China’s three largest carriers grew their domestic networks in October, tapping into second- and third-tier cities to launch new routes, as they recorded yet another month of domestic traffic recovery. The "Big Three" — Air China, China Eastern Airlines and China Southern Airlines — each launched more than 10 new domestic routes during the month. Among them, China Southern, which returned to profitability in its third-quarter earnings, rolled out the most number of new destinations, launching 18 routes. Air China announced 17 new routes, while China Eastern launched 12 routes. Some of the newly-launched routes were between smaller Chinese cities, such as Air China’s daily flights from Wenzhou in eastern China to Nanning in the south. Others included flights from the carriers’ hubs to smaller regional points, like China Eastern’s flights between its Shanghai Hongqiao hub to Wuzhou in southern China. October’s route expansion is also highest number of launches in recent months, underscoring the rapid domestic recovery reported by each of the three carriers after being impacted by the coronavirus outbreak. For the month, the "Big Three" continued to see growth in domestic traffic, helped by the Golden Week national holidays at the beginning of the month. However, the carriers saw a decline in passenger load factor, as capacity growth outpaced traffic volume International traffic remained at dismal levels, due to global travel restrictions to prevent the spread of the pandemic. China Southern carried 11.8 million domestic passengers in October, a 6% month-on-month increase which was also about 3.3% higher than the same month last year. The Guangzhou-based carrier saw domestic RPKs rise 6.5% month on month, with ASKs gaining 8% compared to September, leading to a 1.15 percentage point decline in domestic load factor. Year-on-year, China Southern saw domestic RPKs rise 2.6%, with ASKs climbing 11.6%. The airline carried around 76,000 international passengers for the month, a 5.8% decrease month-on-month, and a 95% drop year-on-year. As for Air China, it carried 8.37 million domestic passengers in the month, a 3.6% increase month-on-month and a 7.7% increase compared to the same month last year. Month-on-month, domestic RPKs grew 8.3%, while ASKs rose 9.8%, leading to a decline in passenger load factor of 1.1 percentage points to 76.1%. Compared to October 2019, Air China saw domestic RPKs rise 2.6%, with ASKs increasing 13.7%. Air China carried 42,900 international passengers in October, representing a 10% month-on-month rise, but a 97% decline year-on-year. It was the only carrier among the "Big Three" to report an increase in international traffic month-on-month. Meanwhile, China Eastern carried 9.1 million domestic passengers in October, nearly 2% higher month-on-month. Compared to last year, it represented a 2.7% decline. Domestic ASKs rose 3.8% month-on-month, with RPKs increasing 2.6%, leading to a drop of 0.4 percentage points in domestic passenger load factor. Year on year, China Eastern reported a 0.6% increase in RPKs, with ASKs climbing 9.7%. As for its international network, the SkyTeam carrier reported an 8.3% month-on-month fall in passenger numbers, carrying just 26,700 passengers for the month. Year-on-year, passenger numbers plunged 98%.

Source: Cirium

Concerns about a lack of air cargo capacity for the global distribution of Covid-19 vaccines – even those requiring the maintenance of extremely low temperatures during transit – are unfounded, in the view of Cargolux chief executive Richard Forson. The biggest logistical challenge will instead be around the “final mile” distribution of vaccines that require sub-zero storage – something that is out of airlines’ hands, Forson stated during a UK Aviation Club event on 12 November.Recalling IATA’s claim in September that “just providing a single dose to 7.8 billion people would fill 8,000 747 cargo aircraft”, Forson observes that “you’re not going to transport 6 billion doses at one time”. Rather, “there’s going to be a maximum amount of vaccines that can be produced by the pharmaceutical company or companies”. Forson believes, therefore, that “the blockage is not going to be the number of aircraft that is required, because I can tell you all of the passenger aircraft in the world will then be mobilised in order to transport these vaccines”, alongside services offered by dedicated freight operators such as Cargolux. Of new-generation vaccines such as Pfizer-BioNTech’s – which may need to be stored at around -70°C to -80°C until they are within hours of use – Forson notes that transport boxes proposed by the manufacturers will ”ensure that temperatures are not compromised”, while also protecting the aircraft from the effects of ultra-low temperatures. Without those boxes, “I can tell you that there’s no aircraft that can ever get to -80°C”, Forson says. “If it does, it will fall out of the sky.” In addition to new-generation vaccines, “there are also other drug companies that work on the older generation where you don’t have to get to these extreme temperatures, but you get to something like -20°C, which we do on a regular basis”, Forson explains. “So there’s no issue about how we’re going to transport it.” Speaking in September, IATA director general Alexandre de Juniac warned that the airline industry’s ability to play a key role in the distribution of vaccines might be compromised by an air freight capacity crunch. “Safely delivering Covid-19 vaccines will be the mission of the century for the global air cargo industry,” de Juniac stated. “But it won’t happen without careful advance planning.” European carrier Cargolux is one of the largest dedicated freight operators in the world, with 30 Boeing 747 aircraft in its fleet.

Source: Cirium

Croatia Airlines is to hold an extraordinary general assembly to approve a recapitalisation scheme which involves raising Kn350 million ($54.7 million) through a share issue. Under the proposal, to be discussed at the 14 December assembly, the share capital of the airline would increase from Kn277.8 million to Kn627.8 million. Croatia Airlines would issue 35 million new shares, with a nominal value of Kn10. “The purpose of the share capital increase is to return the company’s capital and reserves to pre-crisis levels,” says the carrier. It says the increase in share capital shall be carried out through an investment agreement concluded between the airline and the Croatian state. Shareholders other than the government will be excluded from participating in the offer. Croatia’s transport ministry, on 13 November, put forward a proposal to inject Kn88.5 million into the company to compensate for damage inflicted by the pandemic from 11 March to 30 June. The ministry’s proposal says the payment of these funds must be made by 31 December at the latest. Croatia Airlines, it states, is “no exception” to the “devastating” effects on the aviation industry arising from the pandemic.“As a state-owned carrier, it has a strategic role in Croatia’s transport infrastructure, which has proved particularly crucial in this crisis period,” it adds. But it states that the carrier experienced “no significant financial shift” in the crucial summer months, when it would typically generate the largest inflow of funds under normal circumstances. Croatia Airlines’ latest financial disclosure shows it turned in an operating loss of Kn222 million and a net loss of Kn243 million for the nine months to 30 September. Passenger income fell by two-thirds to Kn393 million. Over the seven months of the crisis from March to September the airline cancelled 12,800 flights. It says revenues from tourism account for an “extremely large share” of the country’s GDP, and that both the pre-season and main tourism season have faced a substantial impact. Croatia Airlines had a fleet of 12 aircraft at the end of September, comprising six Airbus A320-family jets and six Bombardier Q400s. The airline cancelled plans to lease additional Bombardier CRJ and Q400 capacity for the peak season. “Given the circumstances and reduced demand, greater emphasis was placed on the use of the Q400 fleet, whose aircraft have a smaller capacity than the Airbus fleet,” it states. Croatia Airlines says the most significant risk affecting its operation is maintaining liquidity, particularly since the duration of the crisis is uncertain. The airline is not expecting a substantial improvement in performance as it heads into the low winter season. It says it has had to develop “several versions” of its crisis business plan, with the current one involving a reduction of flights since August owing to the “deterioration” of the epidemiological situation in Europe.

Source: Cirium