March 10, 2021

Alaska Expands its Northwest Reach

Alaska Airlines announced four new routes today in its Pacific Northwest backyard that will strengthen its hold as the leading carrier out of Boise and add connecting opportunities with its new BFF American at Chicago/O’Hare.

Beginning June 17, Alaska will add two new destinations from Boise — that’s a soft “s” and not a “z” you heathens, say it right — giving the airline 28 daily departures to 12 destinations from the capital of Idaho. The two new cities are Chicago/O’Hare and Austin with both operating year-round and once daily. The flight to Chicago will be timed for connections to American’s vast network out of O’Hare. Austin has been a big focus for Alaska lately.

Alaska is also adding two more cities to from its home base of Seattle. Beginning June 17 as well, Alaska will launch daily, year-round service to both Idaho Falls (IDA) and Redding, CA (RDD).

The two new flights from Boise will be operated by Horizon on E-175 aircraft while the two new Seattle routes will also be operated by Horizon and flown on single-class Q400 turboprops.


Greece Plans to Welcome Vaccinated Tourists by May

Some good news for airlines: Greek Tourism Minister Harry Theocharis said Tuesday that Greece would welcome all visitors beginning in May who can show they’ve tested negative for the virus or that have been fully vaccinated.

Greece’s summer tourism market is crucial to its bottom line, and it was nearly wiped out completely a year ago, causing the country to make summer tourism in 2021 a priority. Travel and tourism account for roughly one-fifth of Greece’s economy and employs one in five of its citizens. That figure is the second largest of any sector in Greece, only behind those who make those olive branch crowns for brides to wear on their wedding day.

The country is placing those who work in tourism near the top of its vaccinated priority order so that it can safely welcome tourists from around the world.  The country expects to have the entire tourism sector — frontline workers, back-of-the house staff and thousand-year old statues — vaccinated by the end of May.


AerCap Acquisition of GE Capital Aviation Services is Official

AerCap announced today that it entered into an agreement to purchase 100% of GE Capital Aviation Services confirming previous reports.

In the deal, GE will receive 111.5 million newly issued shares of AerCap, $24 billion cash, and another $1 billion of AerCap notes and/or cash. GE will own 46% of the new company and will be entitled to nominate two members of the Board of Directors. Additionally, GE retains the right to choose the menu for the catering for all board meetings provided there is always one vegetarian option and no peanut butter cookies.

Citi and Goldman Sachs provided AerCap with $24 billion to help finance the transaction. As a part of the deal, both investment banks insisted upon first right of refusal of any leftover deli tray or cookies from the board meetings of the new combined company.

AerCap expects to maintain its current investment grade credit ratings with S&P, Moody’s, and Fitch. The transaction will enhance many of AerCap’s credit metrics, with the new company having stronger cash flows, a more expansive revenue and customer base, and more diverse selection of lunch options at company meetings.


Cathay Pacific & LATAM Release Final 2020 Financials

Both Cathay Pacific and LATAM unveiled their final financial reports for 2020, and as with most airlines around the world… these don’t look great.

Cathay Pacific reported a loss of $2.8 billion in 2020 compared to a profit of $250 million in 2019. Cathay was hit particularly hard by the pandemic as it does not operate any domestic flights in its role as the flag carrier of Hong Kong. The airline is currently adjusting to new quarantine rules in Hong Kong which require two weeks in hotels for crew returning from an overseas trip. It has most crew on a seven-week rotations of three weeks flying, two weeks in quarantine, and two weeks off.

LATAM didn’t fare much better, as the Santiago-based airline posted an operating loss of $1.6 billion for the year on revenues of $4.3 billion. It could have been much worse for LATAM, but it managed to reduce its operating expensed for the year by 38%. On the bright(er) side, LATAM’s cargo revenues increased 40% in 2020, leading the airline to convert up to eight passenger aircraft to a cargo configuration over the next three years.

LATAM reduced its debt during Q4 down to $7.6 billion which may seem like a lot until you see what our neighbor has racked up on their Visa on Etsy during the pandemic. It ends the year with $3 billion in liquidity including $1.7 billion in cash and nearly $40,000 in hot, just out-of-the-oven empanadas.


Czech Startup to Launch with Unique Seating Layout

Startup airlines seems to be a dime a dozen with new airlines popping up almost weekly like a game of whack-a-mole. But one startup from the Czech Republic is standing out thanks to a seating strategy that seemingly has no chance to work. Pragusa.One – they’re gonna need to work on that name – is planning to operate as soon as this June and will be using four wet-leased wide-body Airbus aircraft configured exclusively with 251 premium economy seats.

The airline will be based both in Prague and Dubrovnik, Croatia, creating its name from combining “Prague” and “Ragusa” the historical name of Dubrovnik, presumably because PragDubrov.one would sound silly. It’s assumed the .one on the end of the name represents how many months this airline is expected to operate before running out of money.

It plans to operate to “business centers” in the United States, Asia, and Africa which seems like a great idea — in theory. Perhaps no one at Pragusa.one have heard about the pandemic that has essentially put an end to business travel? Besides, neither Prague nor Dubrovnik have been known for their high levels of business travel demand from the US. But if it’s not your money being spent to fund the launch, then it should be an interesting story to follow in the coming weeks.


Airline Potpourri

  • Air Iceland Connect will be absorbed into Icelandair on March 16.
  • Air India says that reports of the demise of its B747 aircraft has been greatly exaggerated. While the airline does plan to end using the B747 on international flights, it intends to continue flying it on high-demand domestic routes, because, well… we don’t know why that makes sense.
  • Blue Air is adding direct service to Milan/Linate (LIN) with daily service from Bucharest (OTP) and twice-weekly service from Cluj/Napoca (CLJ).
  • Breeze Airways passed another hurdle to getting its first flight in the air as the review and comment period for its DOT operating certificate passed without incident.
  • Cathay Pacific & Fiji Airways frequent fliers can now earn and burn mileage when flying on each other’s airlines.
  • flydubai is adding twice-weekly service to Tirana (TIA) beginning March 28.
  • Garuda Indonesia has placed an order for four of the unpopular and unloved A330-800.
  • Jetstar is exploring operating its 787 Dreamliner aircraft on domestic routes later this year to increase its capacity during peak periods.
  • Kenya Airways is resuming direct service to France, flying once-weekly from its Nairobi hub to Paris/CDG beginning March 17.

Andrew’s Moment of Levity

What do you get from a pampered cow? Spoiled milk.