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Sun Country Airlines CE Jude Bricker believes higher fares post-Covid are now embedded, even if domestic demand has fallen from the spike seen in 2022. US carriers have in the Q2 reporting season detailed strong demand on longer-haul international routes now that markets have fully reopened post-Covid, with a reduction in the highs reported last summer for domestic flying. Asked about the trend during a Q2 results call on 4 August, Bricker said: “My view is that we observe something and then try to make up a reason why it exists.” While noting transatlantic yields are much higher than they had been, Bricker says its ”a stretch” to say people are flying transatlantic who would otherwise have flown on domestic routes. ”I think more confidently we can say summer of ’22 was an outlier in demand recovery with a lot of recapture from the previous years,” he says. Bricker though believes the airline’s markets are settling into a more consistent revenue environment where unit revenues are around 35%-45% above 2019 levels. “That seems consistent going into all the bookings we’re seeing through the spring of next year,” he says. ”I think what gets me excited is just, it looks like fares have sort of permanently reset into a post-Covid environment, for our network anyway.” Hybrid operator Sun Country – which operates scheduled low-cost, charter and cargo flights across North America and the Caribbean – recorded its highest Q2 revenue of $261m and carried a million scheduled passengers for the first time in a quarter. It posted a sharp jump in operating profit for Q2, from $3.4m to $35.6m.<br/>

Air Montenegro has become the 306th member of the IATA. The carrier has been allocated the designator code “4O”. It marks a significant milestone for the airline, as it will now be able to conclude codeshare agreements and elevate its commercial cooperation with other carriers. Montenegro also uses “4O” as the registration country code prefix on all civilian aircraft. The airline’s newly appointed CEO, Mark Anžue, recently outlined IATA membership as one of the carrier’s top priorities.<br/>

Middle Eastern carriers posted a 0.5% increase in air cargo volumes in June 2023 versus a year ago as global air cargo markets showed the smallest year-over-year contraction in demand since February 2022. This is according to data released by the IATA. The Middle Eastern result was a strong turnaround from the 2.9% year-over-year decline registered in May. Capacity rose 11.1% for the month. Both Middle East-Asia and Middle East-Europe route areas saw annual growth. For the first half of the year, cargo demand was down 5.6% compared to a year ago, with an 11.2% hike in capacity. “We remain hopeful that the difficult trading conditions for air cargo will moderate as inflation eases in major economies. This, in turn, could encourage the central banks to loosen the money supply, which could stimulate greater economic activity,” said Willie Walsh, IATA’s DG. Meanwhile, global demand, measured in cargo tonne-kilometres (CTKs), fell 3.4% in June compared to June 2022 (-3.7% for international operations). For the half year, demand slid 8.1% compared to the January-June period of 2022 (-8.7% for international operations). However, demand in June was only 2.4% below June 2019 levels (pre-pandemic). Capacity, as measured by available cargo tonne-kilometres (ACTKs), rose 9.7% compared to June 2022, which was a slower rate compared to the double-digit growth recorded between March and May. This reflects strategic capacity adjustments airlines are making amid a weakened demand environment. Capacity for the first half of 2023 was up 9.9% compared to a year ago. Capacity is now 3.7% above June 2019 (pre-pandemic) levels. <br/>

Israir Group’s board has approved the introduction of another pair of Airbus A320s to develop the Israeli operator’s fleet. The two aircraft will be dry-leased and arrive in 2024, according to the company, if an agreement is finalised. Israir Group says the decision is part of a management plan to “strengthen the continued growth” of the operator. The additional A320s will be leased for up to eight years and will bring the company’s overall fleet to 11 aircraft. Eight will be directly operated by Israir, with the others wet-leased. Israir Group says it has also authorised the recruitment of extra pilots and cabin crew to meet the operational requirements of an expanded fleet. It states that the leisure company is engaged in a broad development strategy which includes acquiring holdings in companies and hotel real estate as well as the implementation of new digital systems for yield management, reservations and check-in. Israir Group has been holding talks to acquire the Czech carrier Smartwings, which has newly concluded another wet-lease pact with Middle Eastern operator Flydubai. Under the agreement Flydubai is leasing four Boeing 737-800s from the Prague-based operator for the winter 2023-24 season. They will support the Flydubai fleet – which comprises 49 737 Max jets and 30 737-800s – and provide additional capacity during busy periods. Flydubai chief Ghaith Al Ghaith says the wet-lease is the third such agreement it has secured with the Czech airline since 2019.<br/>

Israeli airline Arkia on Monday announced the first-ever direct flight route between Israel and Sri Lanka. The flights, to operate between Ben Gurion International Airport outside Tel Aviv and Bandaranaike International Airport in Sri Lanka's capital Colombo, will be launched on Oct. 31, with two round-trip flights weekly. The flight will take about seven hours in each direction, compared to at least 9.5 hours in the current route, which includes a stopover.<br/>

Jazeera Airways on Monday reported a 26.1% increase in total revenues to KD97.85m ($318.22m) for the first half (H1). Operating profits for the period was KD9.35m and net profit KD6.27m ($20.4m), compared to KD7.38m for the same period last year. Profits for the last year also included a “one-off” gain of KD1.73m from the airline’s sale and lease-back of engines, said a statement. With a strong demand for air travel, Jazeera’s passenger traffic showed a 40.9% increase to 2.1m for the first half of the year. Load factors also increased by 4.1% to reach 78.1% in H1. Marwan Boodai, Chairman, Jazeera Airways, said: “As we share our positive results for the first half of 2023, we remain optimistic and confident of our performance. Demand for travel is high and we are pleased to see that reflected in the increased passenger traffic as well as consistent load factors. We have introduced several new and attractive destinations and look forward to launching others in the next half of the year. While doing so, we continue to focus on maximizing our operational and financial performance through different products, services, and initiatives, in the best interest of all our shareholders, partners and customers.” The Jazeera Airways Board of Directors approved an interim cash dividend of 28 fils per share, a total of KD6.16m for H1 that reflects the company’s strong cash position. <br/>

Pakistan plans to privatise its loss-making national carrier Pakistan International Airlines, the government said on Monday, as the country also seeks to outsource its airport operations in line with an IMF deal. The privatisation decision was taken at a meeting of the Cabinet Committee of Privatisation chaired by Finance Minister Ishaq Dar. The committee "after deliberation decided to include Pakistan International Airlines Co. Ltd in the list of active privatisation projects of the ongoing privatisation programme, following an amendment in the law by the Parliament," a finance ministry statement said. The committee also backed the hiring of a financial adviser to process the transaction of Roosevelt Hotel, New York, an asset of the PIAInvestment Limited, it added. Pakistan hopes to resume PIA flights to Britain in the next three months after services were suspended following a fake pilot scandal. The PIA flights to Europe and the UK have been suspended since 2020 after the European Union's Aviation Safety Agency revoked the national carrier's authorisation to fly to the bloc following the pilot licence scandal. The privatisation of a state-owned enterprise, the PIA, which has accumulated hundreds of billions of rupee in losses and arrears, comes after Pakistan agreed to fiscal discipline plans with the International Monetary Fund.<br/>

While the superpowers and regional actors jostle for influence in the Pacific Ocean, Singapore and an ex-commando trainer may play a key role in changing the tourism landscape there. In September, the new Alii Palau Airlines will connect the aviation hub of Singapore’s Changi Airport to pristine Palau, one of the world’s top diving destinations. Made up of some 340 islands in the Pacific Ocean, the country is a bonanza of back-to-nature attractions. And the network is expected to grow rapidly to include direct links with other Asian cities. “There is not a better transit hub than Changi Airport within Asia. With Singapore’s excellent connectivity, we can tap travellers from Europe, the Middle East, India and even from the United States,” says Ms Akanksha Johri, CFO of Alii Palau Airlines. Alii means “hello” in Palauan. “Transit travellers cannot fault the beauty, ease, safety and quality of Changi,” adds Ms Johri, an India-born Singapore resident who is also known as AJ. Currently, getting to Palau involves tedious connections via Manila, Taipei or Port Moresby. Flights from Tokyo and Incheon involve an expensive and even lengthier transit in Guam, a US territory. Travel time can range from 14 to 24 hours. While there is a seven-hour flight via Manila, this is limited to Tuesdays and Fridays. The flight arrives in Palau at an unearthly 2am, which means a wasted night of accommodation. On the other hand, the upcoming Singapore-to-Palau flight will take less than five hours and arrive in the day, perfect to kick-start a vacation. Besides the Little Red Dot’s aviation link, Alii Palau Airlines has another Singapore story that can be traced to local entrepreneur James S.C.Goh, a former Singapore Armed Forces (SAF) warrant officer and trainer, who has done business in various territories of the Pacific over the past 40 years.<br/>

AirAsia X Bhd’s Q2 2023 earnings are likely to be weaker quarter-on-quarter but its forward booking trends are encouraging. Its 49%-owned Thai AirAsia X (TAAX) is expected to start contributing soon, which will be positive for the PN17 classified airline. Maybank Investment Bank (Maybank IB) Research expects its 2Q23 core net profit to hit about RM30m as compared to 1Q23 earnings of RM42.5m. More importantly, AAX stated demand and fares are rising in 3Q23 on seasonally higher demand. Traditionally the airline carries fewer passengers in 2Q23 due to seasonally lower demand. The research house has forecast AAX’s financial year 2023 (FY23) core net profit to hit record high of RM160.1m driven by high airfares and more aircraft. For FY24, it has forecast the carrier’s core net profit will hit another record high on more aircraft capacity but moderated by lower airfares. The airline is sensitive to fuel price movements and a US$1 (RM4.55) per barrel change in fuel price will impact earnings by RM7m to RM13m. Maybank IB Research said efforts to uplift its PN17 classification are ongoing and more importantly, have not received any negative feedback. It said that AAX qualifies to have its PN17 classification lifted as its shareholders’ equity is already more than RM40m and it has generated three consecutive quarters of profits. AAX hopes to receive a reply by month end on the matter.<br/>