Hospitality Ireland presents a round-up of global travel, airline and aviation news.
Thai Capital Welcomes First Tourists For Quarantine-Free Holiday
More than a thousand foreign tourists arrived in Bangkok on Monday November 1, the first wave of travellers to the Thai capital in 18 months, as part of a quarantine waiver for visitors vaccinated against COVID-19.
There were 1,534 foreign arrivals and 890 Thais on 40 international flights on the opening day on Monday, senior health official Kiattiphum Wongraijit said.
The waiver covers more than 60 countries, including the United States and China, plus several places in Europe, from where some were escaping the winter blues.
"Right now, in Europe as you know it’s quite cold, so we decided to go come here," said German tourist, Simon Raithel, among the first arrivals.
Thailand, one of the Asia-Pacific's most popular tourist destinations, has enforced strict entry curbs that were criticised in the travel industry for being too onerous and economically damaging.
More than 3 million Thai tourism-dependent jobs and an estimated $50 billion a year in revenue have been lost.
Before the pandemic, tourism accounted for about 12% of Thai GDP, with one survey ranking Bangkok as the world's most visited city.
Thailand tested the waters with the reopening of the island of Phuket, but the pilot scheme had mixed results, drawing just 1% of its monthly pre-pandemic level when it started in July.
Under the new national programme, visitors must await a negative COVID-19 test on arrival then can travel freely the following day.
"It is much easier," said Marguerite Jeason from France. "Before at first it was 14 nights."
Airlines have rushed to ready the country for the hoped influx of visitors, bringing jets back from hibernation.
Still, the pickup is expected to be relatively slow, with 180,000 foreign arrivals anticipated this year and 7 million next year, compared with some 40 million in 2019.
Kuwait's Jazeera Airways In Talks With Airbus, Boeing For 30-Jet Order
Kuwait's Jazeera Airways is in talks to buy 30 Airbus A320neo or Boeing 737 MAX jets in a deal worth up to $2 billion, the airline's chairman said on Monday November 1.
Marwan Boodai told Reuters the budget carrier expected to place the long-considered aircraft order by the end of March.
The airline would seek to raise debt to finance part of the purchases, with the remaining to be funded from the company's own cash reserves, which currently stand at 41 million Kuwaiti dinars ($136 million), he said.
The disclosure of jet order talks comes just two weeks before the start of the five day Dubai Airshow, which will be this year's biggest aerospace trade show and a spectacle for commercial and military contracts worth billions of dollars.
Jazeera, majority owned by Boodai, has for many years mulled an aircraft order to expand and replace its fleet of leased narrow-body Airbus jets, though never placed an order.
It currently operates a fleet of 17 Airbus A320 jets.
The airline on Monday November 1 reported a third-quarter net profit of 11.8 million dinar ($39.15 million), its first quarterly profit in two years, according to Refinitiv data.
"We are positive that travel will return stronger to reach 2019 operational performance very soon ... We now believe the worst is behind us," Boodai said in a statement.
Thailand, Australia, Israel Ease Travel Curbs As Lockdowns Bite Elsewhere
Thailand, Australia and Israel eased international border restrictions significantly on Monday November 1 for the first time in 18 months, offering a broad test of demand for travel worldwide amid the coronavirus pandemic.
The relaxation contrasts with tightening lockdowns elsewhere, notably in eastern Europe where infections have hit record numbers, and in parts of China, which has taken a zero-tolerance approach to COVID-19 despite relatively few cases.
Hundreds of vaccinated foreign tourists arrived in the Thai capital for quarantine-free travel after the Southeast Asian nation approved visitors from more than 60 countries, including China and the United States.
Several European nations are also on the list as Thailand, one of Asia's most popular holiday destinations, looks to capitalise on the approach of winter in the northern hemisphere.
"We just picked this flight and it is quite surprising that we are the first flight to arrive," said German tourist Simon Raithel, 41, who planned to head to the Thai south.
In Sydney, hundreds of citizens were greeted by family and friends as they became the first since April 2020 to arrive from abroad without a permit or the need to quarantine.
"(It's a) little bit scary and exciting," said Ethan Carter, who flew in from Los Angeles. "I've come home to see my mum 'cause she's not well."
While travel is initially limited to just a few states and to Australian citizens, permanent residents and their immediate families and New Zealand nationals, it heralds a plan to re-open to international tourists and workers.
Israel also relaxed travel rules on Monday November 1 but tourists should read the fine print before booking.
"Welcome to Israel," the government said in a tweet next to a big blue heart. "We missed you guys."
Individual tourists are allowed in if they have received vaccine boosters - but not if more than six months have lapsed since their last dose, with some exceptions.
That has tempered excitement among hoteliers.
"How many tourists out in the world have actually gotten boosters or are sitting in that six-month period following their second dose?" Israel Hotel Association CEO Yael Danieli said in the days leading up to the relaxation.
"Even if both parents in a family are vaccinated, their children under 12 are not, so they mostly can't come to Israel."
Members of tour groups are exempted from the six-month rule but will have to take PCR or antigen tests every 72 hours for the first two weeks of their stay.
Despite the eased curbs, world travel in full swing is a long way off.
China's tourism sector is suffering from the country's zero tolerance for COVID-19 as cities with infections, or even with concerns about infections, close entertainment venues, restrict travel or delay cultural events. Shanghai Disneyland stopped admitting visitors on Monday.
Eastern Europe is grappling with its worst outbreak since the pandemic started. The Russian capital introduced its strictest lockdown measures in more than a year last Thursday as the daily tally of cases and deaths nationwide hit new highs.
But many Russians have decided that now is an ideal time to fly off for a foreign holiday, with a sharp increase in bookings to destinations where Russia's Sputnik V vaccine is recognised or where COVID entry requirements are cheap and easy.
"Don't quarantine, but holiday on the beach!" travel company Orange Sun Tour proclaims on its website osttour.ru, which offers breaks in Cyprus, Egypt, Cuba and elsewhere.
Rules aimed at moving South Korea towards "living with COVID-19" came into effect on Monday, with the easing of a range of curbs and the introduction of vaccine passports at gyms, saunas and bars.
"The return path to everyday life, to which we're taking the first step today, is a path we've never been on," Health Minister Kwon Deok-cheol told an intra-agency COVID-19 meeting.
The Netherlands will impose new coronavirus restrictions this week in a bid to curb a recent surge in infections, Health Minister Hugo de Jonge said, without giving details.
Britain on Monday November 1 removed the last seven countries on its coronavirus "red list", which required newly arrived travellers to spend 10 days in hotel quarantine.
The United States will lift international travel restrictions for vaccinated travellers on Nov. 8.
Emirates Strips Its First Ever A380 For Furniture, Memorabilia
Dubai's Emirates, which championed the Airbus A380 as the backbone of a global airline network built around the Gulf, has begun stripping one of the four-engined behemoths for the first time as the superjumbo gives way to smaller and leaner models.
The announcement on Monday November 1 comes just weeks before Emirates is due to take delivery of its last A380 from Airbus, bringing to an end an era in which the double-decker passenger jet dominated the airline's growth plans.
The airline has salvaged engines, landing gears and flight control components from the 13-year-old jet that flew its first commercial flight from Dubai to New York in August 2008, it said in a statement.
The A380 would now be stripped of parts to be transformed into furniture, memorabilia and other retail items to be sold and with a portion of proceeds to benefit the airline's charity that helps disadvantaged children.
"It’s an elegant and fitting retirement solution for this iconic aircraft and our flagship," Emirates President Tim Clark said.
With no major secondary market, Emirates was left with little choice but to strip the world's largest commercial passenger jet for parts that could be repurposed.
Airbus ended production of the plane in 2019, 12 years after it started and after it was unable to secure a sustainable order book. Emirates was the largest customer of the A380 jet, having ordered 118 superjumbos, but its inability to reach a deal with engine makers on future orders spelled the end of the aircraft.
The jet's decline also came before the COVID-19 pandemic that drove the airline industry into its worst ever crisis. Most airline executives expect it will take the industry several years to recover to pre-pandemic demand for air travel.
The aircraft had proved popular with passengers, which Emirates long argued is a key attraction for its customers while also helping it carry more passengers between slot-constrained airports than any other commercial jet.
Emirates has said it will still play a key role in its all-wide-body fleet with plans to enhance its remaining A380s. Its new A380s will feature a new premium economy product.
"Emirates will continue to be the largest operator of this spacious and modern aircraft for the next two decades," Clark said in a Sept. 1 statement.
American Airlines Cancels More Flights; Total Tops 2,300
Weather and staffing-led turbulence stretched into a fourth day for American Airlines, with the top U.S. carrier cancelling more flights on Monday November 1 to push the total number to nearly 2,300.
The airline said it cancelled 340 flights, or 6% of its total planned flights on Monday November 1, as of 11 a.m. ET.
Staffing shortages have hit American Airlines, Southwest Airlines Co and Spirit Airlines Inc in particular, as they ramp up flights ahead of the holiday season but face problems finding enough pilots and flight attendants.
"Flight Attendant staffing at American is strained and reflects what is happening across the industry as we continue to deal with pandemic-related issues," flight attendants' union APFA said.
American's pilot union said last month they planned to picket the carrier's major hubs to protest work schedule, fatigue, and a lack of adequate accommodation this summer.
The cancellations are another setback to the Texas-based company, which is already reeling from rising fuel and labour costs impacting the industry as the U.S. prepares to open borders to fully vaccinated travellers.
"The airline had particular weather issues that then spiralled into rippled cancellations and were compounded by an inability to fill out schedules from their labour reserves," UBS analyst Myles Walton said.
Severe winds at the Dallas/Fort Worth International Airport reduced American's arrival capacity by more than half, with the inclement weather also impacting staffing.
The company, however, hoped some of that impact could be mitigated with nearly 1,800 flight attendants returning from leave starting Monday.
"We expect considerable improvement beginning today with some residual impact from the weekend," company spokeswoman Sarah Jantz said in a statement. American's shares recovered losses to trade up 1%.
Meanwhile, rival airlines seemed to have fared better.
Delta Air Lines Inc said on Monday November 1 that it has not experienced any weather-related cancellations so far, while United Airlines said there were no "widespread cancellations".
Maersk Expands Air Freight With New Boeing Planes, Logistics Firm Acquisition
Denmark's A.P. Moller-Maersk said on Tuesday November 2 that it will buy freight-forwarder Senator International along with two Boeing aircraft, the firm's latest move to boost its businesses beyond ocean shipping.
Maersk, which handles one in five containers shipped worldwide, will acquire the German logistics firm, whose largest business is within air freight, for an enterprise value of around $644 million, it said.
During the pandemic, many airlines have been forced to park unused passenger jets, driving up demand for cargo space on dedicated freighters at a time when soaring demand from lockdown-ridden consumers has put a strain on global trade.
With two-thirds of Maersk's revenue still coming from container shipping, the firm is aiming to expand its services to include more air and land-based freight, hoping to deliver door-to-door logistical solutions to clients like Walmart and Puma.
"The COVID situation has only accelerated the fact that we need to move on this," Maersk's chief executive of ocean and logistics, Vincent Clerc, told Reuters.
"Obviously we are making these acquisitions to flesh out a network that we hope to scale. So we trust that this will be growth generating."
On top of the acquisition, expected to close in the first half of 2022, Maersk will add two new Boeing 777 freight aircraft as well as three leased cargo planes to its existing fleet of 15 aircraft.
"Our target is to have about a third of our capacity provided through own tonnage, and two-thirds through belly-space on commercial airlines," Clerc told Reuters.
While the leased planes will be operational next year, the newly built Boeing planes are expected to be delivered in 2024. Combined with Senator International's six airplanes, this will roughly double Maersk's air cargo capacity.
"We feel this is the right mix to assure a certain level of operational control where it's necessary, but also still be able to have the flexibility that we need by moving with commercial airlines," Clerc said.
Japan Airlines Narrows H1 Loss On Cost Cuts, Flags Annual Loss
Japan Airlines Co Ltd (JAL) reported on Tuesday November 2 a narrower first-half loss before interest and tax from a year ago, helped by cost cuts the carrier undertook during the pandemic, but it flagged a wider-than-expected annual loss.
The company posted a first-half loss of 151.8 billion yen ($1.34 billion). In the prior year, Japan's second-largest airline had reported a loss of 223.9 billion yen in the six months ended Sept. 30.
JAL said on Tuesday November 2 that it would report a full-year loss of 198 billion yen, larger than the consensus loss of 120 billion yen from 12 analysts polled by Refinitiv.
In August, the carrier failed to provide a full-year earnings forecast, saying uncertainty made prediction too difficult.
The airline, like the travel industry in the world's third-largest economy, was badly hit as Japan was under a state of emergency for much of the second quarter.
JAL said its workforce would shrink by 2,500 people by the end of the business year on March 31 to 33,500 people as older workers retired and it froze new hiring to lower costs.
Rival ANA Holdings Inc said last week that it expected to report an operating loss in the current financial year, down from an earlier prediction of a profit, and that it would reduce staff numbers by 20% within five years through attrition and retirement.
JAL said it expected to stop burning cash by the fourth quarter of the financial year as travel demand improved.
It said domestic passenger numbers began increasing last month, and by March should reach 92% of pre-COVID levels, though international traffic would remain subdued at 23% of pre-COVID levels.
Japan on Tuesday November 2 confirmed plans to gradually ease COVID-19 border restrictions, but fell short of calls from business lobbies to open up the country in line with its major trading partners.
The country is still under strict regulations preventing most non-resident foreigners, including tourists and business travellers, from entering.
The government has decided to review border controls in stages, Chief Cabinet Secretary Hirokazu Matsuno told reporters on Tuesday November 2, responding to media reports that quarantine for business travellers would be cut to three days from 10.
Airlines Reopen Lounges With New Perks, More Walk-Ins From Economy
Airlines are reopening airport lounges with higher-end service to lure back premium travelers after the pandemic, while increasingly opening the VIP experience to tourists - for a fee.
Premium travel plummeted during the COVID-19 crisis, depriving airlines of higher-margin fares. But with traffic rebounding in certain regions and U.S.-bound travel set to reopen on Nov 8, lounges are a crucial weapon in airlines' post-crisis strategies for retaining their more profitable clients.
United Airlines opened its first Polaris lounge at Washington Dulles on Oct 21 and announced plans last Thursday to reopen existing lounges in New York, Chicago and Houston by end-year, with the rest set to follow in early 2022.
Air France has inaugurated a 3,000-square-metre temple to French design in one of its main terminals at Paris Charles de Gaulle. Dubai's Emirates and Air Canada both plan upgrades to lounge dining and service.
"A lot of the narrative around 2022 is really going to be around that food program, how we serve our customers and elevating that aspect of the experience," said Mats Winter, director of product for Canada's largest carrier.
Air Canada wants a "competitive product" for its business clientele but also for leisure travelers who are making up a growing part of premium-fare purchases, he said.
"The mix has changed, but our commitment to making sure we have a great premium product hasn't. We are obviously keeping a very close eye on the traffic we are seeing in our lounges," Winter added.
Designed as an oasis for premium travelers, lounges could attract more passengers looking to avoid crowds during COVID, said Michael Di Corpo, managing director of Montreal-based firm IEG, which sells software for managing airport lounges.
Passengers globally are contending with longer lines due to requirements like proof of vaccination, while many face longer layovers since ailing airlines now offer fewer direct flights.
"We're seeing more of the 'paying their way' as a way of generating revenues, assuming they're not at capacity," Di Corpo said, referring to the purchase of daily lounge access.
Airlines contacted by Reuters don't break out revenues from lounge services.
While some airlines have previously sold lounge access to passengers from the back of the plane, pressure to find new revenues in the wake of the industry's worst crisis has grown.
Qatar Airways for one, recently launched a less expensive Business Lite fare, where lounge access costs extra.
American Airlines, which reopened the first of its Flagship Lounges in September to premium classes on long-haul flights, made paid access available for the first time.
The airline is especially targeting people traveling for occasions like weddings and reunions, a spokeswoman said.
But there are limits to the democratization of lounges, which can represent investments of millions of dollars.
The last thing executives say they can afford is to crowd out corporate clientele or well-off individuals who drive profits on routes like the Atlantic, with the U.S. lifting restrictions Nov 8 for vaccinated foreigners.
At American, the $150 cost of a day pass to Flagship doesn't give economy passengers access to its most elite service, a private restaurant within the lounge. It does include food with a different menu and space.
United said Polaris lounges would remain premium class only.
Air Canada decided last November to open three of its Maple Leaf lounges to paying walk-in economy passengers and travelers from other airlines on a trial basis to use spare capacity during COVID-19. It has since ended the practice in Vancouver.
"We don't want this to eventually drive capacity concerns, for example, for our premium customers," Winter said.
From Boeing To Mercedes, A U.S. Worker Rebellion Swells Over Vaccine Mandates
In Wichita, Kansas, nearly half of the roughly 10,000 employees at aircraft companies Textron Inc and Spirit AeroSystems remain unvaccinated against COVID-19, risking their jobs in defiance of a federal mandate, according to a union official.
"We're going to lose a lot of employees over this," said Cornell Beard, head of the local Machinists union district. Many workers did not object to the vaccines as such, he said, but were staunchly opposed to what they see as government meddling in personal health decisions.
The union district has hired a Texas-based lawyer to assist employees and prepare potential lawsuits against the companies should requests for medical or religious exemptions to vaccination be denied.
A life-long Democrat, Beard said he would no longer vote for the party. "They'll never get another vote from me and I'm telling the workers here the same thing."
The clock is ticking for companies that want to continue gaining federal contracts under an executive order by Democratic President Joe Biden, which requires all contractor employees be fully vaccinated against COVID-19 by Dec. 8.
That means federal contract workers need to have received their last COVID-19 shot at least two weeks before the deadline to gain maximum protection, according to U.S. government guidance.
With a three-week gap between shots of the Pfizer /BioNTech vaccine, workers must get the first jab by Wednesday. If the government holds fast to its deadline, it is already too late to choose Moderna's vaccine, which is given in two doses four weeks apart. Workers could opt to get Johnson & Johnson's single-shot vaccine until Nov. 24 to meet the deadline.
Vaccines remain by far the most effective way to prevent COVID-19 hospitalizations and deaths, particularly faced with the extremely contagious Delta variant of the virus that can cause infections even among those fully vaccinated.
Despite vocal opposition from some, vaccine mandates have been effective at shrinking the rates of the unvaccinated and convincing the reluctant to roll up their sleeves.
Several big employers such as Procter & Gamble, 3M and airlines including American Airlines and JetBlue have imposed mandates. In some industries, including among food workers, unions have supported vaccine requirements.
But the mandate has stirred protests from workers in industries across the country, as well as from Republican state officials.
Opposition to the mandate could potentially lead to thousands of U.S. workers losing their jobs and imperil an already sluggish economic recovery, union leaders, workers and company executives said.
More legal clashes are likely over how companies decide requests for vaccination exemptions.
For the companies, time is getting tight, though the Biden administration has signaled federal contractors will not have to immediately lay off unvaccinated workers who miss the Dec. 8 deadline.
Under government guidance published on Monday November 1, companies will have flexibility over how to implement the mandate, which may allow them to avoid mass firings.
"A covered contractor should determine the appropriate means of enforcement with respect to its employee," the guidance said.
For Boeing Co in the United States, more than 7,000 workers have applied for religious exemptions and around 1,000 are seeking medical exemptions, people familiar with the matter told Reuters. That amounts to some 6% of the planemaker's roughly 125,000 U.S employees.
At a rally last week outside Boeing property in Auburn, south of Seattle, many of the three dozen workers gathered in driving rain said they would rather be escorted off Boeing property on Dec. 8 than take a vaccine. Others said they would pursue early retirement.
"The mandate is illegal, immoral and impractical," said one veteran Boeing program analyst who attended the rally. "We are standing together against a company and government trampling on our rights."
Many legal experts have said vaccine mandates in the interest of public health are legal. The U.S. Supreme Court has rejected several challenges to mandates, with the high court last week turning away a healthcare worker who sought a religious exemption to a COVID-19 vaccine mandate.
The rebellion has put Boeing executives in a bind. The company could lose skilled staff, but must comply with a presidential order.
A Boeing spokesperson said the company was committed to maintaining a safe working environment for its employees.
The order's provision for religious and medical exemptions is causing more tension.
Two Textron workers who requested religious exemptions told Reuters the company's human resources representatives quizzed them on the name of their church leaders and asked detailed questions about their faith.
Textron declined to respond to questions, but in a statement said it was obligated to comply with Biden's order and was taking steps to do so.
"Employees who are unable to receive the COVID-19 vaccination due to a medical condition or sincerely held religious belief are being provided an opportunity to request an accommodation from this requirement," Textron said.
Spirit AeroSystems did not respond to a request for comment.
Raytheon Technologies' CEO Greg Hayes last week warned the U.S. defense firm will lose "several thousand" employees because of the mandate.
A group representing FedEx Corp, United Parcel Service Inc and other cargo carriers said it would be virtually impossible to have all their workforces vaccinated by the deadline.
Some companies have imposed vaccine mandates even absent immediate government regulation.
Mercedes-Benz USA, the U.S. unit of German carmaker Daimler AG which is not a U.S. government contractor, told employees in an October email seen by Reuters that proof of vaccination against COVID-19 would become a condition of employment beginning Jan. 4.
The carmaker said it implemented the move in anticipation of a separate U.S. government vaccine mandate that would apply to businesses with at least 100 employees, affecting some 80 million workers nationwide.
Less than half of the company's workers at U.S. import processing centres are vaccinated and many refuse to get a shot, according to a source familiar with the matter.
Mercedes USA in a statement said it had given employees 90-day notice to fulfill the requirement, adding that two thirds of its U.S. employees - not including factory workers in Alabama - have provided proof of vaccination to date.
"We expect that the vast majority of our employees will provide proof of vaccination before the deadline," the company said.
Avianca Says U.S. Court Approves Bankruptcy Reorganisation Plan
The Southern District of New York has approved Colombian airliner Avianca's reorganisation plan, Avianca said on Tuesday November 2, which will allow the company to complete its Chapter 11 bankruptcy process before the end of the year.
Avianca, along with rival Chile's LATAM Airlines, were the two largest carriers in the region before the coronavirus pandemic, but both were sent into bankruptcy restructuring when the virus upended air travel, amid especially strict restrictions in Latin America.
Avianca had already posted several years of losses before the pandemic began, and went through a boardroom coup in 2019 led by United Airlines.
"Avianca announces that today, after presenting certain additional documentation that had been required by the court, the tribunal of the Southern District of New York confirmed the company's reorganization plan," the company said in a statement from Bogota.
"The airline expects to successfully complete that process and emerge from Chapter 11 before the end of the year as a financially stronger and more efficient airline."
Avianca will have significantly less debt and more than $1 billion in liquidity when it finishes the bankruptcy process, the statement said.
The company plans to have 130 airplanes servicing 200 routes by 2025, it added.
During the bankruptcy process, Avianca received approximately $2 billion in new financing.
U.S. Aviation Regulator Warns Of Potential Interference From 5G Spectrum Plan
The Federal Aviation Administration said on Tuesday November 2 that it had issued a special information bulletin alerting manufacturers, operators and pilots that action may be needed to address potential interference with sensitive aircraft electronics caused by the use of 5G telecommunications technology.
The FAA has been in discussion with the Federal Communications Commission about its air safety concerns over the plan to begin using some additional spectrum for 5G wireless networks starting Dec. 5.
The FAA said on Tuesday November 2 operators "should be prepared for the possibility that interference from 5G transmitters and other technology could cause certain safety equipment to malfunction, requiring them to take mitigating action that could affect flight operations."
The bulletin said "there have not yet been proven reports of harmful interference due to wireless broadband operations internationally."
It also recommends pilots remind passengers that all portable electronic devices equipped with 5G be should be turned off or switched to airplane mode during flight.
The FAA warned of the potential of the "degradation to the capabilities of safety systems and other equipment that depend on radio altimeters, particularly during low-altitude operations."
The FAA said equipment manufacturers should also continue their testing to determine the susceptibility of specific radio altimeters to 5G interference and should explore design changes that could mitigate the effects of interference.
The aviation industry has voiced alarm about the plan to use C-Band spectrum for more than a year. Network carriers are expected to begin using the spectrum starting Dec. 5 starting in 46 markets.
FAA Deputy Administrator Bradley Mims in a letter first reported by Reuters on Friday October 29 said the agency shares "the deep concern about the potential impact to aviation safety resulting from interference to radar altimeter performance from 5G network operations in the C band."
The Federal Communications Commission (FCC) said Tuesday November 2 it is "committed to continuing to work with its federal partners to simultaneously preserve air safety and advance the deployment of new technologies."
The aerospace and airline sector met with the FCC in August, warning that without changes "major disruptions to use of the National Airspace System can be expected from the rollout of 5G" and added the FAA will be forced to "drastically reduce aviation operational capacity."
Wireless trade group CTIA said on Friday October 29 5G networks can safely use C-band spectrum "without causing harmful interference to aviation equipment," and cited numerous active 5G networks using this spectrum band in 40 countries."
AirAsia Interested In Potential Airbus A321neo Freighter
Malaysia's AirAsia Group Bhd is in talks with Airbus SE about its interest in the manufacturer developing a new freighter version of its A321neo passenger plane, the head of its logistics arm said on Wednesday November 3.
AirAsia would seek to convert a "meaningful chunk" of its 362 orders for the passenger version of the A321neo narrowbody to a dedicated freighter, said Pete Chareonwongsak, CEO of AirAsia logistics division Teleport.
"For a lot of the markets that we need to reach both in range but also in capacity, it's a great product," he told reporters of the potential freighter. "Would we be the launch customer? I don't know. We'll see."
Chareonwongsak cited reports that China's JD Logistics Inc plans to have a fleet of 100 freighters by 2030 as an example of the scale that AirAsia could seek in its cargo business as it focuses on growth in e-commerce.
"We think that Southeast Asia, if we focus on this market, can absorb that level of capacity," he said.
Industry website Leeham News in August reported Airbus was in talks with customers about a freighter version of the A321neo.
An Airbus spokesperson said on Wednesday that it was always looking to advance its products and was in constant dialogue with its customers listening to their requirements.
"There are many studies and not all see the light of day," the spokesperson said. "Details of discussions with our customers remain confidential."
Airbus in July announced plans for a freighter version of its A350 widebody jet, in a challenge to Boeing Co's longstanding dominance of the market for dedicated cargo planes. . Boeing is also expected to launch a freight version of its 777X big jet soon, with Qatar Airways and FedEx seen as potential launch customers, market sources say.
In the narrowbody market, older versions of the A321 and 737 passenger planes are being converted into freighters but there is no new-build freighter plane on offer.
Airbus has looked at the possibility of offering new A320-family freighters in the past. In 2007, for example, Belgian express carrier TNT talked to Airbus about launching such a programme with a large order, Flightglobal reported at the time.
But since then demand for the passenger version of the A320 family has soared and Airbus faces little or no pressure to win freighter sales to add volume, industry sources cautioned. It is debating instead how to manage existing production demands.
Any new product would also have to overcome the hurdle of justifying a $2 billion or so investment with fresh demand, without simply displacing existing orders for jetliners.
"It is better to facilitate the passenger-to-freight conversion market," one industry source said.
The coronavirus crisis has nonetheless shed light on opportunities for narrow-body freight traffic as airlines shipped goods using passengers jets as temporary freighters.
Teleport on Wednesday launched its first 737-800 freighter to be based in Bangkok. It plans to grow the fleet to six planes by 2023, Teleport Chief Operating Officer Adrian Loretz said.
Teleport is in talks with investors to raise $50 million to $100 million by the end of the year and would look to list as a separate company in three years, Chareonwongsak said.
The division, which also carries cargo in the belly of AirAsia passenger planes and has a food and parcel delivery business, is aiming for $1 billion of annual revenue within three years, he added.
Spain Sees Tourism Back To Pre-Pandemic Levels In 2022 After Solid September Data
International travel to Spain is recovering fast and could allow the tourism-dependent nation to reach pre-pandemic foreign visitor levels by 2022, the government said on Wednesday November 3 after data showed a sharp rise in September arrivals.
The number of foreign tourists visiting Spain more than quadrupled in September from a year ago to nearly 4.7 million, data from the National Statistics Office showed, as widespread vaccination and looser travel restrictions enticed back more visitors.
"These data confirm a reactivation of international tourism is underway and that in 2022 we could recover pre-pandemic levels," Tourism Minister Reyes Maroto said in a statement.
Maroto cited Spain's natural tourist attractions and its high level of vaccination - approximately 80% of the population - as driving forces behind the recovery.
She had said in the past foreign tourism would be half pre-pandemic level in 2021 up from less than 20% in 2020.
Unlike Italy and France, Spain does not require proof of vaccination or a recent negative COVID-19 test to enter restaurants or bars, meaning unvaccinated visitors can enjoy their holiday without taking tests every few days.
Nevertheless, total arrivals were still far below the 8.8 million who came to Spain in September of 2019, before the coronavirus pandemic hit.
Tourists spent a total of €5.04 billion in the country, soaring from the €964 million of the previous year but a long way off the €9.62 billion spent in September 2020.
Germans made up the largest group of foreign travellers, followed by Britons and French people, the data showed.
Lufthansa Flies Back To Black On Cargo Boom, Easing Travel Curbs
Germany's Lufthansa expects high demand for its booming cargo business and the recovery of passenger flights to continue next year, it said on Wednesday November 3, after reporting its first underlying operating profit since the coronavirus crisis.
The group reported adjusted earnings before interest and tax (EBIT) of €17 million in the third quarter, versus a loss of €1.262 billion a year earlier, supported by strong freight business and rising demand during the summer season with the easing of travel restrictions.
"We have mastered another milestone on our way out of the crisis: We are back to black," Chief Executive Officer Carsten Spohr said.
Analysts in a company-provided poll had expected an adjusted EBIT loss of €33 million.
Lufthansa's air cargo business reported a record adjusted EBIT of €301 million, as demand and air freight rates rose due to ocean freight bottlenecks and global supply chains disruptions.
"The favourable supply-demand gap will last at least until 2022, but with a high degree of probability beyond that," Spohr said.
The company's third-quarter revenue almost doubled to €5.2 billion, compared with analysts' forecast for €5.5 billion.
Lufthansa, which also owns Eurowings, Swiss, Brussels and Austrian Airlines, said it expected demand to develop positively, resulting in positive earnings before interest, tax, depreciation and amortisation (EBITDA) in the fourth quarter.
It said third-quarter capacity, measured in available seat-kilometres, was 50% of the pre-crisis level. It expects 2022 capacity to rise to more than 70% of the 2019 level.
"The positive development will continue up to 80% in the second half of the year," Spohr added.
New bookings are currently at 80% of 2019 levels, the airline said, prompted by recovering business bookings and rising demand for long-haul flights, especially to the United States, Lufthansa's most important and profitable market.
With the U.S. opening for travellers from Europe next week, Spohr said transatlantic bookings were already around 80% of pre-crisis levels, adding he expected mainland China to open up in the middle of 2022 rather than early next year.
Shares in Lufthansa were up 6.1% at 1101 GMT on Wednesday November 3, the second best performer on Germany's mid-cap MDAX index.
The group, which last year received a €9 billion lifeline in public funding to stay afloat, said it expected capital expenditure of approximately €2 billion next year and that it was aiming for €2.5 billion a year in the long term.
Norwegian Cruise Eyes Return To Profitability In Second Half Of 2022
Norwegian Cruise Line Holdings Ltd on Wednesday November 3 forecast a return to profitability in the second half of 2022, as the U.S. travel and tourism industry claws back from the impact of the COVID-19 pandemic.
Cruise operators recorded billion-dollar losses last year as many ships anchored offshore without passengers, but pent-up demand for leisure travel and roll-out of COVID-19 vaccines have helped cruise lines pull thousands of guests again.
U.S. health officials earlier this year allowed them to resume sailings albeit at reduced occupancy.
Guests with strong household savings have also been splurging on pricey tickets and high-end products and services while on board the ships, helping cruise operators make up for some lost ticket sales due to occupancy restrictions.
For Norwegian Cruise, occupancy was 57.4% in the third quarter ended Sept. 30. It forecast occupancy to be at normalized levels in the back half of next year, when it would also have its full fleet in operation.
The parent of Oceania Cruises also said overall cumulative booked position for 2022 is in line with pre-pandemic record levels and at higher prices, even as the COVID-19 Delta variant hurt bookings for the fourth quarter and early 2022.
Norwegian Cruise also expects monthly average cash burn for the fourth quarter to be at around $350 million, up from about $275 million in the third quarter.
Bigger rival Royal Caribbean Group last week also forecast a return to profitability in 2022.
In the third quarter, Norwegian Cruise struggled as some customers were apprehensive about going on cruises and it spent heavily to prepare ships for voyages again.
Norwegian Cruise's total revenue of $153.1 million missed estimates of $198.4 million, according to Refinitiv IBES. Adjusted per-share loss of $2.17 was also above estimates of $2.09.
Shares in Norwegian Cruise fell 2% in premarket trading.
Colombia's Avianca To Move Domicile To The United Kingdom
Airline Avianca Holdings will move its domicile to the United Kingdom and its stock will no longer be traded on the Colombian stock exchange, the company said on Wednesday November 3, a day after a U.S. court's approval of the company's restructuring plan.
Colombia's flag carrier had filed for Chapter 11 bankruptcy at a U.S. court in New York in 2020 amid the coronavirus pandemic. It now expects to exit the measure by the end 2021, after receiving around $2 billion in new financing under a debt-for-equity deal.
Once its principle domicile is established in the UK, the company will be known as Avianca Group International Ltd. Its current shareholders will not receive any payout or be included as shareholders in Avianca Group, the airline added.
The airline did not say why it was moving its domicile, or why it had chosen Britain.
Colombia's stock exchange on Wednesday November 3 suspended trading in Avianca shares, which had closed at 42.5 pesos (0.01 dollar cents) each on Tuesday November 2. Avianca said it expected its Columbian listing to be cancelled.
Avianca's approved business plan includes all parts of its operation, including destinations it will serve, the planes it will operate, and the way it will serve customers.
Asia Tourism Reopens With Big-Spending Chinese Stuck At Home
Asia's gradual easing of international travel curbs is proving a welcome relief for the region's hard-hit tourism operators slowly opening up to visitors from around the world - with one giant exception.
China, previously the world's largest outbound tourism market, is keeping international air capacity at just 2% https://www.reuters.com/business/aerospace-defense/airlines-cut-intl-passenger-flights-china-new-season-2021-10-29 of pre-pandemic levels and has yet to relax tight travel restrictions as it sticks to zero tolerance for COVID-19.
That has left a $255 billion annual spending hole in the global tourism market for operators such as Thailand's Laguna Phuket to try and fill.
Managing director Ravi Chandran says Laguna Phuket's five resorts have shifted their marketing focus to Europe, the United States and United Arab Emirates to make up for the loss of Chinese visitors, who accounted for 25%-30% of its pre-COVID business.
"Up to today, we have not done significant marketing or promotion in China ... because we don't feel anything coming our way," Chandran said.
The pandemic has cost Thailand an estimated $50 billion a year in tourism revenue and Chinese were above-average spenders based on tourism ministry data.
Thailand hopes to receive 180,000 foreign tourists this year, a fraction of around 40 million it received in 2019, as it opened places beyond Phuket to tourists on Monday https://www.reuters.com/business/aerospace-defense/bangkok-welcomes-first-tourists-quarantine-free-holiday-2021-11-01.
Many experts expect China to keep such stringent measures such as up to a three-week quarantine for those returning home until at least the second quarter of next year and possibly then open gradually on a country-by-country basis.
"Destinations have to identify new source markets and learn how to market and cater to different cultures," Pacific Asia Travel Association (PATA) Chief Executive Liz Ortiguera said, citing the Maldives as a rare example of a successful pivot during the pandemic.
The string of islands in the Indian Ocean promoted itself heavily at trade shows and attracted more Russian and Indian visitors to its luxury resorts and sparkling waters.
China had been its greatest source of tourists before the pandemic but the Maldives saw overall arrivals in the first nine months of 2021 fall just 12% versus the same period of 2019.
CHINA TOURISM EVOLVES
Travel data firm ForwardKeys estimates it will take until 2025 for Chinese outbound travel to recover to pre-pandemic levels. That will also force airlines to re-evaluate their routes given its data shows 38% of Chinese tourists took foreign carriers in 2019.
Even as Singapore, Thailand and Indonesia's Bali gradually open up for international travellers, Thai Airways and Garuda Indonesia are drastically shrinking their fleets as part of restructuring plans amid the absence of Chinese tourists.
When China does open its borders, industry surveys show a reluctance by many to travel internationally due to COVID-19 fears.
There has also been a boom in domestic holidays to Hainan Island which now offers duty free shopping in a threat to future visits to nearby destinations such as Hong Kong and South Korea.
"I honestly do not have much enthusiasm for international travel," said at Kat Qi, 29, a researcher in Beijing who travelled to Southeast Asia and Britain before the pandemic. "A lot of places that I wanted to visit are in less developed countries with gorgeous natural scenery and they tend to be the least vaccinated countries."
Her preference for natural scenery is also a trend emerging in surveys of Chinese travellers. Many are focused on the outdoors at a time when domestic camping holidays have become popular and tourism operators will need to adapt accordingly, experts say.
"The market will have changed so the Chinese people travelling in 2022 will be different from the Chinese travelling in 2019," said Wolfgang Georg Arlt, CEO of the China Outbound Tourism Research Institute. "I think the trends will go away from this shopping and rushing around."
Large group tours that have also fallen out of favour on domestic trips could also be a thing of the past, to be replaced by independent travel and smaller customised tours with family and friends, said Sienna Parulis-Cook, director of marketing and communications at marketing company Dragon Trail International.
"You might have organised travel and everything but it would be with a small group of people that you know, rather than 50 strangers on a tour bus," she said.
Wizz Air Warns Of Winter Headwinds After Summer Returns To Profit
Hungary-based carrier Wizz Air warned that it faced headwinds over the winter but would be ready to take advantage of what it expects to be "exceptional opportunity" next summer, after it returned to profit for the July-September quarter.
For the three months to the end of September, budget airline Wizz posted a net profit of €57 million, in line with analyst expectations, and said it was already back flying as much as it did before the coronavirus pandemic in 2019.
That puts Wizz, the fast-growing airline believed to be behind a rejected takeover bid for bigger rival easyJet in September, ahead of many competitors whose capacity remains at around 60%-80% of 2019 levels.
But chief executive Jozsef Varadi told Reuters on Thursday: "The next five months will be temporarily challenging".
Wizz's eastern European heartlands have lower vaccination rates than the markets it has expanded into in western Europe, plus like all airlines, it is facing rising fuel prices. It is currently unhedged on fuel.
For its third quarter, the October to December period, Wizz guided that it expected an operating loss of approximately €200 million and warned that this loss could carry on into the January March period, depending on operating conditions.
"This is a lot more cautious than anticipated and will require significant downgrades for this year’s forecasts," Goodbody analyst Mark Simpson said.
Shares in the airline traded down 1.5% in early deals on Thursday November 4.
Ryanair, Europe's biggest airline, on Monday November 1 also warned that fare discounting and higher fuel costs would hit its profits.
Looking to next summer, Varadi said that the expected end of coroanvirus restrictions and pent-up demand would make for a buoyant market.
During the pandemic, Wizz has grown its fleet of planes to add bigger, more fuel-efficient models, and added new routes.
"I see that we will be exceptionally well-positioned for taking advantage of the revamp of the market post-COVID," he said.
U.S. Airline Disruptions Cast A Pall Over Holiday Travel
A spate of high-profile flight cancellations has put a spotlight on worker shortages at U.S. airlines, triggering warnings of new delays over the holiday period as airlines scramble for staff.
It is a dramatic shift for an industry that was grappling with surplus labour as coronavirus hammered air travel just a year ago, and is the latest evidence of a widening labour crunch.
As demand in the United States roars back, carriers are struggling to keep up. The challenge is especially pronounced at American Airlines and Southwest Airlines, which have been among the most active in adding seats to meet demand.
American cancelled hundreds of flights last weekend, citing weather and staffing. It faced similar turmoil over the summer.
Southwest last month suffered an operational meltdown that resulted in around 2,000 cancellations and cost it $75 million. Similar factors in August forced Spirit Airlines Inc to cancel 2,800 flights.
Days ahead of the late-November Thanksgiving travel rush, airlines are scrambling to avoid a repeat.
Meanwhile, they face a surge in holiday bookings amid declining COVID-19 cases and rising vaccinations. Southwest said last month ticket sales for November and December were in line with 2019 pre-crisis levels.
Rising demand and labour shortages have left airlines more vulnerable to bad weather, which frequently mars end-year holiday travel. Analysts say that could mean more travel disruption.
"If there's any weather involved, you can expect flight cancellations," said Cowen and Co analyst Helane Becker.
In a staff memo last week, American said it expects to have 4,000 new employees in the current quarter. It is also recalling nearly 1,800 flight attendants from long-term leave.
Southwest aims to hire 5,000 employees by year-end.
The rush to hire in a tight labour market risks driving up costs at a time when soaring jet fuel prices are squeezing profits.
Southwest is offering hiring referral bonuses to employees and has raised its minimum wage to $15 an hour. Even then, it says applicant rates are below pre-pandemic levels.
"The competition for the talent and for really good talent is even tighter," said Greg Muccio, director of talent acquisition at Southwest. "A lot of folks...are looking for a lot of flexibility."
In the interim, both Southwest and Spirit have cut flights to prevent further outages.
Unions blame airlines for poor planning, which they say resulted in fatigue and frustration and made carriers susceptible to such disruptions.
American's pilot union said last month it planned to picket hubs to protest work rotas, fatigue and scarce accommodation.
"We're very concerned that management is stuffing the holiday turkey with uncertainty for the upcoming holiday travel period," said Dennis Tajer, spokesman for the Allied Pilots Association, which represents pilots at American.
To be sure, not all airlines are feeling the same pressures. United Airlines and Delta Air Lines have, thus far, largely avoided some of the turmoil.
Both are flying fewer flights than rivals. United also struck a deal to keep all its pilots flying last year in exchange for reduced work hours and lower pay.
United and Delta restored just over 70% of 2019 capacity in the quarter through September. In comparison, Southwest ramped up its capacity to more than 98% of 2019 levels and American flew 80% of its pre-pandemic capacity.
Industry experts say United and Delta have been partially insulated from the labor squeeze by networks more focused on international markets, where demand remains relatively weak.
But recent congestion has triggered broader questions over decisions by some airlines to slash headcount despite receiving $54 billion in federal aid to help cover payroll expenses.
Senator Maria Cantwell, a Democrat, sent letters in July to the heads of six airlines including American, Delta, Southwest and JetBlue Airways to demand explanations of worker shortages after billions in pandemic bailouts. Cantwell said at best each airline "poorly managed" the situation and at worst let taxpayers down.
While their responses to the letters have not been made public yet, airlines have said that the bailouts saved thousands of jobs, prevented bankruptcy and put them in a position to support the economy's recovery from the pandemic.
Industry experts say federal aid did help carriers retain workers, but problems started when the payroll program ran out of funds. With no clarity on funding and travel demand still weak, airlines asked workers to take unpaid time off or retire early.
"Had they retained 100% of their workers, they would have required more cash," said Cowen's Becker.
Airlines resumed hiring and bringing back pilots this spring as dipping COVID-19 cases brought passengers back.
U.S. air transportation employment in September was more than 12% below its pre-pandemic peak. By contrast, employment at restaurants and bars, struck equally hard by pandemic lockdowns, is just 7.6% below its peak before the COVID-19 outbreak.
Executives acknowledge a coronavirus-shattered airline industry is naturally more risk-averse, leading to tentativeness by some carriers when the recovery kicked in. Southwest, for example, didn't get moving with its hiring plans before July.
"We were kind of late to the game," said Southwest's Muccio.
News by Reuters, edited by Hospitality Ireland. Click subscribe to sign up for the Hospitality Ireland print edition.
