US ultra-low-cost carrier (ULCC) Frontier Airlines expects its new network strategy focused on overlooked markets with less competition from its rivals will start paying off soon. Parent company Frontier Group Holdings said during its quarterly earnings call on 2 May that it expects capacity to grow 12-14% over the second quarter of last year – and to post a similar full-year capacity increase over 2023. ”Pursuant to the shift to high-fare, underserved markets, a significant portion of scheduled capacity in the second quarter of 2024 is allocated to new markets which the company believes will drive higher RASM [revenue per available seat mile] as they mature,” Frontier says. The Denver-based discounter indicated earlier this year that, due to the over-saturation of US leisure destinations, it was trimming unprofitable summertime flying to such core markets as Las Vegas and Orlando. Frontier say it is making “significant progress to simplify its network and allocate growth to high-fare and underserved” visiting friends and relatives markets, which will eventually drive higher margins. “We expect results in the balance of the year to build on the revenue and network enhancements we’re implementing, most notably the transition to underserved, high-fare markets, revenue diversification and cost savings, including benefits related to network simplification,” says chief executive Barry Biffle. Frontier plans to increase its network’s proportion of out-and-back flights to 80% in time for peak summer air travel, seeking operational simplicity and to reduce the risk of domino-effect disruptions. The company touts its “better-than-expected cost and revenue performance” during the first quarter. It reports a loss of $26m on the first three months of 2024, compared with a $13m loss the prior-year period. Revenue increased 2%, year on year, to $865m from $848m.<br/>
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Chilean carrier LATAM Airlines hiked its earnings forecasts for this year on Thursday, backed by a strong first-quarter performance and increased demand. LATAM sees its revenues ranging from $12.8b to $13.1b for the year, up from a previous estimate of $12.4b to $12.8b. Meanwhile, its adjusted EBITDAR - earnings before interest, tax, depreciation, amortization and restructuring or rent costs - for the year were estimated at a record $2.75b to $3.0b, up 10% to 22% from 2023. The previous estimate in December had been for between $2.6b and $2.9b. In a presentation to journalists, LATAM executives cited boosted operations, cost-containment measures and an improved capital structure as the reasoning behind the fresh EBITDAR outlook. In the first quarter, LATAM brought in $796m in EBITDAR. Net profit more than doubled in the quarter to $258m, from revenues up 18% to $3.32b. Passenger traffic, as measured by available seat kilometers (ASK), grew 17.5% in the quarter, topping the pre-pandemic capacity logged in 2019. LATAM said the increase came as it moved a record number of passengers in the quarter and upped its occupation levels on flights. Meanwhile, LATAM's passenger costs were steady in the quarter at 4.3 cents per ASK, the carrier said, while generating $137m in cash.<br/>
The United States on Wednesday issued hundreds of fresh sanctions targeting Russia over the war in Ukraine in action that took aim at Moscow's circumvention of Western measures, including through China. The U.S. Treasury Department imposed sanctions on nearly 200 targets and the State Department designated more than 80 in one of the most wide-ranging actions against Chinese companies so far in Washington's sanctions aimed at Russia. The U.S. imposed sanctions on 20 companies based in China and Hong Kong, following repeated warnings from Washington about China's support for Russia's military, including during recent trips by Treasury Secretary Janet Yellen and U.S. Secretary of State Antony Blinken to the Asian country. China's support for Russia is one of the many issues threatening to sour the recent improvement in relations between the world's biggest economies. Washington also imposed sanctions on Russian air carrier Pobeda, a subsidiary of Russian airline Aeroflot. The U.S. Commerce Department has previously added more than 200 Boeing and Airbus airplanes operated by Russian airlines to an export control list as part of the Biden administration's sanctions over the Russian invasion of Ukraine.<br/>
Pilot unions at Aer Lingus owner International Airlines’ Group (IAG) have vowed to work together to bolster their conditions across the multinational business in a deal signed on Thursday. The move comes as the Irish Airline Pilots’ Association (Ialpa) and Aer Lingus await a Labour Court recommendation on a pay dispute following hearings that adjourned this week. Along with the Irish carrier, London-listed IAG owns British Airways and Spanish airlines Iberia and Vueling. Ialpa, Spanish union Sepla and the British Airline Pilot’s Association (BALPA) signed a declaration of intent to defend and bolster all group pilots’ working conditions. The statement signed by union chiefs at Sepla’s offices says they “do not support” the allocation of new aircraft to any group airline in exchange for pilots agreeing to conditions imposed by their employer. Aer Lingus this week conceded that IAG was likely to allocate a new Airbus jet to one of its other airlines as the dispute between the Irish carrier and its pilots remained unresolved. Luis Gallego, IAG chief executive, warned earlier this year that the group could not expand Aer Lingus’ fleet as planned if it had to agree to the 20%-plus increases sought by pilots as this would hit returns on investment. Ialpa is seeking increases to compensate members for inflation.<br/>
Middle Eastern carrier Oman Air has named Con Korfiatis, the head of Saudi budget airline Flyadeal, as its CE. Korfiatis will succeed acting chief Nasser Al Salmi, the airline’s chief operating officer, who stepped up to the top post last year in place of Abdulaziz Al Raisi. The appointment is crucial to Oman Air, which has embarked on a restructuring effort to turn around heavy losses. Korfiatis will be tasked with steering the transformation programme. Omani transport minister Saeed Al Mawali says Korfiatis is a “perfect fit” for the leadership role at the carrier. “We have full confidence in [his] ability to steer the company towards sustainable, long-term success while guiding it through the challenges and opportunities that lie ahead,” he adds. Korfiatis has previously founded a number of start-up initiatives and held several senior roles in the fields of finance, strategy and operations within a number of airlines including Jetstar Asia, Citilink, Qantas and Viva Macau.<br/>
Go Airlines India, which has been grounded for a year after filing for insolvency, risks having its entire fleet of aircraft repossessed in a further blow to any chances of a revival for the Indian carrier. India’s regulator, the Directorate General of Civil Aviation, deregistered the company’s fleet of 54 leased Airbus SE A320neo aircraft, according to people familiar with the matter, who asked not to be identified because the matter is private. The move, which is in line with a court directive given last week, opens the door for companies that leased planes to Go Airlines — which re-branded as Go First in 2021 — to now take them back. The carrier didn’t own a single aircraft of its own, instead leasing aircraft from 14 companies including SMBC Aviation Capital Ltd. and GY Aviation Lease 1722 Co. Go Airlines’ insolvency resolution professional and a spokesperson for the Ministry of Civil Aviation didn’t respond to requests for comment. Losing access to its entire fleet pushes the carrier even closer to the brink of collapse. Its chief executive officer quit at the end of November, saying he couldn’t get the airline flying again and staff were looking for jobs elsewhere because they hadn’t been paid for months. If Go ultimately fails, it would be the 12th Indian airline to do so this century. “This substantially reduces the chances of revival,” said Bishwajit Dubey, a former partner at Cyril Amarchand Mangaldas & Co. who has extensively worked on insolvency cases. As well as taking possession of the aircraft, lessors could lease them to another airline or even negotiate a fresh deal with Go Airlines if it ever emerges from insolvency, he said. The company’s flying license is the only remaining thing of value it possesses, said Nitin Sarin, a manging partner at Sarin & Co. and who represented the carrier’s lessors in court. Liquidation is the most probable outcome unless it manages a “miracle” in completing its resolution process — which would include inviting and accepting bids from prospective buyers — by June, he said. <br/>
Tycoon Arif Habib and Gerry’s Group are among the initial ten bidders seeking to purchase a majority stake in state-owned Pakistan International Airlines. Habib and Gerry’s Managing Director Akram Wali Muhammad confirmed that they’ve submitted bids for the carrier in messages sent to Bloomberg. Three private-sector airlines operating on domestic routes have also bid, privatization minister Abdul Aleem Khan said in a briefing earlier without disclosing the exact names. The planned stake sale is a step toward the government’s commitment to undertake economic reforms in exchange for a bailout from the International Monetary Fund. Prime Minister Shehbaz Sharif, who returned to power in March, has said it’s no longer sustainable to prop up the money-losing carrier each year with taxpayer funds. Pakistan’s state-owned airline has become more attractive after the government said it would not pass on roughly three quarters of the carrier’s debt to the eventual buyer, said Khan. Pakistan is looking to sell between 51% and 100% of the carrier, which has failed to turn an annual profit in nearly two decades. The nation’s privatization commission has extended the deadline to submit letters of intent until May 18. Potential suitors had requested more time for due diligence and to coordinate with international companies on potential bids, Khan said.<br/>