US no-frills carrier Frontier Airlines is focusing on growing its network in "high fare" markets like Seattle and Detroit at the expense of its footprint in leisure markets such as Las Vegas and Florida in a bid to lift earnings, its CEO told Reuters. The Denver, Colorado-based ultra-low-cost carrier has failed to report a profit in three of the last four quarters despite a travel boom. Frontier's struggles, along with some other discount carriers, has some analysts raising questions about their business model. Frontier CEO Barry Biffle pinned the blame on excess industry capacity in key leisure markets that has depressed airfares. Frontier's fare revenue per passenger fell 22% in 2023 from the previous year. "What happened last year in Florida was the equivalent of Costco, Sam's Club, Walmart, and Target all opening up on the same block," Biffle told Reuters. Frontier is trying to boost revenue by tapping into growing demand for premium travel, adding more seats with extra legroom and business fares targeted at small companies. Biffle said demand for premium seats has been growing at a double-digit pace and currently accounts for as much as 12% of the seats on Frontier's flights. These products also mark a shift away from the traditional business model of ultra-low-cost carriers which offer a no-frills experience at rock-bottom fares and charge heavily for ancillary services. With consumers more willing to splurge on travel, demand for premium cabin has gone up. While US carriers generally do not break out revenue from different cabins, premium cabins accounted for 39% of Delta Air Lines' passenger revenue last year, up from about 38% in 2022.<br/>
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JetBlue is proving that not even your baggage is safe from dynamic pricing, with the airline rolling out fees that vary depending on the day of departure. The price of a first checked bag now ranges from $35 to $50 under a recently revealed fee structure that depends on a number of factors, including dates JetBlue determines to be peak or off-peak. JetBlue is giving flyers a $10 discount if they add a checked bag during booking and at least 24 hours before check-in, with prices ranging from $35 for off-peak dates and $40 for peak dates. Peak dates encompass about half of the year, including most of the busy summer travel season as well as dates before and after the Thanksgiving and Christmas holidays in 2024. For next year, the dates range from mid-February (Valentine’s Day and President’s Day) and most of April for spring break and Easter. Full dates are listed on its website. If a customer checks a bag within 24 hours of departure, the price jumps to $45 for off-peak dates and an industry high of $50 for peak dates. The first checked bag remains free on its transatlantic flights, except for customers flying on its cheapest fare (Blue Basic), which now costs between $60 to $70. JetBlue said that the cost of “transporting bags has gone up significantly due to increased wages and higher fuel costs, and we remain unprofitable since Covid.” “While we don’t like increasing fees, we are making these adjustments to help get our company back to profitability and cover the increased costs,” the carrier said. JetBlue flyers who have an airline-branded credit card, buy tickets in its premium Mint cabin or fares that include checked bags or have Mosaic status are largely exempt from the price increases. <br/>
WestJet Encore pilots could go on strike as soon as April 17 after they approved a strike mandate Tuesday, increasing the prospect of headwinds after a bumpy year for the airline's owner. Aviators at WestJet’s regional carrier voted 97% in favour of strike authorization after contract talks around pay, schedules and career progression came to a "near standstill," the Air Line Pilots Association said. Some 89% of pilots cast a ballot. “What that signals to me is that our pilots are frustrated," said Carin Kenny, who heads the union’s WestJet Encore contingent. The 355 pilots it represents can walk off the tarmac 72 hours after union leadership files a strike notice. The potential job action or lockout can only take place after a 21-day cooling-off period that started when federal conciliation between the two sides wrapped up last week. WestJet Encore employs the lowest-paid regional pilots in Canada, driving some to seek jobs elsewhere, Kenny said. The pilot shortage that she says persists at Encore makes the leap to WestJet's higher-wage mainline operation a rare feat, since flight crew for its roughly 35 De Havilland Dash 8-400 turboprop planes are needed at the regional service. “Right now, there’s nobody coming in, particularly into the captain ranks," Kenny said. "We're not replacing them, and the captains are generally the ones that have the seniority to move over to WestJet. It's sort of a revolving door of trying to fix that." Encore is recruiting newer pilots, she qualified. "But the problem is that they’re not staying. They're getting their experience and then they're going elsewhere — to Porter or Jazz or Air Canada or Flair. Some are going overseas.”<br/>
The loss of new aircraft to Aer Lingus will force the airline to cut plans to hire 80 new pilots and reduce potential promotions by 40, the airline’s management has said. Aer Lingus is due to meet the Irish Airline Pilots’ Association (Ialpa) trade union on Wednesday in an attempt to end a pay row that the carrier claims ultimately threatens the delivery of six new Airbus jets. The loss of the aircraft would force Aer Lingus to drop plans to hire 80 pilots and cut potential new captains’ posts by 40, Adrian Dunne, its COO says in an internal letter. “This will also have a cascading effect on other associated staff groups,” Dunne says. Ialpa argues that it supports growth but not at the cost of compensating pilots already employed by the airline for the soaring inflation of the last three years, or their efforts in seeing the airline through pandemic travel restrictions. The union has told members that expansion and the acquisition of new aircraft are ultimately matters for management. Pilots are seeking salary increases of more than 20%. They say their wages last rose in 2019, since then the cost of living has ballooned by 19% and that salaries have not kept pace with those of other European airlines. They also point out that rate reductions and the loss of flying allowances meant that many endured pay cuts of 70% when Government pandemic curbs grounded the airline in 2020.<br/>
Icelandair expects its EBIT profit margin to increase to between 2-4% this year on revenues rising to $1.6b after firming its financial guidance for 2024. The carrier had previously stopped short of issuing guidance for the year ahead citing market uncertainty stemming from increased seismic activity in Iceland – media coverage of which it has been highly critical of and blamed for having a compounding impact on travel demand to the country. In disclosing a full-year profit for 2023 at the start of February, Icelandair said only that it expected to generate improved EBIT and net profit in 2024. ”Uncertainty in the operating environment has decreased with diminishing impact of inaccurate international media coverage of the volcanic activity in southwest Iceland on bookings and the conclusion of the collective bargaining agreements in the private sector in Iceland,” the company says in issuing updated guidance on 2 April. Icelandair says that, based on the first two months of 2024 and current bookings, it expects revenues to increase this year to $1.6b. The airline generated turnover of $1.52b in 2023. It expects an EBIT margin in the range of 2-4% this year – an improvement on 1.4% on 2023 – and for net profit to increase over last year. The outlook is based on the carrier lifting capacity 10%, as measured in available seat kilometers (ASKs) – including capacity more than a fifth higher in Q1 compared to 2023.<br/>
Israeli flag-carrier El Al has completed that it will issue 92m shares and an equivalent number of warrants following a public offering. It puts the gross consideration for the allocated shares at around 510m shekels ($139m). El Al adds that the future consideration if all warrants are exercised in full is around 524m shekels. It had divided up the stock into 920,000 packages of 100 shares, and secured early commitments from specific investors to purchase over 687,000 of them – almost 75% of the total. El Al auctioned the shares on 31 March. It says this resulted in 328 orders covering 1.18m packages – including the early investor orders – potentially valued at 655.5m shekels. Controlling shareholder Kanfei Nesharim, it says, ordered packages work 92m shekels. El Al states that 54 orders from specific investors, covering nearly 544,000 packages, and 163 orders from the public, for over 365,000 packages, offered a price higher than the set unit figure. It also partially accepted an investor order for 36,000 packages, allocating nearly 11,000. This brought the total acceptance to 920,000 packages, and other offers were rejected.<br/>
Israir Group has indicated that it is still interested in pursuing Czech carrier Smartwings, but that its previous proposed transaction might need to be amended. The Israeli leisure operator has been involved in drawn-out talks to acquire Smartwings, the ownership of which is split between Czech investors and a Chinese company, CITIC China, linked to the country’s economics ministry. Israir Group had advanced a deposit to CITIC, as part of negotiations to take over its 49.9% shareholding, but this was eventually returned in mid-February, after the talks ended as a result of the geopolitical situation in the Middle East. The carrier believes, however, that the stalled acquisition could be revived, indicating that the Czech shareholders in Smartwings are in the process of purchasing the CITIC stake. Israir Group suggests the Czech shareholders “intend to renew the negotiations” for the sale of part, or all, of their holdings in Smartwings during Q2 of this year. But it adds that, given the changes that have occurred over the duration of the previous negotiations, the transaction could “change accordingly”. Smartwings operates around 45 single-aisle aircraft, wet-leasing a number of them, and has European licences in several countries including Poland and Hungary. Israir Group says that, if a transaction is completed, it does not intend to change the operating model of Smartwings. But it aims to introduce the artificial intelligence-based technology which manages Israir’s commercial aspects.<br/>
Indian airline Vistara, co-owned by Tata Group and Singapore Airlines Ltd., has canceled dozens of flights after pilots called in sick en masse over plans to cut their pay, according to a person familiar with the matter. The airline is changing its pay structure to bring it in line with Air India Ltd., which is in the process of merging with Vistara, said the person, who asked not to be identified because the information isn’t public. That will see pilots’ guaranteed pay reduced to 40 flying hours from 70 hours, the person said. The shortage of staff has seen Vistara cancel more than 85 flights since Monday, according to FlightAware data. It typically operates more than 300 flights a day. “We have had a significant number of flight cancellations and delays in the past few days due to various reasons including crew unavailability,” the company said in a statement. The airline will deploy larger aircraft, like Boeing Co.’s 787 Dreamliner and Airbus SE’s A321neo, on some domestic routes as it combines flights, it said. Vistara expects to return to its regular capacity soon and is offering alternate flights or refunds to travelers affected by cancellations and delays, it said. The issue has drawn the attention of India’s aviation regulator, which has directed Vistara to submit daily reports about flight disruptions and said the airline must comply with requirements to make provisions for passengers whose flights are canceled or delayed. Separately, the Ministry of Civil Aviation said it is monitoring the situation but operations are managed by individual airlines.<br/>
SpiceJet will fully own its six De Havilland Canada Dash 8-400 turboprops formerly leased from Nordic Aviation Capital (NAC), as part of a settlement with the lessor, the latest in a string of resolutions. The airline says it will take over ownership of an additional Dash 8-400 turboprop from NAC, bringing the ex-NAC fleet to six examples. “This agreement also heralds immense long-term savings for SpiceJet, liberating the airline from the obligation of regular monthly rentals for these aircraft,” the low-cost operator states. While SpiceJet does not disclose how much it will save from this agreement, the airline states it will save Rs12.5b ($150m) from a string of major lessor settlements. <br/>The disclosure comes about a week after it settled with Export Development Canada over the ownership of 13 turboprops financed by the agency. That transaction resolved $91m in liabilities, according to SpiceJet. On 7 March, it disclosed the resolution of a $49.8m dispute with Irish lessor Echelon Ireland Madison One, which will see it add two more aircraft to its fleet. It followed similar resolutions with Aercap unit Celestial Aviation and Cross Ocean Partners. “The timely arrival of the Dash 8-400 aircraft aligns with the upcoming summer schedule, enabling the airline to offer seamless connectivity and enhanced services to passengers during peak travel seasons,” says SpiceJet. Still, the carrier remains in a shaky financial state. In early March, two senior executives departed, amid reports the airline was looking to shave a significant number of staff to cut costs. <br/>
Pakistan is putting on the block a stake ranging from 51% to 100% of loss-making national carrier Pakistan International Airlines, the privatisation panel said on Tuesday, as part of reforms urged by the IMF. The disposal of the flag carrier is a step past elected governments have steered away from as likely to be highly unpopular, but progress on the privatisation will help cash-strapped Pakistan pursue further funding talks with the IMF. In a newspaper advertisement, the panel set a deadline of May 3 to receive statements of interest in PIA, which has piled up arrears of hundreds of billions of rupees, and it appointed EY Consulting as the financial adviser for the deal. "The restructured PIA is being offered to potential investors in its 'debt-lite' new structure for a 51%-plus stake," the Privatisation Commission said in a website presentation. The panel aimed to sign a share price deal by June 24, after completing all steps in the transaction, it added. "The restructured PIA provides an opportunity to invest in a a full-service airline." PIA's 23% share of Pakistan's aviation market is the biggest, and the airline could grow further to exceed historic levels of 30%, the panel said. With a fleet of 34 aircraft comprising 17 Airbus A320s, 12 Boeing B777s and 5 ATRs, the airline loses traffic to Middle Eastern carriers, who have a market share of 60%, because of an absence of direct flights to destinations.<br/>