Aviation Industry Updates: March 1, 2022

Airlines Face Disruptions From Ukraine Invasion

• Global airlines could face severe disruptions from Russia’s invasion of the Ukraine that could escalate if the West and Moscow volley sanctions at one another.

• Airlines, like Ryanair, Wizz Air, and Qatar Airways which as recently as Wednesday were flying to Ukraine, announced Thursday morning that flights to the country had been cancelled. Ukrainian airspace and the airspace over parts of Russia were closed to commercial traffic overnight. “Due to the closure of Ukrainian airspace overnight, and the apparent invasion by Russia forces, all Ryanair flights to and from Ukraine have been suspended for at least the next 14 days,” Ryanair said in a statement.

• Hungary’s Wizz Air is scrambling to evacuate several personnel and to move at least four aircraft stranded in Ukraine, Bloomberg first reported. It remains unclear how operational Ukraine’s airports are. Overnight reports from the ground suggested that Russia shelled Kyiv’s main international airport and had targeted military and civilian airports around the country. Airline Weekly has been unable to independently confirm these reports.

• The outbreak of war will hammer an airline industry still hobbled by the Covid-19 pandemic and spread far beyond the conflict zone.

• In a worst case scenario: If the West imposes its most severe sanctions, Russia could retaliate by closing its airspace to overflights, disrupting air traffic between Europe, North America and Asia and wreaking havoc for flyers.

• The effects of the conflict already are making themselves known. Oil prices surged past $100 per barrel for the first time since 2014 and are expected to rise even further, especially if the West sanctions Russian oil production. In their fourth-quarter earnings calls earlier this year, airlines had warned that rising oil prices — then well below $100 per barrel — could put a brake on their 2022 recovery plans. Air France-KLM warned last week that an outbreak of hostilities would put “tremendous” pressure on oil prices and could derail the Franco-Dutch group’s plans for recovery this year.

• But overflight permits present an even thornier problem for airlines if the conflict escalates. U.S. flights to Asia already are being rerouted to avoid Ukrainian airspace and the closed parts of Russian airspace. Airlines started curtailing night overflights of Ukraine in 2014 after Malaysia Airlines Flight 17 was shot down by Russian-backed separatists in Eastern Ukraine, IATA said. Daytime overflights have continued, however.

• But a broader closure of Russian airspace or the cancellation of overflight permits will disrupt flights to Asia, particularly from Europe.Data from FlightRadar24, a flight tracking site, show virtually no flights over Eastern Europe on Thursday, from the Polish border and extending over Belarus, Moldova, Ukraine, and Southwestern Russia. Instead, traffic is being rerouted south, over Romania and Turkey and the southern Black Sea.

Airline Weekly

Incoming American CEO To Employees: Don’t “Spend A Dollar More Than We Need To”

KEY POINTS:

• At the ‘State Of The Airline’ employee forum last month current American Airlines President and incoming CEO Robert Isom laid out his vision for the airline. It was mostly about operating reliably as the priority that matters most. One line, though, struck me at the time. I didn’t write about it. Instead it’s been tossing around in my head ever since.

• “The last piece here is be efficient and accountable. This is for everybody. We can’t spend a dollar more than we need to. And we shouldn’t. We have to be on the lookout for opportunities to save while we provide a great product and while we put all of our fantastic investments to work.”

• At first I took Isom’s remark to be a simple platitude. Of course you shouldn’t spend money that’s unnecessary and wasteful. But what does this mantra really mean in practice, and what is the message that he’s sending to managers?

• Looking for places to cut costs, and avoiding expenses, aren’t priorities that are ultimately consistent with delivering a top notch product that drives a revenue premium – and given American’s relatively high costs and high debt load, they need to be driving revenue premium by delivering a product customers willingly pay more for.

• Isom chooses his words carefully. He’s far less off the cuff than Doug Parker. Being careful with money is very intentional for him. And there’s a difference between ‘not spending a dollar more than you need to’ and ‘being a good steward of shareholder resources’. As the mindset of avoiding an extra dollar of spending whenever and wherever possible repeats itself over and over throughout daily choices managers must make, that leads to a different product than where the mantra is to produce the sort of premium product customers will pay more for – that will be needed to deliver the kind of financial performance American needs to be even with the industry (let alone ultimately avoid the courthouse).

View From The Wing

Delta Suspends Aeroflot Codeshare

KEY POINTS:

• Delta Air Lines said on Friday that it had suspended its codeshare with Aeroflot, the Russian flagship airline.

• The suspended codeshare came a day after the United States announced new sanctions on Russia over its invasion of Ukraine. Aeroflot is majority-owned by the Russian government.

• While both airlines are members of the SkyTeam alliance, the codeshare agreement between them is relatively small compared to the codeshares between Delta and other SkyTeam members, such as Air France and KLM.

• Delta puts its code on 12 daily Aeroflot flights between Moscow and other cities in Russia, according to data from aviation schedule database Cirium, while Aeroflot puts its code on up to 36 daily Delta flights from Los Angeles (LAX) and New York (JFK).

• The codeshare allows passengers to connect onward with either airline when traveling from the U.S. to Moscow, or from Russia to New York or Los Angeles. Additionally, a codeshare such as this one means that passengers can check their bags through to their final destinations when traveling on codeshare flights.

• With the codeshare no longer in place, Delta said that accommodations would be made for any affected passengers.

• On Thursday, the United Kingdom prohibited Russian airlines from landing or flying within its airspace, revoking Aeroflot’s foreign carrier permit and canceling the airline’s daily service between Moscow and London (LHR).

• The United States did not ban the airline as part of the suite of sanctions announced Thursday. Aeroflot currently operates service from Moscow to New York, Los Angeles, Miami (MIA) and Washington Dulles (IAD). The Federal Aviation Administration on Thursday prohibited U.S. airlines from flying over Ukraine, Belarus, or parts of Western Russia.

TPG

Breeze Eyes Significant Expansion

KEY POINTS:

• Breeze Airways, the low-cost carrier from JetBlue and WestJet founder David Neeleman, is about to go global.

• The new airline, which took flight in May 2021, initially launched with 39 routes across 16 cities in the U.S., focusing on smaller hubs like Louisville, Kentucky; Tampa, Florida; Charleston, South Carolina; and Norfolk, Virginia. Shortly after, the carrier quickly became the best-funded airline startup in U.S. history, with over $300 million in capital raised within its first three months of operations.

• Now, the little airline that could is eyeing a significant expansion, announcing interest in scaling up its service across the globe. During a panel discussion at the Routes America conference in San Antonio last week, Breeze chief operations officer Lukas Johnson shared that the airline is currently in talks to secure a larger fleet of Airbus A220 aircraft, which will aid it in expanding service to longer domestic routes. "We're going through the certification process for the 220s first," said Johnson.

• "Then we'll tackle the next pieces, which is international, etc."

• Breeze has been quietly kicking around the idea of expanding its service internationally since July 2021, when it was reported that the airline had put in a request for proposals on the Routes Exchange Platform, which is used to establish cooperation between airports and airlines on new routes.

• A timetable for the expansion is yet to be announced. The airline has not yet confirmed which international markets it has its eyes on. In its initial RFP, Breeze expressed interest in airports in the Caribbean, Mexico, and Central America.

Trip Savvy

Weekly TSA Numbers

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American Hosting Meet & Greet at Women In Aviation

• Please note: You may select only 1 time slot per candidate. Any duplicate registrations will be removed.

• As a courtesy please do not select a time slot to meet with a member of the Pilot Hiring team unless you meet Unrestricted ATP minimums.

• Each candidate will be able to meet with a member of the American Airlines hiring team for up to 15 mins.

• If you are unable to make the time slot assigned to you please be courteous to your fellow pilots and cancel the registration ahead of time, so it can be made available to someone else that is looking for a spot!

• The time slots are limited

REGISTER HERE

Southwest Hosts Live Session To Discuss Flight Crew Training Instructor Position

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• Southwest offers a wide range of benefits that you will LUV

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• Thursday, March 3 at 12:00 p.m. CT

INFO SESSION
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