Azul announced (13-Aug-2020) the carrier successfully implemented a management plan to confront the COVID-19 pandemic and optimise the carrier for the future, engaging all of its stakeholders including crew members, lessors, aircraft manufacturers, suppliers and the Government of Brazil. Azul conservatively assumed demand would recover to approximately 40% of pre-coronavirus levels by the end of 2020. Azul stated demand recovered faster than expected, and now projects demand to be at 60% by the end of 2020. [more - original PR][more - original PR II]
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US airlines blocking middle seats cite their growing NPS scoresSome US airlines are touting an increase in their net promoter scores (NPS), even as the COVID-19 pandemic has stalled demand and created even more uncertainty over the timing of a recovery.
NPS is essentially a measure of customer satisfaction that emerged in the early 2000s and is based on customers' responses to queries about the likelihood of a customer recommending a company to a friend or relative. Generally, an NPS of 50 or higher is viewed as a favourable result.
Perhaps unsurprisingly, the operators whose NPS scores have risen have opted to continue blocking the middle seat onboard their aircraft. In fact, Southwest has said that it set a quarterly record for its score during 2Q2020.
Additionally, a number of airlines with improving scores are also working to get their cash burn to break-even by the end of 2020, which remains an impressive goal, given unpredictable demand patterns and the onset of the typically weaker travel season. With those market dynamics, it also remains unpredictable whether positive customer sentiment could help those operators to reach their cash burn levels at an accelerated pace.
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The UK's reimposition of quarantine rules on arrivals from Belgium, Andorra and the Bahamas, not long after similar action on Spain, is another reminder of the uncertainties facing airline capacity planners. COVID-19 cases are also increasing elsewhere.
After 10 straight week-on-week increases, European capacity has moved from 14% of 2019 levels, the lowest of any region 10 weeks ago, to 45% this week (commencing 10-Aug-2020), now the third highest.
The year-on-year reduction of -55.0% is now almost level with North America's -53.4%, while Asia Pacific remains in the lead with capacity cut by 42.9% (still the only region at more than 50% of 2019 levels). Latin America has the deepest cut, -74.1%, followed by Africa's -67.6% and the Middle East's -67.3%.
However, the capacity curve in Europe (and most of the other world regions) is showing signs of levelling out, influenced by the uncertainty over travel restrictions. Moreover, capacity plans for the rest of 2020 from leading European airline groups in their recent quarterly reports are more cautious than the schedules they are still filing with OAG.
Copa Airlines is working to resume limited operations before a more pronounced restart of service in Sep-2020. The company has been grounded since Mar-2020 as its home country of Panama, and many other countries in Latin America, have essentially shut off their borders.
By YE2020 Copa could operate up to 40% of the capacity it deployed in 2019, but the company is working to size its fleet to accommodate what could be much lower demand for the next couple of years.
Despite being grounded for five months, Copa remains on solid footing, which is commendable, given that some of its larger peers in Latin America have sought to restructure under Chapter 11 bankruptcy protection.
Premium Analysis
St. Louis Lambert Airport: privatisation now back in playOnly a few months ago it looked as if the ‘great white hope’ for the airport leasing programme in the U.S. had fallen through as, beset by political disagreements, a once supportive mayor pulled the rug on the project. But now a ballot has been secured by supporters of the project which could change the city charter to authorise the lease.
St Louis-Lambert International Airport is the major airport serving the city of St Louis, Missouri and is the busiest in the state. It also serves the surrounding metropolitan area, which includes much of south-eastern Illinois, and it continues to be an important transport facility in the region, with Southwest Airlines the largest operator at the airport.
In Jun-2020 supporters of leasing St. Louis Lambert International Airport (STL) called for a Nov-2020 ballot measure that would change the city charter to authorise a long term public-private partnership (P3) lease of the airport. If passed by the obligatory 60% of those voting, that authorisation would require leasing the airport to private operators if they commit to at least USD1.7 billion.
But the requirement that the successful bidder should find USD1.7 billion, even over a 50-year lease, could prove to be too onerous.
26-Mar-2020
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US White House announced (13-Aug-2020) an agreement between US President Donald Trump, Israel's Prime Minister Benjamin Netanyahu and the UAE's Deputy Supreme Commander Mohammed Bin Zayed to normalise relations between Israel and the UAE. In the coming weeks, Israel and UAE delegations will meet to sign bilateral agreements on matters such as tourism and direct air services. [more - original PR]
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14-Aug-2020 2:03 PM
Qatar Airways claims status as 'the largest international carrier' during COVID-19 crisis
Qatar Airways reported (13-Aug-2020) it was the leading international carrier during the COVID-19 crisis, according to data from IATA for Jun-2020. The carrier carried 8.1% of international passenger traffic and 6.8% of cargo traffic in Jun-2020, with RPKs more than 50% ahead of its closest competitor. Qatar Airways Group CEO Akbar Al Baker stated: "I welcome these independent statistics from IATA which clearly show our airline's resilience during this crisis and unwavering commitment to our passengers and cargo customers to carry them safely and reliably when they need or want to travel and to transport their goods to where they need to be". [more - original PR]
India's Ministry of External Affairs, via its official website, announced (13-Aug-2020) plans to establish "an air travel bubble between India and Maldives to facilitate movement of people from both sides for employment, tourism, medical emergencies etc". The Ministry noted the Maldives will be the first country in the Indian Subcontinent to establish a travel bubble with India and said travel bubble services between the two countries are expected to commence on 18-Aug-2020.
Flight Centre Travel Group (FCTG) MD Graham Turner stated (13-Aug-2020) there are "further challenges to overcome, plus ongoing uncertainty around government COVID-19 objectives and the strategies they will adopt in the near-term to counter the virus' effects". Mr Turner said businesses must know the objectives for coronavirus control and the lifting of restrictions is critical, and the adoption of a 'Learning to live with the virus' approach, coupled with "sensible" health measures "must be priorities to reduce the already dire economic outcomes being experienced". [more - original PR]
Donghai Airlines, via its official Weibo account, announced (12-Aug-2020) it signed a codeshare agreement with China Southern Airlines on 07-Aug-2020, marking the first codeshare cooperation between the airlines. The airlines will codeshare on domestic services from Shenzhen, Nantong and Zhuhai. Donghai Airlines and China Southern plan to strengthen their cooperation to other areas in the future, including cooperation in ticket sales, customer resources and passenger services.
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