Southwest CEO Gary Kelly says he understands why he just lost Warren Buffett as one of the airline's biggest shareholders. But he doesn't agree with Buffett's bearish view on the future of the US airline industry. Buffett disclosed Saturday that Berkshire Hathaway recently sold its entire stake in Southwest and the three other major US airlines because he believes it will take years for air travel to recover. "I don't think anybody knows, and certainly that's not an unreasonable view to take," Kelly said. "It's a pessimistic one. I am far more optimistic." Berkshire also disclosed a nearly $50b loss in Q1, greatly due to the drop in the value of its investments. All the airlines have reported losses in Q1 so far. Southwest reported its first quarterly operating loss in 11 years as demand for air travel plunged. All of the airlines are expecting even deeper losses in the current quarter. Kelly said he doesn't believe the industry is facing a prolonged decline in the demand for air travel. "I believe this too shall pass," he said. "You go back to the Spanish Flu in 1918, it was followed by the roaring 20's. Life will get back to normal. It is a question of how long that is going to take." Kelly said business and international travel will take longer to return to normal compared to domestic leisure travel. <br/>
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Frontier Airlines’ latest effort to drum up extra business during the coronavirus pandemic never got off the ground. The carrier Wednesday night pulled the plug on its “more room” sales offer, where a passenger could buy an empty middle seat on flights for $39 and up. The deal was heavily criticized, including by Congressional leaders. In a letter addressed to US Representatives, Frontier CEO Barry Biffle said his airline would rescind the more room pricing policy that was set to take effect on Frontier flights starting Friday. The letter was apparently in response to correspondence from the leaders earlier in the day. Biffle has been making the media rounds to promote the new program this week. “We recognize the concerns raised that we are profiting from safety and this was never our intent. We simply wanted to provide our customers with an option for more space,” Biffle wrote. “We will leave the seats blocked which were associated with this product and honor purchases made by all customers who bought the product up until now.” The “more room” initiative drew immediate criticism on social media this week with some referring to it as a cash grab playing on people’s fears of the deadly COVID-19 virus. <br/>
El Al extended its suspension of scheduled commercial flights until May 30 but would continue to use its aircraft for cargo and occasional passenger flights. While Israel has started to ease up tight lockdown restrictions, there has been no change in policy requiring incoming passengers to enter quarantine and a prohibition on foreigners entering the country remains, the airline said. “In light of the low demand for passenger flights, the company has decided to extend the temporary cessation of flights,” it in a regulatory filing in Tel Aviv. The carrier in late March halted flights due to a drop in demand in the wake of the coronavirus outbreak, as well as concerns for the health of passengers and crew and the need to reduce expenses until the crisis ends. Flights had been suspended until May 2 and then extended until May 9, although it operates special rescue flights to various destinations and continues cargo flights. About 5,500 of the carrier’s 6,000 workers are on unpaid leave until May 31.<br/>
Wizz Air Holdings is plotting a major expansion at London Gatwick airport as rival carriers pull back, paving the way for the Hungarian low-cost carrier to emerge from the travel downturn with a bigger presence in the world’s busiest city for passenger traffic. Wizz, Europe’s third-biggest discounter, is keen to expand its UK business beyond a base at Luton, north of London, if it can get hold of the operating slots, Chief Executive Officer Jozsef Varadi said Wednesday in a phone interview. He said he’d like to turn Gatwick, located south of the capital city, into its second British hub. Wizz, which has signaled it will press its growth plans during the current slump, has risen quickly in Eastern Europe but lags far behind Ryanair and EasyJet in the UK and much of western Europe. “We’ve been looking at Gatwick for a long time and we absolutely have an ambition to build a base there,” Varadi said.<br/>
Australian Consumer and Competition Commissions chairman Rod Sims says he is watching Qantas "extraordinarily closely" to ensure its promised cut-price post-pandemic airfares don't crush Virgin Australia as it tries to relaunch under new owners. Qantas boss Alan Joyce Tuesday said that its budget arm Jetstar might cut Sydney to Melbourne fares to as low as $19 to stimulate demand after COVID-19 travel restrictions lift. The prospect of ultra-cheap airfares comes as potential bidders weigh up rescue packages for Virgin Australia, which went into voluntary administration a fortnight ago. Sims said Qantas appeared to be thinking about low airfares in the context of a new Virgin emerging, which illustrated the benefits for consumers of having two airlines competing with each other. "Secondly, it means we the ACCC need to be watching very carefully as this new player emerges to make sure that its ability to be an effective competitor is not killed at birth," he said. "We just need to make sure there’s no conduct that has the purpose or effect of squashing a competitor." The competition watchdog's relatively new powers in section 46 of the Competition and Consumer Act means it can pursue companies for behaviour which has the purpose, effect or likely effect of substantially lessening competition. <br/>
Spirit Airlines Wednesday posted a quarterly loss and said it was in discussions with Airbus to defer 2020 and 2021 jet deliveries and related pre-delivery payments in an effort to reduce its aircraft capital spending by $185m. Spirit said it has cut its capacity by about 75% in April and 95% in May and June and will be evaluating whether to take advantage of US government aid in the coming months.<br/>