star

Thousands of travellers were stranded in Bangkok Thursday when THAI canceled more than a dozen flights to and from Europe after Pakistan closed its airspace amid rising tensions with India. THAI flights resumed by Thursday afternoon after the airline secured permission to reroute flights over Chinese airspace, but it could take up to 3 days to clear a backlog of 3,000 passengers, an airline official said. Flights to and from London, Munich, Paris, Brussels, Milan, Vienna, Stockholm, Zurich, Copenhagen, Oslo, Frankfurt and Rome had been scheduled to fly over Pakistani airspace Thursday, THAI said. Most of the airline's European flights leave after midnight and the cancellations left scores of passengers stuck at Suvarnabhumi. <br/>

Air NZ expects its full fleet of Boeing 787-9s to be in service by the start of September as it eyes an end to the troubles caused by issues with the type's Rolls-Royce Trent 1000 engines. CE Christopher Luxon says that in the 6 months to December, up to 5 of the 787s were grounded due to ongoing maintenance issues with the engines, but that the situation has been improving. “Currently we have 2 aircraft on the ground and from the first of April we expect that to be 1, and by the first of September we expect that to be fully resolved,” he says. Luxon and CFO Jeff McDowall note that the disruption caused by the 787’s engine issues contributed to a number of indirect costs that the airline had to bear during the first half. These mostly related to having to re-accommodate passengers due to the groundings causing a shortage of aircraft. <br/>

Air NZ is adjusting its business plan in response to cooling demand and falling profits, and more changes could follow when the carrier completes a review of its operations. The airline reported a net profit of NZ$152m (US$104m) for the 6 months through Dec 31, its fiscal first half, down 34% from $232m for the same period a year earlier. The carrier “cannot ignore signals” that demand growth is slowing from its previous high levels, CE Christopher Luxon said. In an investor presentation accompanying the results announcement, “weaker than expected” forward bookings for its fiscal second half indicate “a shift in demand dynamics,” the airline said. This is most visible in the domestic and inbound tourism markets, and the carrier is “closely monitoring” other markets. <br/>

Star Alliance is thinking beyond air. It is exploring technologies that will allow frequent flyers to redeem miles not just for flights and upgrades but home stays, tours and activities, even underground train tickets. This is big deal for airlines, where it is still not even possible for passengers to use miles accrued from one Star Alliance airline to redeem a bottle of whiskey on another when shopping inflight. That, too, is being explored. All this is part of Star Alliance’s digital transformation which began February last year when it partnered with Accenture to create a ‘digital services’ platform. Once a digital service is available on the platform, member airlines can decide individually if they want to make it available to customers. <br/>

Air Canada has set higher financial expectations through 2021 as its international network expands, targeting a 19-22% annual modified profit margin through the period and an annual return on invested capital of 16-20%. These expectations announced Thursday are more ambitious than those the airline presented to investors in 2017, which included a 13-16% return on invested capital from 2018 to 2020 and a modified annual margin of 17-20% through 2020. The airline also projects US$4b-$4.5b cumulative free cash flow from 2019 until 2021, excluding net proceeds related to closing the Aeroplan transaction. That’s up from the $2b-$3b cumulative free cash flow originally projected from 2018 to 2020. The airline targeted a leverage ratio of 1.2 by the end of 2019, consistent with the earlier goal for a 1.2 ratio by the end of 2020. <br/>

SAS has reported a SEK576m (US$64m) Q1 net loss for the November-January period, widened from a SEK291m loss it posted in the year-ago period. The carrier said underlying reasons for the deepened loss—for the Q1 of its 2018-19 financial year—included a weak Swedish kroner against the US dollar, rising fuel prices, and economic and political uncertainty such as Brexit. SAS president and CE Rickard Gustafson said it is “no surprise that the Q1 is the weakest quarter of the year and we have reported a significant loss.” Operating revenue for the quarter rose 6.2% to SEK9.5b, while expenses increased 9.7% to SEK8.9b. During Q1, the airline’s efficiency program generated a positive earnings impact of approximately SEK200m. <br/>