle with a net loss of almost 3 billion yuan on a 3.6 percent year-over-year increase in revenues to 17.8 billion yuan.
  • Finnair reported a €115 million ($133 million) net loss in the third quarter. The carrier cited Finland’s July reopening, which was later than many other European markets, for the weak period when revenues were down 77 percent year-over-two-years to €199 million. Finnair carried 87 percent less passenger traffic and flew 74 percent less capacity than it did during the September quarter in 2019. “We are still far from the pre-pandemic passenger numbers,” said CEO Topi Manner last week and adding that the airline maintains expectations of a full capacity recovery by 2023. The airline provided little fourth quarter guidance beyond expectations of positive cash flow citing limited visibility.

    Manner was also optimistic for the recovery, saying the November reopenings of both Thailand and the U.S. to vaccinated travelers as “de facto” resumption of Finnair’s long-haul business. The airline plans to resume flights to both countries this winter and to other key Asian markets, excluding China, in early 2022. As for Finnair’s expansion to Stockholm Arlanda, Manner said the initial launches — to Bangkok, Phuket and Miami with Los Angeles and New York starting before year-end — went well though the long-term future of the base will depend on profitability. The growth takes advantage of “changes in the competitive landscape” in Stockholm, including Norwegian Air‘s exit from long-haul flying and SAS‘s strategic shift focusing long-haul flying in Copenhagen.
  • It was another quarter of losses for Indigo, but the story started to improve by September when the Delta variant, which struck India hard and relentlessly, started to recede in the face of rising vaccination rates. During the quarter, the government imposed a cap 65 percent of 2019 capacity on the country’s carriers, which rose to 85 percent as the surge ended, and recently the government lifted the cap completely. The carrier reported a net loss of 14.4 billion rupees ($192 million), an improvement over its second-quarter net loss of 32 billion rupees, but up from a loss of 12 billion rupees last year. Revenues improve from the second quarter and last year to 58 billion rupees. The international network remains a challenge, and the carrier ended the quarter operating only about one-third of its pre-pandemic international flights. Indigo is in talks with the government to increase the number of international flights it can operate, CEO Ronojoy Dutta said. “It is now time for repair and healing,” he added.
  • A restructured Norwegian Air reported a Norwegian kroner 169 million ($20 million) net profit in the third quarter. But despite the profit and a 50 percent increase in revenues to Norwegian kroner 1.9 billion, CEO Geir Karlsen said last week that the airline still has a structural cost problem. Unit costs excluding fuel were Norwegian kroner 0.51 in the quarter, which is an 82 percent increase from 2019. Norwegian Air will grow into its cost structure with leases for an additional 13 Boeing 737s for its Summer 2022 schedule — for a total of 64 737s — and 70 aircraft by end-2022, said Karlsen. On a positive note, Norwegian Air’s yield was up 15 percent to Norwegian kroner 0.53 during the September quarter. The carrier plans to fly 50 of its 51 737s by the end of December, and forecasts operating 29 million available seat kilometers (ASKs) in 2022 — roughly 31 percent of what it operated in 2019.
  • The U.S. bankruptcy court judge is weighing Avianca‘s Chapter 11 restructuring plan after a confirmation hearing on October 26. Judge Martin Glenn is expected to sign off on the plan, which has the backing of 99 percent of creditors including United, sometime after final comments are submitted to the court on October 28. If approved, Avianca will pivot to a more leisure-oriented airline with denser aircraft and more point-to-point flying, but keeping a premium cabin, widebody jets and membership in the global Star Alliance. In addition, it aims to move forward with its proposed U.S.-Latin America joint venture with Copa Airlines and United.
  • And speaking of bankruptcy, a judge approved Latam Airlines Group‘s request to extend the exclusivity period for it to file a reorganization plan in its Chapter 11 case to November 26. The Chile-based group is the last of the three big Latin American airline bankruptcies to submit a plan with Avianca‘s pending approval and Aeromexico‘s submitted in September.

    In more good news for Latam, the Chilean antitrust court approved its planned joint venture with Delta last week. The immunized pact would cover flights between the U.S. and most of South America. Now, the airlines only need sign off from the U.S. Department of Transportation for the tie up to move forward.
  • The latest U.S. startup Aha! took to the skies on October 24 with flights between Reno and Pasco/Tri-Cities, Wash. The airline, which is the latest reincarnation of former United affiliate ExpressJet Airlines, plans to serve eight destinations from its Reno base by November 10. The carrier flies Embraer ERJ-145 regional jets.
  • U.S. regional SkyWest may take a $15-20 million hit this quarter after a malware attack in October. After containing the attack and moving its systems to a new server, that server failed, causing the cancellation of almost 2,000 flights. That is this quarter. The third quarter, on the other hand, was good; another period of profits for the regional. SkyWest reported a net income of $10 million, down from $34 million last year. Costs rose 82 percent over last year due to increased flying for its mainline partners. The regional benefited from $115 million in federal payroll support in the quarter. Revenues rose 63 percent year over year to $745 million.
  • UPS continues to benefit from the near-insatiable demand for cargo and e-commerce, but it’s not immune to the economy-wide labor shortage. The shipping behemoth reported the highest profits in its history in the nine months that ended on September 30, but its labor costs have risen sharply. UPS is turning to automation, to drive productivity and to replace some job functions. It still has to hire 100,000 seasonal workers for the peak holiday season. Shipping constraints are not an issue for the company. “If you can pull the containers off the ships, and then get them drop shipped to us, we’ve got the capacity to take on those containers,” CEO Carol Tome said. “So we’re here, ready and able to support anything that we can do to unlock some of that jam.” UPS reported revenues of $23 billion, up 9 percent from last year, and profits of $3 billion, generating an adjusted operating margin of 25 percent.

Edward Russell & Madhu Unnikrishnan

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Sky Money

  • American Airlines launched its first enhanced equipment trust certificate (EETC) issue of the year, the $960 million 2021-1 notes, last week. The $758 million A tranche priced at a 124.5 basis points over 10-year U.S. Treasuries on October 26 with an all-in rate of 2.875 percent; and the $202 million B tranche at 254 basis points over 7-year Treasuries a day later for an all-in rate of 3.95 percent. The A notes have an initial loan-to-value ratio of 53.5 percent and weighted average life of nine years with a final maturity of 2036, and the B notes an initial LTV of 67.5 percent and weighted average life of six years with a final maturity of 2032. Proceeds finance the delivery of 21 new Airbus A321neos due from January-September 2022, and five Embraer E175s delivered from October to December 2020.

    Initially, American launched just $592 million 2021-1 A notes but upsized the transaction by $166 million and added five A321neos to the collateral pool within a day. The airline added the B tranche on October 27, the day after the A notes priced.

Edward Russell

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Boeing executives projected confidence about next year, even as the airframer struggles with production, regulatory, and delivery problems with three of its marquee aircraft programs. Despite the confidence, Boeing reported another quarter of losses, although sharply narrower than the same period last year, when the 737 Max was still grounded.

Boeing’s halted deliveries of its best-selling widebody, the 787, earlier this year after regulators found unacceptable gaps in portions of the aircraft’s fuselage. The airframer took a $183 million charge on the program in the quarter and expects costs associated with the delay to reach $1 billion over the next year. CEO David Calhoun insisted there were no safety-of-flight problems with the airframe but said there was a quality concern with a supplier.

Boeing has 105 787s in its inventory and has held production at two aircraft per month while the deliveries are halted. It expects to raise that to five aircraft per month when deliveries resume. “Most of the rework is in the rear-view mirror for us,” Calhoun said. Now, the company is working with the FAA and other regulators to certify its fixes. “The irony of the whole story is that [the 787] is the most utilized widebody out there,” Calhoun said. “Demand will be quite robust in the second half of next year.”

The company delivered 62 737 Maxes in the third quarter and is working through its backlog of aircraft awaiting delivery. So far, Boeing has delivered one-third of the backlog and has re-marketed most of the aircraft cancelled during the almost-two-year grounding. Demand for the Max continues to improve, and Boeing recorded its eighth straight month of increasing orders for the type, Calhoun said.

Boeing plans to ramp production of the Max up from 19 aircraft per month to 31 aircraft per month next year. But with the remaining inventories and the newly produced aircraft, the company will have to deliver as many as 500 aircraft in 2022. “We have to get better about delivering the Max,” Calhoun said. “I’m reasonably confident that we can get through it.”

A production ramp up of that magnitude raises questions about the supply chain’s readiness. Boeing has identified the availability of labor, logistics constraints, and the rising cost of raw materials as areas of concern as it builds up its production rate. “Labor availability within our supply chain will be a key watch item next year,” Calhoun said.

A handful of countries remain to certify the Max, the biggest among them being China. Boeing is in regular contact with its Chinese airline customers and regulators in that country. The company is confident that regulatory clearance will come by the end of the year and deliveries will resume early next year, Calhoun said.

Boeing now expects to start delivering the 777X by the end of 2023, a delay that has angered several of the aircraft’s launch customers. The aircraft is already in flight tests, and the airframer is in talks with regulators on the remaining work that needs to be done on the airframe, Calhoun said. The company is holding the combined 777 and 777X production rate at two aircraft per month.

Lessons from the 20-month Max grounding have taught Boeing how to navigate regulatory concerns over the 777X program, Calhoun said. But he is confident about the delivery date at the end of 2023. “We put a lot of time into this,” he said.

Boeing will make a decision on whether to launch a 777X freighter soon. The company is leaning toward developing a freighter variant, given the demand for cargo aircraft during the pandemic. Air cargo traffic is 8 percent higher now than it was in 2019, despite the absence of belly-hold cargo capacity on international flights. Boeing has had more freighter orders — both dedicated freighters and passenger conversions — in the year to date than it has in any single full year in its history, Calhoun said. Boeing predicts the global freighter fleet will be 70 percent bigger than 2019 by 2040.

In the quarter, Boeing Commercial Airplanes delivered 84 aircraft and had orders for 70 737 Maxes, 24 freighters, and 12 787s. The company’s commercial aircraft backlog is just over 4,100 aircraft, worth $290 billion. The company expects 2022 demand to be robust as airlines replace older aircraft with newer, more fuel efficient — and more sustainable — aircraft. Single-aisle aircraft will lead the recovery, while Boeing expects widebody demand to return to prior levels in 2024.

Long-term trends are favorable for the industry. Boeing said its 10-year market outlook still will reflect the effects of the pandemic on demand, but the effects will be muted in the company’s 20-year forecast. International traffic remains at 69 percent below 2019 levels. Domestic demand is growing, despite a hiccough during the Delta variant’s spread this summer. The global active fleet is at 85 percent of 2019 levels, and airlines are flying 65 percent of their pre-pandemic capacity. This is expected to rise to 70 percent by the end of the year, Calhoun said.

The company has stood up a team to study a clean-sheet aircraft. Calhoun declined to say when or what type of aircraft the team will develop, but stressed that Boeing is actively considering a new aircraft type in the medium term.

Boeing narrowed its third-quarter loss to $132 million from $466 million a year ago, during the depths of the Max grounding. Revenues reached $15.3 billion, up from $14.1 billion last year. Its Commercial Airplanes division reported revenues of $4.5 billion, up 24 percent from last year, and a loss of $693 million, down from $1.4 billion in 2020. Defense and Space revenues were up 3 percent to $$6.6 billion, generating $436 million in earnings. Defense spending is expected to rise in the new year as governments shift resources from Covid response back to national security, Calhoun said.

Madhu Unnikrishnan

Airbus Says Suppliers Are Ready For Production-Rate Increases

Airbus has ambitious plans to ramp up production in order to hack away at its backlog of almost 7,000 aircraft. But analysts are skeptical that the European airframer can ensure its supply chain is ready for the ramp up, given labor, logistics, and staffing travails that currently plague the global economy.

CEO Guillaume Faury admits supply-chain constraints concerned him earlier this year. A few issues remain with a handful of suppliers, but he believes the majority of Airbus’ suppliers are ready to meet to the challenge of the ramp up. “We think over time this will be managed,” he told analysts during the airframer’s recent earnings call. The remaining issues of concern will be “sorted out” by the end of the year, he said.

And the plans are ambitious. Airbus intends to raise the production rate for its A320 family to 64 aircraft per month by 2023. And that’s not all. Every type the manufacturer makes will see production-rate increases next year: The A220 will go up to 6 aircraft per month; the A330 will go up to 3 per month; and the A350 will rise to 6 per month. The last A380 will be delivered by the end of this year and that production line will close.

These are relatively good problems to have, compared with what Boeing is struggling with now. Airbus is keeping its forecast for total deliveries this year to 600 — even though it has delivered more than 400 in the year to date — to hedge against supplier mishaps.

The airframer has more than 100 A320s on its lot to deliver and thinks it will work through that inventory in the early part of next year. After that, it does not have new order slots for the jet until after 2023, unless production goes up.

Sustainability has become part of its conversations with airlines. Airlines are citing sustainability as reason to renew their fleets, conversations that didn’t happen as recently as two years ago, Faury said. Airbus is adapting. It recently unveiled plans for an electric vertical takeoff and landing (eVTOL) through its Helicopters division, and it expects regulatory approval for the aircraft in 2025. The airframer also is stepping up research into alternative fuels and propulsion systems, including hydrogen power, Faury said.

Last year and this year, 20 percent of Airbus’ deliveries were to Chinese airlines. But the manufacturer has not won any new orders from China in “several months,” Faury said, adding that the the country’s stringent and rolling lockdowns have sapped demand. “The Chinese airline industry will be back to ordering planes soon,” he said. “They will need them, and I don’t see a change in nature going forward as far as demand in China will affect us.”

Airbus reported revenues of €35.2 billion ($41 billion) for the first nine months of this year, up from €30.2 billion in the same period last year. Its adjusted earnings before interest and taxes was €3.4 billion, compared with negative €125 million last year. Airbus Helicopters reported revenue growth of 14 percent, while its Defense and Space unit’s revenues were flat.

Madhu Unnikrishnan

Fleet Briefs

  • Alaska Airlines is actively supporting the transition to post-hydrocarbon flight. The carrier has donated a de Havilland Dash 8-400 to ZeroAvia, which is development a hydrogen-powered electric propulsion system for small aircraft. With the donation, Alaska will collaborate with ZeroAvia on developing a zero-emission 76-seat regional aircraft with a range of up to 500 nautical miles. Neither company provided a timeline for the technology though it is generally believed to be a proposition for the 2030s.
  • David Neeleman’s latest venture Breeze Airways took delivery of its first of 80 Airbus A220-300s last week. The aircraft is configured with 126 seats, split between 36 seats in Breeze’s premium “Nicest” cabin, 10 extra-legroom economy seats, and 80 economy seats. The A220 is set to enter revenue service in the second quarter with initial routes to be unveiled early in the new year.
  • After slashing its fleet by nearly two-thirds to just 51 Boeing 737s through administration, Norwegian Air is ready to grow again. The carrier has signed letters of intent to lease an additional 13 737-800s to support its Summer 2022 schedule. Norwegian could swap the aircraft for 737 Maxes, or potentially Airbus A320neos, that CEO Geir Karlsen said would meet its goal of sourcing “newer technology, newer aircraft” going forward. The 737s are leased under power-by-the-hour agreements through 2022/23 IATA winter season with terms of five to eight years. The used 737s will arrive from before Christmas in December through March 2022.

Edward Russell

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Landing Strip

Following recent announcements from Delta Air Lines and United Airlines, anyone outside of the airline industry could be excused for thinking the travel recovery is roaring forward, with road warriors flocking back to planes. As those carriers put it, they are giving travelers more choice and meeting pent-up demand with robust expanded schedules from New York-area airports, beginning in November.

But the resumptions at Delta and United are far from a sign of visitors flocking to Fifth Avenue for their holiday shopping, or bankers resuming their grueling travel schedules. Both airlines have said in recent weeks that the recovery, particularly of business travelers, remains at least three or more months off, with the end of 2022 a more likely timeline. The announcements are fine examples of marketing spin — making lemonade from lemons.

Delta and United — as well as every U.S. carrier — must resume flying at least 80 percent of their slots at New York’s JFK and LaGuardia airports, and at least 80 percent of their runway timings at Newark Liberty Airport on October 31. That’s the day after the U.S. FAA ends the Covid-19 pandemic slot waiver for domestic flights, which has been in place since March 2020. The waiver remains in effect for international flights until March 26, 2022. The change also applies to four more airports: Chicago O’Hare, Los Angeles, San Francisco, and Washington Reagan National.

In short, Delta and United are adding flights to protect their valuable New York-area airport assets: Slots and runway timings.

“The desire to not lose slots takes on heightened strategic importance at this time, because the creation of the Northeast Alliance by American and JetBlue has sharpened competition among the majors,” said Saikat Chaudhuri, a director at UC Berkeley’s Haas School of Business and College of Engineering who studies the airline industry. He agreed that Delta and United are also protecting their slots with the flight additions.

The controversial AmericanJetBlue alliance, which the U.S. Department of Justice has challenged, allows the carriers to create a de facto third competitor to Delta and United in the New York area. JetBlue has added mostly domestic flights at coveted JFK, LaGuardia, and Newark airports, while American has beefed up its longhaul offerings, including new routes from JFK to Athens and Tel Aviv. Discounters, including Southwest Airlines and Spirit Airlines, that lack a sizable presence in New York have challenged the tie up as anti-competitive.

Delta unveiled its expanded New York schedule under the guise of meeting the “significant demand for business and international travel,” as Senior Vice President of Network Planning Joe Esposito put it on October 19. However, not even a week earlier Delta CEO Ed Bastian said domestic business had only recovered to roughly half its pre-pandemic levels, and executives added they do not forecast a recovery to 80-100 percent of 2019 until the end of 2022.

The Atlanta-based carrier’s combined domestic departures from JFK and LaGuardia will increase 16 percent to 336 flights from October 29 to November 5 — the Friday before and after the domestic slot waiver ends — according to Cirium schedules. The number of departures is down almost 23 percent from 435 flights on the corresponding weekday in 2019.

And United will launch its delayed shuttle between Newark and Washington National, with Senior Vice President of Domestic Planning Ankit Gupta touting customer “convenience and comfort” in the airline’s October 26 announcement. But the route has little local traffic with stiff competition from Amtrak and, as United executives said on October 20, corporate travel well below 2019 levels.

The Chicago-based carrier’s domestic departures from Newark will increase 32 percent to 330 flights from October 29 to November 5, Cirium schedules show. The number of departures is down 3.5 percent from 342 flights on the corresponding weekday in 2019.

Both Delta and United say leisure demand is at or even above 2019 levels for the year-end holidays. But one thing is clear, New York travel demand is not about to step up by as much as a third overnight on October 30.

The two carriers are not alone in resuming flights — they are just the airlines that wrapped up the additions in a bow and presented them as a sign of the recovery. From October 29 to November 5, overall domestic departures increase 28 percent to 346 flights at JFK, 34 percent to 474 flights at LaGuardia, and 24 percent to 447 flights at Newark, Cirium data show. American will make one of the largest increases with combined JFK and LaGuardia departures jumping 56 percent to 240 flights.

Departures also increase at Washington National come October 31. The number of flights jump 36 percent to 405 departures by November 5, according to Cirium. Departures hold relatively steady at Chicago O’Hare, Los Angeles, and San Francisco.

Until the lucrative business travelers that typically fill many of these flights to New York return — most likely next year — the added flights are likely to be a drag on airlines’ financials. Added capacity without the demand to fill it means empty seats or discounted tickets, both of which could pull down unit revenues and drive up unit costs that are already under pressure.

Edward Russell

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Routes and Networks

  • Air New Zealand executives hinted at its post-pandemic international network last week. As New Zealand reopens, which is expected in 2022, CEO Greg Foran said the airline will focus on resuming routes — and boosting frequencies — to its partner hubs around the world. A member of Star Alliance, Air New Zealand lists Air China, Cathay Pacific, Singapore Airlines, and United Airlines as strategic partners. In terms of North America, the airline maintains plans to launch nonstop Auckland-New York flights — previously set to begin in October 2020 — and says it will return to United hubs in Chicago and Houston as demand warrants. And although not mentioned specifically, there is little doubt that Air New Zealand will return to its traditional North American gateways of Los Angeles and San Francisco, both of which also happen to be United hubs.
  • With 31 new Boeing 737 Maxes arriving next year, Alaska Airlines is putting some to work expanding its map. The carrier will add Cleveland with daily flights from Seattle beginning June 16. No surprise that the route will be flown with a 737.
  • Romanian discounter Blue Air has unveiled 10 new routes for Summer 2022. The carrier will connect Bucharest to Porto from April, and Bilbao, Olbia, Sevilla, and Zaragoza from June; Cluj-Napoca to Malaga and Valencia from June; and Iasi to Heraklion, Mykonos, and Zakynthos from June. Blue will fly 189-seat Boeing 737-800s on the routes.
  • Italy’s new national carrier ITA Airways has made its alliance selection: It replaces Alitalia in the SkyTeam Alliance. The move came as little surprise considering given its predecessors long history in the alliance. But the move didn’t answer one big question: Who will become ITA’s new strategic partner? The alliance selection would seemingly favor fellow SkyTeam member Delta Air Lines, but extra-alliance tie ups are not unheard of and Lufthansa is interested.
  • United plans to fly 22 daily flights to London Heathrow during the peak Summer 2022 season after having secured five additional slots at the sought-after airport. The carrier will use its expanded access at Heathrow to add a second flight to Denver flight, sixth and seventh flights to Newark, and a third to San Francisco from March. In addition, it will launch its planned daily Boston-London Heathrow service with the fifth new slot the same month.
  • And that’s not the only London growth next summer, Transat will connect Quebec City to London — England, not Ontario — next summer. The leisure carrier will offer weekly service on the Quebec City-London Gatwick route with an Airbus A321LR from May 11 to September 28, 2022. According to Cirium schedules, the flight will be the first nonstop between the cities since at least 2004.
  • Canadian discount startup Flair Airlines is adding a duo of new routes on top of the 14-route expansion it unveiled earlier in October. The carrier will connect Winnipeg to Regina and Saskatoon twice weekly from April 2022.

Edward Russell

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