A seven-figure sum was offered to Qantas in return for seven commitments from the airline, including launching Project Sunrise from Sydney. In late April, the New South Wales Government put AU$50 million (US$39.7) on the table in exchange for Project Sunrise bragging rights.
Sydney to be Australia’s only Project Sunrise airport for five years?
As reported in Simple Flying on Tuesday, the government made the offer after Qantas indicated it might move its headquarters out of Sydney. Qantas has since agreed to stay based in Sydney. However, the airline says the final agreed payment and terms from the New South Wales Government are still being negotiated.
With Qantas suggesting it was revisiting Project Sunrise soon, the New South Wales Government is keen to lock in their capital city as the Project Sunrise launch city and exclusive flight base for the following five years.
Sydney was likely to be the launch city and base for Project Sunrise flights anyway. In that sense, it seems like a fairly easy condition for Qantas to agree to in exchange for a bucket load of cash. But that is not necessarily the case.
Project Sunrise is an ambitious Qantas plan to fly nonstop from Australia’s key east coast cities to London and New York. To date, no aircraft can fly the distances and make money at the same time. But Qantas had settled on a modified version of the Airbus A350-1000 with an enhanced flying range. Project Sunrise was set to go ahead when the worldwide travel downturn struck.
Qantas didn’t abandon their plan. But they did put Project Sunrise aside while they navigated the downturn. However, Qantas CEO Alan Joyce has recently said he is keen to revisit Project Sunrise within the next year.
Is the New South Wales Government about to subsidize Project Sunrise flights?
In his offer to Qantas, New South Wales Treasurer Dominic Perrottet laid down seven conditions for the cash. Regarding Project Sunrise, the Treasurer’s letter stipulated;
“Commitment to proceed with the Project Sunrise project with this being based exclusively in Sydney for at least five years from commencement.”
The phrasing suggests Qantas must go ahead with Project Sunrise if they take the payment. That is a far bigger commitment than merely agreeing to launch and base flights in Sydney. Perhaps this is one reason why Qantas and the New South Wales Government are still working out the final details of the deal.
Qantas has always said they’ll only proceed with Project Sunrise if the business case stacks up. At the start of 2020, with Project Sunrise about to get the green light, that seemed to be the case. Eighteen months later, the airline industry and travel patterns have significantly altered. Among the hardest hit corners of the industry is long-haul flying.
If the offer does constitute underwriting of Project Sunrise, the AU$50 million suddenly sounds less generous than it first did. The money won’t go far when you are flying brand new Airbus jets to far-flung cities on a daily basis.
Also raising eyebrows is the exclusivity clause. Plenty of local flyers argue a case for running some Project Sunrise flights out of Australia’s second-biggest city, Melbourne. Under Dominic Perrottet’s preferred plan, Melbourne-based Project Sunrise passengers would inevitably use a tag flight to or from Sydney. In the process, they’d add to foot traffic through Sydney Airport and generate that airport some cash via local taxes and in-terminal spending. With Sydney a less than optimal transit airport, whether Qantas and its Melbourne-based passengers embrace a Sydney-centric Project Sunrise and Dominic Perrottet’s offer remains to be seen.
IndiGo Builds Up Cash Reserves As It Prepares For Third Wave
As IndiGo slowly begins its recovery from the second wave, it’s already preparing for a third wave. The airline plans to build up cash reserves of over ₹7,500 crores ($1.02 billion) to ensure that it can weather any more challenges in the future. Let’s find out more about how and why IndiGo is building up this war chest.
In an interview with Financial Times, IndiGo CEO Ronojoy Dutta spoke about the future of Indian aviation and his airline’s plans. The news comes days after IndiGo recorded a ₹1,174 crore ($160mn) loss for the first quarter of 2021 (Q4 of the fiscal year). Losses are expected to deeper during the April-June quarter, which saw passenger levels fall drastically due to the second wave in India.
However, IndiGo is already deep in preparations for any further shocks. The carrier has already passed a plan to raise ₹3,000 crores ($410 million) from qualified investors in the future. In addition to this, IndiGo also plans to raise another ₹4,500 crores ($615 million) through bank credit lines and sale-and-leaseback deals with lessors.
This $1 billion war chest is all in preparation for India’s third wave of COVID-19. Doctors have warned that another wave is extremely probable, and everyone must prepare. IndiGo isn’t taking any chances and is creating a huge fund to survive. In a statement, Dutta said,
“The doctors tell us there will be a third wave. There are no ifs and buts about it, and it will probably come around November, December…The board says ‘look, the environment is volatile… What if we go for another three months’ shutdown, then what? And the revenue is zero?’ It’s for that sort of disaster scenario that we are building insurance.”
The second wave has hit airlines extremely hard. While flights were not shut down like during the first wave, passenger traffic fell sharply. From 313,000 passengers in the first week of March, only 57,000 travelers were getting on flights in late May. This meant carriers had to slash capacity sharply and saw revenues shrink drastically.
With a third wave expected, IndiGo is planning far in advance. This leaves the carrier in an enviable position compared to others in the industry. At a time when airlines are unable to pay employees their salaries, the industry is still reeling from the current wave. However, IndiGo has already seen a recovery begin and expects to see things getting better soon.
IndiGo expects to see many “revenge vacations” after being locked in for nearly three months. This will boost capacity and passenger traffic in the short run and help carriers boost their revenues. However, a full recovery will take until at least the middle of 2022, if not later, as vaccinations and border restrictions remain slow moving.
For now, expect IndiGo to continue its recovery and slowly build back to early 2021 levels and beyond.
What do you think about IndiGo’s planning for the third wave? Let us know in the comments!
UK Airlines Prepare For Setback Over Delay In Lifting Restrictions
With the UK seeing an uptick in cases, it looks like the government will delay the lifting of its lockdown restrictions until at least July 19th. Because of this, airlines based in the country appear to be shrinking their schedules and canceling flights, pushing things back by about a month.
UK airlines cancel flights
It looks like a number of UK-based airlines are reacting to news of the extended restrictions by cutting their flight schedules. According to the Daily Mail, airlines British Airways, Virgin Atlantic, and easyJet have all canceled flights until after July 19th- the new end-date for restrictions. Here’s what we know so far:
British Airways: Earlier this week, we reported that British Airways has dialed back its schedule for June and July. According to aviation data experts Cirium, British Airways has 3,867 flights scheduled for the entire month of June. This past week that fell by 42% (1,625 flights) to 2,242 flights for the whole month.
easyJet: Once extremely optimistic and eager for the summer travel season, the budget airline has begun dropping some services to Greece and France.
Virgin Atlantic: The airline told the Daily Mail that it has had to delay the restart of some of our Caribbean services in response to the ongoing impact of COVID-19 restrictions. “These include the London Heathrow to Trinidad and Tobago service, currently assigned Red List status on the UK Government’s traffic light system, which will now resume from 7 October and our London Heathrow – Havana route, now due to commence 1 October,” the airline states.
The carrier has also delayed the restart of some of its transatlantic flights to mid-July. This includes its London Heathrow services to Orlando, Las Vegas, San Francisco, and Manchester to Orlando, Atlanta, and New York-JFK.
All those affected should be notified by their respective airlines or travel agents. Virgin Atlantic notes that when one of its flights is canceled, customers can rebook their flights for a new travel date all the way until April 30th, 2023. Alternately, they can convert their booking to a travel voucher or request a full cash refund.
The anticipated delay to ending lockdown
While an official decision has yet to be published by the government, reports are suggesting that the UK’s ‘Freedom Day’ will soon be pushed back to July 19th, from the original date of June 21st.
This anticipated announcement is believed to be a response to the rising number of COVID-19 cases- recorded as a 240% increase in a period of seven days. The overwhelming majority of these cases, 90% according to The Standard, are the ‘Delta strain,’ which was originally found in India.
Now well aware of how bad an outbreak can get, especially with a variant that may be even more contagious, it looks like the UK will be taking a more cautious approach. Unfortunately, for many Brits, this move will mean a summer vacation closer to home.
Have you been affected by any flight cancelations? Share your experience by leaving a comment.
UAE Extends India Travel Ban Until July 6th: Is The End Near?
The UAE has extended its Indian travel ban once again as cases in the country remain high and with dangerous variants in circulation. Both Emirates and Air India Express have confirmed the extension, which began on April 24th. However, considering this ban is only for one week rather than a fortnight or month, could the UAE be opening its borders to Indians soon? Let’s find out more.
The UAE officially announced its travel ban on April 22nd, with all travelers in India in the last 14 days banned from April 24th. The original ban was only for 10 days, but it has since been extended numerous times due to India’s devastating second wave.
This week saw another extension of the UAE’s travel ban, with travelers barred until at least July 6th. Both Emirates and Air India Express have confirmed that services to the UAE will remain restricted until this date. The news will come as a blow to the thousands of travelers stranded in India and hoping to return.
As cases come down in India, there has been some hope on the horizon for stranded travelers. From a peak of 414,000 cases at the start of May, cases have fallen to just 81,000 on 12th June. This sharp drop could set the stage for countries reopening their borders to India after three months of restrictions.
Notably, the UAE’s travel ban extension has only been for seven days, from July 30th to July 6th. Previously, the extensions were made in increments of 14 days or 30 days, making it clear that services were unlikely to resume soon. Could the short extension mean a border reopening is on the horizon?
It is important not to read too far into the fine print. The UAE could well extend its travel ban for another month until cases in India reach pre-second wave lows. Moreover, the Delta variant has found to be much more transmissible, causing outbreaks in countries like the UK and Singapore as well.
The next step for airlines will be opening up to connecting passengers. Once Emirates and Etihad allow transit passengers once again, travelers can start to hope that the travel ban will be gradually lifted. Similar steps have been taken for travelers from Brazil, another hard-hit, virus variant country. For now, the question of when the travel ban will be lifted remains up in the air.
Huge blow to airlines
At the start of 2021, routes between the UAE and India were some of the busiest in the world. Indeed, India is Emirates’ busiest market, and Air India Express’s entire business model runs on serving the Middle East. The travel ban is taking a heavy toll on airlines in both countries and many will be eager to see flights resume.
However, until cases fall further and the threat recedes, the ban will remain in place. When that happens is anyone’s guess.
What do you think about the UAE travel ban? Let us know in the comments.
How Would A Hydrogen Powered Plane Work?
As the aviation industry continues to look for ways to reduce its carbon footprint and become more ‘green,’ we hear more about electric and hydrogen-powered planes. These are both well under development, though it is still likely some time before we see them in large commercial aircraft. This article looks at how a hydrogen-powered aircraft would work and how close we are getting.
Hydrogen power is a popular possibility in many industries, with an abundant supply. No carbon dioxide is produced as a by-product of combustion, just water.
The concept of a hydrogen-powered aircraft refers to hydrogen as a fuel source (replacing current jet fuel). This could then be combusted to power the engines or used to power a fuel cell.
For clarity, the other popular green technology involves electrically powered aircraft. This refers to the use of stored battery energy to power aircraft engines. Several companies are working on electric aircraft, and there have been small varients built and flown. But battery technology limits use in larger aircraft. They cannot yet be made small (and light) enough.
Two ways to power an aircraft
There are two main ways that hydrogen fuel can be used to power an aircraft:
Combustion. This is very similar to how jet fuel is used currently and how a standard automobile engine works. Modified jet engines could use hydrogen as a combustible fuel source, powering an engine much as happens now but much cleaner.
Used to power a fuel cell. This is a different concept, where hydrogen is used to create electricity (within the fuel cell) that then powers the aircraft. This happens by combing the hydrogen with oxygen. The reaction produces electricity, with heat and water as by-products.
Fuel cells have been around for a long time and already have many applications. Hydrogen-powered buses and other vehicles are an increasingly common sight, for example.
Most smaller aircraft developed to date have used fuel cell technology. For larger aircraft, however, it is more likely that direct combustion will be used, at least initially.
To get a better idea of how a fuel cell works, take a look at this YouTube clip.
Storing the hydrogen
However, the aircraft it powers will require an onboard supply of hydrogen, just as aircraft today require jet fuel. This needs to be stored in pressurized tanks, which is more complicated than storing standard jet fuel. It cannot be stored in the wings, and instead, tanks are needed within the main fuselage.
With the small and low range aircraft developed so far, this is not a significant issue. But with larger aircraft, we are likely to see some redesigns to accommodate this. The fuselage could well need to be longer, with separate cabins and fuel storage. Airbus has also looked at a blended wing design as part of its ZEROe project, which would allow more options for hydrogen storage.
Limitations of hydrogen power
Although it promises a great deal, hydrogen power still has its limitations. Much more research is needed before large passenger aircraft can operate using the technology. This is not just required in aircraft and engine development, but also in the production of hydrogen. Most today is produced from fossil fuels, releasing carbon dioxide. For large-scale use in aviation, this will need to changes.
Airport infrastructure and fueling is also a major consideration. Just as fueling is a limitation for hydrogen and electric-powered vehicles, it could well be for aviation too. For hydrogen aircraft to be a realistic possibility, large-scale changes are needed to airport infrastructure to store and deliver hydrogen. Airlines will need reassurance that aircraft can be fueled easily, not just at a few specific airports.
There are currently plans underway to develop Europe’s first commercial plant for hydrogen-based aviation fuel. Norsk e-Fuel is leading the development of a plant, which should offer a maximum capacity of 10 million liters of hydrogen-based jet fuel within three years.
Where are we with hydrogen planes today?
While large-scale hydrogen-powered aircraft are still a long way off, technology has improved significantly in recent years. The first flight took place in 2008 with Boeing Fuel Cell Demonstrator, a single-person test aircraft. The first passenger aircraft flew in 2016, with HY4, a four-seat light aircraft designed by the DLR Institute of Engineering Thermodynamics.
In 2020, we saw the first commercial-grade flight using a hydrogen-powered aircraft. Zeroavia operated the first commercial-grade flight fully powered by hydrogen in September 2020. The six-seater retrofitted Piper Malibu only flew to 1,000 feet, but it is nonetheless an important step forward. The company is targeting a 250-mile flight by the end of 2020.
And looking further forward, Airbus has revealed a concept for three zero-emission hydrogen-powered aircraft that could see service as early as 2035.
What do you think of the potential and challenges of hydrogen power? Do you think we will see a large-scale commercial aircraft anytime soon? Let us know in the comments?
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