AirAsia races to restore capacity as regional demand returns

The Association of Asia-Pacific Airlines said this week that members’ traffic in March was three times what it was in the same month last year, and – as carriers race to restore capacity as travel restrictions are lifted – load factors are higher than before the pandemic.

In fact, Bo Lingam, chief executive of one of the region’s biggest airline groups, AirAsia, says the biggest challenge is getting enough aircraft back into service to meet demand. Throughout the crisis, governments have rapidly imposed border controls as a way of restricting the spread of the virus. And while the equally swift removal of these is welcome news for the industry, consumers tend to react quicker to the changes than airlines, leading to disappointed customers or operational chaos.

Malaysia was due to drop its strict requirements on 1 May, including tests for air travelers. It follows the example of Singapore and Thailand. This is leading to a surge in demand for tickets from those keen to visit family or take long-delayed vacations without the worry, hassle and expense of having to test, fill out paperwork, and potentially quarantine in a hotel. Lingam says AirAsia is confident it can bring back most of its furloughed flight and cabin crews, and is recruiting to fill any gaps.

Other markets are experiencing strong growth too. Mexico, for instance. There, national carrier Aeromexico said this week that it had almost doubled its year-on-year first quarter revenues, with capacity back to 80% of what it was in 2019. Low-cost rival Volaris also reported a lively first three months, with almost two-thirds more passengers carried than in quarter one 2021, and is gearing up for a summer bonanza on the back of strong tourist demand.

In the USA, a shortage of pilots and other staff remains airlines’ biggest headache and could get worse in the holiday season. Small, start-up carriers are feeling the pinch alongside the majors, who rely on regional partners to feed passengers into their hubs. Leisure airline Avelo, which launched a year ago, has twice increased pay by “a material amount” to retain and recruit pilots. It plans to increase by “hundreds” its current 160-strong contingent of flight and cabin crew in coming years.

Despite the recovery, Boeing’s woes continue, with its backlog of undelivered 737 Max jets remaining at 320, despite the type’s return to service across much of the world. China’s refusal to reapprove the Max is a factor, as is the fact that Boeing has resumed 737 production in anticipation of future demand. The manufacturer is also sitting on 115 787s it has not been able to hand over to customers, with that programme halted by regulators until quality issues are addressed.

If that were not bad enough, delivery of the company’s new flagship product, the 777-9, has been delayed by until 2025, 12 years after the twinjet was launched at the 2013 Dubai Airshow, and six after the original delivery date. Production has also been put on ice for now. While the 777-300ER has been the dominant large widebody on the market for years, introducing its successor is crucial to Boeing’s ability to compete with Airbus’s A350 in the long-haul segment above 300 passengers.

Electric-powered commercial aircraft – something considered a pipedream just a decade ago – is moving close to reality, with British Columbia, Canada’s Harbour Air planning to fly a certifiable version of a battery-powered De Havilland Canada DHC-2 Beaver next year. The Pratt & Whitney Wasp engine is being replaced on the 1950s-built piston single by a Magnix electric propulsion unit. A proof of concept aircraft flew in December 2019.

Finally, the simmering row between Qatar Airways and Airbus over A350s the Doha-based carrier rejected because of alleged surface paint quality issues has taken a new turn in papers filed to the courts in London. Qatar Airways wants to prevent the manufacturer seeking new customers for the widebodies that the airline refused to take delivery of. Qatar Airways had 42 A350-1000s on order, of which 19 had been handed over.

Airbus argues that if Qatar genuinely believes the aircraft are unsafe it cannot object to them being sold to other airlines. The implication is that Qatar’s accusation is a ploy to hold off on taking delivery and payment until industry conditions improve. The airline, meanwhile, is seeking almost a billion dollars in damages from Airbus for having to ground the aircraft, claiming that the skin-paint damage amounts to an airworthiness concern.