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While its peers are slowing growth in flying to address rising fuel costs, Southwest has an additional reason: a shortage of workers. The carrier’s second-quarter capacity will decline 7% from 2019 levels “due to challenges with available staffing,” CFO Tammy Romo said Tuesday at a JPMorgan Chase industrial conference. Southwest still hopes to add 8,000 workers in 2022, on the way to hiring 25,000 over three years. The airline has struggled since at least last fall to hire enough staff, after thousands of people retired early or took buyouts when travel demand was nearly wiped out early in the coronavirus pandemic. Southwest has raised wages, added other incentives and adopted new hiring tactics as it faces unprecedented competition, particularly for entry-level workers from companies like Amazon.com and CVS Health Corp. CE Bob Jordan has said his “No. 1 job” is to hire enough people to stabilize the Dallas-based airline’s flight operations. The company had about 55,000 employees at the end of last year. Southwest joined other airlines in tweaking Q1 capacity to gain power over ticket prices, saying Tuesday that it will be down as much as 10% from 2019 on weaker business travel and lingering effects from the omicron coronavirus variant. The company previously projected a decline of 9%.<br/>

As Japan begins to open its borders to foreign travel following a three-month restriction in response to the Omicron variant, Pacific airline companies are preparing to reap the benefits of increased travel activity to and from the East Asian nation. “We're gearing up in anticipation of the Japanese market, which is the most important international market for Hawaii opening up over the next couple of months,” Hawaiian Airlines CEO Peter Ingram said. “We're really monitoring that situation very closely. And that's going to dictate a big part of how our schedules look for the summer.” Travelers from Japan typically are the largest tourism group in Hawaii. In 2019, Hawaii welcomed 1.5m arrivals from Japan, The Hawai‘i Tourism Authority reported. The Japanese government announced that it would increase the limit on new arrivals from 5,000 to 7,000 each day and, beginning April 1, will raise the figure to 10,000. The world’s eleventh-most populous country has been a bit of an outlier in regards to international travel restrictions in the past few months, taking a more aggressive approach to limit potential coronavirus outbreaks. “I think there's the same potential for [increased demand] on the international side, as policy changes are put in place in places like Australia, which we've already seen, and then Japan and Korea, which are starting to relax some of their restrictions for transborder travel,” Ingram said. “And that positions us pretty well.”<br/>

Start-up Norse Atlantic Airways has delayed its planned launch, citing demand uncertainties and rising oil prices caused by the war in Ukraine. “The tragedy unfolding in Ukraine creates uncertainties within international air transport that we take seriously,” CEO and founder Bjørn Tore Larsen said Tuesday. “We are in a unique position as we have not yet started flying, which gives us the advantage to enter the market cautiously in line with demand and quickly adapt to unforeseen events.” Norse Atlantic, which will operate Boeing 787 Dreamliners, said it now plans to start ticket sales in April and commence flights in June. It had previously expected to start ticket sales in late March and start flying in Q2. Its first flights will be between Norway and destinations in the United States. The new airline said it will start flights from Paris and London when the market situation allows. “The current global situation makes it challenging to predict the demand for transatlantic travel. However, we strongly believe that the demand will bounce back with full force because people will want to explore new destinations, visit friends and family and travel for business,” Larsen said. Norse Atlantic also announced that it had secured slots at London Gatwick airport. The airport, operated by Vinci, said Norse Atlantic had acquired two six-weekly slot pairs. Routes are yet to be confirmed but the airport expects service to start in summer 2022. <br/>

Huge pent-up demand for international travel is minimising the impact on bookings from rises in the cost of living, according to Virgin Atlantic. CE Shai Weiss said the airline is experiencing an “unusual situation” as passenger numbers increase following the end of coronavirus restrictions despite spikes in household bills. He said that there is “tremendous pressure in the cost of living in the United Kingdom”. He went on: “Pressures on discretionary spend have an impact in the long run on demand for travel. But what we’re seeing right now is an unusual situation where there is so much pent-up demand for families and businesses to get together.” He continued: “It does not seem to have a dampening effect. I’m not saying we’re immune … but for now we don’t see it.” Weiss revealed that Virgin Atlantic is not planning to return to Gatwick Airport this year after consolidating its London operations at Heathrow due to the virus crisis. He said Heathrow is “where our business hub is, this is where we connect with other carriers, this is where people want to fly”.<br/>

Cash strapped Israeli airline El Al said on Tuesday it signed a non-binding deal for a $130m loan from insurer Phoenix Group. Israel's flag carrier will pay interest of 5.5% to 7% in the loan, in which final details still need to be worked out, it said in a regulatory filing in Tel Aviv. El Al will put up its Matmid frequent flier club as collateral for the loan. Phoenix will have an option to buy 25% of Matmid by the end of 2027. Sales plummeted at El Al amid restrictions imposed during the pandemic to curb the spread of COVID-19. Israel only recently opened its borders to foreign tourists, allowing El Al to narrow its net loss in Q4 to $110m from $140m a year earlier. The loan is part of a government bailout package, in which El Al was forced to lay off one-third if of its workforce and trim its fleet. The state, which gave El Al a $210m aid package last year, also required El Al to inject more cash into the airline, either by selling a stake in Matmid or securing a loan using Matmid as collateral.<br/>

Emirates has set a 23 June date to open daily services to the main Israeli hub at Tel Aviv. Emirates says it will operate Boeing 777-300ERs on the route from Dubai, configured in three classes. The 354-seat twinjets will feature eight suites in first class, 42 lie-flat business-class seats, and 304 seats in the economy cabin. Services to Tel Aviv have been made possible by the United Arab Emirates’ diplomatic recognition agreement with Israel. “In addition to unlocking tremendous pent-up demand, Emirates’ debut into Israel will mean more choice for travellers as they return to the skies,” says Emirates CCO Adnan Kazim. He adds that the route will offer greater opportunity for business travellers to visit Dubai and take advantage of the carrier’s network from the city and its codeshare agreement with Flydubai. “We are confident that our new services will have a positive impact on enhancing Israel’s connectivity to a wealth of global destinations,” he says.<br/>

PAL is working to strengthen its cargo business to take advantage of the e-commerce boom. PAL is studying to convert some of its aircraft to cargo-only airplanes. “We are looking into that. We are exploring,” PAL’s newly appointed President and COO Capt. Stanley K. Ng said, adding that “the e-commerce is getting stronger.” “We will innovate our business by integrating our cargo reservations system with a new cargo mobile app and website and create more cashless payment options and offer last-mile cargo deliveries directly to homes and offices, soon in the Philippines.” PAL will have a one-way cargo flight from Asia to the United States to transport medical supplies. The airline will use the aircraft back as a passenger airplane, Ng also said. PAL is also studying to acquire more aircraft in order to revert to its pre-pandemic size. “It will take about two to three years because we’ve reduced our fleet size,” Ng said. “We need to forecast the demand. If we forecast that the demand will be enough, then that’s the time when we can actually customize,” he added. On the impact of the rising fuel prices on PAL’s operations, he said: “The fuel component is about 50% of our costs… We are actually managing it. We are looking into solutions on how to manage the situation right now.”<br/>