US Department of Transportation (DoT) issued (27-Nov-2020) a final rule that codifies the terms 'unfair' and 'deceptive', for when the DoT utilises its authority to prohibit unfair or deceptive practices by airlines or ticket agents. According to the final rule, a practice is defined as 'unfair' if it causes or is likely to cause substantial injury, which is not reasonably avoidable, and the harm is not outweighed by benefits to consumers or competition. A practice is defined as 'deceptive' if it is likely to mislead a consumer, acting reasonably under the circumstances, with respect to a material matter. The rule is expected to benefit the public and regulated entities by providing greater transparency and predictability, and also codifies the practice of providing airlines and ticketing agents with the opportunity to provide relevant evidence prior to the DoT taking any action on an allegedly unfair or deceptive practice. [more - original PR] [more - original PR - II]
It is time the industry and governments faced up to the fact that restoring the status quo ante is no longer an option.
This was the key takeaway from the introductory presentation at CAPA Live on 11-Nov-2020.
As we look ahead through the next decade, it is time for a reality check - a reality check nine months on from when the horrible COVID-19 disaster beset the world, in turn looking at a new platform for building for the next decade.
That is to say, the new starting point as 2021 beckons.
What will be the platform for the future growth? And what will shape that growth as industry revenues slump by more than half 2019 levels in 2021?
Korean Air’s plan to take over rival Asiana Airlines will cause one of the biggest-ever shakeups in the South Korean airline industry, and the competitive implications will also be felt elsewhere in the Asia-Pacific region and globally.
The purchase is seen by the government and Asiana’s creditors as the best way to ensure the continuation of Asiana’s operations, albeit under another airline’s identity. Asiana was struggling even before COVID-19 emerged, and the onset of the pandemic torpedoed an earlier buyout attempt by another corporation.
Merging the two airlines will reduce competition, but there are very few alternative paths available that would retain Asiana as a strong competitor. There is limited appetite for outside investment into airlines thanks to COVID-19, particularly for carriers that were financially shaky before the pandemic.
Absent this deal the most likely outcome for Asiana was dramatic downsizing or perhaps eventual collapse. The government has obviously decided that reducing competition was preferable to mass job losses.
The government’s support for a merger of this magnitude would have been difficult to imagine before COVID-19. But this is yet more evidence that the pandemic has shaken up industry norms.
Exciting news on COVID-19 front-running vaccines is welcome for the world and the global aviation industry. But there will be a long, complex road ahead in the vaccine rollout phase. For anyone dreaming of a rapid snap-back to ‘2019 normal mode’ for the aviation and travel industries, it’s wake-up time. Recovery will be slow, lumpy and challenging.
CAPA offers a regular and predictable programme in these unpredictable times with CAPA Live, our virtual monthly programme spanning the whole of 2021, delivering great content, news, data and opinions from the leaders of the industry.
Airport privatisation in the U.S. is at a crossroads, and depends on the as-yet unresolved presidential election for its future direction.
But that has not prevented the slightly unusual pairing of one of Europe’s leading airport operators with a U.S. alternative investment fund which specialises in turning around firms that are on their knees; both of them seeking potential deals in North America.
Unusual, but a sign of the times, and possibly the first of many.
How many such deals will actually arise in the U.S. is unclear, but a new market could emerge in Canada, where many regional airports are in clear and present danger.
IATA launches aviation carbon offsets trading platform, with JetBlue completing first trade
IATA calls on governments to support SAF development
Embraer and EDP enter partnership for electric aircraft research
Lufthansa Cargo commits to five sustainability goals under United Nations framework
United Airlines reports consumers more mindful than ever of environmental impacts
Rebuilding traveller confidence…the core of the traveller experience
Join APEX/IFSA CEO Dr. Joe Leader in a one-on-one discussion with APEX VP / Air Canada’s Director of Brand Experience Anton Vidgen as they explore how the airline worked to create a peer-reviewed study COVID-19 likelihood from air travel in only two weeks.
EgyptAir, via its official Twitter account, announced (27-Nov-2020) the activation of its codeshare agreement with Air Cairo. The carriers are looking to establish a network that will provide services to popular local and international destinations. The agreement will include the ability for EgyptAir passengers to travel directly from Sharm El Sheikh to Naples and Bari on Air Cairo from late Dec-2020, with more destinations to be added in the future.
Qantas to outsource ground handling operations at 10 airports, notifies 2000 staff
Qantas Airways notified (30-Nov-2020) approximately 2000 employees that it will move to outsource ground handling operations at 10 airports across Australia. In Aug-2020, the airline announced its reasons for needing to restructure its ground handling operations, and commenced a review of external bids from specialist ground handlers and in-house bids from employees and their representatives. The bids were required to meet the following objectives:
- Reducing the overall cost of ground handling operations, as Qantas anticipated it could save approximately AUD100 million (USD74 million) p/a based on pre-coronavirus levels of operations, through the use of third party providers;
- Avoiding large spending on ground handling equipment such as aircraft tugs and baggage loaders, approximately AUD80 million (USD59.2 million) over five years;
- Better matching ground handling services, and their cost, with fluctuating levels of demand.
The Transport Workers Union (TWU) submitted a bid on behalf of employees in accordance with terms in the enterprise agreement. Teams from some individual airports submitted local proposals. Qantas stated no bids met the objectives. A number of external bidders, some of whom already provide the services at 55 airports across Australia, met all of the objectives, including reducing annual costs by approximately AUD103 million (USD76.3 million). Preferred bidders are being notified on 30-Nov-2020, and subject to consultation and finalising contract terms, transition is intended to occur in 1Q2021. Affected employees will be entitled to a redundancy package and given support to transition to new jobs outside the business. [more - original PR]
Air Canada concluded (27-Nov-2020) a collective agreement amendment with its pilots, represented by the Air Canada Pilots Association, for contractual changes to enable the airline to competitively operate dedicated cargo aircraft. The carrier is finalising plans to convert several of its owned Boeing 767-300ER aircraft to freighters. The aircraft were recently retired from passenger service. The airline operates up to 100 international cargo services per week using modified passenger aircraft. [more - original PR]
ICAO reported (26-Nov-2020) all implementation elements for the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) are now complete and "everything is prepared for the start of its pilot phase in 2021". ICAO also approved the organisations which are now eligible to certify the sustainability and life cycle emissions values of CORSIA eligible fuels. [more - original PR]
IATA reported (27-Nov-2020) the following from its latest industry forecast:
- COVID-19 vaccines will be deployed in 2H2021;
- There will still be vaccine production and distribution challenges and recovery of air travel demand will "take time and be uneven" between emerging and developed markets;
- IATA anticipates airline cash burn until 2022, projecting a further USD75 billion of cash to be burned between 4Q2020 and mid 2021;
- Availability of the vaccine will allow travel demand to rebound only in 2H2020;
- There is a possibility of turning cash positive at aggregate level only in 4Q2021;
- Government support or progress on the use of testing to accelerate market opening will be "critical" for the survival of airlines in many regions over the next six to nine months. [more - original PR]
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