Delta May Trim August Capacity Over Weakness Concerns
1 The US has seen steady growth in passenger numbers since April, but there are now concerns that the momentum may not continue as hoped, according to Delta CEO Ed Bastian.
Edward Russell at TPG reported that in a virtual town hall this morning, Bastian said the airline’s August schedule was likely to “come down a little bit” from what’s out for sale now. He specifically mentioned parts of Florida as being a concern. When asked to define “a little bit,” he responded “you know, I mean, a smidge, just a skosh.” (Ok, maybe he didn’t say that last part.) This comes at a time when COVID-19 cases are surging throughout the South and Southwest, and robust rebound hopes may be feeling just a little too aggressive.
Delta has been planning substantial growth in August. According to Diio by Cirium, Delta scheduled 40,292 flights in June; 68,315 flights in July; and 107,138 flights in August. As a point of comparison, last August Delta scheduled 180,046 flights.
Delta was already publishing a conservative schedule, especially compared to American which has gotten aggressive as of late. Even if Delta is talking about minor trimming, this is still notable and concerning for the industry.
Hawai’i to Allow Negative COVID Testees to Skip Quarantine
2 The state of Hawai’i is eager to welcome tourists — and their dollars — back to the islands as soon as it’s safe to do so. In a step in that direction, Governor David Ige announced visitors who show a negative test — dated within 72 hours before arrival — upon deplaning will not be subject to the state’s 14-day quarantine beginning August 1. They will, however, be directed to the airport gift shop where they will be expected to spend large amounts of money to help fill the state’s budget deficit.
Potential visitors must receive a PCR test (nasal swab) at a location approved by the Hawai‘i State Department of Health. It is the responsibility of the visitor to take the test and pay for it. The state will not provide tests at its airports for visitors on arrival.
Despite this update, temperature checks will continue at airports across the state. Anyone with a temperature higher than 100.4 degrees or who is experiencing other symptoms will be required to undergo a secondary screening at the airport with trained healthcare staff. Those who are not will be flashed a shaka and pointed to the nearest beach.
This news has been welcomed by Hawaiian Airlines which has been in a near-slumber during the quarantine. The airline has already begun ramping up with Honolulu to Portland, OR returning July 1. In addition the following routes will restart with single daily service on July 15:
- Honolulu – Sacramento
- Honolulu – San Diego
- Kahului – Hilo
- Kahului – Kona
- Kahului – Lihu’e
AA Pilots Want Government to Pay for Middle Seats
3 The Allied Pilots Association (APA), representing the 15,000 pilots of American Airlines, introduced a concept labeled “Safe Essential Air Transportation Seating (SEATS),” to help the industry recover while maintaining customer confidence to encourage bookings.
The SEATS concept would have the government purchase enough seats on every flight so that no passengers would have to sit next to each other. Airlines certainly wouldn’t reject this plan, but some said they’d prefer if the government just filled up a giant dump truck with money and handed over the keys.
The price paid by the government would be based on industry average costs from 2019, keeping any one airline from garnering an economic advantage. The APA says that, as immunity to the virus rises, the number of empty seats needed to be purchased by the government would fall. Of course, we’d have to figure out how to know if someone is actually immune or not for that to be possible.
Qantas Announces Post-Outbreak Recovery Plan
4 Qantas released the second draft of its post-virus recovery plan on Thursday. The first draft was one sheet of paper that said “more people flying on airplanes,” but the airline’s board rejected it as not detailed enough.
In this second, more thorough draft, Qantas detailed its plan to reduce its costs by A$15 billion over the next three years and to ground 100 planes for at least the next 12 months. Qantas is also going to raise A$1.9 billion in equity to accelerate the airline’s recovery. The airline will also be trimming its subsidiary Jetstar Asia’s fleet.
Of Qantas’s 29,000 staff, approximately 8,000 are expected to have returned to work by the end of July this year. It’s anticipated that this will increase to around 15,000 by the end 2020, and could reach as high of 21,000 by June 2022.
Lufthansa Shareholders Easily Approve Bailout
5 Despite earlier concerns that it wouldn’t be able to get the necessary shareholder approvals in time, Deutsche Lufthansa AG shareholders today overwhelmingly supported the plan to accept money from the German state.
There were 39,000 shareholders present representing 39% of the share capital. Of those, 98% voted to approve the plan, easily surpassing the two-thirds requirement.
Though shareholders may approve, Lufthansa’s competitors do not. Ryanair says it plans to challenge the bailout.
As a reminder, the bailout plan will pump up to €9 billion into the airline. Some comes in the form of loans, but the German government will also acquire a 20% stake. Though the government won’t greatly influence daily decisions, it is rumored that it has asked Lufthansa to dedicate its A380 fleet to provide multiple daily flights from every German city with a runway to Palma de Mallorca.
Airline Potpourri
- American has asked DOT to allow it to continue to suspend service to all Hawaiian airports except Honolulu through August 18.
- easyJet will begin operating as many as 500 daily flights beginning next week.
- Jet2 is cutting 482 cabin crew and pilot jobs.
- WestJet is laying off the oddly specific number of 3,333 employees, and will consolidate all of its call center operations in Alberta.
Andrew’s Moment of Levity
A storm came through and blew off 25% of my roof last night.
Oof.