FAA Lifts Grounding Order on 737 MAX
The FAA lifted its 20-month grounding of Boeing’s 737 MAX aircraft, making the aircraft legal to operate and carry passengers in the United States pending a series of modifications required for each plane. The aircraft, which was once the best-selling jet in Boeing’s fleet, was grounded worldwide in March of 2019 after crashes by Ethiopian Airlines and Lion Air killed a combined 346 people.
The recertification from the FAA requires that all MAX planes undergo modifications focused on the software of the flight control systems. It’s this software that led to the tragic crashes of both the Ethiopian and Lion Air flights. Additionally, pilots operating the aircraft must undergo additional training.
American Airlines plans to be the first airline in the United States to return the plane to scheduled service on December 29 between Miami and New York/LaGuardia. United Airlines also plans to fly the aircraft, resuming ops sometime in Q1 with Alaska on a similar timeframe. Southwest expects the airplane to go back into service sometime in Q2. And Norwegian, well, you might want to see the fifth story below before making any guesses about that…
Delta Extends Blocked Middle Seats Through March 30
Delta Air Lines is extending its middle-seat blocking policy through March 30, the longest any U.S. airline is guaranteeing empty middles. Most airlines have moved on from the practice with Southwest hanging on for another two weeks plus Alaska through the first week in January. JetBlue is slowly weaning itself by strangely blocking less and less until it’s done in early January.
Spirit remains the only U.S. airline that guarantees you will sit next to someone in a middle seat… assuming you pay for it. If you don’t, you’ll be charged an adjacent vacancy fee that must be paid to prior to getting off the aircraft.
Delta’s decision to block middle seats through March includes the beginning of the lucrative Spring Break flying period for airlines, potentially leaving revenue on the table at a time when airlines desperately need any cash they can get their hands on. When asked to comment, a Delta spokesperson might have said “yeah, but we make so much from selling Skymiles to American Express at such ridiculous rates, revenue from any seats we sell on our airplanes is just gravy.”
Southwest Expands Layoff Threats
Southwest Airlines sent WARN Act notices to 403 staff this week, marking the second wave of warnings in as many weeks.
The airline is trying to get unions to agree to a one-year, 10% reduction in salary in order to reduce its cash burn. Southwest believes it currently has 20% more employees than it needs based on current demand — an excess of salary it currently pegs at $1 billion.
The 403 staff who received this round of notice are mechanics represented by the Aircraft Mechanics Fraternal Association and include facilities maintenance workers and technicians who clean aircraft and replace carpets & seat covers, among other tasks.
If Southwest and its union cannot come to an agreement, furloughs could begin as soon as January 25.
Virgin Australia 2.0 Begins
Virgin Australia officially exited administration today, becoming the first Australian airline to emerge from voluntary administration still intact. The airline, with new owner Bain Capital, is now being run by CEO and Managing Director Jayne Hrdlicka.
Virgin Australia 2.0 plans to keep its lounges operating — re-opening them as demand allows — with its Brisbane lounge opening today. It will be the only Australian airline to operate three classes of service domestically, with Qantas and newcomer Rex operating just two.
The airline said it expects to maintain approximately one-third of Australia’s domestic market share, which is roughly what it possessed prior to the pandemic. Simple math says that’s unlikely since Rex has reinvented itself as a full-fledged domestic carrier intent on challenging both VA and Qantas on the key domestic routes between Sydney, Melbourne, and Brisbane.
Virgin Australia will be implementing a buy-on-board program in economy as part of its 2.0 rollout. The revamped menu will be available early in 2021, with the promise that water, coffee, and tea will remain complimentary. For those waiting on the edge of their seat to see if rival Qantas will match the buy-on-board program, continue reading below in Airline Potpourri.
Norwegian Turns to the Luck O’ the Irish
Like a lover scorned, Norwegian Air turned to an unlikely source for comfort after being told by Norway’s government that it was cutting off the financial spigot. The airline is following the rainbow to Ireland, its friendly, jovial neighbor located 800 miles to the west.
Norwegian plans to enter into an examinership process in Ireland which will begin bankruptcy proceedings for the airline while also earning it the protection of the Irish Examinership in an attempt to reduce debt, reduce the size of its fleet, and most importantly — raise capital.
Norwegian is able to use this loophole because most of its aircraft assets are held in Ireland. Norwegian’s subsidiary, Arctic Aviation Assets, is based in Dublin. AAA handles aircraft financing and ownership on behalf of the airline as well as acquisition of hard cider and Guinness for Norwegian’s headquarters.
The process of examinership in Ireland allows financially sustainable businesses to address elements of the business which require restructuring with the aim of protecting jobs and preserving the core value of the business. How Norwegian falls into the “financially sustainable” bucket, however, is entirely unclear.
Airline Potpourri
- Aerolineas Argentinas plans to resume much of its pre-pandemic schedule this January, including resuming flights to New York/JFK and Miami.
- Aircalin‘s first A320neo completed its first test flight and is expected to be delivered to the airline by the end of 2020.
- Fiji Airways is planning a flight to nowhere aboard its brand-new A350 this Saturday, November 21. The two-hour journey will be fully-catered and the airline plans to strategically place crying babies throughout the cabin to fully simulate the passenger experience.
- Qantas will not be introducing a buy-on-board program, saying it intends to maintain complimentary snacks, drinks, and meals on-board its flights. This is great news for lovers of free Vegemite and bad news for members of the civilized world.
- Wizz Air took delivery of 30 new aircraft during the pandemic.
Andrew’s Moment of Levity
Did you hear about the celery that was arrested last night? Turns out they got him for stalking.