HK Express, according to a FATIII Weibo post, reportedly stated (22-Sep-2020) it transferred 10 A321s to Alice Springs for long term storage on 21-Sep-2020 and 22-Sep-2020.
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Among what is an increasing number of positive statements being made by airport managers about infrastructure investment, Latvia's Riga International Airport has committed to sticking with its ‘sustainable’ investment plan, so that it can compete with other airports with the aim of becoming a Northern European air traffic hub.
During the summer of 2020, with the support of the (EU) Cohesion Fund and its own funds, a number of large-scale investment projects worth more than EUR15 million were implemented at Riga Airport.
With so many competitors for that mantle across the region, Riga has got its work cut out, but the direction airBaltic has taken, especially with its fleet selection, could help the airport towards achieving that goal.
The potential is for Europe-Russian Federation hubbing and the development of long haul, with associated short haul feed, and airBaltic is well placed to do the former, having centralised its fleet on the A220 (the old Bombardier C-series). The airline is well positioned to set up a regional ‘low cost’ hubbing operation that could challenge the majors at their legacy hubs.
Premium Analysis
Airline debt grows: takers for US government loans are dwindlingAs the deadline to access loans from the US federal government nears, Southwest Airlines, Delta and Spirit have decided not to pursue that avenue, opting instead to access the markets to continue building liquidity as the COVID-19 crisis continues to result in depressed demand.
After United used its loyalty programme as collateral to raise capital, Delta has raised a whopping USD9 billion backed by its SkyMiles frequent flyer programme. Spirit has also forged new financings backed by its loyalty programme.
All airlines are working to bolster their liquidity as hopes of break-even cash burn appear to be slipping well in to 2021 as demand, while showing some signs of improvement, remains severely depressed.
Delta, Southwest and Spirit will avoid some of the more onerous stipulations associated with the federal loans; but all airlines continue to build up significant debt that they will work feverishly to restructure when some sense of normality returns to commercial aviation.
Analysis
Aviation returns to the 1930s20-Sep-2020
Aviation returns to the 1930s
There’s been much talk about the post-COVID industry reverting to the profile of the 1970s, with its reduced traffic levels, the prospect of more active government intervention, smaller networks and higher prices.
But in two very important ways the real timeframe to compare is the 1930s. There are important lessons to be learned from industry and government behaviour 90 years ago.
First of all, WWI had spawned the multilateral Paris Convention of 1919, which established that every state had absolute sovereignty in the airspace over its territory, a response to the new aircraft that easily crossed boundaries. That meant essentially that all borders were closed to foreign aircraft and permission became necessary even to overfly.
Secondly, in the earlier, barnstorming days of aviation the biggest inhibitor of commercial air travel expansion was safety. There was an uncomfortable tendency for airlines to crash, a feature that would-be passengers found undesirable.
Back in May-2020 when Colombia’s largest airline and one of South America’s largest operators Avianca filed for Chapter 11 bankruptcy protection, CAPA concluded that it would be hard to fathom that Colombia would let its flag carrier simply disappear.
Eventually, Colombia’s government did step up and offer Avianca a USD370 million loan that would be part of a larger financing package for the airline. But the government’s support has now been temporarily suspended after a court challenge, creating new uncertainty for Avianca in its restructuring process.
The latest development occurs just as Colombia’s commercial aviation industry is getting started again, and as flights slowly restart, Avianca remains the country’s largest operator by a solid margin.
According to Eurowings CEO Jens Bischoff, "the ultra low cost business model is on the decline throughout Germany".
The head of Lufthansa's point-to-point low cost airline said this while announcing plans to replace 95% of the capacity to be withdrawn by the ultra LCC Ryanair Group from Duesseldorf.
The base of Ryanair's subsidiary Laudamotion at Duesseldorf will close from 24-Oct-2020, following the closure of its Stuttgart base at the end of Sep-2020.
This is fighting talk from Mr Bischoff, but may be premature. Europe's three LCC groups – Ryanair Group, Wizz Air Group and Pegasus – have increased their share of Germany-Europe capacity throughout 2020, including the period after fleet groundings. Ryanair Group and Pegasus are cutting capacity by less than the market, whereas Wizz Air is almost maintaining 2019 capacity levels.
Moreover, Ryanair's closure of Laudamotion bases in Germany should not be interpreted as a withdrawal from this market. Laudamotion was restructured when employees did not agree to new terms, and Ryanair now has a new subsidiary, Lauda Europe, to facilitate the opening of new bases across Europe.
Recorded at CAPA Qatar Aviation Aeropolitical and Regulatory Summit, 5-6 Feb 2020
Airport Slots And Facilities – Implications Of Policy Choices For Airline Competitiveness
• What are the alternative ownership models to privatisation?
• What do governments need to consider when deciding whether airports should be privatised?
• What form should regulation take, in order to strike a balance between national and private interests?
• Who ‘owns” airport slots? How should slot policy be regulated and developed?
• What future is there for managing airport capacity that cannot meet demand? To prevent chaos and one that limits growth?
CAPA Live OctoberMore
Upcoming Event
14
Oct
Virtual Event: CAPA Live October
CAPA Live will bring together a variety of industry experts to explore how aviation has returned to the 1930s thanks to the COVID-19 pandemic.
CAPA Live NovemberMore
Upcoming Event
11
Nov
Virtual Event: CAPA Live November
CAPA Live will bring together a variety of industry experts to explore how aviation is looking back to the future...winners & losers of the pandemic.
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22-Sep-2020 12:06 PM
Australia's Prime Minister outlines inbound capacity increases across three states
Australia's Prime Minister Scott Morrison announced (18-Sep-2020) the following staged approach to inbound returning traveller increases across select states, key details include:
- New South Wales: "To take an additional 500" by 27-Sep-2020;
- Western Australia: Increase arrivals by 200 per week from 27-Sep-2020, scheduled to increase to 500 extra by 11-Oct-2020;
- Queensland: Increase arrivals by 200 per week from 27-Sep-2020, with arrivals scheduled to increase "to that full 500 extra" by 04-Oct-2020. [more - original PR]
India's Ministry of Civil Aviation (MoCA), via its official website, announced (21-Sep-2020) India established an air travel bubble with Bhutan and "Indian and Bhutanese carriers are now permitted to operate services between India and Bhutan". According to MoCA, India also has air transport bubble agreements with Afghanistan, Bahrain, Canada, France, Germany, Iraq, Japan, the Maldives, Nigeria, Qatar, the UAE, the UK and the US.
CAAC reported (21-Sep-2020) the following traffic highlights for Chinese airlines for Jul-2020:
- Passengers: 39.1 million, -34.1% year-on-year;
- Passenger load factor: 74.8%, -8.8pp;
- Cargo: 552,000 tonnes, -10.4%;
- Domestic: 367,000 tonnes, -10.5%;
- International: 185,000 tonnes, -10.1%. [more - original PR - Chinese]
Nepal Airlines, via its official Twitter account, announced (21-Sep-2020) it resumed scheduled domestic services on 21-Sep-2020, following a temporary suspension since 24-Mar-2020 due to coronavirus related travel restrictions (My Republica/The Himalayan Times, 21-Sep-2020). The airline plans to operate the following domestic services from Sep-2020:
- Kathmandu-Rukum: Twice weekly;
- Kathmandu-Bhojpur: Three times weekly;
- Kathmandu-Dang: Three times weekly;
- Kathmandu-Phaplu: Twice weekly;
- Kathmandu-Khotang: Weekly;
- Kathmandu-Taplejung: Twice weekly;
- Kathmandu-Khanidanda: Twice weekly;
- Nepalganj-Rukum: Twice weekly;
- Nepalganj-Jumla: Weekly;
- Nepalganj-Bajura.
Philippine Airlines (PAL) announced (19-Sep-2020) it has "stepped up" processing capabilities to address system backlogs and has so far refunded around 80% of PHP15.9 billion (USD328.2 million) in COVID related refund requests. The carrier added it has canceled over 60,000 flights since Mar-2020, affecting over 1.3 million passengers. PAL has since restored approximately 15% of its domestic and global network and intends to increase frequencies and add more services when travel restrictions ease. [more - original PR]
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Find Out MoreAviation returns to the 1930s
Issue 53
- There has been much talk about the post-COVID-19 industry reverting to the profile of the 1970s, but in two very important ways the real timeframe to compare is the 1930s.
Global Outlook 2020: A look into the coming decade, expect massive change
Issue 52
- If the first two decades of the century were transformational for the aviation industry, the 2020s will be revolutionary.