Kulula.com and British Airways operator's certificate suspended indefinitely
March 14, 2022
The South African Civil Aviation Authority (SACAA) has indefinitely suspended Kulula.com and British Airways flights in South Africa. Comair, which operates both Kulula.com and British Airways had hoped to resume flying again by midday on Sunday. SACAA suspended kulula.com and British Airways flights for 24 hours on Saturday. It was a precautionary suspension following a review of certain policies, systems and procedures. SACAA said it undertook the review because of the recent spate of safety incidents at Comair. The SACAA wanted to confirm Comair's compliance with applicable Civil Aviation Regulations. So, Comair was to use those 24 hours to show that its risk and safety management systems were effective in managing potential hazards. As the 24-hour suspension drew close to an end, the Authority said it recognised Comair's efforts to resolve the matter as speedily as possible. But the Authority found that there are risks that Comair must attend to immediately. SACAA said after working through the night to review the evidence received from Comair, it raised three level 1 findings and one level 2 finding. A level 1 finding shows an immediate risk to safety and security, and it must be closed with immediate effect. Level 2 findings must be closed within 7 days. "The SACAA is fully committed to ensuring that the operator is back in the air and has dedicated a full team to assess and review the evidence as it gets submitted. The commitment to safety, in this case, supersedes any other need, and this is to ensure that South Africa maintains its safety record of having ZERO fatal airline accidents," said the regulator in a statement. Earlier on Sunday morning, Comair said it was planning to resume Kulula.com and British flights by midday. At the time, Comair was still engaging with the Civil Aviation Authority to lift the suspension. "We are doing everything possible to get the suspension lifted. We continue to engage constructively with the SACAA and are working hard to provide the CAA with the additional information it requires," said Comair CEO Glenn Orsmond at the time. All flights are cancelled. Comair said it is unable to confirm when it will start flying again. "This is a huge blow to our customers, employees and the flying public as it effectively takes 40% of the capacity out of the market. The implications for the aviation sector and the country are considerable should the suspension continue for any length of time," said Orsmond.
Orsmond added that Comair's priority now is to assist stranded passengers. He said the company will keep customers updated via SMS . "We have chartered two aircraft to assist vulnerable passengers and those who most urgently need to travel."
Airline fares in USA up 13% versus 2021 level
March 11, 2022
Airline ticket prices in the USA increased 13% during the 12 months ended February 2022, the US Labor department's Bureau of Labor Statistics disclosed on 10 March. The consumer price index for airline fares rose 5.2% in February compared with the previous month. Over the last 12 months, the "all items" consumer price index increased 7.9%. The all-items consumer price index is commonly used as a measure of inflation in the USA. The bureau collects prices each month in 75 urban areas across the USA from about 6,000 housing units and approximately 22,000 retail establishments. "The 12-month increase [in the all-items index] has been steadily rising and is now the largest since the period ending January 1982," the bureau states. The energy consumer price index rose 26% year on year, with all major energy component indexes increasing. The ongoing war in Ukraine and the related energy sanctions imposed on Russia are expected to push airfares and prices at the gasoline pump even higher, which could have a dampening effect on travel demand in the USA.
US lawmakers raise antitrust concerns on Frontier-Spirit deal
March 11, 2022
A group of US House and Senate lawmakers on 10 March sent a letter to federal regulators, asking them to review the proposed merger of Frontier Airlines and Spirit Airlines and “to oppose it if you determine it will threaten competition in the airline industry or ‘the public interest’”. The lawmakers in their letter to the US Transportation department and the antitrust division of the Justice Department warn that the proposed merger “could lead to higher prices and lower quality for consumers, and lower wages for workers”, stating that previous airline mergers drove fare increases. “Pilots, flight attendants, and other workers in the airline industry would lose an alternative employer, and Spirit-Frontier would face less competitive pressure to offer better compensation and labour conditions to their employees.” The merger proposed in February is valued at $6.6 billion and would create the fifth-largest US carrier by capacity size if approved. Frontier and Spirit have declined requests to speculate on the chance of regulatory approval. Signatories of the letter to regulators included Democratic senators Elizabeth Warren and Ben Ray Lujan; and Democratic House representatives Rashida Tlaib, Mondaire Jones, Katie Porter, Jan Schakowsky, and Alexandria Ocasio-Cortez. The only non-Democrat included was senator Bernie Sanders, an Independent from Vermont who caucuses with the Democrats. Combining Frontier and Spirit could create a company that is four times larger than the next-largest ultra-low-cost carrier, according to the letter, adding that the two airlines would face less pressure to improve customer service. “As has often been the case with airline mergers, the resulting Spirit-Frontier carrier could hurt consumers in numerous ways, consolidating market power for the airlines and reducing choices for travellers.” US president Joseph Biden in July 2021 directed federal agencies to re-evaluate their antitrust oversight in a bid to maintain competition, workers’ rights, and consumer rights. By doing so, he signalled a shift away from the policies of former US president Donald Trump, who eased or eliminated long-established regulations at numerous agencies. The Justice Department has sued to halt the codeshare partnership between JetBlue Airways and American Airlines that focuses on flights from Boston and New York City, which was approved in the final days of the Trump administration despite anti-competitive concerns voiced by critics including Spirit Airlines. Combining the two ULCCs would create a leisure powerhouse yet it remains to be seen whether it would enable them to dominate a significant range of markets, JP Morgan analyst Jamie Baker said in a research note in February. The network of the combined airline would include 86 nonstop markets in the USA that overlap, Baker says, yet “none will consolidate to solely the combined entity”. The merged airline would have a 24% market share on those US routes, Baker reports, yet it would “emerge as the dominate operator in a handful” of markets including the Tampa to Cleveland route where it would have a 77% share of traffic.