SAS CEO Rickard Gustafson stated (03-Dec-2020) there were signs demand recovery during the summer schedule, however as EU and North American coronavirus cases accelerated in Sep-2020 and Oct-2020, renewed travel restrictions reversed a positive trajectory. At Q4FY2020, approximately 40% of SAS' pre-coronavirus markets were under travel restrictions, growing to over 65% by the end of the quarter. To adapt to the recent developments, the carrier reduced offered seat capacity to well below 40% by the end of Oct-2020. [more - original PR]
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 time frame to compare is the 1930s. There are important lessons to be learned from industry and government behaviour 90 years ago.
First of all, 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 and people were unwilling to embark on such a dangerous mode of transportation.
- How has this previously unimagined level of disruption impacted the aviation industry?
- What impact has the closure of borders had on international recovery?
- How will the industry encourage passengers back into the air?
- Business and corporate travel will be subdued by a combination of weak economic conditions, employer concerns over duty of care, what impact will this have?
- The industry profile will change drastically, affected by the reduction in high yield business travel, as airlines disappear or reinvent themselves and as opportunistic new entrants appear. What will it look like?
- Airports will need to adapt, expensively and innovatively: Are they prepared?
- Are environmental issues still being addressed and can it impact regrowth?
- The industry will resort to a greater reliance on loyalty programmes, IT solutions and E-commerce – and partnerships.
Royal Air Maroc, via its official website, stated (02-Dec-2020) it will offer free COVID-19 medical insurance for eligible passengers for up to 31 days after departure. The scheme includes coverage for up to EUR150,000 in medical expenses for passengers diagnosed with COVID-19 while travelling with the airline. Passengers required to quarantine will also be eligible to claim up to EUR100 per day for the period under the scheme.
Norwegian Air Shuttle, in a stock exchange filing, announced (03-Dec-2020) a proposed plan to secure current and future travellers and potentially enable the company to exit its Irish Examinership process through measures to "right-size the company operations at a level of proven profitability". Details include:
- Measures involve reducing the fleet size and reconstructing the company's balance sheet to attract new investors and potentially support from Norway's Government;
- The company will perform a "reverse split" of shares in the ratio of 100:1 and reduce the nominal value of each share from NOK10 (EUR0.94) to NOK0.01 (EUR0.001);
- The company will undertake a debt to equity conversion, which will include aircraft financing or leasing liabilities, vendor and supplier liabilities, bond obligations and potentially arrangements that will require Norwegian to only pay for aircraft on a power by the hour basis until 2022;
- The final step in this process will be an equity issue of up to NOK4 billion (EUR376 million) in common stock and/or hybrid equity instruments to existing, new and other potential stakeholders;
- Should these actions be successful, shareholders and debtors will become "meaningful minority shareholders" of the company.
Norwegian will hold an extraordinary general meeting on 17-Dec-2020.
Kenya's Tourism Research Institute reported (03-Dec-2020) international visitor arrivals decreased 72% year-on-year to 470,971 for Jan-2020 to Oct-2020. Performance in Jan/Feb-2020 was comparable to 2019, but this was followed by a "drastic decline" in Mar-2020 and a "total collapse" from Apr-2020 to Jul-2020. Gradual growth in arrivals was recorded since the reopening of Kenya's borders and airspace in Aug-2020. The top source markets for Jan-2020 to Oct-2020 were as follows:
Civil Aviation Authority of Bangladesh (CAAB), via its official website, announced (30-Nov-2020) airlines are permitted to resume scheduled international services from Bahrain, China, Saudi Arabia, Kuwait, Malaysia, the Maldives, Oman, Qatar, Sri Lanka, Singapore, Turkey, the UAE and the UK to Bangladesh, commencing 05-Dec-2020.
Perth Airport welcomed (30-Nov-2020) Australia's Federal Government approval for 'Perth's New Runway' project. Perth Airport submitted a comprehensive and detailed draft Major Development Plan (MDP) to the Federal Government for approval, detailing engagement with airline partners, stakeholders and all levels of government on a range of issues including aviation operations, airspace management and flight corridors, aircraft noise, heritage and environmental issues. The project will see approximately AUD520 million (USD386.8 million) of investment with almost 500 jobs created during construction. The new runway will underpin the airport's future operations, with expectations it will inject approximately AUD2 billion (USD1.5 billion) into the tourism sector in its first two decades of operation. Perth Airport CEO Kevin Brown said the airport was committed to ensuring the Munday Swamp heritage site remains protected and accessible to current and future generations of Noongar traditional custodians, and "significantly modified the design of the runway to ensure the Munday Swamp indigenous heritage site will be protected". [more - original PR]
Want More News Like This?
- If the first two decades of the century were transformational for the aviation industry, the 2020s will be revolutionary.