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Air Canada is in talks with Airbus SE about adding longer-distance A321neo jets alongside its fleet of Boeing 737 narrowbodies as travel demand rebounds, people with knowledge of the matter said. The carrier is looking at ordering 10 to 20 aircraft, one of the people said. The negotiations are preliminary and may not lead to a deal, according to the people, who asked not to be named discussing matters that aren’t public. While Air Canada was an established operator of Airbus’s original A320 family, it chose the Boeing Max in the contest between new-generation planes. Adding a small fleet of A321neos would bring a further boost for an Airbus model that can carry 220 people in two classes over longer distances than the rival Max 10. Air Canada is also talking with jet lessors about sourcing the A321s, one of the people said. An Airbus spokeswoman declined to comment on any discussions the company may have with customers. Air Canada referenced a Feb. 18 conference call, when CEO Michael Rousseau discussed fleet renewal initiatives as the airline emerges from the pandemic. Last May, the CEO said that Airbus A321LR, or long range, models “potentially have a place in the Air Canada fleet as we go forward.” Other airlines have also returned to growth mode, looking ahead to fielding newer, less-polluting planes in the post-pandemic era as the drag on demand caused by the coronavirus starts to lift. <br/>

Turkish Airlines is cancelling all flights to Ukraine on February 24 because of the closure of Ukranian air space, the airline said Thursday. The airline's chief executive, Bilal Eksi, made the statement on Twitter.<br/>

Sweden, which has a 22% stake in SAS, said it was examining the Scandinavian carrier’s plans to raise capital, suggesting Stockholm was not yet ready to back the airline with more money. SAS on Tuesday said it aimed to slash annual costs by 7.5b Swedish crowns ($805.5m) across the company over five years, and that it hoped to raise more cash from its main owners Sweden and Denmark following a multi-billion rescue deal in 2020. Swedish Enterprise Minister Karl-Petter Thorwaldsson on Wednesday said it would take time to analyse SAS’ plan. “The company has just presented a comprehensive plan consisting of many different components. We will include both financial and legal advice in the comprehensive analysis that needs to be done,” he said. “As a responsible owner, it is important to make a thorough analysis of the content of the plan before we give further comments,” he said in an email. Nikolaj Wammen, Finance Minister in Denmark, which also holds a 22% stake in SAS, on Tuesday told Reuters the government was monitoring SAS’ developments closely and declined to comment further. Loss-making SAS had already been struggling for years in the face of growing competition from low-cost carriers when the pandemic and travel restrictions slammed the aviation industry.<br/>

SAS risks a credit downgrade from Standard & Poor’s if the Scandinavian airline follows through with plans announced this week to convert debt into equity. This week, the Stockholm-based airline said it planned a number of measures, including a rights offering and swapping hybrid and unsecured debt for equity, to raise capital and lower its debt levels, while repositioning the business coming out of the Covid-19 pandemic. Such debt restructuring measures are typically viewed by the ratings agency in the same way as a default, because they usually result in creditors receiving riskier assets like stock instead of being fully repaid in cash. “We could downgrade SAS if we view an imminent credit or payment crisis, or that the airline participates in transactions considered akin to default,” S&P said in an April 2021 report warning of a liquidity crisis over the following 12 months. S&P declined to comment beyond the April report. It currently rates SAS at CCC, three steps above default, indicating vulnerability to non-payment. Moody’s Investors Service meanwhile rates the company Caa1, three steps above the category that is likely in or very near default. Both of these ratings are on negative outlook. SAS said it doesn’t comment on credit rating changes. <br/>

Lufthansa has told pilots that it could launch a new airline to save on costs if negotiations on a new union contract collapse, according to people familiar with the matter. While it could lead to walkouts, such a move would be aimed at increasing Lufthansa’s leverage after months of talks that have failed to produce an agreement on pay, said the people, who asked not to be identified discussing confidential matters. A fresh operating certificate would enable the German company to dismiss pilots, cabin crew and ground staff working under the old structure, then offer to rehire them with less costly contracts. Lufthansa, which required billions in state bailout money to survive the coronavirus pandemic, is seeking ways to boost profitability and help repay debts racked up during the crisis. There’s a long history of airlines creating lower-cost units to hire new staff on significantly lower pay than incumbents. British Airways, a subsidiary of IAG, is launching a new unit this summer based at London Gatwick airport, and paying staff less than the main airline. Germany’s Sueddeutsche Zeitung reported earlier that Lufthansa is considering founding a new carrier to cut personnel costs, without saying where it got the information. A move by Lufthansa to establish a new carrier would likely spark an expensive strike by its powerful pilot union. For years, Lufthansa has struggled with relatively high personnel costs, a consequence of Germany’s stringent labor laws and powerful unions. The company last year launched a new carrier, Eurowings Discover, that hired staff on significantly lower pay than they’d receive at the group’s other airlines.<br/>

Swiss will apply a new kind of aerodynamic coating on some long-haul aircraft that promises to lower frictional resistance and thereby increase fuel efficiency and reduce carbon emissions. The Zurich-based carrier says on 23 February that it will use the “Aeroshark” riblet film, developed by Lufthansa Technik and German chemicals company BASF, on its 12-strong Boeing 777-300ER fleet. “Reducing its environmental footprint is one of the greatest challenges ahead for the aviation sector, and being carbon-neutral in our flying by 2050 is a key Swiss strategic objective,” says chief executive Dieter Vranckx. “In becoming the world’s first passenger airline to use the innovative Aeroshark technology, as we’ll be doing with our Boeing 777 fleet, we’ll now be making a further substantial contribution to ensuring more sustainable travel.” Swiss follows Lufthansa Cargo, which said last May that it would use the film on its 777 freighter fleet beginning this year. “The film features millions of ‘riblets’ – small protrusions just 50 micrometres high – which replicate the highly hydrodynamic skin of sharks, and thus reduces an aircraft’s aerodynamic drag wherever it is applied,” Swiss says. Each aircraft will require 950sq m (10,226sq ft) of the film, which is applied to the fuselage and the engine nacelles. It promises to improve the jet’s aerodynamics, and reduce the 777 fleet’s fuel consumption by 6m litres and carbon dioxide emissions by 15,200 tonnes, or 1.1% each year. Swiss says that is equal to the amount of emissions from 87 long-haul flights between Zurich and Mumbai. Swiss will apply the film to the aircraft from mid-2022, the company says. The airline is aiming to cut its 2019 net CO2 emissions by half by 2030, and making its entire business and operations carbon-neutral by 2050.<br/>

Air New Zealand has announced a statutory loss before taxation of $376m for the six-month period ending December 31, 2021. The airline said operating revenue was nine percent lower than the prior period, driven by a 26% decline in passenger revenue due to the COVID-19 alert level restrictions and Auckland lockdown. Cargo revenue increased 29% on the same period last year to $482m, supported by Government freight support schemes. Fuel costs increased 14% to $174m for the half year, with the increasing cost of fuel expected to impact the second half. The total amount Air NZ has drawn down from its loan facility with the Government is $760m as at February 23. The airline has liquidity of $1.4b as at February 23, made up of approximately $170m of cash and $1.24b of available funds under the remaining Crown facility and redeemable shares. Air NZ says steps to recapitalise the balance sheet are underway, including an equity capital raise that is intended to be launched by the end of March 2022. CEO Greg Foran says limited international travel on top of local lockdowns in the first half of the financial year had a huge impact on this interim result. "The airline has typically derived two-thirds of its revenue from its international passenger network and much of that was effectively grounded for the majority of the first half." The airline predicts a loss before taxation and other significant items exceeding $800m for the full year. Despite the remaining uncertainty around future travel demand and ongoing impacts on financial performance, Foran can see light at the end of the tunnel. "We're bringing back approximately 250 cabin crew and pilots and have reanimated one of our Boeing 777-300s to do some of the cargo heavy lifting. Looking further out to the end of this calendar year, we will be ramping up more passenger flights to North America and looking forward to starting up our direct service to New York City."<br/>