unaligned

Southwest said mass flight cancellations and delays that disrupted travel for tens of thousands of customers earlier this month cost it $75 million and that it plans to further trim its schedule. The airline on Thursday cut its December capacity to 92% of what it flew in the same month of 2019, down from a plan to fly 95% of its schedule two years ago. Southwest canceled more than 2,000 flights between Oct. 8 and Oct. 13. It blamed the meltdown on bad weather in Florida and air traffic control issues, which was compounded by staffing shortages. Its closest rivals, including those in Florida, had relatively minimal cancellations. On Oct. 8 in Orlando, one of the airports that Southwest highlighted as an issue in an customer apology, the airline had canceled more than a third of its scheduled departures, while American Airlines canceled 16% of its departures and Spirit Airlines scrapped 6%, according to aviation consulting firm Cirium. The revenue hit, announced in quarterly results, came from flight cancellations, customer refunds and “gestures of goodwill,” Southwest said. CEO Gary Kelly said in an earnings release that the airline’s 2022 schedule “reflects more conservative staffing assumptions, as well, all compared to historical norms.” The airline reported a Q3 profit of $446m on Thursday compared with a $1.6b loss year earlier, thanks to a boost from federal aid and voluntary leaves of absence by employees. Southwest’s revenue rose to $4.68b in the quarter up from $1.79b in Q3 of last year. “Our active (versus inactive) and available staffing fell below plan and, along with other factors, caused us to miss our operational ontime performance targets, and that created additional cost headwinds,” Kelly said. That along with a surge in Covid-19 cases led to a revenue hit of $300m, he said.<br/>

Unlike some of its peers, Alaska Airlines is striking a note of caution on the trajectory of the recovery, predicting that it will be “choppy,” despite reporting its first quarterly profit since the pandemic began. Bookings for travel in Q4 fell off in September and October and only now are beginning to show signs of strength. “The consequences of the Delta variant have not yet dissipated,” CCO Andrew Harrison told analysts during the company’s Q3 earnings call on Thursday. The airline expects the decline in bookings will cost it $200m in Q4. Alaska reported Fourth of July and Labor Day travel almost approaching 2019 levels. But, starting toward the end of July and ramping up through August, Alaska saw demand take a precipitous drop in September and October. Only now, in the last few weeks of October, has the Seattle-based carrier seen demand start to return. When the Delta variant began to spread, Q4 bookings fell to half of 2019 levels. They’ve now recovered to 10 percent below 2019. “We hate that we aren’t getting the fourth quarter we reasonably expected to have thanks to the Delta variant,” added CFO Shane Tackett. “The recovery will be choppy at times as we learn to live with Covid,” CEO Ben Minicucci said. Still, Alaska expects to return to its pre-Covid size by next summer and is poised to grow after that, if demand warrants. The carrier has firm orders for 93 Boeing 737-9s, including 63 due in 2022-23, and has options for a further 52 if needed. Some of these aircraft will be arriving to replace Alaska’s remaining 24 Airbus A320-family fleet, a legacy of its merger with Virgin America. These aircraft, after undergoing engine modifications and maintenance, will be returned to lessors in 2023. To prepare for a choppy recovery, Alaska is focused on keeping costs low. <br/>

Mesa Air Group is looking to enter the drone food delivery business with the purchase of four pilotless aircraft from startup Flirtey. Mesa, a Phoenix-based regional carrier, has an option to buy 500 additional drones, the two companies announced Thursday. Terms weren’t disclosed. The deal marks the first time a US airline has attempted to break into the so-called last-mile delivery business. Autonomous drone delivery appeals to restaurants, pharmacies and retailers as a potentially faster, cheaper way to deliver small parcels than paying drivers to fight through traffic and find parking. The labor shortage currently afflicting the restaurant industry only makes drones more appealing. US approval of routine deliveries by small flying robots remains years away. The FAA has yet to write regulations governing such operations, and Flirtey hasn’t won approval to conduct the kind of robust tests being done by Alphabet’s Wing LLC and United Parcel Service. Amazon.com, which in 2013 said it could start making drone deliveries within four or five years, hasn’t moved beyond the testing phase. Mesa, which operates 600 daily flights with 145 aircraft, has experience navigating FAA regulations, arguably making it a natural partner for a drone startup.<br/>

Mexican ultra-low-cost carrier Volaris reports strong earnings during the third quarter of 2021 as tourists flocked to the country in greater numbers, and more domestic passengers chose to travel by air. The Mexico City-based airline says net profit rose to Ps1.5b ($73.9m) during the three-month period that ended on 30 September, more than doubling its profit of Ps713m in 2019. The carrier says revenue rose 35% over 2019 levels, to Ps12.8b, due to “higher capacity, healthy load factors and stronger unit revenue per passenger”. “We demonstrated, again, Volaris’ agility and ability to adapt to a challenging demand environment by redeploying capacity to the appropriate markets and by stimulating demand,” says chief executive Enrique Beltranena. “Moreover, we delivered strong quarterly results in line with the ambitious goals we had set for the third quarter. Our ultra-low-cost business model has proven resilient in difficult times and continues to have significant room for further growth.”<br/>

Icelandair Group has defied the impact of new coronavirus variants to post a net profit of nearly $20m for Q3. The operator expanded its network in the three months to 30 September to cover 34 destinations – comprising 23 in Europe and 11 in North America. It flew some 700,000 passengers in the quarter, although this figure remains less than half of the 1.5m carried in the pre-crisis Q3 2019. Icelandair Group says the rise of the Delta variant resulted in a “booking trend setback” during August and September. But it adds that the situation has “recovered” and booking have been “strong” in the last few weeks, aided by the opening of transatlantic travel.<br/>

Air Baltic is expecting to take a financial hit from the Latvian government’s decision to impose a fresh month-long Covid-19 lockdown in the country, despite travel restrictions being unaffected by the move. Local media reports cite a meeting between government ministers and Air Baltic management during which it was estimated that the lockdown, beginning on 21 October, would cost the state-owned airline E10m, as fewer people are expected to travel to Latvia. Air Baltic acknowledges that estimated financial impact when presented with it by FlightGlobal, but notes that it only covers the four-week lockdown and that the carrier was already in “crisis mode”. “It will be possible to evaluate the impact of the current situation only in a few weeks’ time,” the Riga-based operator says. Air Baltic further notes that it “regularly reviews its flight schedule and makes the necessary adjustments” and that it will “continue to do it also throughout the upcoming winter season”. It also clarifies that transit passengers will be unaffected by the lockdown because the Latvian state “has not introduced any additional travel restrictions”.<br/>

The CEO of Ryanair has acknowledged the need for ambitious sustainable aviation fuel targets while also expressing concerns about how food prices could be affected. On Wednesday, Michael O’Leary said his firm was investing “a lot of money” with Trinity College Dublin on research into sustainable aviation fuel, or SAF. In April, the two organizations launched a sustainable aviation research center backed by a E1.5m donation from the airline. As well as focusing on SAF, the center will look at noise mapping and zero-carbon propulsion systems for aircraft. Ryanair has itself set a target of powering 12.5% of its flights with SAF by the year 2030. O’Leary said he thought it was “a very ambitious target – I’m not sure we’ll get there.” He went on to articulate his feelings about the wider effects of increasing SAF usage. “I do worry over the longer term, though, on sustainable aviation fuels … what’s that going to do to food prices going forward?” “I think we’re going to reach a point in the next 10 or 20 years where there will be challenges posed not just for the airline industry, but for industry in general, around sustainable aviation fuels where it may have an upward impact on food prices.” Although the European Union Aviation Safety Agency says there’s “not a single internationally agreed definition” of sustainable aviation fuel, the overarching idea is that it can be used to reduce an aircraft’s emissions. <br/>