Southwest Expands to Chicago/O’Hare and Houston/Intercontinental
1 Southwest Airlines announced today it will continue its expansion into the country’s largest and busiest airports. It plans to serve both Chicago/O’Hare and Houston/Intercontinental in the first half of 2021. This will be Southwest’s first foray at O’Hare while the airline served IAH on and off since its founding in 1971 through 2005.
Southwest planned to begin service at both airports in 2022, but the airports both purchased EarlyBird on Southwest.com for $15 each, convincing the airline to move in about six months early. Schedules will be announced in the near future.
The announcement from Southwest is notable in that it will be adding an airport in cities where it is already the dominant carrier at alternative airports. Southwest has a massive presence at Chicago/Midway and Houston/Hobby, accounting for over 95% of the traffic MDW and over 92% at HOU. The addition of these two new airports follows Southwest’s move into Miami, despite its large presence at Fort Lauderdale.
For a more detailed look, see crankyflier.com Tuesday morning for a full rundown.
Big Island Opts Back In to Hawai’i Pre-Travel Testing
2 Big Island Mayor Harry Kim announced over the weekend that his island will participate in the state of Hawai’i pre-travel testing program after all. The Big Island opted out last week amid concerns of growing cases on the island and a lack of confidence in the state’s pre-testing program.
In order to bypass the mandatory quarantine on the Big Island, visitors will be taking a second, rapid COVID test upon arrival in Hawai’i to supplement the one required by the state. If the test is positive, a second PCR test will be required and the passenger will remain in quarantine until the results are available. The state approved Mayor Kim’s proposal once the mayor was able to secure an unlimited supply of mai tais test kits from the federal government.
With the Big Island joining the pre-travel test program, all four main Hawaiian counties will be able to receive visitors who bypass the quarantine with testing starting Thursday, October 15.
The only group lobbying against the pre-travel program was the HAP, Hawaiian Association of Pigs, as the lack of visitors have led to fewer luaus, a great development for the pigs who are so often roasted at the center of the event. HAP director Barbie Q. Sandwich commented that the decision was short-sighted by the state and would result in more deaths for members of its group. Assistant Director and musical director Jimi Hamdrix plans to host a benefit concert for the pigs sometime later in the month.
Air Canada to Purchase Transat at a Fraction of the Original Price
3 Air Canada and Transat originally came to an agreement back in June of 2019 for Air Canada to acquire the tour operator and its airline for $13.70 per share, a total purchase price of $549 million. But the downturn in demand from the pandemic has forced the two sides back to the negotiating table with Air Canada now expecting to go through with the purchase at the greatly reduced price of $3.80 per share, coming to a total of $144 million.
Despite the dramatic savings for Air Canada, the revised price still shows a 31.6% premium on the 20-day rolling average of Transat’s stock, indicating that Transat is still getting a decent value. The deal must be approved by two-thirds of Transat’s shareholders.
The vote will take place in December and is also subject to court approval. Air Canada plans to provide bottomless Tim Horton’s coffee at the Transat shareholder meeting to help grease the skids. The shareholders are expected to approve the deal at the meeting, as it seems the proper Canadian thing to do. After the two sides came to a second agreement, it would be downright rude to vote it down, eh?
Malaysia Airlines Faces Uncertain Future
4 Malaysia Airlines had its restructuring plan rejected by its lessors on Friday, leaving the airline in a state of uncertainty as it looks to stay solvent and remain in operation.
With travel still at an all-time low in southeast Asia, majority shareholder Khazanah Nasional is trying to cut its losses and push the airline into liquidation. The two sides cannot even agree on how far apart they are on a deal with a group of lessors calling the restructuring plan “fatally flawed.” MH CEO Ismail Izham has a different take on the proposal saying that some lessors agreed with the plan, and the rest are 50-50.
The general outline of the restructuring called for a significant cash injection from Khazanah Nasional to keep the airline solvent as it attempts a recovery. The plan is relying on a return to pre-pandemic travel levels by Q3 2022 at the latest, with MH breaking even by 2023.
Australia Plans to Keep Borders Closed
5 With many countries working on travel bubbles and planning to reopen their bubbles in the not-too-distant future, Australia is taking the opposite approach. It is likely to keep its border closed deep into 2021.
Josh Frydenberg, the Treasurer of Australia said “international travel, including by tourists and international students, is assumed to remain largely closed off until late next year and then gradually return over time, and a vaccine to be available around the end of 2021 is one of the assumptions in the budget.” He did say, however, that he’d make an exception for any country that was willing to take Mel Gibson off his hands for good.
Despite the ban on international travel expected to continue, the country does plan to resume unrestricted domestic travel later in 2020. Western Australia will be the exception as that state does not plan to reopen to interstate travel until April.
Airline Potpourri
- British Airways CEO Alex Cruz is “resigning” from his position, and will be replaced by Aer Lingus chief executive Sean Doyle.
- easyJet is demanding a bailout package from the UK Government or…or else.
- EVA plans to resume 2x-weekly service between Taipei and Bangkok on October 25.
- Hawaiian is suspending its regional carrier ‘Ohana by Hawaiian’s interisland operations between its Honolulu hub and both Molokai (MKK) and Lanai (LNY). The suspensions are effective on November 1.
- Lufthansa will operate aircraft without a first class cabin on all flights this winter to the United States.
- LOT is resuming 5x-weekly service from its Warsaw hub to Ostrava (OSR) later this month.
- PAL Airlines, an appropriately-named Canadian airline, is looking to add a Q400 to its fleet.
- SKY Airline has received DOT approval to operate passenger and cargo flights between the United States and Peru.
Andrew’s Moment of Levity
My friend came over to join us for dinner over the weekend. He asked me why we don’t pray before eating and I told him that we don’t have to, my mom is a good cook.