A surge in merger and acquisition activity in the aviation sector are expected in the months ahead and more airline collapses are likely. That is among the findings contained in PwC's Aviation Industry Outlook for 2021, which also envisages that airlines will need ongoing access to emergency liquidity, including government support, for the foreseeable future. The report finds that extensive government support already provided, estimated to be at least $180b, has played a major role in saving a number of weak carriers from collapse. However, in doing so "a long-term un-levelling of the playing field" has been introduced, the report concludes. According to the data analysis firm, Cirium, more than 40 airlines went out of business in 2020. That the figure would have been much higher without the injection of government support which has kept many airlines afloat. The PwC report says record numbers of investors are "lining up" in anticipation of finding real value in distressed aviation-related transactions, arguably for the first time in over a decade. "Capital should be available in scale as the recovery trajectory becomes better defined," the report concludes.<br/>
general
US President-elect Joe Biden’s spokeswoman on Monday quickly dismissed Donald Trump’s announcement that a Covid-19 ban on travellers arriving from much of Europe and Brazil would be lifted, underlining the US’ fractious transition of power. “On the advice of our medical team, the Administration does not intend to lift these restrictions on 1/26,” tweeted Jen Psaki, Biden’s press secretary. “In fact, we plan to strengthen public health measures around international travel in order to further mitigate the spread of Covid-19.”<br/>Biden will be inaugurated on Wednesday. Trump, who is due to leave office, announced minutes earlier that restrictions imposed on people travelling from Europe and Brazil will be lifted from January 26, provided people have a recent negative Covid-19 test result. “This action is the best way to continue protecting Americans from Covid-19 while enabling travel to resume safely,” Trump said released by the White House. Travel bans remain in place for China and Iran. The CDC announced last Tuesday that all air passengers bound for the US are required to test negative for Covid-19 within three days of their departure.<br/>The test policy will also take effect on January 26, and expands on a previous testing rule that targeted Britain and came into effect in December, following the emergence of a coronavirus variant believed to be more transmissible.<br/>
The pandemic has ended a plucky attempt to break the stranglehold that carriers like British Airways and Delta have on the transatlantic market. Norwegian Air’s decision to cease long-haul services to ensure its survival won’t surprise anyone familiar with its years-long struggle to make money. But this may not be the end of attempts to carry passengers cheaply between Europe and the US on modern fuel-efficient aircraft. BA parent, IAG, responded to Norwegian’s rise by offering its own lower-cost long-haul unit, Level. It even briefly considered acquiring Norwegian, which shows what a threat the Nordic disruptor posed. Such competition benefited passengers, though alas not Norwegian’s bottom line. Most will conclude Norwegian’s vision was doomed to fail: The economics of flying route lengths of more than seven hours are very different to short-haul, where Southwest Airlines Co., EasyJet Plc and Ryanair Holdings Plc long ago proved the low-cost approach can be very lucrative. Still, I wouldn’t bet on this being the final chapter in the sorry history of bargain-fare, long-haul flying. So long as there are risk-taking entrepreneurs with access to capital and aircraft, the dream of cheap intercontinental travel will never be completely extinguished. And though it sounds strange, the post-Covid period might be as good a time as any to start an airline. “There is no such thing as long-haul, low-cost; just long-haul, low-price,” quips Bernstein Research’s Daniel Roeska. Story has more.<br/>
Prospects for Europe’s airlines in the first quarter of 2021 have deteriorated notably in recent weeks, but bank HSBC expects intra-European and possibly transatlantic passenger numbers to bounce back for the summer season. In a note to clients entitled “A year of two halves, hopefully”, HSBC reduces its performance estimates for the sector over the full year 2021 because of the current lockdowns across the continent. The bank now expects just 10% of 2020’s capacity in the first quarter, down from a 20% projection previously. But it believes that the rollout of a vaccine in throughout the period “offers a chance” for a rapid return to flying as the year progresses. “The near-term outlook, for the March 2021 quarter, for aviation has got worse,” writes HSBC’s head of European transport equity research Andrew Lobbenberg. “The prospect of society emerging from the pandemic in H2 21 improves. Correspondingly, the prospect of a partial summer flying season in 2021, whilst not guaranteed, continues to look quite good.” HSBC downgrades its ratings for SAS and AENA and lowers its estimates for full year 2021 across much of the sector, although for subsequent years its projections “are cut by less or even raised”. Any return to flying will be dependent on the development of health protocols such as pre- and post-flight testing and quarantine decision, it notes, something that could be aided by the development of health passports to register test results and vaccine status.<br/>
All UK travel corridors, which allow arrivals from some countries to avoid having to quarantine, have now closed. Travellers arriving in the UK, whether by boat, train or plane, also have to show proof of a negative Covid-19 test to be allowed entry. The test must be taken in the 72 hours before travelling and anyone arriving without one faces a fine of up to GBP500. All passengers will still be required to quarantine for up to 10 days. The isolation period can be cut short with a negative test after five days in England, but it does not apply in Scotland, Wales or Northern Ireland. The government has said the travel corridor closure will be in force until at least 15 February. Under the new rules, travellers arriving from the Falklands, St Helena and Ascension Islands are exempt. Those arriving from some Caribbean islands are exempt until 04:00 GMT on Thursday 21 January.<br/>
London Heathrow lost its top spot among European airports last year as travel curbs tied to the coronavirus pandemic kept passengers away. Heathrow’s 73% drop left it trailing both Istanbul’s new hub, which attracted 23.4m travelers in its first full calendar year of operation, and Paris Charles de Gaulle, which retained the No. 2 spot. All of Europe’s airport’s suffered, with 23m passengers equating to a rank outside the top 30 in any normal year. A push to replace country-specific entry curbs with pre-flight testing has unraveled with the rise of more-infectious strains of the virus. Britain’s quarantine policy and a shifting list of exempted countries have also discouraged travel to London. The government last week tightened up further, halting flights from South America and extending self-isolation to all arrivals. While most West European airports -- from Frankfurt to Amsterdam to Barcelona -- saw traffic sink 70% or more last year, Istanbul’s two biggest hubs and Moscow Sheremetyevo reported smaller declines, thus rising in the ranks. Traffic at Moscow’s two smaller airports has not yet been reported. New national clampdowns mean travel will remain difficult for some time. <br/>
A man who was “too scared” to fly home because of Covid-19 has been found living in Chicago’s O’Hare International Airport. Aditya Singh, 36, spent three months hiding out before being arrested at the weekend. The Calfornian was reportedly squatting in the security zone of O’Hare International – wearing an staff ID badge that he had allegedly found, and surviving on food hand-outs from fellow travellers. Singh arrived at the airport on a flight from Los Angeles on October 19, the Chicago Tribune reports. However, he never left. He was arrested on Saturday, after two United Airlines employees noticed that his identification was false – and then alerted the police. He appeared in court on Sunday, charged with misdemeanor theft and criminal trespass. He had hidden in the airport because he was “scared to go home due to Covid,” said Assistant State’s Attorney, Kathleen Hagerty, who explained that Singh had received food from other passengers. It is not known why Singh, who lives in the Los Angeles suburb of Orange, had travelled to Chicago. The court heard that he is unemployed, and has no criminal background.<br/>
Several more airlines have received approval from the Civil Aviation Authority of Singapore to stop over at Changi Airport with passengers who are en route to other destinations. At least three airlines - Lufthansa, Swiss International Air Lines and Garuda Indonesia - resumed ferrying transit passengers this month. On its website, Singapore Airlines says it has agreements with Air France and KLM Royal Dutch Airlines to let their customers transit through Changi from approved cities to destinations that SIA and SilkAir fly to. The move marks another small step forward in reviving the Republic's air hub, which has been battered by travel restrictions amid the Covid-19 pandemic. While Singapore has reopened its borders to transit passenger traffic since June last year, only the three airlines under the SIA Group were allowed to ferry such passengers until end-November last year. Local budget carrier Jetstar Asia received approval to resume flying in transit passengers in December.<br/>
The number of passengers flying with Russian airlines in 2020 fell 46% year on year, the aviation authority said on Monday, reflecting the impact of the coronavirus pandemic. Some 69.17m passengers flew with Russian airlines, federal aviation agency Rosaviatsiya said, citing preliminary data. Russia grounded international flights due to the coronavirus outbreak last year but operations were later resumed on several routes. In December, Russia airlines carried more than 5m passengers, which was down 43% from a year earlier, Rosaviatsiya said.<br/>