October 6, 2020

FAA Extends Slot Waivers at Three Airports

1 The FAA is extending its slot waivers at three of the nation’s busiest airports: LaGuardia and JFK in New York along with Washington’s National Airport.

Prior to the pandemic, airlines were required to utilize their slots 80% of the time or risk losing them to a competitor. Major U.S. airlines have lobbied the FAA to extend the waiver that was set to expire this month, knowing that demand will be far below 80 percent for some time. The FAA waiver will now be in place until March at three airports, and it is also continuing a review of its restrictions at four other major airports: Chicago/O’Hare, Newark, Los Angeles, and San Francisco.

The major carriers — those with the slots — applauded the decision while LCCs and those outside the big three — those that want the slots — were disappointed by the ruling. United praised the FAA decision that “will provide more stability and certainly during this historic pandemic.” Meanwhile, American was overjoyed at the fact that it will be able to continue to pretend to serve New York while not actually doing so.

Spirit was dismayed, as it completely opposed even the idea of a slot waiver. The airline said the decision was “unacceptably protective of dominant incumbent carriers at the expense of the traveling public and of low-cost carriers ready and willing to serve.” The airline followed up its discussion by sending a bill for $27.99 to the FAA as part of a “waiver extension fee” and also charged anyone who just read that quote $1.99.


British Airways Unveils its First Class Suite

2 British Airways has unveiled its inaugural first class suite, to be debuted on the A350 as a part of the world’s nicest business class its First Class cabin.

The suite will be on the airline’s Boeing 777-300ER, but only on the 77H version, as the 77L version of the plane will not have the suite but instead will have metal folding chairs borrowed from an elementary school near Heathrow in the first class cabin.

The new aircraft orders were placed by BA and the suites were developed prior to the pandemic. 

British Airways also confirmed an order in February of 2019 for 42 Boeing 777-9X aircraft. The 9x is still in development, and BA says it will have yet another unique first class product that will be “differentiated service” from the newly-unveiled suite. Knowing BA, that could mean a lot of things, from an even newer suite product, to the aforementioned elementary school folding chairs and everything in-between.


Alaska Looks to Retire More Airbus Aircraft

3 Alaska Airlines is speeding up the retirement process for 10 A320s it inherited from Virgin America in its fleet, another reduction in the number of non-Boeing aircraft operated by the airline. The decision to retire the planes early will cost Alaska somewhere between $115 and $125 million in impairment charges, plus a handling fee of $13.99 per plane.

The 10 planes Alaska plans to retire are the last remaining Airbus aircraft owned by the airline — all other Airbus (Airbi?) are leased, with leases expirations ranging from 2021 to 2025. It’s highly likely that all A320s will disappear, but there is still no good Boeing replacement for the awesome power of the A321s in the fleet.

Assuming you blindly ignore wholly-owned subsidiary Horizon’s regional operations, Alaska operated an all-Boeing fleet of aircraft prior to its merger with Virgin America when it inherited 71 Airbi. With Boeing seeing an all-time low in demand for their planes due to a combination of the pandemic and the MAX having that whole crashing problem, the time could be ripe for Alaska to strike a good deal with the manufacturer to keep the fleet at full strength later in the decade. What can adequately replace the A321, however, still remains to be seen.


Virgin Australia has a New Sugar Daddy

4 Virgin Australia has secured A$200 million from the Queensland government in exchange for the airline maintaining its base in Brisbane.

The A$200 million will flow to the airline in the form of loans, financial incentives, and subsidies. In addition to the cash, the state government is making an equity investment into the airline of about A$20 million, which constitutes about 2% of the airline with its new owner Bain Capital.

Virgin Australia will maintain its base in Brisbane for at least 10 years as part of the agreement. The Queensland government believes the investment in the airline is a sound decision and taxpayers will reap the benefits for many years to come. The joke is on Queensland, however, since it didn’t specify WHICH Brisbane. The good people of Brisbane, California — which is located just north of SFO — are hoping to lure the airline away.

The unfortunately named Queensland Treasurer Cameron Dick said that the ROI to the taxpayer will be in the 7% range and that the investment helped prop up the airline and saved jobs for thousands. In addition to the 7% return, the airline will send a Vegemite sandwich to each citizen of the state annually on the anniversary of the signing of the deal as a thank you for the cash.


Norwegian Hits Record Lows; Wizz Smells Blood in the Water

5 Norwegian Air posted record low numbers in September with the airline flying just 319,370 passengers a titanic drop of 90% from September of 2019.

Load factors were down to 53% in September after being filled to 90% in September of 2019. The only bit of good news is that the flights departed on-time, with 98% of the airline’s schedule operating on-time for its anemic passenger loads.

The airline posted a lost of $570 million for the first half of 2020, and that number is expected to be worse for the final fix months of the year. 

With Norwegian on the ropes, rival LCC Wizz Air is making a move for its frozen home turf. Wizz announced that it is opening its first base in Scandinavia and is going for the kill shot. Wizz is opening a base in Oslo, and will begin a domestic operation in Norway. To begin, it will operate one plane on three routes: Bergen (BGO), Tromsø (TOS), and Trondheim (TRD). Wizz Air’s Norwegian base will open November 5 — just in time for that Norwegian winter.


Airline Potpourri

  • American is reducing its daily frequency on its JFK-LAX service down to 2x daily (but using larger airplanes) while reducing SFO-JFK to 1x daily for November.
  • Avianca has received permission from U.S. Bankruptcy Court to access $2 billion in financing.
  • Emirates will resume flying from Dubai to Lyon on November 4, starting twice-weekly service a month earlier than previously expected.
  • Etihad is ending service to Brisbane — the one in Australia.
  • Finnair plans to operate 45 destinations from its Helsinki hub in its 2020-21 winter schedule with six long-haul destinations. Overall, it plans to operate 275 fewer flights than last year.
  • LATAM plans to operate its 777-300ER on four new domestic routes this winter in Brazil.
  • SpiceJet has the spicy idea of launching the first LCC service between London and India. It’s planning to lose money (we assume) on 2x-weekly service from London/Heathrow to Delhi and 1x-weekly to Mumbai.
  • Spirit plans to resume 3x-weekly service from Fort Lauderdale to Cap-Haitien, Haiti (CAP) on December 3.

Andrew’s Moment of Levity

Ran into my buddy from college, he was the drummer in our band. He’s actually got twins now, he named them Anna 1 and Anna 2.