Southwest Grounds Monday Evening and Tuesday Flights Due to Technical Mishaps
Southwest Airlines grounded its entire network for short time last night when a technical glitch with the airline’s third-party weather data provider experienced an outage, and the problem came back again for a second round today.
Because of the outage, Southwest personnel including dispatchers and pilots had no access to vital weather information that is needed to safely operate their aircraft. Even more concerning, it meant they were unable to properly set their fantasy baseball lineups to anticipate potential delays and postponements across the Major Leagues.
Flights were grounded in the early evening hours and were back in the air by about 9 p.m. PT. The airline saw 1,412 delays on Monday, accounting for 38% of its flights with 45 – about 1% — being canceled. When officials from AA saw the figures, they couldn’t understand what the issue was, instead heaping praise on Southwest. No one from AA could remember the last time they had a day where 62% of flights operated on-time, with the airline also realizing they need to add “third-party weather reporting malfunction” to its goody bag of delay explanations.
Issues again reared their ugly head for the airline on Tuesday, as it was forced to ground all aircraft from another outage around 2 p.m. ET. It hasn’t yet been made clear if the two incidents are related. Southwest canceled approximately 475 flights in its Tuesday schedule – 14% of the schedule – by 3 p.m. ET, proving once again that the second surge is usually worse than the first.
US & EU End Airbus-Boeing Dispute
Seventeen years is a long time to hold a grudge and the United States and European Union finally came to that realization as they agreed to end the long-running trade cold war between Airbus and Boeing. The two governments will suspend all tariffs for five years on sales by the two aircraft manufacturers.
The agreement stemmed from an apparently newfound understanding that your enemy’s enemy can be your friend – both manufacturers are uniting to fight against the threat the Chinese will pose in the airplane manufacturing sector at some point in the future, probably.
In the deal both groups agreed to provide research and development funding through an open and transparent process and to not give specific support, such as tax breaks, to their own producers that would harm the other side. They also agreed to raise the maximum permissible value on holiday gifts in the Secret Santa exchange from $20 to $50.
Emirates Reveals $5.5 Billion Loss
Emirates Airline posted its year-end financials for the 2020-21 fiscal year ending on March 31 and unlike the airline’s premium class interiors, they are not pretty. The airline saw revenue plunge 66% to $8.4 billion, leading to a $5.5 billion loss.
Most everything was down for Emirates, with passenger and cargo capacity down 58% and load factor at just 44.3% compared to 78.5% for the previous fiscal year. The airline carried just 6.6 million passengers, an 88% drop from the year prior.
The airline was able to cut costs by $2.1 billion, led by a 31% reduction in workforce. The redundancies were the first in the airline’s history. The savings did lead to an increase in passenger yield – those that did fly earned the airline 10.6 cents per revenue passenger kilometer. Overall operating costs dropped 46% with the gas bill coming in 76% less – which happens when you ground most of your fleet. Emirates also reduced its fleet by 11 aircraft, emerging from the pandemic with 259 planes.
Thanks to a recent $3 billion cash injection from the Dubai government, the airline ended the year with $5.4 billion in cash, most of which is tied up in gift cards for high tea at the Burj Khalifa.
Finnair Launches Basic Business Fares
Finnair placed its new Business Light fares on sale today, for flights within Europe and to Asia. The airline is not yet offering the product on its flights to the United States due to the Transatlantic Joint Venture with American and others which keeps it from setting its own pricing across the Atlantic because sharing is caring.
Finnair’s new fare offering seems more like Spirit’s “Big Front Seat” than an international premium class offering. The new fares:
- Do not allow changes or cancellations
- Require a fee for seat assignments and lounge access
- Do not offer any priority access on the ground including: check-in, security and boarding
- Only allow carry-ons for free; checked baggage will come with an additional fee
- Do not include on-board internet access
- Earn significantly less than other elite fares on Finnair – only 150% miles are earned, compared to 200-250% for most premium fares
- Do not come with a seat belt or tray table. The seat belt is available for €8/hr. and the tray table is €4/hr. The airline will offer a bundle of both the seat belt and tray table for €12/hr.
Passengers will also have to walk through a gamut of Finnair staff throwing objects at them including mini-bags of peanuts and unused amenity kits from last year as they board the aircraft.
SAA Sold to Lessor and Private Equity Firm
It’s a new era for South African Airways as the currently-grounded carrier was sold to a group consisting of Johannesburg-based lessor Global Airways and private equity firm Hairth General Partners. The pair will combine for 51% ownership of the airline, leaving the South African government with a 49% minority stake in the carrier.
Global Airways also owns the recently launched South African domestic startup airline Lift. The partnership will invest just over $250 million in the airline in the next three years, while likely reserving several millions beyond that to pay for bankruptcy lawyers three to five years from now when the airline fails again.
Lift co-founder Gidon Novick said that the government’s only financial obligations right now are to settle their existing liabilities. The partnership wants to list the airline on a stock exchange to see if it can find others to pay for its investment. SAA will now look to establish a new route network and find a realistic date to return to operations. Novick expects a phased roll-out as borders across the world reopen.
- Air Canada received a Notice of Enforcement Proceeding from the U.S. DOT with regards to its handling (or lack of handling) the processing of refunds since the onset of the pandemic. DOT is proposing a $25 million fine which is good, but it would have been more helpful if DOT did this a year ago when Air Canada first started keeping people’s money illegally.
- American and the New York Transportation Development Corporation launched a $150 million bond issue for an expansion of JFK’s Terminal 8.
- DHL added another 737-800F to its fleet via a wet-lease from iAero Airways.
- Eastar Jet’s lone suitor is underwear specialist Ssang Bang Wool. The company considered pulling its support of the purchase when it read a brief stating that the previous favorite for the airline, livestock and logistics firm Harim Group dropped its bid.
- FlyArmenia had its AOC suspended by Armenia’s Civil Aviation Authority. Today some of us learned that Armenia has a Civil Aviation Authority.
- flydubai will begin daily service to Warsaw on September 30.
- Moldovan Airlines is going into liquidation.
- SunExpress has applied for permission to operate charter operations from Turkey to the United States.
- Surinam Airways final active aircraft was seized by its lessor on Monday, forcing the airline to consider to change its name to just Surinam. Which would be confusing, but perhaps not as confusing as a company with no airplanes putting Airways in its name.
- SWISS plans to reduce its Airbus fleet by 15 aircraft. The airline will drop five A330s or A340s plus another ten short haul Airbus currently operated by Helvetic.
- TAP has tapped Punta Cana as its newest destination, with twice weekly service from Lisbon beginning in the winter. An exact launch date will be announced in the coming weeks.
- Turkish is increasing frequencies to five of the ten U.S. destinations it serves. Boston is now seeing daily service from Istanbul, Chicago/O’Hare increased to 10x-weekly, Los Angeles is 11x-weekly, Miami will increase to 10x-weekly tomorrow, and San Francisco will upgrade to 10x-weekly beginning Thursday. Atlanta, Houston, New York/JFK, Newark, and Washington/Dulles are all left to ask themselves what they did wrong.
I’ve got a deep-rooted phobia of over-engineered buildings. It’s a complex complex complex.