April 29, 2020

DOT Exemption Bonus Round: Delta is Back

1 Delta is back to play the bonus round of Exemption Roulette with a request to the DOT to allow the airline to suspend service to nine destinations in its network. In the filing, Delta uses a novel approach by saying that it wants to reduce its footprint of stations in order to minimize the coronavirus risk to “as few airport workers as possible… while continuing to ensure reasonable access to its domestic network for all communities that Delta currently serves.”

The nine destinations that Delta is proposing to cut all have another airport served by Delta within one hour’s drive time.  With that knowledge, Delta makes the point that it will not be depriving any area of air service but instead will be slightly inconveniencing some travelers who might need to drive up to an hour to the alternate airport. The nine airports are: Brunswick, GA (BQK), Flint, MI (FNT), Hilton Head, SC (HHH), Kalamazoo, MI (AZO), Lansing, MI (LAN), Melbourne, FL (MLB), Peoria, IL (PIA), Pocatello, ID (PIH), and Worcester, MA (ORH).

Each of those nine airports, in addition to having another Delta station within an hours drive saw load factors last week ranging from 4% (Worcester, a city that JetBlue already tried and failed to get exempted) to 13% (Melbourne), indicating that the number of passengers that would be inconvenienced is very small to begin with.

Delta concludes its filing by poking at United which made a similar request last week for six small airports that was denied by DOT.  Delta oh-so-nobly differentiates its filing by saying that United wanted to cut service for economic reasons but Delta is doing so for health reasons. If that works, then Delta also has a bridge refinery it would lke to sell.


Please Sir, Can I Have Some More?  JetBlue Comes Back to DOT

2 JetBlue has also returned to the DOT table looking to gain more exemptions for service while maintaining its service levels under the CARES Act.  JetBlue is taking a tact similar to that of Spirit, looking to reduce its need to serve major hub airports that are dominated by one or two other airlines where JetBlue has minimal presence.

The 17 airports JetBlue is looking to suspend service from are: Atlanta (ATL), Charlotte (CLT), Chicago/O’Hare (ORD), Dallas/Ft. Worth (DFW), Denver (DEN), Detroit (DTW), Houston/Bush (IAH), Las Vegas (LAS), Minneapolis (MSP), Nashville (BNA), Philadelphia (PHL), Phoenix (PHX), Portland (PDX), San Diego (SAN), Seattle (SEA), and Tampa (TPA).


Port Authority to Restrict Access at NYC Airports

3 In an effort to reduce the number of people inside the airport, the Port Authority of New York and New Jersey will restrict access at LaGuardia (LGA), Kennedy (JFK) and Newark (EWR) airports until the state of emergency is lifted in New York and New Jersey.

Access to the airport will be limited to those with a boarding pass, airport ID or proof that the individual is a vendor, contractor or otherwise has legitimate business to conduct in the airport. It’s unknown if there will be similar restrictions on the legions of rats that call the airports home.


Norwegian Expects Its Long-Haul Operation to Disappear Until April 2021

4 In a presentation to investors to drum up cash to keep the airline afloat, Norwegian said it doesn’t expect to return to pre-virus flying levels until 2022.

The airline expects it will be able to fly short-haul Nordic routes only in 2020, with a limited return to medium- and long-haul flying in April 2021. Norwegian says it will prioritize long-haul destinations based on profitability with London/Gatwick (LGW), New York/JFK and Los Angeles (LAX) likely to be amongst the first to return. It’s safe to assume Italy and Spain will be at the bottom of the list, just above North Korea.

Norwegian currently only has enough cash to last through the middle of May and is looking for a $261 million loan from the Norwegian government to remain solvent. It is also putting its hopes on a big debt restructuring that it hopes to woo bondholders to approve next week.


The Bright Side: Southwest CEO Believes Air Travel has ‘Bottomed Out’

5 As bad as everything seems right now for airlines, the good news is that Southwest CEO Gary Kelly believes that we’ve seen the worst of it, and demand is finally on the upswing.  

Southwest’s cash flow hit rock bottom the first week of April and Kelly says that it’s shown gradual improvement for the second and third week of the month.  An improvement from near-zero to barely anything isn’t anything to jump up and down about, but it’s better than nothing. While there’s still a long, long way to go, it does provide a basis of encouragement that the worst is behind us for domestic travel…. until the next wave hits.

On its most recent earnings call, Southwest also revealed it expects to fill only 6% of seats in April, with that number going as high as 10% for May.  This compares to Southwest’s 86% of seats that were filled in the second quarter of 2019.  


Airline Potpourri

  • Alaska will use some of its 737-900 passenger aircraft in cargo operations. Cargo will be placed under seats, in overhead compartments, and in closets on-board the aircraft. Cargo that includes Copper River salmon for the upcoming season will be given extra space in pilots’ bellies.
  • Austrian has extended its suspension of flight operations through May 31. Sister airlines Lufthansa and SWISS will keep their repatriation flight schedules through then as well.
  • JetSuite filed for bankruptcy on Tuesday, with its largest creditor, amazingly, being Netflix with over $900,000 owed. That’s a whole lot of Netflix. So far, its affiliate JSX seems unaffected.
  • Lufthansa will require passengers to wear a mask on board through August 31. With this new rule, it will no longer be blocking middle seats in economy and premium economy.
  • Uzbekistan Airlines has extended its suspension of service through June 30.

Andrew’s Moment of Levity

When you get stressed or feel down, just remember, someone out there is quarantined with your ex.