Compulsory vaccines, resilient cargo and lazarus airlines

The question of whether businesses can, should or will require workers to be inoculated against Covid has been in the headlines, with media organisation CNN this week confirming it had fired three employees for breaching its regulations on only vaccinated staff entering its premises. On 6 August, United Airlines became the first major US air carrier to require its pilots and other employees to have the jab.

To many, these so-called vaccine edicts are a breach of liberties, and out of place in a democratic society. For others, however, the obligation to keep colleagues and customers safe trumps that freedom. With international travel likely to be governed for the foreseeable future by strictures for vaccination certificates, testing, and quarantining, the question must be: how long before even domestic air journeys are the exclusive preserve of the double-jabbed?

For now, government rules rather than a lack of passengers remain the big brake on airline recovery. Each time restrictions are relaxed, a bookings surge follows. Many European nations have removed bans on vaccinated US travelers, but will the Biden administration reciprocate? Plans to fully reopen some of the world’s busiest and most lucrative air corridors after 18 months are being worked on, but no date has been set for their implementation. Until then, the industry must wait.

Whether it is passenger bookings, numbers of flights, load factors or aircraft orders, all the indicators point to a gradual recovery in aviation taking place in the second half of 2021, despite concerns about Covid infection rates continuing to ground flights in much of the world, particularly Asia-Pacific. In the USA, cases may be rising again, but demand for domestic air travel continues to rebound, raising an almost-forgotten ghost of the pre-Covid era: the pilot shortage.

This week low-cost airline Spirit endured several days of operational chaos, which many are putting down to it simply not having enough flightcrew. Spirit itself blamed “weather, system outages and staffing shortages”, as well as high industry load factors, for causing “widespread irregularities” in its network. Although Spirit’s flight cancellations have been the highest profile, it is far from the only US airline to have apparently miscalculated its crew requirements for the busy summer season.

While US passenger airlines seem to be lurching from near-bust to boom – at least on in-country operations – other parts of the industry have experienced a smoother journey through the crisis. Since March 2020, a drop in belly hold capacity due to grounded flights and increasing e-commerce has been good news for the specialist air freight sector. This week, Atlas Air became the latest cargo carrier to report strong quarterly earnings.

Business aviation too has been remarkably resilient over the past 18 months, with reports of high-net-worth individuals turning even more enthusiastically to the sector as airline travel has grown more complicated. Previously loss-making business jet maker Bombardier on 5 August reported a strong quarter two profit, noting that demand for both new and used aircraft was proving better than its expectations.

This week brought news too of two famous airlines returning, if not from the dead, then deep hibernation. South America’s LATAM filed for Chapter 11 protection in the USA in May last year, but plans to exit the process before the end of 2021. The Santiago-based carrier is even ordering 28 new Airbus narrowbodies as it bids to modernize its fleet, on top of a previous commitment for 42 aircraft from the European manufacturer.

South African Airways suspended operations last year, and even lost its licence from the country’s civil aviation regulator as long-running financial troubles threatened to bankrupt it. However, the flag-carrier has now won back its licence, and plans to resume services with eight aircraft. It has secured a deal with its pilots’ union that will see it retain 88 of its 268 pilots. However, keeping profitable an airline that has been on a precarious financial footing for decades will be daunting.