general

US airlines have come a long way since the spring of 2020 when COVID-19 brought the industry to its knees. Yet the pandemic will loom large when big carriers report quarterly earnings starting on Thursday. The latest wave of the health crisis, driven by the highly contagious Omicron coronavirus variant, has caused havoc for a short-staffed industry. A multifold increase in daily sick calls as well as a series of winter storms have led to mass cancellation of flights. Since Christmas Eve, US airlines have canceled more than 30,600 flights, or about 7% of the scheduled total, according to flight-tracking service FlightAware - one of the biggest disruptions in recent years. Until the Omicron variant began to take a toll on airline operations, the quarter through December was shaping up as the industry's strongest period in two years. The promising start prompted Delta and Southwest last month to forecast a profit for the quarter. Both carriers had previously expected to report a loss. Delta is due to report fourth-quarter earnings on Thursday. Analysts on average expect the Atlanta-based carrier to post an adjusted profit of 15 cents a share, according to Refinitiv data. Similarly, Wall Street expects Southwest's adjusted profit to come in at 9 cents a share on Jan. 27. American Airlines Tuesday forecast a smaller-than-expected fall in Q4 revenue. Both American and United Airlines will report their results next week. The virus-induced turmoil has dampened expectations of an upside earnings surprise. Air travel demand tends to cool off in the first quarter, which should ease staffing needs of carriers. Still, their earnings could suffer if they struggle to run a smooth operation. "If planes do not fly, airlines do not generate revenue," said Peter McNally, global sector lead for industrials materials and energy at research firm Third Bridge.<br/>

China has ordered the cancellation of more than two dozen scheduled flights from the United States in recent weeks after numerous passengers tested positive for COVID-19 after arriving in China. China's aviation regulator has mandated the cancellations of eight total scheduled U.S. passenger airline flights for Shanghai under its COVID-19 pandemic rules: four by United Airlines and two each from Delta and American Airlines. Delta said it canceled Detroit to Shanghai flights last Friday and Jan. 14 due to the Chinese rule requiring "all affected carriers", whose passengers test positive for COVID-19, "to cancel inbound service on certain China flights." The Civil Aviation Administration of China (CAAC) has also canceled at least 22 other US bound flights operated by Chinese carriers since December after positive COVID-19 tests, including eight by China Southern Airlines. The United States is facing a surge in infections caused by the highly contagious Omicron variant and on Monday had 132,646 people hospitalized with COVID, surpassing the record of 132,051 set in January 2021. The seven-day average for new cases has doubled in the last 10 days to 704,000. United said it had been forced to cancel flights from San Francisco to Shanghai scheduled for Jan. 15, 19, 22 and 26. The Chicago-based carrier flies from San Francisco to Shanghai four times weekly.<br/>

The US FAA Tuesday said it briefly halted departures at some West Coast airports on Monday around the time of reports that North Korea had launched a ballistic missile. A US official said the FAA paused some West Coast operations for less than 15 minutes "due to initial reports of events in the Indo-Pacific region," without directly tying it to the missile launch. Earlier on Tuesday, the United States condemned North Korea for a ballistic missile launch, saying it violates multiple UN Security Council resolutions and poses a threat to its neighbors and the world. The North American Aerospace Defense Command (NORAD) did not issue any warning following the launch, a spokesperson said. The US Indo-Pacific Command assessed the launch did not pose an immediate threat to US personnel or territory, or US allies. The ground stop occurred around 2:30 p.m. Pacific Time, according to published reports and live air traffic control communications. The FAA added Tuesday it "regularly takes precautionary measures. We are reviewing the process around this ground stop as we do after all such events."<br/>

Heathrow carried fewer passengers in 2021 than in the first year of the pandemic as a wave of cancellations following the emergence of the Omicron coronavirus variant deepened the crisis for aviation. At least 600,000 passengers cancelled trips from Heathrow in December following the discovery of the highly infectious Omicron strain that prompted a return of strict rules on travel, the UK’s largest airport said. Heathrow also warned of “significant doubt” over how quickly demand for travel would resume, and it predicted that the end of all travel and testing rules was years away. In the UK, the government has loosened some of the tough rules brought in when Omicron was first discovered, although all travellers still need to take a coronavirus test after they enter the country. “There are currently travel restrictions, such as testing, on all Heathrow routes — the aviation industry will only fully recover when these are all lifted and there is no risk that they will be reimposed at short notice, a situation which is likely to be years away,” Heathrow chief executive John Holland-Kaye said. In all, 19.4m passengers passed through the airport in 2021, just a quarter of 2019 levels, and lower than the 22.1m in 2020, when numbers were helped by a normal start to the year. Travel to Asia, where many borders are still in effect closed, was the worst hit, down 40 per cent on 2020 levels, while the only routes to experience a rise in traffic were on domestic shuttles around the UK. Several travel companies, including British Airways’ holiday arm and Virgin Atlantic, have reported a boost to ticket sales since the changes to the UK travel rules last week. But Heathrow, which has ceded its crown as Europe’s busiest airport during the crisis, used the notably downbeat commentary to urge the UK Civil Aviation Authority to allow it to raise landing fees on airlines. “The regulator must focus on an outcome that improves service, incentivises growth and maintains affordable private financing,” Holland-Kaye said.<br/>

Boeing said Tuesday that it received 79 new orders for planes in December, capping its best year of sales since 2018 as it tried to move past a prolonged crisis caused by two crashes of the 737 Max jet. The company sold a net 535 new planes last year after factoring in cancellations. That was a big turnaround from 2020, when cancellations exceeded new sales by 471 planes, and just ahead of its chief rival, Airbus, the European aviation giant. But Boeing delivered 340 aircraft to customers, far fewer than Airbus. In addition to the Max crisis, the company’s performance has been dented by quality concerns about its 787 Dreamliner. The concerns forced Boeing to slow production and suspend deliveries of that plane. About two-thirds of the planes sold last year were variants of the Max, which regulators around the world grounded for nearly two years after the crashes, which killed a total of 346 people. Boeing’s December orders included the sale of 50 Max jets to Allegiant Air in what amounted to a big shift by the budget airline, which typically buys used planes. Since the FAA allowed the Max to fly again in late 2020, the plane has been used for just over 300,000 flights carrying paying passengers, with about 475 of the planes in circulation, the company said. Boeing also sold a record 84 freighter planes last year, reflecting strong demand for air cargo. At the start of this year, the company had 4,250 orders in its backlog, about 80 percent of which were for the Max. Airbus, which is based in France, said on Monday that it sold 507 planes last year and delivered more than 600. It has an order backlog of 7,082 planes.<br/>

Spain’s airport operator Aena said on Tuesday that passenger traffic through its airports jumped nearly 58% in 2021 from the previous year but was still less than half the number seen in 2019, before the coronavirus hit. The total number of passengers recorded in 2021 was nearly 120 million, some 43.6% of pre-pandemic levels, Aena said. Foreign travel fared worse than national, the company data showed, with 64.3% fewer international passengers travelling than in 2019 compared with 39.2% fewer domestic travellers. Freight volumes were less severely affected and were just 6.6% below their pre-pandemic levels, thanks in part to cargo being transported on standard passenger aircraft, the company said. In December, Aena handled 12.7m passengers, down 30% from the same month in 2019 but more than 200% up from December 2020. <br/>

A jet emblazoned with the navy and yellow stripes of Indonesian carrier TransNusa took off for a test flight from the Shanghai Pudong International Airport last month. The ARJ21, developed by the state-owned Commercial Aircraft Corp. of China, or COMAC, is the nation's first homegrown passenger plane. It is set to make its long-awaited overseas debut after receiving approval from Indonesia's Transportation Ministry, a significant step in China's jet ambitions. The plane seats from 78 to 90 passengers, and has been flying commercially in China since 2016. But the model has never been used by a carrier outside China. COMAC looks to finally break into overseas markets by leveraging its partnership with compatriot China Aircraft Leasing Group Holdings (CALC). Approved for commercial flights in 2011, TransNusa Aviation used to operate several domestic routes out of El Tari Airport in eastern Indonesia before the coronavirus pandemic forced it to ground planes. The carrier is now preparing to resume service, including using new ARJ21s provided by its controlling shareholder and COMAC strategic partner CALC. CALC invested $28m to obtain an indirect stake of 35.68% in TransNusa in March 2020. It also signed a deal with COMAC last year for the purchase and purchase rights to 60 total ARJ21s, part of which will go to TransNusa. ARJ21s have struggled to find overseas buyers, due to its lack of type certificate in the US and Europe -- the de facto global standard for aviation safety. Because of this, China has promoted its homegrown jet mainly in countries where it holds more clout, such as in Africa and or among participants of Beijing's Belt and Road infrastructure-building initiative. In 2014, Chinese Premier Li Keqiang toured African nations to drum up interest in the ARJ21. The Republic of Congo agreed to buy three jets, granting the model a type certificate in 2016, and sending pilots to train in China in 2018. But global aircraft demand has plunged due to COVID-19. COMAC has not said whether it actually ended up delivering ARJ21s to the Republic of Congo. Story has more.<br/>

Global air-cargo growth slowed sharply in November as demand was hit by supply-chain disruptions, partly because Covid-19 restrictions left workers stuck in quarantine, causing labor shortages. Demand for air freight, measured in cargo ton kilometers, rose 3.7% from the same month in 2019, prior to the pandemic, according to the International Air Transport Association. That’s less than half the 8.2% increase seen in October and also significantly lower than in previous months, IATA said. Global air-cargo growth slowed sharply in November as demand was hit by supply-chain disruptions, partly because Covid-19 restrictions left workers stuck in quarantine, causing labor shortages. Demand for air freight, measured in cargo ton kilometers, rose 3.7% from the same month in 2019, prior to the pandemic, according to the IATA. That’s less than half the 8.2% increase seen in October and also significantly lower than in previous months, IATA said. “The pressures of labor shortages and constraints across the logistics system unexpectedly resulted in lost growth opportunities,” IATA DG Willie Walsh said Tuesday. “Manufacturers, for example, were unable to get vital goods to where they were needed, including PPE,” he said, referring to personal protective equipment, demand for which has jumped due to a surge in Covid cases in many developed economies. <br/>IATA called on governments to swiftly address supply-chain pressures, including taking steps to ensure aircrew operations aren’t hindered by Covid restrictions designed for travelers and providing policy incentives to address labor shortages. <br/>