Southwest expects depressed travel amid the nationwide surge in coronavirus cases and typically weak seasonal demand to combine for a difficult start to 2021 for the industry. “January and February are bound to be really rough months -- winter time, high case loads -- and they are seasonally soft anyway,” CEO Gary Kelly said Thursday. “We can get started on the vaccine process and get started on recovery, but we’ve got a long way to go.” Kelly’s grim outlook added to recent warnings from other airlines that a bookings slowdown that started before Thanksgiving has persisted this month. The industry has struggled to stimulate demand that’s been pummeled by the pandemic. Domestic travel remains only about one-third of last year’s levels, and international demand has lingered at about 15% amid quarantines and travel restrictions. While Kelly expects Southwest to lose less money in the fourth quarter than its $1.2b deficit in the third, “the revenue environment is still depressed... You have to be grounded in the reality that this is really difficult, it’s not a quick fix. No one knows exactly how this will play out and when.” Southwest will add more cities to its network beyond the 10 it had already announced for this year and next, Kelly said. By using idled workers and planes parked during low demand, the airline can enter the destinations at relatively low cost, he said.<br/>
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Southwest plans to continue adding new markets to its network after announcing about 10 new destinations during the pandemic, CEO Gary Kelly said on Thursday, a strategy that threatens to put rivals like United Airlines on defense. Low-cost carrier Southwest recently unveiled plans to launch service at Chicago O’Hare and Houston’s George Bush Intercontinental Airport, two United hubs, next year, as well as places like Palm Springs, California, and Sarasota, Florida. On Thursday it added Jackson, Mississippi, to the list. “There’s more coming,” Kelly said. He said the marginal cost of adding a flight is “very modest,” assuming there is demand for the route, given the airline’s current 20% overstaffing and hundreds of parked airplanes as overall travel demand remains depressed. The destinations are intended to be permanent additions to Southwest’s network, he said.<br/>
Mexico’s biggest airline plans to use proceeds from a $173m stock sale to pounce on struggling rivals as it rebounds from an unprecedented travel collapse. Volaris is restoring seating capacity this month to 100% of last year’s levels and targeting a return to profitability by the second quarter of 2021, said CEO Enrique Beltranena. The carrier has also identified a dozen or so Mexican destinations and almost twice as many abroad where it will invest in grabbing market share as demand returns and Covid-19 vaccines take hold. “This was an offensive move,” Beltranena said of the share offering. “There was also a market effect from vaccine news, and a weakened dollar means we’ll be able to maximize those pesos.” The moves herald Volaris’s return to the attack after the coronavirus pandemic gutted travel demand. Unlike their US counterparts, Mexican airlines didn’t receive any government aid. But Volaris slashed fares 30% to coax people onto planes and benefited from a route network geared to the leisure market. That contrasted with the fate of Grupo Aeromexico SAB, which filed for Chapter 11 bankruptcy as its business-travel markets evaporated.<br/>
Ryanair’s debt will triple to E1.2b by the end of its current financial year as it remains under pressure due to the pandemic, according to global ratings agency Standard & Poor’s. It warned that the higher debt – compared to E434m at the end of last March - will leave the carrier’s credit metrics “under considerable pressure” in the next few quarters. However, the ratings agency reaffirmed its BBB rating on Ryanair Holdings, Ryanair DAC as well as the carrier group’s debt instruments, but with a negative outlook. S&P said that a Covid resurgence across Europe had resulted in renewed travel restrictions. “We now expect the recovery of air traffic to be slower than we previously foresaw,” noted analysts at the agency. They said that while vaccinations in the UK have begun, the widespread availability and acceptance of the Covid treatment, which it added is “critical” for restoring air travel demand, “may lag”. Standard & Poor’s pointed out that Ryanair has lowered its traffic assumptions and doesn’t expect to fly more than 38m passengers in the financial year that ends next March.<br/>
Latvian carrier Air Baltic will launch five new routes from its Riga base in the summer season, beginning 28 March. The carrier will begin flights to Manchester in the UK, Bergen and Trondheim in Norway, Yekaterinburg in Russia, and Yerevan in Armenia. Air Baltic plans to serve 65 destinations from Riga next summer, including 17 previously-operated routes that were not served in summer 2020 due to Covid-19-related travel restrictions. “I strongly believe that the demand for flights will begin to grow in the coming months once reliable solutions such as vaccines and wider testing to limit the spread of Covid-19 are introduced,” says Air Baltic CE Martin Gauss. “Although flying will surely be different, we plan that by next summer, with certain restrictions in place, more travel options will be available.”<br/>
Israel's Israir airline quickly announced following US President Donald Trump's announcement of normalization between Israel and Morocco that within a few months, they would begin 20 flights a week between the two countries. Israir CEO Uri Sirkis said that "if all parties are serious, it will be possible to open direct lines within three months." El Al said it was examining the possibility of establishing direct flights between Israel and Morocco after the US announced Thursday that the two countries would normalize relations. Such flights "would be very popular among Israeli clientele," the carrier said. El Al said that the company "will begin operational preparations for operating direct flights to Casablanca, subject to obtaining all the necessary approvals from the various authorities." In addition, Moroccan King Mohammed told Trump by phone on Thursday that Morocco intends to facilitate direct flights for Israeli tourists to and from Morocco, according to a statement from Morocco's royal court. <br/>
People are beginning to get their confidence back in travel and China tourists will be the first to travel again, as the country is almost being cleared of the pandemic, says AirAsia Group CEO Tan Sri Tony Fernandes. The Chinese tourists are important as they make up the largest number of tourists travelling worldwide before the pandemic. “I foresee Chinese tourists flying to Malaysia too. Travellers will prefer shorter flights of about four hours as a start. “AirAsia will benefit because there are many direct flights from Kuala Lumpur to Chinese cities, ” he said Wednesday. China, Thailand and Malaysia were seeing a strong demand for domestic travel, he said. “We think Asia will be in the lead for borders reopening. I think in June of next year, we will begin to see more international travel. By February of next year, we will see domestic travel returning to pre-Covid levels,” he added. He believes the progress in vaccines, new testing methods, medicines, and the knowledge gained from the pandemic meant that there was a beginning to the end. Fernandes said with steps such as wearing masks, the air circulation in the plane and hepa filters made it almost impossible for the virus to spread in a plane. He also said Covid-19 has ensured airlines would work closer with airports, whom he claimed had generally been the problem in trying to make things easier in the past.<br/>
Cebu Pacific Air has highlighted the bewildering array of coronavirus-related protocols as it works get passengers flying again. Cebu Pacific head of commercial Alex Reyes says travellers confront “a very complex situation” when making a decision about flying. As with many airlines, Cebu Pacific has a page listing testing and other requirements for various destinations, but it is extremely difficult to keep it fully updated. “We try to capture all of the current regulations in place now,” he says. “It’s not perfect because the regulations are constantly changing…whether at the country level or even at the city level. They are constantly evolving and changing, as they react to the unique circumstances of their own locality.” More often than not, he says, people still opt to buy a ticket, but there are travellers that are put off by the complexity involved in booking a flight and dealing with the correct testing protocols. “I think the traveling public understands is that it is massively complex right now. Everyone is doing their part to try and make sure that yes, you can fly or no, you cannot fly. Or you get to fly as long as you do X, Y and Z.”<br/>
Virgin Australia’s newly installed CEO has said it will be “irresistible” to fly again, as the airline aims to regain market share under new ownership. Jayne Hrdlicka said Wednesday that the company was well-placed to take a third of the domestic market, reinstating it to pre-Covid levels as travel within the country resumes. “We’re three weeks under new ownership, we’ve got the strongest balance sheet of any airline in the country right now, and by the time we get to January ... we fully intend to be roughly a third of the domestic market. That’s what we were pre-Covid,” Hrdlicka said. Hrdlicka is the former boss of budget carrier Jetstar, a subsidiary of Qantas. She was named as successor to Paul Scurrah in October, as part of a strategy by new owners Bain Capital to save the flailing airline after it went into voluntary administration in April. Her installation coincides with the start of the summer season in Australia, which has largely reopened its domestic borders amid falling coronavirus cases. “It will be irresistible to fly again,” said Hrdlicka. “We’re in a great spot as a country now. We’re able to get out, spend time with other people, and we can travel.” <br/>