Ontario International Airport stated (14-Jan-2021) its passenger operations "fared significantly better than most airports in California and across the world" in 2020. Domestic passenger numbers decreased 53% year-on-year and international traffic decreased 68%, compared to projections of a global drop in air passenger volumes of 60%. Ontario International Airport Authority CEO Mark Thorpe said: "Despite the challenging passenger numbers for 2020, several airline partners restarted service to popular destinations in the second half of the year and announced additional routes for the first half of 2021". [more - original PR]
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Europe's airlines are operating 2.3 million fewer seats in the week of 11-Jan-2021 compared with the previous week, which is a decline of 22.6%. This is the biggest week-on-week percentage fall since the first wave of the COVID-19 pandemic in Jun-2020.
Europe's capacity this week is down by 70.9% from 2019 levels (the last full year before the crisis), and that is also the biggest drop since Jun-2020.
Moreover, this is easily the biggest fall of all world regions. Middle East capacity is down by 56.6%, Africa by 47.6%, North America by 46.9%, Latin America by 39.8%, and Asia Pacific by 36.7%.
For all regions, apart from the Middle East, these rates are worse than last week. COVID case numbers are rising again in Europe and in much of the rest of the world. Concerns over new strains of the virus are also increasing. Lockdown/travel restrictions have tightened and airlines are scaling back capacity plans.
Until vaccination programmes are more widely available and taken up (and shown to be effective), it seems likely that Europe's airline capacity may slide further.
On 31-Dec-2020 IAG announced that its subsidiary British Airways had received commitments for a GBP 2 billion five-year term loan facility underwritten by a syndicate of banks. On 8-Jan-2021 easyJet announced a GBP1.4 billion five year facility, also underwritten by a syndicate of banks.
The unusual feature in both loans is that they are partially guaranteed by UK Export Finance (UKEF), an arm of the UK government.
Such loan guarantees to UK exporters mark a strategic shift for the UK's export credit agency towards more direct support. In the past, its support has typically been indirect, through guarantees provided to foreign buyers of UK-produced goods and services, with direct support to UK exporters generally focused on smaller businesses.
UKEF has long supported the UK aerospace sector's exports through credit guarantees and loans to foreign airlines buying from UK exporters. Loan guarantees to UK airlines are an innovation, offering BA and easyJet a new way to benefit from indirect state support.
Premium Analysis
India's airline industry could emerge stronger after shake-upSignificant competitive shifts are likely in India’s airline industry as it begins to recover from the COVID-19 crisis. Some major ownership changes could lead to consolidation, and another player could enter the mix with the resurrection of Jet Airways. Meanwhile, the low cost giant IndiGo is increasing its dominance of the local market.
The Indian airline market has always had huge potential for airlines due to its size, but profitability has remained elusive. On the domestic front strong competition and excess capacity growth have hindered financial returns, and on the international side overseas airlines have been more successful than local airlines in tapping into this market.
However, there is a good chance the airline industry will come out of the pandemic in better shape for long term success.
Strong advances into the airline sector by the Tata Group could prompt mergers, and the privatization of Air India should set it up on a better financial footing. There were already some signs that the rapid pace of growth was moderating before the pandemic struck and airlines are likely to be even more cautious, for the immediate future at least.
Qatar Airways does not intend to operate A380s for the foreseeable future: CEO
Air France KLM Martinair Cargo and Kuehne+Nagel launch zero emission airfreight operation
Gevo launches 'Net-Zero' sustainable fuel concept and selects first site
Uni of Melbourne consumer psychologist: Gen Z cares for environment more than other generations
Norway proposes gradual increase in carbon tax rate
2020 was a year in which the development of many (although not all) airports came to a sudden stop, with capex being replaced in the pecking order by opex in most cases – and in many, simply by survival measures.
Along with that everlasting hiatus came a cull of airport investment and privatisation activities, again with a few notable exceptions, mainly in countries where multiple concession procedures were already well advanced.
Over two parts this report details the few deals which were done in 2020, some that were abandoned or suspended, and those airports which have emerged – or may emerge – as future investment opportunities, assuming that the much-desired ‘post COVID recovery period’ actually takes place this year.
It says a lot that the last time airport privatisation was considered in any detail by CAPA (in the Sep-2018 research publication ‘Airport Finance & Privatisation Review 2018’), that report ran to 186 pages. This one will be lucky to make 30.
At a time when the aviation industry is searching for up-to-the-minute market intelligence, news, trend analysis and thought leadership, CAPA - Centre for Aviation delivers a virtual “Summit” on the second Wednesday of each month, jam-packed with information, data and live interviews. CAPA experts, global airline CEOs and other cutting-edge industry leaders present live from a next-gen virtual event platform.
The most recent CAPA Live event was on 13-Jan-2021, and featured the below speakers. Find out more
Jen Barclay
Council Member, Corporate Travel Community (CTC)
Duncan Emerton
Director, Custom Intelligence & Analytics, Informa Pharma Intelligence
Stephen Furlong
Senior Equity Analyst, Davy Research
Dr Brent Coker
Silvia Mosquera
Chief Commercial Officer, Avianca
Recorded at CAPA Live December, 9 Dec 2020
Aviation Insiders Air cargo prepares for vaccine roll-out
As the industry prepares for the arrival of newly announced vaccines for the COVID-19 virus, it is clear the impact for travel and aviation will be significant. Not only is there a rush to understand how these will be distributed around the world in the next 12 months but also an understanding of the industry once it is widely available.
- How do you plan for something that is on a scale like never before?
- What are the expectations around what proportion of distribution will be by air vs other surface modes?
- Refrigeration is one challenge. What are the other special features around distributing the vaccines globally?
- What are the realistic timeframes for delivering across the world?
- There are large rewards for airlines who get it right. How stiff is the competition between airlines/how much coordination or cooperation?
Airports Council International – North America (ACI-NA) forecast (14-Jan-2021) US airports will lose at least USD17 billion between Apr-2021 and Mar-2022 due to a prolonged decline in commercial aviation traffic. The losses are in addition to around USD23 billion that US airports are expected to lose between Mar-2020 and Mar-2021. [more - original PR]
EgyptAir, via its official Facebook account, announced (14-Jan-2021) plans to commence daily Cairo-Doha service on 18-Jan-2021. The airline will operate the service with the "latest types of aircraft". Chairman and CEO Mohamed Roshdy Zakaria said the airline may increase frequency to twice daily depending on demand (Anadolu Agency/Arabian Business/Bloomberg, 13/14-Jan-2021).
Air Senegal and Dakar Blaise Diagne International Airport signed (30-Dec-2020) a MoU on 29-Dec-2020 for the establishment of an aeronautical maintenance centre at the airport. The proposed facility will provide MRO services for local, regional and international customers. [more - original PR - French]
Delta Air Lines announced (14-Jan-2021) it implemented the following measures to mitigate COVID-19 impacts:
- Completed over USD25 billion in financing transactions in 2020, including USD9 billion SkyMiles financing;
- Received USD5.6 billion in payroll support programme proceeds through the CARES Act, with USD4 billion in grant funds, USD1.6 billion in low interest rate loans and issuance of warrants for over 6.7 million shares;
- Restructured aircraft order book, reducing aircraft purchase commitments by USD2 billion in 2020 and USD5 billion through 2022;
- Accelerated fleet simplification strategy with 227 aircraft retirements in 2020, reducing the number of fleet families from 13 to 11. The carrier anticipates the cumulative retirement of around 400 aircraft through 2025, further simplifying fleet families down to nine;
- Reduced total adjusted operating expense by 40%, with a nearly 50% or greater reduction in 2/3/4Q2020. [more - original PR]
All Nippon Airways announced (14-Jan-2021) plans to further suspend 11,361 domestic frequencies between 19-Jan-2021 and 28-Feb-2021. Between 19-Jan-2021 and 31-Jan-2021, the carrier will operate 32% of its planned schedules, and 55% in Feb-2021. [more - original PR - Japanese]
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