ARC NEWS
Azimuth to become first Russian A220 operator
July 23, 2021
Russia’s Azimuth Airlines placed an order for six Airbus A220 aircraft at the MAKS Moscow air show, which would make it the first Russian operator for the narrowbody. Azimuth says it plans to receive the six A220s by 2024 under a lease agreement with Air Lease Corporation. The first delivery is scheduled for mid-2022, the carrier says in a statement. The planes will have a single-class layout with 148 economy seats, Azimuth specifies, adding it intends to operate the A220 on both domestic and international routes. Azimuth currently operates a fleet of 15 Sukhoi Superjet 100 aircraft, and has a letter of intent for a further 2. It ordered a further 10 Superjets, also under a leasing transaction, at the MAKS air show.


American's operating result turns positive in second quarter
July 23, 2021
American Airlines made an operating profit of $441 million in the second quarter of 2021 – a giant step forward after reporting a $2.5 billion operating loss in the second quarter of 2020, and a testament to the positive impact of Covid-19 vaccination efforts on demand for domestic leisure travel in the USA. The profit gap with the pre-pandemic second quarter of 2019 is still wide. The Fort Worth-based carrier notched a $1.2 billion operating profit in the second quarter two years ago. In 2021's second quarter American made a net profit of $19 million, though if special items are excluded that becomes a net loss of $1.1 billion. "[The $1.1 billion net] loss, while large, is the smallest we've had since the start of the pandemic, as demand for air travel has improved significantly throughout the quarter," American's chief executive Doug Parker said during an earnings call on 22 July. The carrier generated $7.5 billion in revenue in the second quarter, compared with $12 billion in 2019's second quarter. Total capacity was down 26% in the second quarter versus the second quarter of 2019, and the load factor fell 10 percentage points to 77%. American ended the second quarter with $21.3 billion of liquidity, a company record, the carrier states. Its cash-burn rate turned positive in the quarter, ultimately averaging out to a "cash build" rate of $1 million per day. Parker emphasises American's renewed focus on improving its balance sheet. His announcement that the carrier is prepaying on 22 July the entirety of its $950 million spare-parts term loan scheduled to mature in April 2023 is intended to evidence that American is serious about slashing its debt. "Today, as the recovery continues, we've begun the deleveraging of our balance sheet," says Parker. American intends to trim its debt by more than $15 billion by the end of 2025 versus its previous guidance of $8-10 billion. The carrier expects capacity and revenue in the third quarter will be down 15-20% and 20%, respectively, versus the third quarter of 2019, as it awaits the return of demand for domestic business travel, as well as the easing of international travel restrictions which hinder the return of demand for long-haul business travel. American's president Robert Isom says he's seen "no degradation" in bookings related to the recent increase in the daily rate of new cases of Covid-19 in the USA. He adds: "Our net bookings are fully recovered, and we're focused on... managing demand while bringing back the network in full."


​Qatar Airways and Airbus
July 22, 2021
Qatar Airways chief executive Akbar Al Baker has accused Airbus of "bullying" the airline over a dispute regarding their A350 aircraft. Speaking to the FlightPlan webinar series on 21 July, Al Baker declined to comment on the details of the dispute, but said that Qatar Airways will not accept any further Airbus aircraft until the issue is resolved. "Airbus and Boeing both know, that when we say something we do it," he says. "We will not take any planes from Airbus until such time that the concerns we have are addressed by them, and they are contractually obliged by that." He continues that the airline will "not accept any bullying from any aircraft manufacturer". When asked to clarify whether in his view Airbus was attempting to bully the carrier, he responds: "Yes because they are ignoring the issue with the planes that we have, and they are trying to dilly-dally and drag their fleet instead of solving the problems that they have." He adds that although Qatar Airways would not seek to use its ownership position in other airlines to pressure Airbus, the dispute would "raise their eyebrows too", because it would alert them to problems with the aircraft. Data shows that Qatar Airways has 19 A350-1000s and 34 A350-900s. Of these, two A350-1000s and 11 -900s are listed as being in storage. Qatar Airways has another 23 A350-1000s on order. Regarding the carrier's wider fleet plan, Al Baker says that Qatar Airways has taken impairments on all its 10 A380s. Should the type return to service, he expects a maximum five aircraft to be reactivated. But Al Baker expresses doubt that market demand will be sufficient to make the aircraft profitable. Turning to freighters, Al Baker adds that Qatar Airways is looking to make an order either with Boeing or Airbus for latest-generation aircraft "before the end of the third quarter of this year". He adds, however, that the airline would consider a potential A350-based freighter only "if they [Airbus] resolve our issues".


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