Emirates' Clark fears 777X jets could arrive five years late
April 09, 2021
Boeing's 777X programme is in "a state of disarray", in the view of Emirates Airline president Tim Clark, who has revealed that the Middle Eastern carrier may not receive its first of the aircraft until as late as end-2025 – over five years later than scheduled. "We should have had our first delivery in June last year, and so far we have no visibility on when the first one will arrive," Clark said during a webinar organised by Simple Flying on 7 April. Clark says that, following discussions with Boeing Commercial Airplanes chief executive Stanley Deal, he expects the jets will begin arriving "either at the back end of '23, '24 or possibly even '25". Data shows that Emirates has a total of 115 777X jets on order: 101 777-9s and 14 777-8s. Letter-of-intent commitments cover a further 11 777-8s. Boeing says it is working closely with global regulators on the 777X's development, including a rigorous test program. "Our team remains focused on executing this comprehensive series of tests and conditions to demonstrate the safety and reliability of the airplane’s design," Boeing says. "It is diligent, deliberate work and we are pleased with the progress to date. We also are providing regular updates to our launch customers.” The airframer also highlights recent comments from 777X launch customer Qatar Airways that it expects to receive its first aircraft in 2023. Clark says the absence of the aircraft makes it difficult for Emirates to plan its fleet and network strategy. Emirates had planned to begin replacing some of its A380s with 777-9s, a strategy that would have enabled it to build capacity while retiring its oldest aircraft. Delays mean that such a move "has been shifted to the right, but we don't know by how much at this stage". Amid the uncertainty, the Airbus A380 will play an ongoing role at the carrier for at least another 15 years. The double-deck type has formed the backbone of the airline's fleet for over a decade, and Clark highlights that pre-pandemic the A380 accounted for 85% of profits and was "always full", proving popular with travellers across all seat classes, something that "we see continuing". The use of high-capacity aircraft such as the A380 and 777X underlines Emirates' commitment to its hub-and-spoke strategy. Clark says: "I see no reason to adjust our business model whatsoever [because of Covid-19]." He notes that most long-haul point-to-point routes remain uneconomical, while the use of a hub pushes down unit costs and allows income to increase "exponentially" as capacity is increased. Clark adds that he expects a rapid return to flying in the second half of 2021 as vaccines are rolled out. Emirates' passenger numbers declined from around 4.5 billion in 2019 to around 500 million last year, but he asserts that "people's desire to travel hasn't changed". "In the short term there will be a bow-wave of demand," he adds. This "will have to be accommodated by a diminished airline community in terms of capacity offered".

Comair delists to access government-backed financing
April 08, 2021
South African carrier Comair is delisting from the Johannesburg stock exchange in a move which will allow it to access government-backed financial support. In an update, the airline's administrators say it can now apply for funding in the sum of R100 million ($6.9 million) under a Covid-19 loan guarantee scheme put in place by the South African Reserve Bank and private commercial banks. Such funding is a "fundamental element" of its debt restructuring, say the administrators. Comair is seeking to put in place a total of R600 million of new debt under its business plan published in September 2020. It had entered restructuring in May. A consortium comprised of seven individuals plus an investment vehicle, Luthier Capital, is seeking to take full control of the airline, which resumed flights in December 2020.

​IATA's new director general 'optimistic' on summer recovery
April 08, 2021
The rollout of vaccines means that international passenger traffic numbers should improve significantly by the northern hemisphere's peak travel season in the second half, according to IATA's new director general Willie Walsh. During his first press briefing in his new role, the former IAG chief executive cited mounting evidence of pent-up demand, including healthy passenger numbers in reopened domestic markets such as Australia, or Russia, where traffic has reached pre-pandemic levels. Economic growth has also rebounded strongly, while last year's summer jump in European passenger numbers shows that the continent's travellers are keen to return to the skies as soon as they are able. "We should remain optimistic about a summer holiday season for those in Europe," says Walsh. "I'm definitely going to take one as soon as I can." Although forward bookings show that ticket sales are far below normal for this point in the year, Walsh notes that passengers are purchasing tickets closer to the date of departure. "It's still early," he says. "It's only April." Referencing data from IATA which shows weak load factors and international travel down by 89% in February compared with two years earlier, Walsh cautions that, even accounting for the expected rebound, "the industry is not ready to stand on its own feet at the moment." He is urging governments to extend the periods before airlines are required to start repaying debt, to recognise the fact that "this has gone on longer than anyone anticipated". Walsh adds: "It will take some time for airline to be able to repay the debt that they have taken on and get back to remunerating shareholders as they were before the crisis." Framing how he intends to lead IATA going forward, Walsh sounds a warning that some parts of the aviation ecosystem may seek to recoup lost earnings through higher charges for airlines, especially those in monopoly positions. He suggests that London Heathrow airport, with which he frequently clashed while at IAG, may enact higher charges, and complains that air traffic providers are, in some cases, using their positions as "monopoly suppliers" to increase fees. IATA will be "very strong and aggressive" in opposing such moves, he vows. He also states his expectation that regulators will take a "tough" stance. Walsh argues that once the threat of Covid-19 recedes, all associated travel restrictions should be removed, allowing people to travel exactly as they did before the pandemic. He indicates that while he may break from his predecessor's habit of holding weekly press briefings through the crisis, he will communicate regularly to the press "when we have something to say", adding: "At the moment, there is plenty to say."


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