Etihad Airways launched (21-Mar-2023) reciprocal interline partnerships with Airlink (South Africa), Austrian Airlines and Philippine Airlines, resumed codeshare partnerships with ITA Airways and Air Seychelles and resumed interlining with Biman Bangladesh Airlines. Etihad chief revenue officer Arik De stated the agreements provide passengers with connectivity with 58 European, 41 African and 23 Asian destinations. [more - original PR]
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Analysis
Air cargo makes a soft start to 2023 – decline across all regions except Latin America in Jan-202322-Mar-2023
Air cargo makes a soft start to 2023 – decline across all regions except Latin America in Jan-2023
Historically, a downturn in air cargo business has presaged one in the passenger segment. CAPA wrote about such a possibility again, in Jun-2022, based on statistics published at the time.
So far it hasn’t happened. Indeed, the reverse is true, with sustained COVID-19 recovery in the passenger segment in most parts of the world.
But IATA figures for Jan-2023 point to a continuing soft underbelly in the cargo business, with demand continuing to fall in most regions and capacity also falling in half of them. No region has anything to shout about, except perhaps Latin America, where both demand and supply have increased – but that amounts to little in the overall scheme of things.
The underlying issue globally is the uncertainty brought about by an amalgam of negative factors that rarely occur at the same time, like a flock of black swans landing on the global runway and refusing to move. Accordingly, we have entered an era where forecasting the future is subject to so many variables that guesswork carries the same degree of credibility.
Canadian ultra-low cost carrier Flair and aircraft leasing management company Airborne are embroiled in a public dispute over Airborne’s decision to seize four Boeing narrowbody aircraft from the airline. Airborne seized the Boeing aircraft – one 737-800 and three 737-8s – from Flair on 11-Mar-2023.
It is a highly unusual situation, and creates challenges for Flair as it scrambles to find aircraft to operate its planned schedule for the summer season in the Northern Hemisphere. Flair is examining ways to get alternative sources of capacity. Its CEO Stephen Jones said, “...but this is pretty short notice, and so it is more likely that we will need to trim some of the schedule to fit the available capacity”.
Previously, Flair has said that it was planning to bolster capacity by 50% during the northern summer of 2023 and grow its fleet to 27 aircraft.
The controversy has resulted in Flair suing Airborne and the leasing company’s lessor partners, and the situation could be a setback for Flair as it works to reach its short term and long term ambitions.
The ‘go-to’ airports in Europe for those seeking information on the changing fortunes of air transport are most often the ‘FLAP’ airports (Frankfurt, London Heathrow, Amsterdam and Paris Charles de Gaulle). But there is value in examining the two Rome airports, which are in common ownership.
The larger, Fiumicino, caters to domestic, international and intercontinental flights but has never reached its potential, given the population it serves and the size of Italy’s GDP. The smaller, Ciampino, the original Rome airport, now exists primarily to service Ryanair.
The protracted failure of Alitalia and the slow transfer to ITA (Italia Trasporto Aereo S.p.A.) as the flag carrier is one of the main reasons that Rome is not a more significant aviation city. But Aeroporti di Roma (AdR) is investing for a much bigger future, with Fiumicino extended, to be able to handle 100 mppa by 2046, at a cost of more than EUR8 billion.
In the short term the financial statement for FY2022 for AdR is better than might have been expected, given how badly hit Italy was by the first wave of COVID-19 in 2020.
Qantas is looking to boost its fleet and workforce numbers as it attempts to ramp up capacity and complete its post-pandemic recovery. Part one of this analysis examined how aircraft delivery delays are complicating the Qantas Group’s fleet plans. This second part focuses on the airline’s efforts to expand its workforce, and the challenges it faces in that regard.
Qantas has launched a recruitment drive aimed at boosting staff numbers to match its capacity goals. Like most of the airline industry, it will have to contend with a tight labour market and training bottlenecks – for the near term, at least.
The airline is looking to improve its training pipelines, most notably by establishing its own engineering academy. This will help it meet its longer term hiring targets.
Changes are also under way in the airline’s leadership team, with a well-regarded executive joining the company and a realignment of roles. More serious leadership moves could be on the horizon, as speculation builds about the CEO succession plan.
Like many airlines around the world, Qantas is facing multiple frustrating growth constraints that are preventing it from taking full advantage of the strong rebound in demand. The airline is attempting to address some of these headaches with new fleet and training investments.
The likelihood of further narrowbody aircraft delivery delays has prompted Qantas to tap into the used aircraft market for short term narrowbody capacity, and it plans to wet-lease more regional jets. Rebuilding the widebody fleet has also been slowed by the need for lengthy maintenance checks as aircraft come out of storage, and by delayed deliveries.
Qantas has launched a recruitment drive aimed at boosting staff numbers to match its capacity growth plans. However, a tight labour market and training bottlenecks complicate these efforts. The airline is also looking to improve its training pipelines, partly by establishing its own engineering academy. This will help it meet its longer term hiring goals.
Part one of this analysis will examine the fleet aspects, and part two the workforce moves.
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Recorded at CAPA World Aviation Summit & Awards for Excellence, 02-Dec-2022
Partnerships and alliances take on an increased purpose
For the surviving airlines, partnership and alliances appear as an increasingly attractive option. Before the pandemic many had started to question the value of alliances. Now they are providing an important safety net for carriers enabling them to serve strong, profitable markets and allow partners to support wider connectivity.
Mergers and consolidation have accelerated as a result. JetBlue’s acquisition of Spirit Airlines from under the nose of Frontier Airlines – and the premium it paid – could be the start of a trend as airlines seek to solidify their market penetration.
The expansion of partnership has not just been within the industry though – it is also looking at expanding collaboration with other transport providers, technology partners, environmental organisations and more.
The global pandemic has significantly accelerated the pace at which companies are bringing new ideas to market, including massively expediting some processes and applying pressure on industry ecosystems to deliver services in new ways.
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How should companies use partnerships to build business resiliency?
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Can strategic joint ventures bridge the supply and demand gap?
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Will the COVID pandemic break down the Mergers & Acquisitions wall or actually make it stronger?
Saudia announced (21-Mar-2023) plans to add 25 destinations to the Saudia Group network (including flyadeal) in 2023. The airlines will commence services to Beijing, Birmingham (UK), Dar Es Salaam, Djibouti, Chittagong, Johannesburg, Kano, Baghdad, London Gatwick, Nice, Lisbon, Malaga, Mykonos, Sharm el Sheikh, Tbilisi, Baku, Trabzon, Izmir, Antalya, Bodrum, Sarajevo, Heraklion, Rhodes, Larnaca and Tivat. Saudia Group director Engr Ibrahim Al-Omar stated: "These new destinations will offer greater access and choices to our guests. Given the increase of demand in international travel, this is the right time to expand our global network". [more - original PR]
Lynx Air CEO and president Merren McArthur, speaking at CAPA Airline Leader Summit, stated (17-Mar-2023) ultra LCCs are focused on simplicity, high utilisation and stimulation of traffic. Ms McArthur added "who we are targeting is the most price sensitive customer".
Wizz Air president Robert Carey, speaking at CAPA Airline Leader Summit, stated (17-Mar-2023) the carrier has "always had a large presence in London", and is "the largest operator in Luton". Mr Carey said London Gatwick made sense as a "natural extension point", adding the carrier will "look to grow at every opportunity we have" in London.
Wizz Air president Robert Carey, speaking at CAPA Airline Leader Summit, stated (17-Mar-2023) the carrier has "made a lot of additions in the network". Mr Carey highlighted expansion in Italy, London Gatwick, Albania and Abu Dhabi, and added "everybody wants to travel, everybody is back out there flying".
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