Aviation Industry Updates: January 4, 2022

Podcast: Southwest CEO on Optimism and Recovery

• New Southwest Airlines CEO Robert Jordan said that he sees 2022 as another “transition” year in the recovery. He is optimistic that business travelers will return — his predecessor has said this may take 5-10 years — but does not expect this to occur overnight.

• “I’m an optimistic guy,” said Jordan. “I’m very optimistic that we’re going to get the travel back,” said Robert Jordan, incoming CEO of Southwest Airlines, at Skift Global Forum, in conversation with Airline Weekly editor Madhu Unnikrishnan. Listen now for the full interview.

LISTEN HERE - Skift

American Turns to New CEO | Saddled With Debt and Growing Pains

KEY POINTS:

• Mr. Isom will take the reins at American as CEO on March 31 after Doug Parker, who pieced American together through blockbuster deals to form the world’s largest airline by traffic, retires. Mr. Parker will remain chairman of American’s board.

• Mr. Isom will have to address a number of problems. The airline’s operation, which he oversaw, has lagged behind competitors in recent years. Relations with labor unions have been contentious. Before the pandemic, investors were growing restive as the airline’s share performance flagged.

• Mr. Isom has told employees that he isn’t looking to change the airline’s strategic direction, but will work to improve its operation and return the airline to profitability.

• “This is no excuse. This is a management leadership issue. But I will say, the level of complexity that’s in the business today is unprecedented,” Mr. Isom told pilots in a town hall shortly after his appointment was announced. “So I will ask for some patience, a little bit of understanding. It is our job to fix.”

• In an interview earlier this month, Mr. Isom said American is positioned to thrive as demand returns. Despite major setbacks in the fall, American has run as well or better this year than it did before the pandemic in terms of delays and cancellations. The airline’s fleet of relatively young planes and a more domestic-focused network could give it a boost as rivals have also taken on more debt and faced their own struggles ramping up, analysts have said.

WSJ

United Makes Its Case | Wants To Be The Unofficial US Flag Carrier

KEY POINTS:

• Global borders are reopening and US carriers are focused on expansion. The new year will see US airlines fly to distant destinations once again including new and returning destinations in Singapore, Australia, India, and more.

• United, however, wants to be the carrier to take travelers to more of those destinations and plans to fly its aircraft further than its competition. The strategy will give travelers more non-stop options when traveling to underserved overseas destinations but is also part of United's new goal to be America's flag carrier, similar to British Airways in the UK or Air France in France but for which the US has no official designation.

• "Frankly, we are the flag carrier of the US," Scott Kirby, United's chief executive officer, told reporters in June. "Our international long haul wide-body fleet is almost as big as all of the other US airlines' [wide-body fleets] combined. We fly to places that no one else flies."

• "Holding aside all the challenges posed by COVID and its variants, United believes that there is a decided business advantage in operating its own flights from its various US hubs to points in Europe, Asia, Africa, and elsewhere," Henry Harteveldt, travel analyst and president of Atmosphere Research Group, told Insider.

Business Insider

Five Bold 2022 Predictions For The U.S. Airline Industry

KEY POINTS:

• As 2021 comes to a close, U.S. airlines are heading into an uncertain 2022 with the pandemic continuing to raise questions rather than sunsetting. This makes predictions tougher, but still fun to try. I won’t allow myself to just re-predict something that didn’t happen in 2021, even though I think a bankruptcy might still be possible. So, here are five new predictions that I believe are likely to happen, even if not desirable:

• Airline Onboard Mask Mandates Will Continue All Year

• The Big Four’s Domestic Share Will Drop To 60%

• Narrow-bodies Will Overtake Wide-bodies On Many Transatlantic Routes

• Airline Loyalty Programs Will Embrace Less-Frequent Travelers

• Airline Execs Will Stop Saying All Business Traffic Will Return

• One absolute truth about every forecast is that it will be be wrong in some ways. These five predictions all seem likely in late 2021, and 2022 will be a challenging year for many airlines as a result. As has been true for the last few years, the carriers with the lowest costs that can make money on the price-sensitive leisure traveler will continue to outpace the largest airlines that are dependent on business travel returning.

Forbes

Weekly TSA Numbers

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