Court Clears Way for Bain’s Virgin Australia Purchase
1 One of the final obstacles for Bain Capital to take control of Virgin Australia on September 4 were some of the airline’s main creditors who had banded together to make an end run for control of the airline.
The bondholders were among the 10,000 creditors owed nearly $7 billion from Virgin’s administration process (Australian for bankruptcy) that began earlier this year. The bondholders are concerned they will receive far less than they’re owed once the administration and reorganization is fully approved.
Their attempt to take control was denied in Australian Federal Court earlier this week, and, after a couple days of evaluating their options, the group has decided to drop their pursuit of the airline. Instead they will now focus on new possible endeavors, to include a kangaroo petting zoo and opening a Vegemite museum.
Southwest Expects Rest of 2020 to Be More Not Good
2 In a filing with the SEC (this one, not this one), Southwest Airlines said that it expects its September capacity to decrease by 40% compared to September 2019, as opposed to the 20-25% it had previously expected.
Southwest now estimates third quarter capacity to decrease an additional 10% in the range of 30 to 35% year over year. The airline has turned a net-profit every year since 1973, but July saw a daily cash burn of $17 million. Southwest can’t say whether or not it will be able to get to break-even by the end of 2020.
The good news, however, is that despite the cash burn, the airline is in a strong enough financial position that it declined a $2.8 billion loan from the US government. When raising funds, the airline took inspiration from Qantas selling its amenity kits for $25. Southwest tried selling a snack pack consisting of a can of water, a tiny cup, and a small bag of pretzels for $3.99. Very few sold because the purchase process proved too confusing. Customers had to log-on exactly 24 hours before the sale began to claim a spot in line to make the purchase.
Singapore to Open Travel Bubble with New Zealand & Brunei
3 As of September 1, Singapore will allow free travel between its island and New Zealand and Brunei. Visitors from the two nations can apply for a special air travel pass beginning September 1.
On arrival from the two countries, passengers will have to take a COVID-19 test in Singapore and self-isolate until the results are known. Once a test comes back negative, the traveler will be free to leave quarantine.
In addition to the update for New Zealand and Brunei, the length of required quarantine for visitors from Australia (except Victoria), mainland China, Macau, Malaysia, Taiwan, and Vietnam will be reduced by half to seven days. Introverts who prefer no human interaction are free to quarantine as long as they like, whether in Singapore or anywhere else in the world.
Aeromexico Plans to Reduce Fleet by 30%
4 Aeromexico expects to be a considerably leaner airline after it exits bankruptcy (American — and apparently Spanish — for administration) reorganization. The process allows the airline to rid itself of planes through lease renegotiation and rejection of current and future leases.
Aeromexico currently has 19 Boeing 787, 4 B737-700, 29 B737-800, 6 B737 MAX, and 47 Embraer E190. It has already eliminated its nine Embraer E170, and additional aircraft are likely to adios the fleet as well.
In the coming months, Aeromexico is likely to up-gauge its narrowbody fleet to its 737s — aka Espiritu-ize aka adding more seats, making them more like their Mexican LCC competition. The airline is also expected to reduce the number of regional aircraft it operates in favor of its fleet of 737s.
When PreCheck Just Isn’t Fast Enough
5 A woman attempted to make her way through TSA security at Pittsburgh International Airport on Wednesday by throwing water on the TSA agent checking her ID and then making a run for it.
Shockingly, she was not successful. Brandi Bailey, age 32, was subdued by police just beyond the checkpoint and then attempted to break free to board the airport’s train that travels between concourses. Again, she was not successful. One could wonder where she thought the train went and how far she was going to get even after boarding, but that be a massive waste of time.
That won’t stop us, though! We spent way more time than we should have going through the different options and all we decided that, if she were a video game character, her awareness rating would be very, very low.
PIT does have some great post-security dining & shopping, as it is one of the few airports that offers the opportunity to go beyond security without a boarding pass. Perhaps Ms. Bailey was very excited to do some early holiday shopping at the airport and panicked. Either way, she’s been charged with disorderly conduct, resisting arrest and criminal trespass. We’d make another joke here, but we thought the hilarity stood on its own.
Airline Potpourri
- Blue Air is feeling less blue these days as the European Commission approved the €62 million buyout from the Romanian government.
- Blue Panorama, which apparently is changing its name to Luke Air, is launching a new route from Milan/Bergamo (BGY) to Dakar/Blaise (DSS) that will operate 2x weekly beginning October 23.
- Delta will not fly to Shannon, Ireland (SNN) in 2021.
- El Al has extended its suspension of all service through September 30 while it looks to find a buyer for the airline.
- Ibom Airlines, one of the most unfortunate names in all of aviation, took delivery of its fourth CRJ900.
- JAL will increase frequency from Tokyo/Narita to Singapore from 2x weekly to 3x weekly. It will also resuming service to Sydney with one weekly flight from both Narita and Haneda. The Sydney flights will be capped at 30 passengers each.
- Lübeck Air, a brand-new airline in Germany, ambitiously launched operations with 2x daily service to Hamburg from its Lübeck (LBC) hub.
- Thai is considering absorbing its regional carrier Thai Smile.
- Viva Aerobus is launching a new destination, flying from Monterrey (MTY) to Dallas/Ft. Worth with 2x weekly service beginning September 17.
Andrew’s Moment of Levity
I lost my job this week of being a courier driver. I often got lost and had to bring my deliveries back to the office. When she let me go, my boss told me that I just wasn’t delivering the goods.