US aviation: will an uptick in demand survive a third wave?
Generally, US airlines are seeing somewhat positive booking trends for the country's upcoming Thanksgiving and Christmas holidays, which is welcome news because demand stalled in Jul-2020 after a spike in the country's COVID-19 cases.
Now the country is entering what some health experts are describing as a third wave of rising cases.
But for now, bookings for the US holiday season appear to be holding steady. That is likely due to a combination of industry efforts to convince the public that air travel is safe, and the reality that the populace is simply getting used to living through a pandemic that shows no signs of slowing down in the immediate future.
TO READ ON, VISIT: US aviation: will an uptick in demand survive a third wave?
Europe's winter traffic <25% of last year. Expect airline bankruptcies
After nine successive weeks of progressively worse year-on-year declines, Europe now has the deepest capacity cut of all world regions.
Seat numbers have been cut by -63.4% in the week commencing 19-Oct-2020. Middle East, previously occupying last place, now moves above Europe with a -62.8% cut, while Africa is -59.1%, Latin America -57.8%, North America -52.1% and Asia Pacific is -39.2%.
Ryanair, Europe's biggest airline, has cut its winter capacity plan from 60% to 40% of 2019 levels. EUROCONTROL DG Eamonn Brennan told CAPA Live October that he expected air traffic movements in Europe at 40% of last year's this winter, which suggests a lower figure for seat capacity (since long haul flights, with more seats, have been cut more heavily than short haul).
The EU's 'traffic light' approach to travel restrictions does not seem likely to alleviate the outlook to any meaningful degree. With Europe's aircraft perhaps only half full on average, passenger numbers could fall short of 25% of prior year traffic, pushing revenue even lower.
Expect European airline bankruptcies by the end of this winter.
TO READ ON, VISIT: Europe's winter traffic <25% of last year. Expect airline bankruptcies
United Airlines pivots to its Houston, Denver airport hubs
US major airlines have undertaken some network shifts during the COVID-19 crisis as international borders have closed and business travel has dried up. United's changes have included less emphasis on its coastal hubs and executing opportunities at interior hubs as leisure passengers are resuming at a faster rate than business customers.
Although US capacity remains down significantly year-on-year, some of the country's operators are making tactical moves in United's hubs, and that new competition is occurring as United and all operators are working to entice passengers to travel, likely through offering lower fares.
No one can predict if the changes in the US domestic market will be permanent, but even in the midst of a full-blown pandemic, competition remains robust.
TO READ ON, VISIT: United Airlines pivots to its Houston, Denver airport hubs
Flybe, do fly, do. But reviving the UK regional airline is risky
With aviation mired in its worst ever crisis, news that Thyme Opco plans to resurrect UK regional airline Flybe in 2021 has attracted attention.
The affiliate of Cyrus Capital (which, alongside Virgin Atlantic and Stobart Group, bought Flybe in 2019) has acquired Flybe's brand, intellectual property, stock and equipment from its administrator. This does not include aircraft, but is understood to include its operating licence, subject to CAA approval, while the position on Flybe's former slots is unclear.
Meanwhile, UK capacity has fallen more heavily than in Europe overall, including its domestic market - the main focus for regional airlines. The UK regional sector is now populated by former Flybe franchisees, who are building commercial partnerships among themselves. Loganair dominates, while Eastern Airways, Blue Islands and Aurigny Air Services also have appreciable seat shares.
Flybe was the biggest airline in the domestic UK regional market, but repeated losses demonstrated a lack of focus. Reinventing it in its previous form would be a mistake, and Thyme Opco plans to start smaller.
However, other than the Flybe brand - whose value is questionable - the proposal seems to offer little advantage over a totally new-start regional airline.
TO READ ON, VISIT: Flybe, do fly, do. But reviving the UK regional airline is risky
Alaska Air: sequential improvements on long road to recovery
Airlines worldwide continue to battle the fallout of the COVID-19 pandemic, but even as demand remains severely depressed, US operators are encouraged by sequential improvement in booking trends.
Alaska Air Group has observed a widening of booking curves and increases in passengers carried on a weekly basis, and it appears that customers are growing increasingly comfortable with air travel, even as the US enters what is being deemed a third wave of rising COVID-19 infections.
Of course, those encouraging signs remain against a backdrop of what is still severely depressed demand, but any positive trends are a welcome respite as airlines work to shore up demand, aiming to push revenue to a point where they can achieve break-even cash burn.
TO READ ON, VISIT: Alaska Air: sequential improvements on long road to recovery
Qatar's Hamad Airport: expansion continues and cargo a focus
Qatar Airways occupied a valuable role in the early months of the pandemic: providing essential cargo services around the world that were not directly connected to its base, while the passenger division also provided more than its fair share, in some cases activating fifth freedom rights that it did not previously use.
Now, and in common with a small but growing number of airports elsewhere, the airline and the airport it operates are looking to the future and are adamant that the Phase II expansion of Doha's Hamad Airport will continue, to help cement its position as a leading global hub in a 'post-COVID' world and with the 2022 World Cup now on the horizon.
TO READ ON, VISIT: Qatar's Hamad Airport: expansion continues and cargo a focus
ACSA's parlous state; prepared to lose airport investments
In a recent CAPA report it was revealed that international services had restarted in South Africa in Oct-2020, and that the virus infection figures were falling from a very high total.
However, the state airport operator is under great pressure as desperate rescue attempts continue to save South African Airways, and with other airlines in difficulties. ACSA (Airports Company South Africa) has historical investments in India, and has had for more than 15 years, and more recently has investments in Brazil.
ACSA wants to try to spend its way out of its malaise with commercial investments at its airports and probably sees the offloading of equity in the two foreign airports as a way to help capitalise that. But is that a case of short term thinking?
TO READ ON, VISIT: ACSA's parlous state; prepared to lose airport investments
Lombok Airport: huge interest in Indonesian airport concession
There are few deals available for the world's big airport operators and investors to aim for. Even so, it comes as a surprise to see so many of them pre-qualifying for a concession on a small airport in Indonesia - even if it is a gateway to an important tourist region.
As is often the case, this transaction has also unearthed a raft of fresh faces, most of them with no prior connection to the air transport business but with specialist skills to offer to established players, within consortiums.
More importantly, it demonstrates there is continuing interest in investing in the business, which is something it needs right now.
TO READ ON, VISIT: Lombok Airport: huge interest in Indonesian airport concession
