Time For Growth - Airline Routes and Ground Services
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Final countdown
Europe’s LCCs hope for
a strong summer
Eastern promise
Korean Air prepares for
life after lockdown
Selling the dream
Why Orlando International is
Time For Growth
marketing destinations again Can China drive a global aviation recovery?
airlinergs.com Spring 2021
Global Outreach It all begins at Miami International Airport, Florida’s Global Gateway: • Among the Top 3 Gateways to the USA and the Leading Airport Connecting the Americas. • The USA’s #1 International Freight Hub and the #1 Airport for International Passengers to Florida. • New Air Service Incentive Program – ASIP6 – now available. www.miami-airport.com iflyMIA | marketing@miami-airport.com Photo Courtesy: Felipe Galvez
Editor’s
N O T E S
Edward Robertson
ed@evaint.com
I
don’t want to tempt fate, but it is shows on page 44.
beginning to feel like there is a note
of optimism in the aviation industry This is not to say we are out of the woods
regarding the Covid-19 pandemic. quite yet.
Vaccine programmes are rolling Our technology feature on page 40 shows
out across the world and, providing how both Boeing and Airbus have been
countries administer them effectively, forced to reconfigure operations during
we should see both an increase in the pandemic while Emirates boss Sir Tim
international flights and more confident Clark has also warned many airlines still face
travellers in time for the summer. considerable financial difficulties (page 16).
As a result, airlines are planning to resume Meanwhile, an analysis of the Asia-Pacific
services in volume and easyJet CEO Johan region on page 26 shows that there is
Lundgren (page 4) is now ready to do so just still work to be done in recovering traffic
as soon as possible. numbers. And of course, if the region’s
commercial aviation sector is to recover it
Further afield, Korean Air has retrained staff is likely that it will be driven by China, which
in the downtime to ensure they are ready to is home to 1.4 billion people and offers huge
meet new demands and challenges (page 20), potential both to the area and the rest of the
while United Airlines’ Scott Kirby is confident world (page 30).
that commercial aviation will return to normal
quicker than currently predicted (page 24). But with news that Orlando International
Airport is once again marketing destinations
Ground handlers are also keen to see flights and the dream of visiting them (page 36)
ramp up and have developed new practices it does feel like there are reasons to be
to ensure they can deal with the demands of optimistic – something we’ve all been
Covid-19 on a day-to-day basis, as our story dreaming about recently.
James Sheridan Parveen Raja Humza Raja
Chairman Publisher Sales Manager
james@evaint.com parveen@evaint.com humza@evaint.com
Charlotte Willis Gemma Keen Alpha Diallo
Office Manager Events Coordinator Graphic Designer
charlotte@evaint.com gemma@evaint.com alpha@evaint.com
Shobhana Patel Salam Raja
Head of Finance Producer
finance@evaint.com salam@evaint.com
Spring 2021 | Airline Routes & Ground Services 1
Contents SPRING 2021
Issue 35 2021
www.airlinergs.com
Content may not be
reproduced in any format
without written permission
from EVA International
Media Ltd
Join the conversation
Twitter: @args_eva
Linkedin: /args-magazine
Advertising opportunities
Contact Humza Raja on
+ 44 (0) 20 8253 4005
humza@evaint.com
Address changes and
subscriptions:
charlotte@evaint.com
ISSN 2516-8002
04
EVA INTERNATIONAL MEDIA LTD
PUBLISHERS & EVENTS SPECIALISTS
The opinions expressed in
04 Airlines
this publication are those EasyJet boss Johan Lundgren is hoping Europe’s
of the individual authors vaccination programme will open up its skies in time
or advertisers and do not
necessarily reflect those of for the summer
EVA or its members.
The mention of specific
companies or products in 08 Airlines
articles or advertisements
contained herein does not
Norwegian is reassessing its European programme
imply that they are endorsed after closing down its long-haul operations
or recommended by EVA.
Published by:
EVA International Media ltd 12 12 Airlines
Boswell Cottage
19 South End, Croydon
Cirium considers the changes airlines must
London, CR0 1BE, UK make in order to be fit for purpose in a post-
Covid-19 world
Tel: +44 (0) 20 8253 4000
Fax: +44 (0) 20 8603 7369
www.evaintmedia.com 16 Airlines
Emirates boss Sir Tim Clark warns many airlines
Printed by:
The Manson Group Limited
still face a struggle for survival as Covid-19
St Albans, Hertfordshire continues to bite
AL3 6PZ, United Kingdom
Distributed By:
Central Mailing Services
59 60 Gravelly Industrial Park
20 Airlines
Korean Air staff have been busy preparing for
Tyburn Road, Birmingham,
B24 8TQ, UK
20 operations once flights resume in serious numbers
2 Airline Routes & Ground Services | Spring 2021
Contents
24 Airlines
United Airlines’ Scott Kirby is optimistic about the
future of aviation once the pandemic subsides
26 Route development
Asia-Pacific is still feeling the impact of Covid-19 in
its aviation market
30 Route development
China will be the engine for aviation growth as
24 travellers start flying again
36 Airports
Orlando International Airport explains its market-
ing plans as Americans return to the skies
40 Technology
Both Boeing and Airbus rethink operations as
the Covid-19 pandemic continues to impact
their businesses
44 Ground handlers
Ground handlers around the world continue to
30 develop new ways of dealing with the pandemic
44
Spring 2021 | Airline Routes & Ground Services 3
Airlines
Divining an uncertain
future
The future may be unclear, but easyJet’s Johan Lundgren is still making plans for it,
whatever shape it takes.
By Edward Robertson
Perhaps the most frustrating thing about variants, vaccine-rollout problems, new So when asked during an online CAPA
the Covid-19 global pandemic is that once government regulations that often Live interview in February about recent
we seem to have a handle on it, the virus question logic, or people’s reactions to Eurocontrol predictions that aviation
throws us another curveball. the situation, life doesn’t feel much clearer traffic levels in June could still be
than a year ago when Covid-19 went from depressed by as much as 70 per cent
Whether that takes the form of new regional issue to global problem. compared with 2019, easyJet CEO
4 Airline Routes & Ground Services | Spring 2021
Airlines
Johan Lundgren Sustainability is key to aviation’s growth
Johan Lundgren is keen to make the Keeping the future sustainable
point that the only certainty the future EasyJet’s boss is urging governments millions and millions of families and people to
holds is uncertainty. to avoid the temptation to tax enjoy this product and service that weren’t
aviation more in a bid to make the industry there before.”
He says: “There are a number of scenarios more sustainable.
out there, but let’s be very clear: nobody Lundgren also argues more taxes would
knows. Nobody knows if it’s going to be Speaking in an interview during the February only lower load factors, so making flying less
more or less than some of the stats you’re CAPA Live event online, CEO Johan Lundgren efficient and a less green form of transport.
mentioning. Of course, it’s interesting to says sustainability remains a core concern for
look at the scenarios, and some of them an industry that has been largely grounded However, he admits that the ongoing
are based on some underlying assumptions during the Covid-19 pandemic. pandemic will have an impact on the
that could well be true, but the fact is that industry’s work to become more sustainable
this could change in a few weeks’ time.” However, while clearer skies might mean as airlines focus their financial resources on
cleaner skies, he believes that when aviation surviving the ongoing and ever-changing
However, Lundgren believes that should returns introducing new taxes which increase rules that can see lockdowns and travel bans
the rollout of the vaccination programme costs with the aim of reducing demand would introduced with little to no notice.
across his European markets be judged be a mistake.
a success by June, then the relaxation of Lundgren says: “This is the danger with the
Lundgren says: “The point is not to reduce pandemic because it has removed, clearly,
governmental restrictions on flying will be
flying, the point is to make sure that aviation funds from the industry to invest into new
met with a boom in the market.
has less impact on the environment. technology that was so desperately needed.
“We can be very positively surprised if
“To only look at the demand side on this and “You see that some of the commitments that
there is a positive continuation of the say: ‘Well, we should introduce taxes,’ or: ‘We some airlines have made (to sustainability)
vaccination programme,” he adds. should make it more expensive for people have been withdrawn throughout this.”
to fly,’ is an awful, awful way of looking at it
“It is most important that governments because it drives social inequality. However, he adds airlines need to remain
come out with a plan as to how they’re focused on increasing their sustainability not
going to unwind these restrictions that are “It means that you go back to the days before just for the sake of the environment and the
in place, so we can look forward to a good the deregulation in the middle of the ’90s, industry, but also for their own bottom line.
summer because we know that there is when flying was something that was available
underlying demand out there. This is not a to wealthy and privileged people. “We know that customers coming out of
question about demand, this is all about the this crisis are going to pay more attention on
restrictions that are in place.” “Companies such as ours have allowed these things,” he says.
Lundgren says a combination of the LCC’s
Spring 2021 | Airline Routes & Ground Services 5
Airlines
“We have turned
own research in its top five markets and that the early indications of the demand every stone in
his previous experience of crises, ranging
from 9/11 to the 2008 global financial crash,
that we’re seeing for the summer is
into the big, traditional holiday resorts,
this company and
show that the leisure market will be the where people recognise that there’s an looked underneath
first to recover, followed by visiting friends infrastructure in place.”
and family, while business travel will be last. it to see how
Business travel growth
With domestic flying also remaining more Lundgren is also positive that although we can be more
popular than international travel, he adds it might be last, the business travel
the airline will have to be both patient and market will return in strength as people efficient and how
nimble, not just to react to market demand
but also to government restrictions.
become increasingly disillusioned with
video conferencing and human nature
we can be more
reasserts itself. productive.”
“We want to wait as long as we possibly
can before we start operating them “When it comes to establishing new
(flights), putting them on sale, getting the relationships; when it comes to talking Johan Lundgren
crew in and start looking at the capacities with more than one person; if you want to easyJet CEO
versus demand,” Lundgren says. have a creative debate; if you want to start
looking into complexities or if there are
He believes this job will be made easier difficult decisions that needs to be made,
by the very nature of being an airline, meeting in person is far superior,” he says.
especially if some countries are quicker to
lower restrictions than others. “People and humans are social
creatures; they want to meet and they
Lundgren adds: “We know that, for want to travel. They want to establish
instance, if there are big variances between those relationships, so I don’t believe
countries then there will be restrictions for a moment that there is going to be
that are tighter and harder in one country a structural shift of any significance. I’m
than another. But the beauty of having an sure there will be some changes but,
airline is you can move your assets. don’t forget, there will also be general
underlying growth.”
“You can fly to different places, you can
fly to where demand is. It’s fair to say Lundgren adds easyJet will also be well
6 Airline Routes & Ground Services | Spring 2021
Airlines
placed to take advantage of the markets while Ryanair is 15 per cent at most.
upon their return having undertaken the He adds: “The big overlap sits with “We’ve also
largest cost-out programme in its history the legacy carriers. We know there
during lockdown. are retrenchments there and we are got to face the
With a combined focus on right-sizing the
absolutely going to take the opportunity
to grow when the demand is there and
reality that there
company and increasing productivity, the
airline also put many of the crew on part-
when the opportunity arises.” might be some
time contracts in order to avoid mass staff And while the future might remain time here with
redundancies. unclear, Lundgren does have a plan for it.
He adds: “We plan to have the flexibility some suppressed
He says: “We have turned every stone in to be able to grow, definitely take
this company and looked underneath it to (market) share and definitely build on the demand”
see how we can be more efficient and how opportunities we have.
we can be more productive. Johan Lundgren
“But we’ve also got to face the reality that easyJet CEO
“If the cost isn’t generating revenue or there might be some time here with some
driving a superior customer satisfaction suppressed demand, and that’s what you’ve
experience that, in its turn, drives more then got to work out and see what you’re
revenue, then it should go.” going to do to come out of this in the best
financial way that you possibly can.”
Legacy management
Lundgren argues this should also put Of course, there must be more detail to
the airline in a good position to grow at easyJet’s plan than this but, with the future
the expense of the competition, which is continuing to remain as uncertain as it
unlikely to be rival LCCs as easyJet only has does, it will likely be a while before the fine
a 3 per cent route overlap with Wizz Air, print becomes apparent.
Spring 2021 | Airline Routes & Ground Services 7
Airlines
End of the
Norwegian’s decision to drop its entire
long-haul network in order to focus on
short-haul, European flights comes as it
seeks to simplify its business and reduce its
American
level of debt.
In 2019, the airline was operating a fleet
of 156 Boeing aircraft, including 37 787
Dream
Dreamliners, 18 737 Maxs and 101 737-800s.
However, a spokesman says all long-haul
routes have long since come to an end,
including all flights from the UK to the US
With aviation suffering from the ongoing Covid-19 and South America, flights from France,
Italy, Spain and Norway to the US as well as
pandemic, Norwegian has cancelled its long-haul Norway-Thailand.
programme in a bid to survive The spokesman added while it is hard
to quantify exactly how many long-haul
By Edward Robertson flights were operating in 2019 and 2020,
8 Airline Routes & Ground Services | Spring 2021Airlines
“2020 was an exceptionally difficult year”
Just the briefest of glances over has caused, there is a great fighting
Norwegian’s fourth quarter results spirit and engagement within the
in 2020 reveal the extent of Covid-19’s company, and together we will build
impact on the airline’s fortunes. new Norwegian when we exit the
reconstruction processes.
As the report states: “The pandemic
continues to have a negative impact “Now, we are doing everything we can
on the aviation industry. Demand was do to emerge as a more financially
severely affected by changing travel secure and competitive airline with
restrictions and the continued spread of an improved customer offering, and
Covid-19 across Norwegian’s key markets.” as soon as Europe begins to reopen,
we will be ready to welcome more
The statement adds that of the customers on board.”
current fleet of 131 aircraft, an average
of 15 were operational in the last three Nor has 2021 started off looking any
Jacob Schram months of the year, between them better. New figures released by the
carrying 574,000 customers. airline show that in January, 74,224
customers flew with the airline, a
in 2019 alone the LCC operated 18,528 The passenger numbers equated to 96 per cent decrease year on year.
transatlantic flights. a 92 per cent decrease year on year Reflecting the anticipated bad figures,
while capacity measured in available ASK was down 98 per cent while the
seat kilometres (ASK) was down 96 per load factor was just 35.9 per cent,
Since 2019, the number of aircraft in
cent and passenger traffic measured down 45 percentage points on the
the airline’s fleet has dropped to 131
in revenue passenger kilometre (RPK) previous January.
and the spokesman says Norwegian is
was down 97 per cent.
already in conversation with lessors In January, 74,224 customers flew with
regarding the spare aircraft, as well as Despite the considerable reduction in Norwegian, a decrease of 96 percent
having plans to sell any it owns that are ASK, the airline was unable to boost load compared to the same period last
now surplus to requirement. factors, recording 52.4 per cent for the year. The capacity (ASK) was down
entire period and down 32.5 percentage 98 percent, and the total passenger
Of the aircraft that Norwegian plans to points compared to 2019’s figure. traffic (RPK) was down by 99 percent.
keep, in February this year it was operating The load factor was 35.9 percent,
eight 737s, down from a total of 15 in the While Norwegian might have been down 45 percentage points.
last three months of 2020. able to alleviate some of the pain by
reducing operating expenses before Jacob Schram, CEO of Norwegian,
The new plan will see the airline leasing and depreciation by 82 per said: “The pandemic continues to have
continue to operate initially 50 cent, the net loss for the airline was a negative impact on our business
narrowbody aircraft on both NOK 16.6 billion ($1.95 billion). as travel restrictions remain. We are
domestic Norwegian routes as well as doing everything in our power to
international ones across the Nordics Norwegian CEO Jacob Schram says: come out of the examinership as a
and to key European destinations. “2020 was an exceptionally difficult stronger, more competitive airline
year for the aviation industry and for and we look forward to welcoming
However, the spokesman is remaining tight- Norwegian. Consequently, the fourth more customers on board as travel
lipped about the exact nature of the new quarter results are as expected. restrictions are lifted.”
short-haul programme, revealing only that
“Unfortunately, many of our Norwegian operated eight aircraft
Norwegian would operate routes that show
employees are furloughed or have lost on average in January, mainly on
strong demand.
their jobs, partly due to the company’s domestic routes in Norway. The
decision to cease long-haul operations. company operated 96.8 percent of its
The airline is then planning to operate an scheduled flights in January, whereof
additional 20 narrowbody aircraft in 2022. “Despite the difficulties the pandemic 90.4 percent departed on time.
Meanwhile, the long-haul programme will
end thanks not just to the ongoing situation
which has seen the airline’s Dreamliner fleet
Spring 2021 | Airline Routes & Ground Services 9Airlines
Norwegian’s Dreamliners have
carried passengers for the last time
grounded, but also because of the extreme these operations will not continue. The company overhaul will also see
uncertainty over future demand. a focus on the finances, with its debt
“The consequence of this decision is that expected to be reduced to NOK20 billion
Norwegian CEO Jacob Schram says: “I am the board of directors of the legal entities ($2.37 billion) while as much as NOK5
pleased to present a robust business plan employing primarily long-haul staff in Italy, billion ($590 million) in capital will be
today, which will provide a new start for France, the UK and the US have contacted raised through a combination of a rights
the company. By focusing our operation insolvency practitioners. Norwegian issue to current shareholders, a private
on a short-haul network, we aim to will continue to assess profitable placement and a hybrid instrument.
attract existing and new investors, serve opportunities as the world adapts and
our customers and support the wider recovers from the impact of Covid-19. Schram added the airline has also reinitiated
infrastructure and travel industry in Norway a dialogue with the Norwegian government
and across the Nordics and Europe. “Our short-haul network has always about possible state participation based on
been the backbone of Norwegian and the new business plan.
“The Covid-19 pandemic has profoundly will form the basis of a future resilient
affected the entire aviation industry. business model. Should it win both private and public
Travel restrictions and changing support, we must hope that Norwegian
government advice continue to “Our focus is to rebuild a strong, profitable has a strong future. Covid-19 has caused
negatively influence demand for long- Norwegian so that we can safeguard as several European airlines to collapse and
haul travel, and Norwegian’s entire many jobs as possible. while the number of carriers that have
Boeing 787 Dreamliner fleet has been suffered this fate is not as high as some
grounded since March, 2020. “We do not expect customer demand in have predicted, the loss of any more
the long-haul sector to recover in the near airlines should be considered very sad
“Future demand remains highly uncertain. future, and our focus will be on developing indeed, especially when a vaccination
Under these circumstances a long-haul our short-haul network as we emerge from programme is being slowly rolled out
operation is not viable for Norwegian and the reorganisation process.” across the continent.
10 Airline Routes & Ground Services | Spring 2021A state-of-the-art Departure Control System
with the best Total Cost of Ownership in the industry
100%
BEST TOTAL COST LOW COST AIRPORT FAST
OF OWNERSHIP CONNECTIVITY MODEL IMPLEMENTATION
IN THE INDUSTRY
INTUITIVE & SHORT WIDE RANGE OF
EASY TO USE TRAINING TIME SELF-SERVICE OPTIONS
WEB BASED CONTINUOUS GROUND HANDLING
APPLICATION DEPLOYMENT IT SPECIALISTS
info@res2.eu | +31 (0) 85 130 36 60 | www.iport.aeroAirlines
Reshaping Jeremy Bowen
aviation
Reconfigured fleets, improved demand forecasting
and increased operational flexibility will all be key in
driving the world’s post-Covid-19 commercial aviation
industry, says Cirium CEO Jeremy Bowen.
The worst year in aviation history might global passenger airline traffic to levels
be behind us, but government-enforced last seen in 1999. A staggering 21 years of
lockdowns and border closures continue to aviation growth was wiped out in a matter
restrict movement and reduce demand for of months.
commercial aviation worldwide.
This led to more than 40 commercial
Earlier this year, Cirium’s Airline Insights airlines ceasing or suspending
Review revealed the pandemic had rewound operations in 2020 around the world,
12 Airline Routes & Ground Services | Spring 2021Airlines
while we witnessed the profound impact the number of flying passengers would not Retirement and reconfiguration
of the well-oiled flight scheduling return to 2019 levels until 2024. That is one First, the sudden demise of certain aircraft
system thrown into chaos. The year of the more optimistic scenarios. types in 2020 is one of the most visible
closed with two thirds of the world’s effects of the pandemic on aviation – and
passenger fleet still grounded – some Until Covid-19 vaccines are rolled out the trend is set to continue.
of which will never take off again – more widely, the airlines will be impacted
and those aircraft in service are flying for some time – particularly as the For the A380, in particular, the outlook
significantly fewer hours. pandemic continues to halt international in 2021 remains bleak. Many airlines have
travel. Airlines are already finding new already declared the aircraft too large
However, there are some silver linings. ways to try and re-grow air travel through for their current needs, while Airbus
Carriers welcomed the opportunity building traveller confidence with safety has announced it will cease production
to return newer aircraft to the skies, measures and communications and completely. Only Emirates remains
particularly those which have an offering testing strategies. committed to the A380, announcing new
excellent range such as the Airbus aircraft deliveries.
A320neo aircraft and the recently What the pandemic does enable is the
reapproved Boeing 737 Max. In fact, at opportunity for the carriers, especially Operators struggle to fill larger aircraft
the end of 2020, only 10 per cent of the major ones, to try new things as demand for long-haul travel continues
A320neo aircraft were in storage. without upsetting the boat too much. to stand at a halt, while such aircraft are
For example, retiring and reconfiguring generally less efficient per seat than next-
So, what about the future? At the IATA aircraft, uncovering new ways to generation twin-engine rivals such as the
2020 annual general meeting held online forecast travel demand and adopting Airbus A350 and the Boeing 787 Dreamliner.
in November 2020, it was predicted that more flexible flight scheduling methods. However, some aircraft types in storage
Spring 2021 | Airline Routes & Ground Services 13Airlines
will be converted to freighters. At least impact of Covid-19 exacerbated this Such indicators were used by airlines
70 aircraft conversions happened in inefficiency as historical bookings were no as a secondary source previously but
2020 and this is expected to increase longer comparable. are now becoming primary indicators
in 2021 to approximately 90. The trend to predict future travel demand and
is largely driven by the strong growth In Q4 2020 alone, bookings were develop pricing strategies.
in e-commerce, helped by customers down 78 per cent compared to the
making their purchases online. same period in 2019. Adding to the Airline operational flexibility
unpredictability, the summer period saw In a pre-Covid world, most travellers would
In addition, more than 150 commercial 40 per cent of bookings being made at book flights between six and 12 months
jets were used for cargo in 2020, albeit the last minute – as little as one to three ahead. This long-range booking window has
the aircraft did not undergo a physical days before travel. fallen to just six to eight weeks, so airlines
conversion. Many of these aircraft are must be able to react much more quickly
being used in cargo networks to replace New indicators are needed instead, such when it comes to demand pricing and
the temporary loss of cargo capacity until as travellers’ online interactions, social equipment use.
long-haul passenger networks recover. media activity and their sentiment –
these can be monitored around global The increased volatility of flight scheduling
Improved demand forecasting real-world events and trending activity. and booking numbers must also be met with
Before the pandemic, airlines relied Signals using artificial intelligence (AI) dynamic approaches to aircraft and crew
on historical bookings data to forecast can automate the information for rostering and there is a clear need for closer
travel demand, although this saw carriers airlines to understand where flight cooperation between network planning
operating flights with empty seats. The activity may increase. departments and scheduling.
14 Airline Routes & Ground Services | Spring 2021Airlines
The transition might prove challenging information for travellers, including seek to improve the experience of flying.
but dynamic flight scheduling will help notifications and alerts, will become more
break down the legacy silos which critical than ever. Lastly, the leasing sector is likely to take
continue to exist between commercial on an even greater role as the financial
planning network teams and revenue With so much uncertainty for passengers struggle for airlines prevails. In 2020, leasing
management. In the months ahead, around flying during Covid-19, the onus is companies pushed past the 50 per cent
airlines will thrive on operational on airlines to communicate more effectively ownership share of the global fleet for the
resilience and seamless collaboration. about the status of flights automatically and first time and the trend is set to continue.
improve the customer experience.
Other trends Cirium has identified include Sale-and-leasebacks in particular are an
greater consolidation of airlines, particularly But AI is not just about alerts and immediate source of cash – something
in the Asia-Pacific, where more domestic notifications. It has huge potential to airlines desperately need in these
competitors will merge or be acquired. streamline the entire travel experience, challenging times.
Merging airlines usually leads to a stronger from the minute the passenger leaves
single entity and, against the backdrop of the their front door. One thing we know for sure, is that aviation
pandemic, this increased level of resilience has a proven record of resilience. At Cirium,
might just prove to be an important asset. In the post-Covid world, we should we are confident the industry will weather
expect to see more emphasis on a this difficult period and emerge in better
Meanwhile, the implementation of AI touchless airport and in-flight experience shape – with younger, more fuel-efficient
technology will accelerate and automate – and so we’re likely to see new aircraft – gradually navigating its way to
the traveller experience. Real-time proactive technologies come into use as airlines recovery in the years ahead.
Spring 2021 | Airline Routes & Ground Services 15Airlines
Cash in or cash out
The news surrounding Covid-19 may be improving but airlines still face a
battle to survive, the Emirates boss believes
By Edward Robertson
16 Airline Routes & Ground Services | Spring 2021Airlines
“Last year people thought that, one,
Sir Tim Clark, Emirates
there would be an end in sight; and two,
that they would supplement the cash
requirements of non-operating by debt
provision or by state aid or whatever
it was, to a point where they could get
through, certainly for the first quarter of
this year. Well, that hasn’t happened.
“It looks as though it’s going to go on
for longer; and therefore you see the
cries from the heart, from a number of
entities within our industry, as well as
the players in the industry saying: ‘We’re
going to run short of cash very quickly.
You need to understand this.’”
Fundamentally flawed
However, Clark adds while the pandemic
has had a very real, and very alarming,
impact on the aviation industry, he
believes Covid-19 has been a catalyst for “I’m not sure it’s
any airline failures, as opposed to the
fundamental cause.
the right time to
He says: “I’m not sure it’s the right
start thinking
time to start thinking about whether about whether
As 2021 gathers pace, there is an air your business model is fit for purpose.
of unease remaining over the aviation If it was fit for purpose prior to the your business
industry as the Covid-19 pandemic pandemic, then it’s probably going to be
continues to bite. fit for purpose post pandemic. model is fit for
When the virus first became a global “If there was a fundamental problem prior
purpose.”
issue, aircraft around the world were to that, then there’s no point blaming the
grounded, creating very real concerns pandemic for the fact that you failed. It
that countless airlines would be forced was going to happen anyway, perhaps now
out of business. sooner rather than later.” Sir Tim Clark
CEO, Emirates
However, by CAPA’s own estimation, This is not to say that staff at Emirates
only about 30 airlines closed down have not used the downtime of the last
for good thanks to a combination of year to fine tune the business, with a
government backing and some strong lot of work focusing on how best to
investment activity. manage the supply chain that allows the
airline to operate.
While this may be a relief to the
industry, Emirates president Sir Tim Which is just as well. Despite the initial
Clark is warning that the situation is optimism that Clark says he felt when
even more precarious this year, as Covid-19 vaccines were created, new
despite vaccinations being rolled out mutant variations of the virus and
globally there is little to indicate when problems with vaccination programmes
commercial aviation may resume again around them mean: “We’re not going
at any significant level of activity. to see capacity return to the levels I’d
hoped in July and August. I think that
Speaking in a one-on-one interview in might only happen in the last quarter of
the online CAPA Live event in February, this year.”
he says: “The problem is that the airline
industry and all the associated aerospace And it is this continued delay to earning
sectors … have had a year of this now. serious cash that may yet spell the
Spring 2021 | Airline Routes & Ground Services 17Airlines
Dubai International Airport acts
as a super hub for Emirates
demise of many airlines, even the ones what they actually want. Their aspirations He adds: “It’s far better to have healthy
that were originally well placed to will be the same, but how they get the competition and that the carriers
survive the ongoing commercial trauma aspirations may be slightly different.” that are doing a good job in all the
caused by few to no customers. In which geographical sectors of the world
case, he believes governments will be Instead, Clark is more concerned about can continue to operate. It serves no
forced to step in again with the required how the world’s airlines will initially purpose for one carrier to dominate and
money. meet the demand when it returns, as price gouge or whatever; that is short-
many aircraft have been mothballed term thinking. It’s not healthy thinking
Clark says: “There is an obligation to during the pandemic while both and it doesn’t do anybody any favours.”
ensure this sector survives and there’s Boeing and Airbus will take time to get
no point worrying about state aid production levels of new aircraft up and Emirates plans
or who gets what. First thing – get it running again. Despite his pleas for a strong global
(aviation) going and keep it healthy aviation market, Clark admits the airline,
and active as it’s so important to the “So if you take this all together, there which has about 250 aircraft in total and
global economy and deal with the rest is likely to be a shortage of capacity is still flying to 104 of its pre-pandemic
afterwards.” principally in the medium and long-haul 142 destinations, is well placed to meet
markets,” he says. “And given that the demand once aircraft are permitted to
He is also confident that the consumer capacity … and the demand … will be very return to the skies in serious numbers.
demand will be there once aircraft are strong in multiple segments, there could
allowed to return to the skies again. be a supply and demand issue.” He says: “From a predatorial point of
view, a competitive point of view, we
“My view is that once we are through Even though this could create have a very large fleet, which, unlike
this, demand for air travel will return monopolies on routes which Clark other carriers, (we have not) discarded
and consumer confidence will return,” believes would be of benefit to an or retired or put into mothballs.
Clark says. airline with the scale Emirates enjoys,
he is hopeful that rival airlines will be “The airplanes are being kept in
“It may be slightly more finessed in the ready and waiting to pick up the slack as an advanced state of readiness for
sense that people may be smarter about quickly as possible. operations as soon as we need them.
18 Airline Routes & Ground Services | Spring 2021Airlines
There is a view that there will be a
stripping out of capacity over the next
Which leaves Clark and the airline feeling
optimistic about the future, despite the
“It serves no
two or three years. Capacity has been dialling up of the current threat level purpose for
taken out and will not be replaced.” to airlines globally as the pandemic
continues to bite. one carrier to
Furthermore, Clark believes Emirates’ longer
term planning, which includes moving to He is also confident that new sectors dominate and
more fuel-efficient aircraft as its Airbus will emerge in the market as a result of
A380s are slowly phased out, will mean it the pandemic and that Emirates is well
price gouge or
still has a network 30 per cent bigger in the
number of cities served by 2035.
placed to benefit from them. It is simply
a matter of time, and factors beyond
whatever; that is
his control, that will allow the serious short-term
He adds the plan remains largely resumption of service.
unchanged and also rests on Dubai thinking.”
International Airport remaining key to Clark says: “How and when these airplanes
the strategy as the airline’s super hub. come in will be a question of managing
where we think demand is likely to
Clark says: “There was never any be in the countries and whether the Sir Tim Clark
suggestion that the business model manufacturers are in a position to deliver CEO, Emirates
and the centrality of the super hub (in at the pace and numbers that we want.”
Dubai) that we created would alter in
any way. In many respects, it got larger, Which, under the current circumstances
more focused, and as we grew the hub, is about as optimistic as you can get,
the unit cost of operating the hub fell. It especially when there are many airlines
got the benefits of scale to the level that out there that may yet have closed down
we have at the moment.” by the end of this year.
that the changing global environment will originally shared value with.
Emirates’ partnership with either force more airlines to join them out of
Qantas is in ‘deep freeze’
economic necessity or, alternatively, abandon “And do I see a little bit more of that? Yes.
them as they seek more nimble models of Prior to the pandemic, it was already being
cooperation with their rivals. talked about. And that’s not to say that there
won’t be groupings, but I would suggest that
Clark says: “In times of distress and difficulty, those groupings may span alliances, that
the aviation community has had a habit they may involve players in other parts of the
of forming clusters to protect itself from world. Qantas is a OneWorld member, they
the trading conditions across the global work with us.”
economy. We’ve seen that in the past.
However, Clark admits the current working
“On the other hand, there may be a view relationship with Qantas is undergoing a
that perhaps the dominance of the way the “deep-freeze situation” as the Australian
alliances work may not be fit for purpose in airline has cancelled its entire international
Shifting alliances the new way of doing things.” operation currently, while its domestic
programme undergoes regular upheaval as
Alliances face a crossroads as the He adds instead of choosing the safety Australian states close their borders to one
Covid-19 pandemic forces airlines blanket of size that alliances offer, a strategic another whenever Covid-19 outbreaks strike.
to re-evaluate their business strategy from rethink among airlines, coupled with Airbus
top to bottom. and Boeing’s increasing focus on the creation He adds: “But the relationship, I hope, will
and production of long-haul, twin-jet aircraft not change. It’s always been a very good one,
Speaking in a CAPA Live interview online could create new opportunities. hopefully profitable for both sides.”
in February, Emirates president Sir Tim
Clark believes the repercussions from Clark says: “These (aircraft) change the Similarly, Clark is hopeful of working with
the current crisis are yet to be fully needs for carriers which hitherto had local rival Etihad, with cargo potentially
understood, let alone felt. allowed their geographical markets to be providing an inroad to a closer relationship,
controlled by others. They now have the providing competition rules allow and
And when it comes to alliances, he argues ability to move to the city pairs that they neither brand is diluted by the other.
Spring 2021 | Airline Routes & Ground Services 19Airlines
Picking up the pieces
Cargo might have helped Korean Air navigate the Covid-19 pandemic so
far, but staff are preparing for new ways of working in the future
By Edward Robertson
Perhaps one of the hardest things about been while the present remains so pandemic travel world.
living through the Covid-19 pandemic uncertain, the future is not much
has been working out what to do with clearer, thanks to governments still One such airline that embodies this
all the excess time available. ready to impose flight restrictions philosophy is Korean Air, which has just
should new waves of Covid-19 occur, released its tentative 2020 financial
Whether it is passing the endless hours while IATA has predicted passenger results which show it still made an
at home during lockdown or running demand in 2021 will be half that of 2019. operating profit of KRW238.3 billion
a business that can no longer perform ($219 million) from KRW7.4 trillion ($6.8
its key functions, trying to fill in the While this might mean route development billion) in sales.
downtime in a meaningful way has programmes are largely on hold, airline
proved to be a challenge even for the staff are finding new ways of ensuring that Despite the initial good news
most productive of people. once international commercial aviation surrounding an airline making a profit
resumes, they will be ready and waiting in such a difficult year, the airline’s
A particular problem for airlines has to welcome passengers to the post- president Keehong Woo says the
20 Airline Routes & Ground Services | Spring 2021Airlines
Cargo has been a key revenue
generator for Korean Air
success was largely down to cost cutting “Sadly, Incheon Airport, one of the
and cargo sales rising by 66 per cent largest Asian hubs, is no longer
due to increased global demand for bustling with people; it is very quiet
anything from Covid-19 diagnostic kits but hopefully this will soon improve as
to automobile parts. people start travelling again.”
The passenger side of the business did not Noh adds Covid-19 started becoming
fare nearly so well; sales fell by 74 per cent a serious problem in South Korea
since the start of the pandemic. from February 2020 and was felt most
profoundly in May, when the airline was
Handling Covid-19 on the ground operating as few as eight flights a day to
But what does this mean on the ground? any one of 24 cities.
Korean Air managing vice president
airport customer service Sungjae Noh This is a considerable drop on the 150
says the impact has been heavily felt by international flights to 108 cities Korean
all employees. Air would have operated on a normal
day, although the situation turned out
He adds: “Due to the pandemic, it has to be far more complex than simply
been an unprecedented, disastrous cutting capacity as the airline responded
year for everyone, but especially to each country’s new laws.
for those in the travel industry. The
demand dropped sharply and our 2020 Noh says: “In addition, travel restrictions
international flights were reduced and requirements were surprisingly
Sungjae Noh by about 61 per cent and capacity by different and inconsistent, which created
around 82 per cent. chaos for airlines and customers.”
Spring 2021 | Airline Routes & Ground Services 21Airlines
Safety in the time of Covid-19
Korean ramps up ground handling
Covid-19 safeguards
While Korean Air has been
doing all that it can to make the
customer travel experience safer,
it has also focused on ensuring rampside
staff adopt new practices.
Managing vice president airport
customer service Sungjae Noh says
although ramp operations for passenger
flights were reduced by 61 per cent in
response to the global pandemic as
governments closed down airspace,
cargo increased by 2.5 per cent in 2020.
He adds the closed airspaces brought a
fresh set of issues for staff to handle, further
compounded by a spate of bad weather.
Noh says: “As many international flights
were suspended it was challenging to
However, the airline got to work on with Incheon currently include the secure enough parking areas for grounded
preparing for the future and prioritised introduction of biometric technologies, aircraft. To manage the situation, following
a ‘Care First’ programme to emphasise including biometric check-in, while talks discussions with the airport authority,
safety measures introduced throughout with IATA could lead to the introduction we secured additional parking space to
the passenger journey. of its Travel Pass. accommodate all the grounded airplanes.
This included teaming up with Nor has the work been limited to the “In addition to the Covid challenges we
Incheon International Airport to work passenger experience, Noh says, with also experienced unusually harsh winter
on a number of practices including the business itself also feeling the weather and typhoons in the summer in
temperature checks both on arrival at effects of the changes. Korea, which further hindered our fleet
the airport and on boarding the aircraft, operations as we had to tie up all the
social distancing throughout both He adds: “During the pandemic Korean grounded jets to prevent any damage.”
environments and plexiglass screens at Air has successfully restructured the
check-in and service desks. organisation to better focus on the Once the immediate problems were
core aviation business and strong cargo solved, new ways of working were
The airline has also introduced a Covid-19 operation. In particular, Korean Air is introduced with Korea Airport Service,
an outsourcing company for Korean Air’s
test centre at the airport, promoted an committed to transporting Covid-19
ramp operations, ensuring all staff wore
enhanced self check-in system to travellers vaccine and medical supplies safely
personal protective equipment (PPE)
and introduced a back-to-front boarding across the world.”
when entering the aircraft and that their
system on its aircraft.
temperatures were regularly checked too.
The airline’s initial results show this has
Noh says: “Korean Air has overcome crises been achieved by raising KRW1.1 trillion The ramp bus and staff areas were
before in its 50-year history, we are resilient ($880 million) worth of capital through disinfected frequently, while the
and in the past we have turned these new shares, a move it was hoping to repeat disinfectant used on aircraft interiors
challenges into opportunities. in March 2021 with the aim of raising a was strengthened. Monthly cleans were
further KRW3.3 trillion ($2.6 billion). carried out on a daily basis, with even
“Health and safety standards and higher levels of cleanliness applied to
protocols have become critical and we Korean has also sold its inflight catering and aircraft that had carried any passengers
will maintain the highest standards of duty-free business unit to South Korean with a suspected Covid-19 case.
cleanliness, whilst continuing to invest in private equity fund Hahn & Company for
technology and discover opportunities KRW981.7 billion ($864 million). Noh added Korean Air has also provided
for innovation.” more education and training opportunities
However, perhaps the most interesting in time for when operations resume fully.
Future thinking move is Korean Air’s acquisition of local
Future innovations under discussion rival Asiana Airlines for KRW1.8 trillion
22 Airline Routes & Ground Services | Spring 2021Airlines
($1.6 billion), with regulatory approval
expected this year.
Providing the deal is given the go-ahead,
more than 80 aircraft will be added
to Korean’s own fleet of more than
150 aircraft and give it the lion’s share
of the South Korean domestic and
international markets.
Noh says: “Recently Korean Air announced
the acquisition of Asiana Airlines, a bold
move that will further enhance the
competitiveness of the Korean aviation
industry with more streamlined route
operations and lower costs.”
And we can be sure that, should the
deal go through, Korean Air staff will be
more than ready to navigate the much
larger airline towards a happy landing.
After all, they have had the time on
their hands to be fully prepared and
presumably, like the rest of the world,
will be pleased of the opportunity to do Korean Air staff are prepared to
something positive in anticipation of a welcome travellers back to Incheon
brighter future. International Airport
Collaboration & Chris Notter Fabio Gamba Nikki Ozols
Sustainability
Chief Moderator ASA Volare Aviation
Podcast
In case you
missed out Woo Kam Weng
POS Aviation
Mete Erna
HAVAS Ground Handling
Amr Samir
Link Aero Trading
www.airlinergs.com
Available on Available on
Thomas Konietzko Robert Williams
Celebi RED Handling UK Ltd
Spring 2021 | Airline Routes & Ground Services 23Airlines
United thinking
United Airlines boss Scott Kirby is questioning Covid-19 aviation dogma, from
mass airline consolidation in the US to the return of business travel
The ongoing Covid-19 pandemic is unlikely to “The reason I thought it would happen everyone is happy. I can promise you, United
lead to a rash of consolidations among American earlier is because the choice would be Airlines is not doing that.”
airlines, the boss of United Airlines believes. something even worse and no one is faced
with that choice today, and so I don’t think Kirby says instead the airline is preparing to
Speaking at the online CAPA Live event in there’ll be any major consolidation here in take delivery of 94 narrow body aircraft in
March, the carrier’s CEO Scott Kirby says the US, but I guess we’ll see. 2022 and 2023 that can start working on its
when the crisis first struck, he thought domestic programme.
certain airlines could be open for acquisition Having raised more than $26 billion in
as they fell on financial hard times. liquidity and cutting cash burn, Kirby is also “Compare that 94 aircraft to the fleet size of
bullish about the future. In particular, he some of those other airlines and that’ll give
However, the reaction to the crisis with argues that United is prepared to defend you a scale of what we’re planning to do,” he
airlines accessing finance means he now its market share against LCCs, which in the adds.”The growth plan was working great at
believes they are far safer commercially than past have sought to take advantage of any United before.”
could have been expected, so reducing the problems that cause mainline carriers to pull
need for consolidation. back from the market, particularly if they Like many others in aviation Kirby also
lead to an increase in oil prices. believes the domestic and leisure markets
Kirby says: “We’ve been able to raise will be the first to recover and the airline
so much liquidity, not just through the He says: “One of the analysts wrote last week will be able to take advantage of this thanks
government but through the private capital … that when times are tough, the network to its decision to get rid of change fees on
markets, that no one has a liquidity issue. carriers push back from the table and leave economy and premium cabin tickets for
Everyone is going to survive. the table scraps for the low cost carriers, and flights, initially in the US or to Mexico or the
24 Airline Routes & Ground Services | Spring 2021Airlines
Scott Kirby considerably longer to bounce back. “Business travel is
He says: “It is true that the leisure and not transactional.
domestic market is going to be the first to
recover. But I will bet you dollars to donuts It’s about
that in 2023 long-haul international is going
to be outperforming domestic by a very relationships. This
wide margin. It’s just a timing issue.”
is a question
Kirby is also questioning the accepted
wisdom that the Covid-19 pandemic will be
about human
particularly deadly for the business travel nature instead of
market, largely thanks to the belief that the
use of videoconferencing tools like Zoom technology
during the lockdown will continue to be
popular even when the skies reopen. and human
He says: “Business travel is not transactional.
nature has not
It’s about relationships. This is a question
about human nature instead of technology
changed.”
Caribbean. Further down the line the policy and human nature has not changed.
will be spread out to all international travel Scott Kirby
originating in the US. “I’ve been fond of saying the first time CEO, United Airlines
someone loses a sale to a competitor who
However, Kirby does not subscribe to showed up in person is the last time we’ll do a
the theory that long-haul travel will take sales call on Zoom, and that’s going to be true.”
Refurbished GSE
We buy and sell
www.airbusiness-gse.com
Spring 2021 | Airline Routes & Ground Services 25Route Development
Surviving the About a year on from the outbreak of the
Covid-19 virus in China and its initial spread
in the Asia-Pacific region before travelling
waves
across the world, and the region’s aviation
sector remains depressed.
Preliminary traffic figures for January,
2021, released by the Association of Asia
Asia-Pacific is still feeling the impact of Covid-19 Pacific Airlines (AAPA), show that the
tighter border restrictions imposed by
on its commercial aviation sector more than a governments across the world continue to
year after the region was the first to be hit by the curtail international flights.
pandemic and ensuing response Indeed, the only glimmer of hope to be seen
is in the growing air cargo demand as world
By Edward Robertson trade begins to pick up momentum again.
26 Airline Routes & Ground Services | Spring 2021Route Development
“The uneven roll-
out of vaccinations
across the world
will only delay the
full reopening of
borders.”
Subhas Menon
director general, AAPA
AAPA director general Subhas Menon says Air cargo activity was more positive,
the latest figures show that in the first with demand measured in freight tonne
month of the year, a total of 1.3 million kilometres (FTK) having grown by 0.3 per
international passengers flew with an Asia- cent, despite freight capacity levels falling
Pacific airline, just 3.9 per cent of the 33.5 by 25 per cent year on year thanks to the
million passengers who flew with the same decline in passenger belly-hold space.
carriers in January 2020.
Menon says: “Renewed efforts to
Offered seat capacity was 12.1 per cent of the contain Covid-19 through lockdowns and
January 2020 volume, while the international border restrictions have again affected
passenger load factor averaged 27 per cent international passenger demand, which
for the month, a significant 54 percentage remains close to a standstill.
point decline from the 81 per cent achieved
in the corresponding month last year, before “The uneven roll-out of vaccinations across
international aviation felt the full impact of the the world will only delay the full reopening
Covid-19 pandemic. of borders.”
Spring 2021 | Airline Routes & Ground Services 27Route Development
Both Qantas and Air New Zealand
have seen operations suffer
He argues that the crisis remains a serious two countries, allowing citizens of each free largest airport, having seen its total number
threat to airlines, adding: “In this extremely travel between the nations in question. of passengers for the six-month period fall
challenging operating environment, airlines by 73.4 per cent to 2.8 million, compared to
are struggling to survive. It has long been thought New Zealand and the same period in 2019.
Australia could pioneer the practice, having both
“While some airlines are receiving financial controlled their Covid-19 outbreaks through The drop in numbers was largely thanks
support, further assistance would be needed stringent lockdowns and the closing of their to the 96.8 per cent fall in international
for most airlines to stay afloat, given that borders to all but a few outsiders. travellers with transits included, to just
international borders remain largely shuttered.” 187,003, while the domestic market has
However, speaking at the release of Auckland remained a little more stable, having
Menon adds that as well as fighting to survive Airport’s half-year results for the period ending decreased by 44.6 per cent to 2.6 million.
now, many airlines have one eye on the future to December 31, 2020, CEO Adrian Littlewood says
ensure that when travellers are ready to return to he is not expecting to see any such measures Comparisons of Auckland Airport’s plight with
the skies, so carriers will be ready to receive them introduced this year. Sydney Airport, Australia’s largest gateway, across
in a post Covid-19 world. the Tasman initially tell the same story, with its
He adds: “Although the government remains 2020 full-year total passenger numbers down by
He adds: “Meanwhile, the industry is working with committed to restarting two-way, trans- 74.7 per cent year on year to 11.2 million.
several stakeholders to prepare the ground for Tasman travel, and we support this, for the
the sustained resumption of air travel, notably purposes of this underlying earnings guidance However, Sydney kept a firmer grip on
on contactless digitalised tools and passenger we have assumed there will be no material international travellers with a 77.5 per cent fall in
facilitation protocols to ensure a safe and quarantine-free, two-way Tasman travel during the total number, while the domestic sector saw
seamless journey for travellers.” the remainder of the 2021 financial year. It also a drop of 72.9 per cent.
assumes no further lockdowns of an extended
Closed corridors duration during the period.” Sydney Airport CEO Geoff Culbert says: “The
One of the key hopes for restarting recovery won’t be linear, but our experience
international aviation has been the The launch of the travel corridor would have shows that when restrictions are eased and
establishment of travel corridors between been a considerable boost for the country’s borders come down, people are keen to travel.
28 Airline Routes & Ground Services | Spring 2021You can also read
