Heathrow does not expect full traffic recovery until 2026
October 27, 2021
London Heathrow does not expect passenger traffic to recover fully until 2026, and is complaining that recent proposals to allow it to increase charges "do not go far enough". The airport saw its first full quarter of passenger growth since 2019 in the three months ended 30 September, boosted by the easing of travel restrictions and a surge in pent-up demand. Despite this, passenger numbers reached only 28% of their pre-pandemic levels, while cargo volumes, amid a lack of capacity on passenger flights, recovered to 90% compared with the third quarter of 2019. For the first nine months of the year, pre-tax losses narrowed to £1.38 billion ($1.91 billion) from £1.52 billion in the same period of 2020. Heathrow has lost £3.4 billion cumulatively since the start of the pandemic, remains loss-making currently, and has £4.1 billion in available liquidity. "We are on the cusp of a recovery which will unleash pent-up demand, create new quality jobs, and see Britain's trade roar back to life – but it risks a hard landing unless secured for the long haul," states Heathrow chief executive John Holland-Kaye. Heathrow has recently become embroiled in a spat with airline customers over charges, as the airport seeks permission from the UK Civil Aviation Authority to impose large rises in fees in a bid to claw back some of the losses built up through the crisis. Addressing the issue, Holland-Kaye argues that higher charges are required in order to "sustain service and resilience after 15 years of negative real returns for investors". He adds that the CAA's current proposals therefore "do not go far enough to ensure financeability" and to enable shareholders receive a fair return "which is key to securing future private investment in passenger service and resilience for Britain's hub airport". The CAA's proposals, published earlier this month, envisaged increasing average charges to a potential range of £24.50-34.40 per passenger over the next five years, up from a cap of £22 in 2020. This proposed increase has been strongly criticised by airlines. Lobby group Airlines UK described the move as a "blatant gouging" of the sector and warned it would ultimately hurt passengers. "How on earth can it be in the interests of consumers to ramp up charges by as much as 50%?" asked the group. Airlines' worry is that such increases will force them to raise fares and choke off demand just as the recovery is gathering pace. Seeking to further make the case for higher charges, Holland-Kaye highlights that private investment has "transformed Heathrow" in recent years, "so that it is now rated by passengers as one of the top 10 airports worldwide, and airlines are able to achieve premium margins". The comments are a sign that tensions between the airport and its airline customers are set to continue, ahead of the CAA's announcement of its final decision on 17 December. Turning to sustainability, Heathrow is advocating the establishment of a global mandate for sustainable aviation fuels to ensure that aviation can thrive while reducing its negative impact on the environment. "The UK government's ambition to implement a mandate for at least 10% SAF use by 2030 and £300 million kickstart funding for production in the UK, provides leadership by example to other world leaders ahead of the COP26 summit in Glasgow," states Holland-Kaye. "We now need government to set higher mandate levels for 2050 and provide a price-stability mechanism, such as contracts for difference, to scale up supply as fast as possible."
Viva Aerobus swings to profit in third quarter
October 27, 2021
Grupo Viva Aerobus generated an operating profit of Ps1.63 billion ($79 million) in the third quarter, swinging from a loss of Ps751 million in the same period previous year. The figure represents a 175% increase from the same period in 2019, the Mexican airline group says. The group posted revenue of Ps5.94 billion, up 225% year on year and 50% as compared to 2019. Net income was Ps919 million as compared to a loss of Ps734 million in the previous year quarter. It is the second consecutive quarter in the net income zone, the group says. The figure also represents an increase of 307% from 2019. At 4.21 million, booked passengers continued posting encouraging numbers, growing 128% year on year and 26% as compared to 2019, the group says. Capacity, as measured in available seat-kilometres, rose 113% year on year and 43% as compared to 2019, whereas revenue passenger-kilometres grew 127% year on year and 33% versus 2019. As of 30 September, the cash and equivalents balance stood at Ps8.18 billion as compared Ps3.07 billion and Ps3.80 billion in 2020 and 2019, respectively. During the quarter, Viva Aerobus operated 125 routes, 103 domestic routes and 22 international. Additionally, the group added one Airbus A321ceo and one A321neo aircraft, its 50th aircraft. The group incorporated a total of seven aircraft so far this year. Currently, the group has 20 A320ceo, 20 A320neo, five A321ceo and five A321neo aircraft in its fleet. On 20 September, Sonia Jerez joined Viva Aerobus as finance chief, the group says.
Emirates recruits for 'accelerated recovery'
October 26, 2021
Emirates plans to recruit over 6,000 staff over the next six months as part of plans to rebuild capacity in response to a "sooner-than-expected surge" in customer bookings. As part of this, the Middle Eastern carrier has restored around 90% of its pre-pandemic network and plans to reach around 70% of capacity by the end of 2021. This "accelerated recovery" will entail additional frequencies, including its Airbus A380's. "By November, Emirates will offer more than 165,000 additional seats on its flagship A380 aircraft," says the carrier. It currently operates its A380s to 18 destinations, but plans to ramp this up 65%, to 27 routes, by end-November. The recruitment drive will seek to onboard 3,000 new cabin crew, 500 airport services staff, 700 ground staff, 600 pilots, and 1,200 technical staff. Emirates Group chief executive Ahmed bin Saeed Al Maktoum states: "We have been prudently restoring our operations in line with the borders reopening and ease of travel protocols, and with the positive signs in the economic recovery and continuous growth of demand, we are hopeful to be back to where we were pre-pandemic, from mid-2022." Data shows that the carrier is continuing to expand capacity, with sharp gains recorded through October, even as flight activity has slowed elsewhere into the winter. Emirates operated a seven-day average of 272 flights on 24 October, for example, up from 245 on 1 October and 162 on 1 June. This remains, however, around half of the capacity it operated in October 2019, long-haul travel having been particularly hard hit by the pandemic.