Air New Zealand chairman Therese Walsh says the airline will continue to focus on its domestic network and expects to increase capacity to over 110% of pre-pandemic levels. Walsh says the airline will further “[unlock] that demand” through increasing flight frequency as part of its domestic network strategy, during its 2021 annual shareholders’ meeting on 28 October. The domestic network has been a major contributor to the airline's operating revenues despite the ongoing challenges in the past 12 months, she says, with domestic capacity tracking in excess of 90% of pre-pandemic levels prior to the latest lockdown in August. Walsh states: “Leisure demand was up 130% in May, June and July compared to pre-Covid levels, and we had seen strong performance on our regional routes, with routes such as Tauranga-Christchurch and Hamilton-Christchurch performing well above pre-Covid levels, along with New Plymouth, Kerikeri and Invercargill.” It also expects to increase frequency on its international network from November. "While the trans-Tasman bubble is closed, we are flying an average of 50 flights per week to 16 destinations including Los Angeles, Hong Kong, Shanghai, Australia and key Pacific ports. From November, this will increase to 65 flights per week for the summer period," says Walsh. Air New Zealand has also started new cargo flights to Guangzhou in China. Walsh adds: “The board acknowledges the lack of financial return for our shareholders but assure you that we are using this opportunity to further critique our cost base and roll out an exciting new strategy. “We aim to be a more cost-effective and more innovative airline than even before and we look forward to sharing those rewards with you in the future. We thank you for standing by us through this difficult time.” Chief executive Greg Foran states: “2021 has been uncertain, volatile, and complex and continues to be so. Remarkably, we managed to keep our planes flying every single day, moving customers, and moving freight. “And through this we’ve maintained a strong cost discipline and developed new capabilities which will allow us to build back even better when the borders reopen and domestic restrictions ease.”

The UK plans to slash air passenger duty (APD) on domestic flights from April 2023, while imposing an additional tax on ultra-long-haul services. As part of the country's annual budget statement, chancellor Rishi Sunak said the move would halve APD for 9 million passengers annually, support local airports, and "bring people together across the UK". The measures will introduce a new domestic band for APD set at £6.50 ($8.90), which will apply to all flights between airports in England, Scotland, Wales and Northern Ireland, excluding private jets. Carriers have long complained that APD in effect double taxes their domestic services because it charges a passenger with a return ticket for both legs of their journey, compared with only once for an international trip. The extra duty on ultra-long-haul services will apply a £90 charge to flights of 5,500 miles or more, roughly the distance from London to Sri Lanka or Mexico City. It means the UK's new APD distance bands will be set at 0-2,000 miles, 2,000-5,500 miles and 5,500 miles plus, at rates of £13, £87 and £91 respectively for economy passengers, plus the new domestic tariff. Sunak adds that the additional duty on long-haul flights is being enacted to reflect the environmental impact of such services and will affect fewer than 5% of passengers. Both measures will come into force from April 2023.

Fitch Ratings has upgraded Russian flag carrier Aeroflot’s long-term credit rating to “BB” from “BB-” and outlook from “negative” to “stable” level. The SkyTeam carrier says the upgrade is primarily driven by an active recovery of the Russian market with domestic traffic and load factor outperforming the pre-Covid-19 levels of 2019. Analysts expect “international travel to gradually recover to 2019 levels by 2023, given the capacity removed during the course of the pandemic, which was reflected in heightened 2021 yields”. The rating upgrade also reflects Fitch’s view that Aeroflot has made significant efforts to improve the liquidity situation, as well as the systemic importance of the airline for the industry and the country's economy. The agency also cited the carrier’s efforts in rescheduling aircraft deliveries and lease payments restructuring underlining that this is “adding to financial flexibility”.