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JetBlue Airways slashed its 2023 outlook and warned of a potential loss in the current quarter as travelers opt for destinations abroad and the carrier grapples with the end of its partnership with American Airlines in the Northeast. JetBlue forecast adjusted earnings per share for the full year ranging from 5 cents to 40 cents, down from an earlier estimate for per-share earnings of as much as $1. The New York-based carrier said it could post an adjusted loss of as much as 20 cents for the third quarter with revenue down 4% to 8% from the same period last year. The airline’s shares tumbled more than 8% on Tuesday after reporting Q2 results. Here’s how the company performed in the period, compared with Wall Street expectations, according to Refinitiv consensus estimates: Adjusted earnings per share: 45 cents vs. 44 cents expected; Revenue: $2.61b vs. $2.61b expected. JetBlue reported net income of $138m for Q2, or 41 cents a share, compared with a net loss of $188m, or 58 cents a share, a year earlier. Revenue rose 6.7% to $2.61b, roughly in line with analyst estimates. Airline executives this earnings season have noted a shift in demand toward long-haul international travel, which was hurt during the Covid pandemic. That change along with increased capacity is driving down domestic airfare, as travelers opt for new destinations abroad, they said on recent earnings calls. JetBlue’s COO, Joanna Geraghty, said the shift is “pressuring demand for domestic travel during the peak summer travel period. “While we remain on track to deliver a profitable year and record revenue performance, we are taking action, including redeploying capacity to mitigate these current challenges and improve margins,” she said in an earnings release.<br/>

JetBlue Airways slashed its full-year profit forecast over signs of a slowdown in domestic demand, becoming the latest carrier to warn of a shift toward international routes and renewing questions about the durability of a post-pandemic surge in US travel. The company also said Tuesday that it would earn less this quarter than analysts expected, echoing comments from Alaska Air Group Inc. last week that waning demand and fares would hurt near-term results. “The guidance is extremely disappointing,” Helane Becker, a TD Cowen analyst, said in a note about JetBlue. “The current revenue environment where domestic fares are trending lower is driving the big reduction in earnings expectations.” The shift has been unexpectedly rapid for US airlines, after industry leaders for months talked of a boom in demand that was expected to persist even through an uncertain economy. As more countries have relaxed pandemic-era policies, travelers have increasingly opted for overseas flights at the expense of domestic routes. Along with Alaska’s warning, Southwest Airlines Co., the largest carrier focused predominantly on US flights, spooked investors last week after it didn’t say whether it expected an early-summer travel surge to carry into the second half of the year. The carrier does offer some international flights, including routes to London and Paris. While growth there is a positive for JetBlue, “this segment appears unlikely to be large enough to offset the carrier’s domestic challenges,” Stephen Trent, a Citi analyst, said in a report. Adjusted full-year earnings will be 5 cents to 40 cents a share, compared to the carrier’s earlier outlook for 70 cents to $1, JetBlue said Tuesday. Revenue for 2023 will increase as much as 9%, compared with its earlier outlook for a jump in the high single digits to low double digits on a percentage basis. The company expects the wind-down of the Northeast Alliance with American Airlines Group Inc. in the Boston and New York City areas, along with weather and air-traffic control delays in the northeast, to each reduce 2023 profits by 20 to 25 cents a share, with the shift in travel demand to outside of the US accounting for another 15 to 20 cents.<br/>

JetBlue Airways was always going to lose some revenue by ending its alliance with American Airlines in the northeastern US. The hit, disclosed Tuesday, is big and will cut the carrier’s full-year profit per share outlook down by at least a fifth. The New York-based airline expects ending the alliance, known as the “NEA,” will reduce full-year earnings per share, a measure of profits, by $0.20-25 in 2023. To put that in perspective, JetBlue in April forecast full-year earnings per share with the alliance to be $0.70-1.00. Now, it expects the profit metric to be a measly $0.05-0.40 in 2023 after ending the alliance. The air traffic control staffing-related cancellations in New York and the shift in travel patterns to international trips this summer also weigh on the airline’s full-year outlook. “Our decision to terminate the NEA will result in a near-term drag on margins as we lose key codeshare revenue,” JetBlue CEO Robin Hayes said Tuesday. And, in addition to lost revenue, costs related to the alliance will “linger” due to the slow wind-down of the pact, he added. JetBlue and American began unwinding their alliance on July 21 when both carriers stopped taking new bookings under the pact. Many expect a so-called “drain down” end to the partnership where all existing bookings drain out of the system as no new ones are taken. The decision to end the alliance followed a federal judge’s ruling in May that found it to be in violation of U.S. antitrust law and ordered the pact terminated. American, for its part, plans to appeal the ruling. The Fort Worth, Texas-based carrier has said the end of the JetBlue alliance is not “material” on its full-year financial outlook. “As we head into 2024, we will be able to mitigate the impact as we are increasingly able to redeploy capacity currently underperforming in NEA markets to high-margin leisure opportunities throughout our network,” Hayes said on the longer-term outlook. He and other executives were not more specific on where that Boston and New York capacity could go, however, the airline is strong in large leisure markets like Florida and the Caribbean.<br/>

Frontier Airlines on 1 August reports a $71m Q2 profit amid competition from international long-haul flights and ongoing operational difficulties. For comparison, the Denver-based ultra-low cost carrier (ULCC) made a $13m profit during the same period last year. In an observation recently shared by other US carriers, pent-up demand for international travel that “skews very, very heavily to Europe” is cutting into the domestic leisure market, Daniel Shurz, senior vice-president of commercial for Frontier, said during the carrier’s quarterly earnings call. CE Barry Biffle characterises the phenomenon as a “temporary headwind” and expresses confidence that the market will eventually shift back in favour of domestic flying. But the carrier still expects that its Q3 results will be affected by competition from long-haul carriers. The airline generated revenue of $967m, up 6% from $909m in Q2 of 2022, while costs were down 2% year-on-year, to $888m from $902m. Frontier flew 7.6m passengers in the three months ending 31 June, up 17% from last year. Like low-cost carrier peer JetBlue Airways, Frontier is experiencing weather and air traffic control-related operational disruptions. “Weather across the United States, in particular Florida, has produced record air traffic control delay programmes, resulting in the cancellation of 3% more flights in July,” Biffle says. “The biggest challenge is simply that we are seeing more ground-delay programmes and we are seeing them put on much sooner and for much longer duration than we’ve seen in the past,” he continues. Frontier executives say the company is incorporating ATC constraints into its network planning moving forward. “The forecast is that ATC staffing stays low for a few years,” Biffle says. “But we can plan around it much better.” <br/>

Flair Airlines is adding new routes to its flights from Canadian cities. For Manitobans, that means easier access to more destinations. In its announcement Tuesday, the airline noted the addition of 13 new routes as part of its winter schedule. Of the nearly dozen routes, three new flight paths will be going to and from Winnipeg: Las Vegas, Cancun and Orlando-Sanford, Fla. Each flight is expected to depart twice a week from Winnipeg. The low-fare airline will begin flying between Winnipeg and Cancun on Nov. 30. The airlines noted that it had carried 436,112 passengers throughout the month of June and that it “continues to lead with strong on-time performance.” At Tuesday’s press conference, CCO Garth Lund said the reason behind the new routes was the potential the city of Winnipeg offered. “We have expanded here significantly in Winnipeg, with new routes to all three destinations…. This is our very first sun service from the city, so far we’ve just been serving the domestic routes,” said Lund. “I think it’s a market that’s probably underserved by existing carriers.” CEO Stepen Jones, when asked about the airline’s plans to go beyond adding new routes, said Flair Airlines does not work in the business of vacation package deals. “We know what we’re good at, which is operating a great low-cost airline. We’re not a package tour operator,” said Jones. “I think increasingly today people are able to do and put together great deals themselves with all of the internet booking options.” <br/>

Plans by Wizz Air to give its CE an extra two years to unlock a GBP100m bonus have triggered a backlash as the airline battles a depressed share price and the fallout of a regulatory reprimand for its handling of client claims. Proxy advisers Institutional Shareholder Services and Pirc have recommended investors vote against a resolution put forward by the low-cost airline to give József Váradi until 2028 to win the one-off award if Wizz Air’s share price hits GBP120. Shares stood at GBP24 on the eve of the company’s AGM, which is on Wednesday. Pirc, in a report, described the plans as “highly excessive”. ISS has also recommended shareholders reject the re-election of Barry Eccleston as chair of the board’s remuneration committee citing “material concerns” about Wizz’s practices. The company had given Váradi until 2026 to hit the scheme’s target when it first unveiled it two years ago, when its share price was more than GBP40. The price has since fallen, hobbled by Wizz’s unhedged exposure to the price of oil in the wake of Russia’s invasion of Ukraine, and questions over the durability of the current boom in air travel. Wizz Air’s board is joining others including at some US-listed companies in adjusting management incentive plans to account for the coronavirus pandemic and more recently to inflation and energy disruptions. Some of these adjustments occurred despite poor stock performances. The move to increase Váradi’s chances of hitting the payout comes as the airline is dealing with a reputational crisis in the UK for its handling of customer compensation in the wake of last year’s travel disruption. The UK’s aviation regulator last week reprimanded the airline for its “unacceptable” handling of customer compensation claims in the wake of cancelled or delayed flights. The airline has apologised and agreed to revamp its processes. ISS and Pirc have not only advised shareholders to vote against the company’s proposed amendments to the award, but also against its overall pay report and policy. The airline said the changes to the bonus scheme were a response to “the impact of external events on Wizz Air’s growth plans over the past two years”, including the war in Ukraine and supply chain backlogs.<br/>

Estonian carrier Nordic Aviation Group has brought in consultancy firm Knighthood Global to carry out a restructuring, in an attempt to turn around losses after supply chain issues hit its revenues amid rising costs. Knighthood Global, an aviation consultancy chaired by former Etihad Airways Group chief James Hogan, has this month begun a six-month consultancy to review operations and the cost structure at the company. Nordic Aviation Group was established in 2015 after the collapse of Estonian Air, and operates the Nordica brand and regional capacity provider Xfly, which it took full control of in 2020. Long-standing CE Jan Palmer stepped down at the end of last month and former Air Seychelles chief and Etihad executive Remco Althius – who is heading the turnaround team – has been named CE. Nordic Aviation Capital chairman David O’Brock says: ”In the past few months, the economic situation of Nordica has deteriorated sharply, and the company’s revenues have turned out to be considerably lower than expected. In turn, the costs significantly exceed revenues. ”The situation in the aviation market is very difficult – there’s a delay in leased aircraft with which Nordica is supposed to service its clients, there is a deficit in both workforce as well as equipment; the costs of all inputs have risen. All those aspects have turned Nordica’s business on to a path of loss.” It also cites ”an overly optimistic” expansion strategy adopted late last year as negatively affecting the carrier’s financial situation. <br/>

Air Belgium has been holding discussions with a new investor after turning in a full-year loss of E44.6m, nearly four times deeper than the previous deficit. The airline’s auditor, Mazars, points out that cumulative losses have reached E91.6m, and remarks that uncertainty exists which could present “significant doubt” over the company’s ability to continue operating. Air Belgium underwent a capital increase in February last year, and certain shareholders granted loans of E7m to the company in December. The airline says it has entered discussions with new investors for a new capital hike, in order to strengthen equity. These talks resulted in a binding offer by a potential investor on 30 June. Air Belgium believes it can return to profitability in the third quarter of this year as a result of the developments. The carrier operates passenger services to holiday destinations including Mauritius and South Africa. But it discontinued services to Caribbean locations in March this year because they were proving unprofitable, the result of French carriers being “extremely competitive” and offering fares nearly 50% lower. Air Belgium says the decision has freed aircraft capacity to allocate to its charter and wet-lease activities. The carrier generated revenues of E228m last year, up by 74%, through an increase in its passenger and freight transport. But it states that the renewal of its fleet – the introduction of two Airbus A330-200s to replace A340-300s – was delayed by six months, to Q4 2022, by the late arrival of the aircraft. “The company missed the high summer season for [wet-lease],” it adds.<br/>

Jordan's Queen Alia International Airport has reached an agreement with Air Cairo, a unit of Egyptian flag-carrier Egyptair, for the launch of two direct flights per week - Mondays and Thursdays - to the Egyptian beach resort town of Hurghada, said the airport operator, Airport International Group (AIG). The inclusion of Amman-Hurghada flight to QAIA’s expanding destination network emphasizes AIG’s steadfast commitment to adding more direct and affordable routes to popular regional and international cities in order to cater to the demands of both leisure and business travellers, it stated. The inaugural flight was welcomed by representatives from Airport International Group; Air Cairo; its ground handler, Menzies AHS; and its general sales agent, Alpha Tourism. Speaking on the occasion, Airport International Group CEO, Nicolas Claude said: "We are delighted to have received this inaugural flight from Hurghada, launching a direct connection to yet another city in Egypt through Air Cairo all year round."<br/>

MaxAir claims it resumed limited scheduled domestic operations on July 30, 2023, following a two-week grounding due to safety concerns, but is keeping its B737s on the ground. "After conducting a thorough internal investigation, it was brought to our attention that our operations were impacted by adulterated fuel. As a result, we promptly initiated an in-house audit and, in the interest of passenger safety, voluntarily suspended our operations for two days before the intervention of the Nigerian Civil Aviation Authority (NCAA) [on July 13, 2023]. We would like to reassure all our passengers that we have been working diligently to address the safety concerns raised during this suspension period. Our dedicated team has been working around the clock to resolve these issues," the airline said. However, ch-aviation analysis of ADS-B data shows that MaxAir did not reactivate any of its B737s on July 30. As its fleet of five B737-300s and one B737-400s remains grounded, the airline continues to operate two B747-400s and one B777-200 on services connecting Nigeria and Jeddah. On July 30, the airline added Abuja, Lagos, and Gomel as additional stops on its services to its main Hajj/Umrah base at Kano in northern Nigeria. Those sectors, operated under the same flight number as the Jeddah-Nigeria sectors, appear to be its only domestic operations at this point. ADS-B data shows that MaxAir has not resumed any of its scheduled domestic flights operated independently of the Jeddah flights.<br/>

Israeli operator Israir Group has agreed a six-month extension to the deadline for completing negotiations over its proposed acquisition of Czech carrier Smartwings. Israir Group says the 180-day extension – which commences on 4 August – has been agreed with Smartwings shareholders. The negotiations between the parties concern particular aspects of the acquisition, including the date on which Israir will take control and which associate companies it will directly own. Under the most recent plan, Israir will take a majority of Smartwings – rather than the entire share capital – as well as holdings in subsidiaries. These subsidiaries include Czech Airlines, in which Smartwings has a 30% stake. Israir Group points out that the framework plan would require additional due diligence for any entities that are added. The company recently paid a deposit in favour of Chinese firm CITIC Group, one of the shareholders in Smartwings. Israir Group reiterates that it cannot guarantee that the Smartwings transaction will be completed, pointing out that several elements remain uncertain, including the size of the holding that it will acquire.<br/>

Ambitious Indian low-cost carrier Akasa Air has become the first Asia-Pacific operator to take delivery of a higher-density Boeing 737 Max. Akasa signed for the Max 8-200 as part of a wider 72-strong order for 737-8s placed at the 2021 Dubai air show. The carrier took delivery of its first 737 Max just over a year ago ahead of its launch of services last August. The new delivery takes its fleet up to 20 aircraft – the threshold under which Indian carriers are clear to operate international services. Ryanair became the first Max 8-200 operator – a high-density variant that has 197 seats and an extra pair of exit doors – in the summer of 2021. Akasa Air CE Vinay Dube says: ”Today’s landmark addition to our fleet heralds the international chapter of growth in Akasa’s story, and makes us extremely optimistic about our future. Going from zero to 20 aircraft within 12 months is not just an Akasa record but a record that encapsulates the potential of our great country and one for our whole nation to be proud of.” Dube said that Akasa Air is “still on track” to announce a potential order for at least 100 new aircraft – and its first international routes – by the end of the year. Akasa has carried over 4m passengers since launch across a network covering 35 domestic routes connecting 16 Indian cities.<br/>

The CEO of Capital A, the investment arm of the AirAsia Aviation Group, has ruled out a listing Philippines AirAsia on the Philippine Stock Exchange (PSE) in the foreseeable future but says he intends to pump US$1b into the carrier to expand its operations there. CEO Tony Fernandes made the comments while signing a letter of intent (LOI) at a meeting in Malaysia this week with Filipino President Ferdinand Marcos Jr. The LOI addressed Capital A's plans to expand the network and fleet in the Philippines, in addition to building an MRO facility at Cagayan de Oro Laguindingan and ramping up its logistics presence. "We're excited about what we can do in the Philippines," said Fernandes. "Over the next few years, we think we'll invest about US$1b into the Philippines. We have about US$300m so far. We want to grow our aircraft from 23 to 50, including wide-body aircraft. We are just applying for the license now." Prospects of an IPO for Philippines AirAsia have been floating around for several years, egged along by Fernandes raising the idea now and again. However, he now says IPO plans are on hold "for the time being." Instead, Fernandes wanted to discuss bolstering the footprint of Philippines AirAsia at Cebu, a city of almost 1m people. "There is a huge potential in Cebu," he said, noting that the low-cost carrier already flies to Caticlan, Davao, Puerto Princesa, Manila Ninoy Aquino International. Seoul Incheon, Taipei Taoyuan, and Tokyo Narita from the airport. Fernandes said Philippines AirAsia also wanted direct flights to airports in Thailand, Australia, and Indonesia.<br/>