High hopes for summer, and transatlantic low-cost is Bjorn again

Since the start of the Covid-19 crisis a year ago, we have become used to false dawns. There was hope of a summer bounce in 2020, then a return to some kind of normality in the final quarter, and finally a rapid drawing back of restrictions once vaccines began rolling out in January. However, we are almost a quarter of the way through 2021 and – with third or fourth waves sweeping many parts of the world – the outlook still seems uncertain at best.

However, airline leaders do seem more optimistic about the near future than they have for some time – and not just about domestic and short-haul leisure flights, the market many expect to revive before long-haul and business travel. This week, IATA’s outgoing director general Alexandre de Juniac stated that he was “reasonably optimistic” of a return to services between the EU and the USA by June.

Meanwhile, British Airways chief executive Sean Doyle believes bilateral agreements to allow travel between the UK and certain countries, including the USA, could be imminent. His counterpart at Virgin Atlantic, Shai Weiss, is also confident that North American flights can resume ahead of the crucial summer season. Aside from the crucial transatlantic business links, Virgin Atlantic in normal times carries tens of thousands of Brits on vacation to Florida.

On the other side of the pond, a number of industry executives have been making extremely positive comments this week. They include aircraft leasing veteran Steve Udvar Hazy, executive chairman of Air Lease – and someone who has done business through every aviation crisis of the past 50 years – who said he is detecting “green shoots” of recovery, with several carriers resurrecting purchasing agreements for Boeing 737 Max aircraft.

“It feels like the beginning of the end,” Southwest Airlines chief executive Gary Kelly remarked in an interview with the Washington Post. His opposite number at Delta Air Lines, Ed Bastian, told an investor conference that, thanks to strong forward bookings, “we are getting really close to 2019 numbers”. And American Airlines chief executive Doug Parker noted that his airline’s bookings for the next three weeks are higher than at any point since before the pandemic.

In China, where the effects of Covid-19 hit first, the mood among airlines is also reasonably upbeat. There, the in-country market began recovering mid-way through 2020, as Beijing managed to suppress the first and prevent subsequent waves of the virus. However, one of the largest travel markets in the world is not out of the woods yet. While year-on-year domestic traffic in February is 187% up on the low-point of 2020, it is still 55% down on the same month in 2019.

Singapore Airlines has been one of the worst affected major airlines because its entire business is built on international services, and the island state has shut its borders to all but a tiny proportion of essential traffic. However, the carrier said this week that it is planning to start opening its network again, thanks to a gradual recovery based on worldwide vaccination campaigns. In February, SIA carried just 3% of the passengers it handled the same month a year earlier.

Finally, from the “just when you thought it had gone for good department”, two stories. Firstly, despite retiring all its Boeing 747s, British Airways plans to return its other four-engine jumbo – the Airbus A380 – to service. The airline’s 12 A380s have been in storage since the start of the pandemic, but British Airways believes they can continue to perform a role on some of its ultra-long-haul, lower-frequency routes, such as London to Singapore, Los Angeles, Johannesburg and Hong Kong.

The decision sets BA apart from its two main European competitors – Air France and Lufthansa – which have said they will not be resuming flights with the double-decker type. Airbus officially ended the A380 programme two years ago. The final example to be built, MSN272, departed Toulouse this week for outfitting in Hamburg, ahead of delivery to the superjumbo’s most loyal customer, Emirates. The Dubai carrier has ordered 123 of them in total.

Secondly, the financial ills of Norwegian put a dampener on what once seemed an exciting new market – low-cost transatlantic services. However, this week it emerged that a start-up from Norway, backed by none other than Norwegian founder Bjorn Kjos, was seeking to launch routes between Europe and the USA using Boeing 787s, the type used by Norwegian before its withdrawal from long-haul. Norse Atlantic Airways has already begun advertising for crew.