Some Border Restrictions Could Scale Back by May
Sources inside the Biden administration say that the president is considering pulling back on many of the current border restrictions put in place due to the pandemic by mid-May.
The federal government is looking to open the land border with both Canada and Mexico for the first time in more than a year while also easing entry requirements by air. Inbound air travel for visitors from Brazil, Europe and the U.K. is currently being reviewed on a weekly basis by administration officials.
The land crossings with Canada and Mexico have been closed monthly since last March. The most recent extension of the closure goes through April 21.
The mid-May target can be explained as that’s when the government expects vaccines to be widely available to the entire U.S. population. Canada has requested that the land border remain closed until the vaccine availability is as extensive on their side of the border. The Biden administration has come to an agreement with Prime Minister Trudeau that the two governments will work together and base any border reopening on a coordinated approach based on science, public health criteria, and the NHL standings.
Raising Fuel Prices Latest Challenge for Airlines
With air travel demand showing positive signs of returning for summer, airlines are now contending with rising fuel prices which are increasing at a rate faster than the expected recovery of the industry.
U.S. jet fuel prices reached a 13-month high of $1.67 a gallon on Wednesday and that comes after using the discount at the pump by redeeming points earned at their local grocery store.
Last year, when operating a bare-bones schedule, fuel prices were at their lowest as a relative percentage of overall costs. But airlines are bracing for potential sticker shock when it comes to fuel prices this year, with American saying it expects its 2021 fuel cost to increase by $38 million.
Airline analysts expected the costs to reach this point in the latter half of 2021, but not this quickly. Many airlines stopped hedging fuel prices last decade when prices reach historic lows, leaving them potentially exposed financially to a dramatic rise in price. Spirit expects fuel costs to be up 32% this quarter compared to Q4 2020, leading the airline to consider adding an additional fee for passengers tied to the daily price of oil. They ended up declining, but did add a $2.99 fee to replace revenue from the fee they opted not to add.
Sun Country IPO Raises $218 Million
Sun Country Airlines stock traded for the first time on Wednesday, outperforming expectations by arriving on-time and jumping 40% on its first day.
The stock, which had the best first day at work since that new guy in accounting brought everyone freshly baked cookies, started the day trading at $24 before reaching $36 midday. The airline sold 9.1 million shares at $24, earning it $218 million in the process.
In February when Sun Country announced its IPO plans, it was hopeful of raising $100 million. So this was – as the kids say – better.
The money will be used to pay off all the airline’s debt and then for internal purposes. We assume that means purchasing everyone a new office chair and upgrading the Keurig machines at the company’s headquarters. Sun Country lost $4 million last year after turning a profit of $49 million the year before. It is hopeful that the IPO combined with growing demand for travel will see it return to profitability in 2021.
WestJet & Delta Launch Reciprocal Benefits
While Delta Air Lines has had reciprocal benefits for its elite members with partner airlines for decades, WestJet has never done so – until today. The two airlines are expanding their partnership despite the fact their joint venture is currently on hold.
The benefits will not be available to the hoi polloi of the two airlines, but instead to elite members and those traveling in a premium class. WestJet elites will receive complimentary preferred seats on Delta while Delta elites Gold and above will receive free seat selection on WestJet.
Both airlines will offer free checked baggage (in-laws are not permitted to be checked) to elites of the other. The amount of free checked bags ranges from one for entry level elites to three for top-tier. Priority check-in and drop-off will also be offered to all elites except those flying to New Jersey in order to prepare those travelers for the disappointment they’re sure to endure upon arrival.
Lounge access is available based on a complicated matrix of elite status, destination, class of service and high school GPA.
Final A380 Leaves Toulouse
The final A380 aircraft built by Airbus left the hangar at Airbus’ facility in Toulouse, flying to Hamburg to begin preparing for its delivery to Emirates.
The flight to Hamburg took three hours and 10 minutes and was the inaugural flight for the aircraft. The plane began preparations for its first flight much like a baby prepares for its first steps – turning its Rolls Royce engines on, performing engine runs and taxiing tests. They’re so cute when they’re young.
The aircraft is the 252nd and final A380 to leave Toulouse. Emirates was the largest customer of the aircraft by a wide margin, with it having a firm order of 123 A380s. In Hamburg, prior to being delivered to Emirates the aircraft will be painted in Emirates livery and on the inside it’ll be outfitted with entirely too much gold trim.
Airline Potpourri
- Amazon Air is adding its first air gateway in Fairbanks. It’s Amazon Air’s second location in the state and its most northern gateway in the world. The gateway would have opened last month but the airport let its Prime membership end without renewal because its credit card had expired.
- IAG is issuing two senior secured bonds today. The first has an amount of €500 million and is due on March 25, 2025. The second is for €1 billion and is due on March 25, 2029. For those amounts they should have just bought Powerball tickets. You don’t have to pay the money back that way.
- Qantas is extending memberships of its Qantas Club members by three months. A nation rejoices.
- Ryanair announced 40 new route additions to its summer 2021 schedule.
- Singapore is selling a number of its first-class accessories for sale including amenity kits, pajamas and a mural of a loud, obnoxious business traveler that you can place to your right to simulate being seated near on the aircraft.
- Virgin Australia will begin offering its new business class menu on March 25.
- Volotea is opening a new base in Italy, at Olbia (OLB) beginning June 4.
Andrew’s Moment of Levity
Do you know the last thing my old uncle said to me before he kicked the bucket? He said “Nephew, watch how far I’m going to kick this bucket.”