Fitch Ratings has downgraded Turkish carrier Pegasus' foreign- and local-currency long-term issuer default ratings (IDR) to 'B+' from 'BB-'. The downgrade reflects its expectation of Pegasus' delayed deleveraging on the back of a weaker operating environment for both international and domestic businesses, the US-based ratings agency says. The outlook on the IDRs remains negative. Fitch Ratings has affirmed its $375 million senior unsecured bonds rating at 'BB-'/'RR3' and has also affirmed its national long-term rating at 'AA(tur)', reflecting the recalibration of Turkey national rating scale following Fitch's downgrade of Turkey's sovereign rating to 'B+' from 'BB-' on 11 February. Fitch says the negative outlook reflects potential further macroeconomic instability due to prolongation of the Russia-Ukraine war or a volatile Turkish economy, which may pose further risk to Fitch's forecasts and the sector recovery. Fitch adds that it may revise the outlook to stable if the current positive trends in operations including ancillary business continue despite higher cost pressures. Fitch Ratings states: "The 'B+' ratings reflect Pegasus' strong domestic position in Turkey with strong growth prospects on both international and domestic routes, an industry-leading cost base with a young and fuel-efficient fleet and readily accessible hard-currency liquidity. "The rating also reflects high execution risk inherent in its aggressive growth strategy, a weak operating environment with foreign-exchange and geopolitical risks, weak leverage and coverage metrics and smaller scale than many peers." In 2020-2021, Pegasus has been successful in capacity ramp-up but recovery of yield, load factor and profitability were slower than Fitch's expectation. Its domestic capacity, measured by available seat kilometres, remained resilient throughout the pandemic and exceeded its pre-pandemic level in the third quarter of 2021, before significantly underperforming from the fourth quarter as its focus moved to international. Pegasus expects over 50 new aircraft deliveries in 2022-2025, all Airbus A321neos, which are more fuel-efficient and have larger capacity but also pose challenge to load-factor management, Fitch adds.

China Eastern has resumed operating a small number of its Boeing 737-800s, flight tracking data suggests, after a fleetwide grounding of the variant for nearly one month since the fatal MU5735 crash. Data from Flightradar24 shows instances of China Eastern operating its 737-800 jets. An example includes a 737-800 jet, bearing registration B-207L, on flight MU5843 on 17 April, from Kunming to Chengdu. Data shows the aircraft, bearing MSN 63075, is of 2018 vintage and managed by China Everbright Financial Leasing. Another 737-800 jet, bearing registration B-1308, is expected to be operated on flight MU5844 on 18 April, from Chengdu to Kunming, according to Flightradar24 data. Data shows the 2017-vintage aircraft, bearing MSN 63762, is managed by SPDB Financial Leasing. The data also shows China Eastern Group operates a fleet of 223 737-800s, of which 108 are operated by China Eastern Airlines, 71 by Shanghai Airlines and 44 by China United Airlines. The resumption of 737-800 operations comes after China Eastern grounded its 737-800 fleet on 21 March, in response to the fatal crash of flight MU5735 at Wuzhou, Guangxi province, killing all 123 passengers and nine crew. It was flying from Kunming to Guangzhou. Days-long search efforts have recovered the aircraft’s cockpit-voice and flight-data recorders, which have been sent for analysis, as well as parts of aircraft. Preliminary details on the crash are expected to be released, in line with ICAO’s accident investigation provisions that require states investigating the accident to lodge the preliminary report within 30 days of the accident.

Hong Kong International airport handled 94,000 passengers in March, a figure up 61% year on year, although passenger traffic continued to remain significantly lower than the pre-pandemic level in 2019. The growth in passenger throughput was mainly attributed to the growth in Hong Kong residents’ travel. During the month, departure passengers to Southeast Asia and mainland China experienced the most significant increases, Airport Authority Hong Kong says in a 14 April press release. HKIA handled 9,870 flight movements during the month, representing a year-on-year decrease of 7%. Cargo throughput fell by 11% to 352,000t due to flight reductions amid the emergence of the Omicron variant of Covid-19. Overall cargo to and from North America and Europe experienced the most significant decreases during the month, it adds. On a 12-month rolling basis, passenger volume grew by 70% to 1.4 million, while flight movements rose by 13% to 144,505. Cargo throughput rose by 7% to 4.9 million tonnes. The Hong Kong government lifted restrictions on arrival flights from nine countries on 1 April, it says.