Heathrow Airport has warned that it risks having fewer passengers in 2021 than in 2020 as UK government travel restrictions continue. The UK's largest airport also says in its six-months results that it is falling behind European rivals in terms of cargo and trade activity. "Recent changes to the government's traffic-light system are encouraging, but expensive testing requirements and travel restrictions are holding back the UK's economic recovery and could see Heathrow welcome fewer passengers in 2021 than in 2020," it says. It adds that fewer than 4 million people travelled through Heathrow in the first six months of 2021, a level that would have taken just 18 days to reach in 2019. The airport now predicts 21.5 million passengers in 2021, a 2.7% drop compared with 2020 or a 73% decline compared with 2019. Heathrow notes that cargo volume remains 18% down on pre-pandemic levels, while Frankfurt and Schiphol are up by 9%. Trade routes between the EU and the USA have recovered to nearly 50% of pre-pandemic levels while the UK remains 92% down. "The UK is emerging from the worst effects of the health pandemic, but is falling behind its EU rivals in international trade by being slow to remove restrictions," states Heathrow chief executive John Holland-Kaye. "Replacing PCR tests with lateral flow tests and opening up to EU and US vaccinated travellers at the end of July will start to get Britain's economic recovery off the ground." Heathrow Airport says its cumulative losses from the Covid-19 pandemic have now reached £2.9 billion ($4 billion). In the first six months of 2021, its revenue fell to £348 million from £712 million, while it made an adjusted loss on earnings before interest, tax, depreciation and amortisation (EBITDA) of £33 million, from a profit of £222 million in the year-ago period.

South African Airways' low-cost subsidiary Mango has been placed in business rescue. "The situation with Mango is quite unfortunate," SAA's interim chief executive Thomas Kgokolo has told broadcaster eNCA. "What we can say is that the board and shareholders have agreed that Mango will go into business rescue." He adds that negotiations with labour and key stakeholders are ongoing. SAA itself emerged from business rescue at the end of April. It is awaiting approval for its air operator's certificate from the regulator before it can resume operations. Kgokolo expects SAA will receive its AOC by 30 July after agreeing a deal with pilots on training and submitting a portfolio of evidence to the regulator. "If the AOC is confirmed by this week, what we plan to do as early as August is get back into cargo. Cargo will probably go in first before we talk about the passenger restart date," he tells eNCA. SAA plans to resume operations with a fleet of eight aircraft, he adds, with a careful focus on the choice of routes and costs to ensure the new business is sustainable.

Icelandair has seven of its nine Boeing 737 Max jets in service and expects to bring the other two into operation by late August. The carrier is also planning to take another Max 8 and Max 9 in the fourth quarter, and another Max 8 – the last of the 12 737 Max jets it ordered – in the first quarter of 2022. “[Icelandair Group] is currently in the process of financing the three remaining aircraft,” it says, adding that a “backstop” financing option with lessor BOC Aviation is still in place. While introduction of the Max was held up by the prolonged grounding of the type, Icelandair indicates it is impressed with the aircraft’s performance. “The aircraft is even more technically reliable and fuel-efficient than originally anticipated with a payload-range exceeding prior expectations – making its suitability for Icelandair’s route network outstanding,” says the carrier in a second-quarter briefing. “Favourable [post-pandemic] market conditions may result in further additions to the fleet, the feasibility of which is currently being explored.” Icelandair Group says it will start a strategic initiative to review the carrier’s long-term fleet strategy at the end of summer 2021, with a view to completing the work by the end of the year. Icelandair had originally ordered 16 Max jets but cut the order to 12 last year as the air transport crisis took hold and the airline reached a settlement with Boeing over the grounding. The airline says the “first signs of a turnaround” in international passenger travel emerged over the second quarter, although the increase in production has started later than forecast. May and June generated a “meaningful increase” in the flight schedule, it says, with destinations and frequency being added weekly. Capacity for the quarter equated to 15% of that in the same period in 2019. But the airline says it expects to “accelerate its ramp-up” in the third quarter, with capacity in the fourth quarter 2021 to reach 70-80% of the company’s 2019 level. “The ramp-up has started,” insists chief executive Bogi Nils Bogason, pointing out that strong bookings in the second quarter resulted in a positive cash-flow from operations of $65 million, and nearly $20 million for the first half. “This is a remarkable turnaround from the previous year.” But Icelandair Group’s financial performance continues to illustrate the pressure under which the industry has been struggling. Its operating loss for the quarter reached $62 million and more than $108 million over the first half to 30 June. But the company stresses that the operating results for the quarter have been affected by its international route network ramp-up. “Realising a positive profit contribution from flights during ramp-up is generally challenging and this year it was further impacted by the pandemic,” it says. It points out that it invested “substantially” in operations in preparation for an “ambitious” second-half schedule, expenditure which included acquiring the three additional Max jets and the re-introduction of other aircraft to its fleet which had been in long-term storage.