Author: Brett Snyder

April 23, 2020

Westchester Becomes First US Airport to Temporarily Shut Down Due to Virus

1 Westchester County Airport (HPN), located in White Plains, NY, will become the first US airport to shut its doors due to the Coronavirus.

The airport, which is used for private aircraft in far greater numbers than commercial service, will close on Monday to accelerate a runway repair project that had originally been scheduled for later in the year. At its peak pre-virus, HPN handled 40 flights a day from four airlines (American, Delta, JetBlue and United) to 11 destinations. It’s currently down to just one daily flight, a United Express CRJ-200 from Chicago/O’Hare that arrives late in the evening, spends the night, and returns to Chicago the next morning.

The work to repair the runway was originally going to be done only between midnight and 6 am to avoid impacting airport operations, so it was planned to take four months to complete. With the airport closed, the work will be performed during regular hours and will only take a month.

Improving an airport used to be described as doing open-heart surgery on a patient who was running a marathon. Now the patient is napping, so it’s time to get to work.

Delta’s A220s, MD-88s Still Flying as Rest of the Fleet is Partially Grounded

2 As Delta works towards grounding much of its mainline fleet — 650 of the 874 planes it has in its possession — its shiny new toy, the A220 is still flying full stop.

Delta has been forced to ground at least some of nearly every aircraft type in its fleet, including half of its 116 757s and 54 of its 77 767s. It detailed the current state of the airline in its 10-Q this week:

As you can see, it is continuing to fly all 18 of its workhorse MD-88s — aircraft it had planned to retire in the next five years — but those are now expected to be gone by July. Most notably, all 31 of its new A220s remain in service as Delta continues to fly the newest narrow-body in its fleet.

The A220 remains an important strategic decision for Delta going forward in a post-virus world. It currently has a firm order for 64 more from Airbus and will feature the airplane on more routes if it can pull off the swap with Boeing for its current fleet of 717s we discussed in yesterday’s newsletter.

Middle Seats or Bust

3 Ryanair CEO Michael O’Leary made it clear the airline would not continue to fly if it were unable to book passengers in middle seats due to social distancing guidelines in the future. The airline’s ultra, ultra low-cost model relies heavily on load factors being high to turn a profit and says it cannot sustain itself by neglecting a third of the seats on its aircraft.

O’Leary told the Irish government that if it imposes a restriction on the sale of middle seats “either the government pays for the middle seat or we won’t fly.”

While no one would understand Ryanair’s business model than its CEO, this seems like a strange hill to die on today. When the world opens back up and Ryanair is flying again, demand isn’t going to magically return to pre Covid-19 levels. Ryanair, or any airline, is unlikely to have many, if any, flights full enough to sell middle seats for several months, if not longer.

Virgin Atlantic’s Search for Cash Infusion Won’t Come from Delta

4 Virgin Atlantic is currently on the prowl for a cash infusion as most of its operation is shuttered due to the virus outbreak. But its partner and 49% shareholder, Delta Air Lines, will not be the one providing the cash. Virgin Atlantic has requested a loan from the UK government and has not received an answer yet.

Delta is not in a position to grant the loan and has no intention to do so. Delta is currently running through more than $50 million per day through the current crisis. It also is maxed out in its investment in Virgin Atlantic at 49%, meaning any additional investment that is not matched by VS or another UK-based company would run it afoul of foreign ownership laws.

Lastly, there’s the pesky fact that Virgin Atlantic currently owes Delta $200 million dollars itself for a restructuring of its JV agreement with KLM and Air France. We can see why Virgin Atlantic is gun-shy about asking Delta for financial assistance. The last time we owed someone $200 million, we made the foolhardy decision to ask them for a small loan to help get through the weekend. Suffice to say, it did not end well for me or my thumbs.

The Bright Side: Laos, Thailand Expect to Resume Domestic Operations Next Month

5 After suspending operations on April 1, Lao Airlines, the national carrier for Laos, will resume domestic operations on May 8. Bookings will be available through Lao’s website or its local call centers beginning May 4.

Meanwhile, just south of Laos, Thailand expects to resume domestic operations as soon as May 1. Thai AirAsia and Thai Lion Air are expected to be the first to restart operations in Thailand. The Thai government has imposed conditions on airlines to resume flying, including putting a maximum of 49 passengers on 70-seat planes and having a requirement to leave the back two rows vacant on flights of 90 minutes or longer for passengers who might get sick en route from some wicked Pad Thai, or as they call it in Thailand — Pad.

Airline Operation Potpourri

Aeroflot has eliminated all international operations from its schedule through July 31. Originally the airline had planned to restart international operations from its Moscow/Sheremetyevo (SVO) hub on July 2.
American has chosen today to raise bag fees for passengers on international flights in Basic Economy. Passengers flying between the United States and Europe or Africa on a Basic Economy ticket will now be charged $75 per bag, up from $60… whenever there actually are passengers again.
Etihad has loaded its schedule to restart operation beginning May 16. Interestingly, from May 16-May 31 the airline will only offer full fares booking in F (first) class, J (business) and Y (first) booking classes (RBDs).
LATAM will fly two international routes in May, the airline announced in an email Thursday. It will fly from its Santiago (SCL) hub to Miami with six weekly flights, and from Sao Paulo (GRU) to Miami three times per week.
United has swapped aircraft on its premium transcontinental routes from Newark to Los Angeles & San Francisco and Boston to San Francisco, replacing flat business class seats with a traditional domestic first class recliner seat.
WestJet will join Air Canada in suspending flights to the United States from April 26 until June 4 due to the 30-day suspension of non-essential travel between the two nations.

Andrew’s Moment of Levity

If the organizers of the College Football Playoff offered an automatic spot in next season’s playoff to the first college or university that discovered the vaccine, this entire pandemic would over within a week.

April 22, 2020

Delta’s Weak Q1 Earnings Will Only Get Worse in Q2

1 Delta Air Lines released its Q1 earnings report on Wednesday and the numbers are, as expected, gruesome. But hey, let’s start with the good news. Expenses were down an incredible $450m. Of course, that’s not due to great cost control but rather a massive cancellation of service along with plunging oil prices.

Back to the numbers that matter, the Atlanta-based airline had a net loss of $534 million in Q1 of 2020, its first quarterly loss in five years. That was on a revenue decrease of 18 percent. This is downright rosy compared to what’s coming next quarter.

These figures come after an extraordinarily strong January and February for the airline before the bottom fell out in March. Delta has been burning through $100 million of cash reserves per day and hopes to have that reduced to $50 million by the end of June.

In an effort to save money, Delta is cutting 80% of its domestic capacity and 90% of its international capacity through June, while 37,000 of its 90,000 employees are taking voluntary unpaid leave.

United Introduces Social Distancing-Friendly Policies

2 Introverts who have to fly in the next five weeks will be thrilled by United’s new policies to make social distancing easier on all passengers. Through at least May 31, it has enacted new policies to keep people far away from others, even if they want to cuddle up. The airline will:

Limit seat selection so middle seats are not available and that window & aisle options are alternated for groups traveling in pairs on regional jets or in the premium cabins
Board the aircraft in smaller groups to make distancing more practical
Process upgrades at the gate rather than automatically in the days leading to departure to be able to better manage the seat map

If you’ve been quarantining with someone and somehow aren’t sick of them yet, United will let you sit next to each other if you contact the airline. Oh, and on the off chance that there’s a flight with enough demand to need to sit people next to each other, United will undo the block. But come on, that’s not happening for a long time.

CARES Act Exemptions: Seaborne Wins While Silver Losers

3 They may have owned by the same company, but Silver Airways and Seaborne Airlines saw very different outcomes on their exemption requests from the DOT Wednesday.

Seaborne received the good news that it can suspend service to two Puerto Rico locations — Vieques (VQS) until June 30 and Culebra (CPX) until September 30. The latter is particularly useful since Seaborne doesn’t actually have an airplane that can land on that short runway.

Meanwhile, Silver’s attempt to wiggle out of its Huntsville (HSV) to Orlando (MCO) flight failed. It will have to serve the Alabama city.

Draft Day Trade Rumors: Delta wants to swap 717s for MAX in Exchange with Boeing

4 On the eve of the NFL Draft, a trade rumor is circulating, except this one isn’t being reported by Adam Schefter. Delta Air Lines is looking to swap its 78 leased 717s in exchange for purchasing 100 737-MAX aircraft from Boeing according to reporting from The Air Current ($ Subscription Required $).

Delta owns most of its fleet — 70%, but the 78 717s represent nearly 40% of its leased aircraft. Returning these aircraft to Boeing would free up capital during the current crisis and allow the airline to regain its current financial footing as payment on the 100 MAX aircraft would not be due until closer to delivery. Boeing, facing near-zero aircraft demand for the near future, might be willing to make a deal to get Delta back on the order book.

The Bright Side: American Airlines “You Are Why We Fly” Video

5 American Airlines posted a :43 second video on YouTube this week that’s worth a look. It’s been a challenging two months for everyone, airlines included. The hundreds of thousands of employees of airlines, airports and the entire travel industry have seen their world turned upside-down and this video is a brief reminder of what it’s all about.

Airline Operation Potpourri

Air Mauritius entered voluntary administration as the airline was unable to meet its financial obligations. It is not going out of business at this point.
Austrian Airlines will withdraw its fleet of seven A319s and cut its fleet of Boeing 767s in half in an effort to reduce costs.
China Eastern’s May flight schedule includes one international destination per country per week from Shanghai. It will continue to serve New York/JFK with once-weekly service for the foreseeable future.
China Southern released its international flight schedule for May, continuing to serve one destination per week per country with Los Angeles being the one US destination, having weekly service from Shanghai. The airline also announced that it would not be accepting any third-party or agency bookings through August 1.
Etihad, a 25% shareholder of Virgin Australia is open to discussions with regards to the future of VA, which is currently in the midst of voluntary administration procedures.
Interjet’s entire network is down to just 148 weekly flights to 5 destinations from Mexico City (MEX).
Vivaaerobus will operate 244 weekly flights on 34 routes based on its schedule filed through May 10. It will operate 14 routes from its Monterrey (MTY) hub, nine from Mexico City (MEX), eight from Guadalajara (GDL) and three from Cancun (CUN).

Andrew’s Moment of Levity

All credit for today’s moment of levity goes to the Twitter account of Manhattan, KS Regional Airport (MHK).

April 21, 2020

Air Canada to Temporarily Suspend Transborder Flights

Air Canada will suspend flight operations between Canada and the United States for four weeks beginning this weekend. Air Canada will end flights from its three remaining Canadian hubs, Montreal (YUL), Toronto/Pearson (YYZ), and Vancouver (YVR), to 11 U.S. destinations this Sunday, April 26 with plans to resume service May 22.

This is happening as Canada and the US agreed to extend border restrictions for another 30 days. Air Canada was able to withstand the first period with a skeleton schedule, but now it’s giving up.

TSA Adjusts With the Times

TSA has loosened screening procedures to account for the new reality of flying in the time of coronavirus. Many of the updates deal with standard changes that have become the new normal in the world — sanitizing & wiping everything down in the checkpoint regularly and social distancing in line.

However, a couple changes will have a direct effect on passenger behavior and loosens some previous TSA restrictions.Passengers are now permitted to travel through TSA checkpoints with one 12-ounce bottle of hand sanitizer. This is above the normal 3 oz. cap on liquids, and… apparently can’t be used as a weapon like all other liquids per TSA?Face masks are now permitted to be worn throughout the checkpoint. Passengers will need to adjust the face mask if requested by a TSA officer to allow for confirmation that you, in fact, are not hiding a 13-ounce bottle of hand sanitizer.This won’t effect many of us with the dwindling numbers of passengers in the air travel system, but for those that are traveling, these new policies are passenger-friendly and hopefully ease some of the strain from traveling.

For a first-hand account of what flying in today’s world is like, check out today’s post on crankyflier.com.

CARES Act Exemptions: Hey, Don’t Forget About Us!

Advanced Air, a southern California based airline that primarily flies Essential Air Service routes and a California shuttle service for Surf Air, submitted its requests for exemptions under the CARES Act while Tradewind, a New England based airline did the same.

Advanced Air has four destinations it serves only as part of a winter schedule and is requesting that it not be required to continue to serve those into the spring and summer. Those destinations are Austin (AUS), Carlsbad, CA (CLD), Dallas/Ft. Worth (DFW), and Taos, NM (TSM). It also serves six destinations as a service operator-only and says it should be released from its obligation to these destinations as the airline it operates on behalf of has reduced its flight schedules. Those destinations are: Las Vegas (LAS), Los Angeles/Hawthorne (HHS), San Carlos, CA (SRQ), San Francisco (OAK & SFO), Santa Barbara (SBA), and Truckee, CA (TRK).

Advanced Air will be hanging on to the three cities it services as part of its EAS contract: Albuquerque (ABQ), Phoenix (PHX), and Silver City, NM (SVM).

Tradewind Aviation requested exemptions from serving four locations: Berlin, NJ (19N), Martha’s Vineyard (MVY), Nantucket (ACK) and New York City (TEB/HPN). Tradewind says that it never served Berlin, NJ and its inclusion was an error. As to the other three, it says it plans to begin service Memorial Day weekend, which is what the airline intended all along.

Frontier Pauses Expiration of Miles

In an e-mail to members of its MyFrontier mileage program on Tuesday, Frontier disclosed that it would be pausing the expiration of miles indefinitely. Any member whose miles were to expire March 1, 2020 or later will be able to keep those Frontier miles for the time being. The program will let its members know at least 90 days before the expiration date returns.

Frontier also announced it will not raise the price of redemptions, with one-way domestic trips starting at 10,000 miles and 15,000 for international.

The announcement does beg the question — does anyone actually have Frontier miles?

The Bright Side: Vietnam Hopes to Resume All Domestic Operations

The civil aviation authority in Vietnam has requested permission from the federal government to reopen all domestic operations in the country as soon as this Thursday. After an April 1 shutdown of the country’s domestic flights, the government re-opened a very limited amount of flights last week, from Hanoi (HAN) to Ho Chi Minh City (SGN) and Da Nang (DAD).

The intention now is to resume all domestic operations on April 23 in addition to upping the frequencies on the already-in-place routes to and from Hanoi. The Vietnamese government is expected to grant the request as early as Wednesday of this week.

Airline Operation Potpourri

Air India has stopped taking bookings as the Indian Government instructed all Indian airlines to halt bookings until further notice. Air India had begun taking bookings for domestic flights beginning May 4 and international flights beginning June 1 until the government stopped it.
Allegiant will receive $171.9 million from the federal government under the Payroll Support Program.
ANA reduced its domestic operations at its Tokyo/Haneda (HND) hub to 10 daily flights to 4 destinations.
Bangkok Airways plans to restart domestic operations June 1 with 224 weekly flights. The airline will serve six destinations from its Bangkok (BKK) hub with one additional route from Phuket (PKT) to Kah Samui (USM).
Emirates has pushed back its restart date two weeks as it now plans to resume operations on July 1. Its limited repatriation flights are unaffected.
Mesa Air will receive $92.5 million from the federal government to help make payroll under the Payroll Support Program.
Norwegian is down to 264 weekly flights, all domestic. That includes 10 routes from its Oslo (OSL) hub around Norway, plus two destinations from Bergen (BGO) and one from Tromsø (TOS).
Qantas filed its May domestic schedule, and it shows 266 weekly flights across Australia. Most of the flights are from its domestic hubs: Brisbane (BNE), Melbourne (MEL), Perth (PER), and Sydney (SYD).
Singapore extended its flight cuts through the end of May. It is currently serving just 15 destinations, with Los Angeles being its lone destination in the United States.

Andrew’s Moment of Levity

In an effort to replace lost revenue, casinos on the Las Vegas strip have opened up drive-thru service. Customers can drive to their favorite casino, hand over a pre-determined amount of cash and then go about the rest of their day.