January 14, 2021

Airlines Beef Up Inauguration Security Measures

With President-elect Biden’s inauguration less than a week away, airlines are increasing security measures and other in-flight protocols for the safety of staff and passengers in light of several incidents which occurred before and after last week’s insurrection at the U.S. Capitol.

From January 16 through January 23, Delta will ban firearms in checked baggage for all flights into Richmond and all three D.C. area airports. Meanwhile, American is suspending alcohol service on flights to and from the three D.C. area airports from January 16 through January 21, which could incite a riot in its own right.

Delta, American, and United have will all have crews overnight at airport hotels away from downtown Washington or Baltimore. American is also offering private transportation to and from the airport for its crew. This is actually quite innovative since we understand they’ll just pull some regional jets out of the desert since they have nothing better to do and have them drive the crews to the hotel.

On top of this, the FAA approved a one-strike and you’re out policy effective through the end of March. Passengers can be fined up to $35,000 and/or put on a no-fly list for gross violations including assaulting, threatening, or intimidating crews. Flight crews will have the right to forward unruly passengers to the FAA for these offenses along with a host of other infractions, including passengers who clap upon landing; travelers in boarding zone 6 walking towards the jetway and hovering when boarding is first called; and people who watch a personal entertainment device without headphones.


Delta Releases Q4 and FY2020 Financials

Delta Air Lines became the first of the major U.S. airlines to release its final earnings report for 2020, leading what will surely be a string of airlines mired in red numbers. Delta posted a loss in Q4 of $1.1 billion on revenue of $3.5 billion. The Q4 revenue figure was a drop of 69% from Q4 2019 and came as Delta had 62% less capacity than the year prior.

On the (slightly) bright(er) side, Delta’s cash burn reduced to “just” $12 million per day, a 90% drop from its cash burn during the onset of the pandemic in March. Remember, however, that Delta’s cash burn numbers always look better than the rest because they exclude some debt and aircraft payments. The real number is probably closer to $400 trillion per day, give or take a few hundred trillion.

For the full year 2020, Delta posted a pre-tax loss of $9 billion which excludes another $6.6 billion in the red that was directly related to the pandemic. Delta earned $15.9 billion in revenue, a drop of 66% from 2019. The total operating expense for Delta including virus-related items dropped to $29.5 billion, down $10.8 billion from 2019.

In its earnings call on Thursday, Delta CEO Ed Bastian said that the airline has not decided if it will continue to block middle seats beyond March 31, also saying Delta has no interest in placing an order for the 737 MAX aircraft. Bastian also said that his airline would be interested in picking up slots at DCA that American and JetBlue will be forced to divest themselves of. Delta is the third largest carrier at the airport with a 14.5% share of passengers.


FAA Extends Slot Relief at Seven Major U.S. Airports

The FAA announced late Thursday it will extend the current waiver exempting airlines from their required minimum amount of service required to maintain slots at slot-controlled U.S. airports. The waiver was previously scheduled to expire on March 27, but will now remain valid through October 30, the end of the summer season. The extension will affect three airports: New York/JFK, New York/LaGuardia and Washington/National.

In addition to these three, the FAA will extend its policy for prioritizing flights canceled at designated IATA Level 2 airports for the purposes of establishing the airline’s operational baseline. This extension is also valid through October 30, and affects four airports: Chicago/O’Hare, Los Angeles, Newark and San Francisco.

In coming to the decision, the FAA requested comments on the issue in December. The government received 56 responses which came from IATA, oneworld & Star Alliance, Port Authority of NY & NJ, six U.S. carriers, 28 foreign airlines, some guy named Billy, and more. Despite not being named specifically in the report, we assume that Ryanair was one of the 28 foreign airlines to comment. Though it doesn’t fly to the U.S., the airline is loathe to miss an opportunity to complain, comment, or blame a government – any government – for something — anything.


United’s Return to JFK Delayed

United Airlines’ return to New York/JFK after a five-year absence is being put on hold for nearly a month. With travel not having recovered in the wake of the pandemic, especially on the coasts, United will wait to launch its return to flying from JFK to both Los Angeles and San Francisco until February 28 instead of the previously scheduled February 1.

In addition to delaying the start of service for four weeks, United will also pull back on the frequency of both routes, operating a mere five-weekly flights to both destinations. The airline remains hopeful that it can increase to its originally planned 2x daily service as early as late-March.

In the meantime, passengers that really can’t wait for United’s return to JFK can make their way to the airport any time in February and pass the time watching the final weeks of CNN Airport Network while counting down the days until a United flight again arrives… after a lengthy air traffic control delay.


Norwegian Eliminates Long Haul Network

Norwegian Air Shuttle announced a revised business structure in an attempt to make itself more attractive for investors to hand over some much-needed cash. Among the many ways it is attempting to look better, executives are considering Botox and a lip lift. But in the meantime, the first two steps taken by the airline are to eliminate long-haul flying and cut 1,100 staff in the U.K. whose jobs focused on supporting the long-haul network.

In the near future, Norwegian will strive to reduce its debt to “just” $2.35 billion while raising approximately $600 million to keep its planes in the air. Getting rid of all those 787s it has in the fleet should help.

The airline plans to focus on narrowbody, short-haul flying in the Nordics and throughout Europe. It will also shift considerable energy to its domestic network in Norway. It will have about 50 aircraft in service for 2021, with a hope to increase that number to 70 by 2022. The airline does not see the demand for long-haul flying returning anytime soon and believes by focusing on its core business and staying in Europe, it has a more practical path to losing less profitability.


Airline Potpourri

  • Air Canada has agreed to a sale & leaseback with Air Transport Services Group. ATSG will convert the aircraft from a passenger to a freighter configuration by taking out all the seats and giving it a hard scrubdown from nose to tail to get the maple syrup smell out. It’ll then lease the plane back to AC for its cargo operation.
  • Austrian will begin the phase out of its 767 fleet in March with its first aircraft ending its life with the airline. The rest of the 767 fleet is expected to finish up its flying on behalf of Austrian by the fall.
  • Congo Airways placed an order for two E195-E2 Jets from Embraer. These will join two E195s previously on order for the airline.
  • Loganair released its summer schedule from its hub at Isle of Man (IOM) Airport, which will include double-daily flights to London/Heathrow, four dailies to Manchester, and three to Liverpool aboard the coolest-looking tails in the sky.
  • Sky Lease, a Miami-based cargo airline is facing a proposed fine from the DOT of a cool $422,500 for operating dozens of flights last summer on a pair of 747s that were missing required avionics. The airline has 30 days to respond to the FAA ruling. That time might be best spent looking for their checkbook or remembering their Venmo password.
  • Wizz Air issued its first bond — worth €500m — that is expected to close on January 19.

Andrew’s Moment of Levity

The rent on my apartment includes all utilities. My landlord called and said he wanted to come speak with me about my high heating bill. “No problem,” I said to him, “my door is always open.”