United Airlines is eager for long-haul international travel to return, with the segment critical to its returning to profitability after the dark days of the coronavirus pandemic.
But if Americans want to relax on Greek beaches or see the Eiffel Tower this summer, the Chicago-based carrier’s CEO Scott Kirby says they will likely need a Covid-19 vaccine.
“For anybody who wants to travel long-haul — go to Europe this summer, or go to New Zealand or Australia [during] the North American winter, I expect you’re going to have to have a vaccine,” United CEO Scott Kirby said during a Washington Post Live event on Thursday.
Nearly 55 percent of Americans 18 years of age and older had received at least one shot of a Covid-19 vaccine as of Thursday, according to U.S. Centers for Disease Control and Prevention data. By comparison, only 26 percent of EU citizens over 18 had received a shot, data from the bloc shows.
And at United, Kirby said between 50 and 60 percent of staff are now vaccinated.
Kirby’s rationale that travelers will need vaccines is based on firm logic. The first European countries to reopen to American visitors, including Croatia, Iceland and Greece, all require proof of vaccination from travelers. And, just this week, European Commission President Ursula von der Leyen said the EU was considering reopening to vaccinated Americans this summer. Similar rules are expected for the proposed U.S.-UK travel corridor.
Earlier in April, United unveiled plans for new nonstop flights to Croatia, Iceland and Greece this summer. And, despite concerns about vaccine hesitancy in the U.S., bookings for the new flights are “through the roof,” said Kirby.
Beyond those select countries, Kirby said the news of the EU and maybe the UK reopening to vaccinated Americans this summer is “encouraging.” His comment echoes thoses made by Lufthansa Group CEO Carsten Spohr, whose airlines are partners of United and rely heavily on transatlantic travelers, also on Thursday.
United needs 65 percent of business and long-haul international travel to resume before it can return to profitability. Both were mainstays of its business before the crisis with U.S. domestic leisure travel — the only segment that has significantly recovered to date — amounting to only about a third of the airline’s revenues. United expects business travelers to begin returning in earnest from September.
In other words, the leisure-led recovery this summer is unlikely enough to turn the tide of red ink to black in United’s financial statements.
“It’s an open question, towards the end of this year or early next year is my best guess,” said Kirby when asked when United could next turn a profit.
That’s not to say the airline lacks optimism for the summer. United plans to fly roughly 55 percent of its 2019 passenger capacity in the second quarter. That is split heavily in favor of domestic where 64 percent will fly compared to just 36 percent internationally, according to Cirium schedule data. Schedules for the rest of the summer, including July and August, are not yet finalized.
In addition, United will have more opportunities to generate revenue this summer than it has in recent months. The airline is reinstalling six seats to each of its 190 Embraer E175 jets — the most common aircraft in the United Express fleet — after removing them last year, and launching more than 20 new seasonal routes targeting beach-bound vacationers.
Kirby, for one, is personally positive about Europe reopening to vaccinated Americans. He already has plans to take his family there this summer, he said.
Southwest’s Plan To Attract More Business Travelers
Southwest Airlines is aiming to gain a bigger slice of the post-COVID business segment, Andrew Watterson, Southwest Airlines EVP, and Chief Commercial Officer, recently said. The low-cost carrier is taking advantage of the current commercial environment in the US to do it. Let’s investigate further.
The business travel market is one of the biggest question marks for the post-COVID world. There are mixed opinions regarding the importance this segment will have going forward. Some say it will never be the same, impacted by the appearance of new technologies embraced by companies like Zoom. Others say face-to-face business interactions will never go out of style.
While Southwest’s CEO, Gary Kelly, said last year on CNBC that business travel recovery might take up to ten years, the airline is still planning to attract this segment going forward.
Today, at a CAPA Live event, Southwest CCO Andrew Watterson said,
“Post-COVID, we will have a better offering to business travelers as well as our enhanced network for leisure travel as well. So we expect to take a bigger slice of the reduced pie of business travel post-COVID. And so, we think we’ll end up in a better spot than we were pre-COVID.”
How will Southwest achieve its goal?
Southwest’s plan to attract new business travelers depends mainly on two pillars. The first one is accessing new airports, increasing the number of bases from which it flies. The second one is the launch of a project appealing to large corporations instead of single customers.
In the last year, Southwest has opened up 17 additional stations across the United States. This number includes launching flights from some highly contested hubs like Chicago O’Hare, Houston’s Bush Intercontinental, and Miami’s International.
Adding to that, Southwest has expanded its presence in the global distribution system (GDS) network. This has allowed the airline to enhance its corporate travel game through agreements with Travelport and Amadeus.
Combining both aspects give Southwest a tremendous edge. Watterson said,
“We’re going into more business-friendly airports in the East and the Central of the country. We’re already there in the West of the country, combined with being able to distribute to corporations more seamlessly with GDS’s. We kept doing that project throughout COVID, and now we are going live with all the major GDSs. And so, we think when that comes together, we will have a better offering to business travelers.”
The Southwest of the future
Southwest Airlines will continue to be a leisure-focused airline. In the last year, the two things that have boosted Southwest have been its financial strength and employee engagement.
Thanks to the compromise from Southwest’s employees, the airline has been able to open up at least 17 new stations, added Watterson.
Last month, Chairman and CEO Gary Kelly said in a statement,
“While the pandemic is not over, we believe the worst is behind us, in terms of the severity of the negative impact on travel demand.”
Going forward, the airline is excited about its recent big order for aircraft with Boeing.
“That combined with continuing to match supply and demand, the same market we’ve developed, we’ll just keep managing that and deploying incremental capacity to the demand we see,” added Watterson.
What do you think of Southwest’s plans to attract business travelers? Let us know in the comments.
Boeing 737 Classic Operator Canadian North Wants Three -700s
by Sumit Singh | May 12, 2021
Canadian North president and CEO Chris Avery has shared that his airline is expecting three Boeing 737-700 aircraft this summer. The carrier plays a crucial role in serving communities across Nunavut and the Northwest Territories. It is now looking to make the most of the unexpected opportunities brought about by the pandemic by upgrading its fleet.
Overcoming the challenges
Boeing 737s make up the biggest portion of Canadian North’s fleet. The airline has a mix of -200, 200C -300, -300(QC), -400, and -400C aircraft in its holdings. Despite the diverse range of 15 737s, the carrier is interested in upgrading to meet its sustainability and efficiency targets.
In a talk with CAPA Live, Avery highlights that the industry conditions before the pandemic made it a challenge for his airline to get hold of an aircraft such as the 737-700. The 737 MAX was grounded, and passenger demand was at an all-time high across the continents. So, getting hold of a -700 at a reasonable price was, understandably, a tough task.
Moreover, the regions that Canadian North serves generally have low populations. As Avery explains it, adding another flight to Clyde River is not the same as providing an extra service to Las Vegas. Therefore, the carrier has to be more reserved with its fleet renewals.
Ready to take the leap
Nonetheless, the pandemic caused a significant shift amid the downturn in passenger activity. So, the situation is allowing for the operator to transition.Advertisement:
“Getting hold of 737 NG aircraft was cost-prohibitive for us because our scheduled business is reliant on low utilization … We also have a sizable charter business in the West, specializing in workforce movement for the oil sands, and more recently, liquefied natural gas work in northern BC. And again, that’s low utilization flying because we’re flying for the customers when they want,” Avery told CAPA Live.
“… but because of COVID, we’re now able to access next-generation 737 aircraft at lower ownership costs, which are more fuel-efficient and better for the environment than the classic aircraft that we operate. So, we’re moving up the chain and moving up to more fuel-efficient aircraft.”Advertisement:
Keeping in communication
Canadian North also holds 13 ATR 42s. It also has a British Aerospace BAe 146, which it inherited from First Air. These turboprops are praised by airlines working in remote areas for their ability to take off and land in tough conditions.
Altogether, the airline in talks with ATR and Boeing about further renewing the fleet. The two manufacturers understand the economics of the airline. So, after the parties conclude on the right solution in the next chapter, there may be further additions this decade. Until then, Canadian North will be looking to put the 737 NG’s promoted superior, efficiency, reliability, and high-value returns to the test.
Ryanair To Open Zagreb Base Early Amid Croatia Airlines Competition
Ryanair will open its Zagreb Airport base more than a month earlier than planned this summer, in July, much to the disapproval of Croatia Airlines. Ryanair has also announced two new routes to Zagreb, and it is appealing against the state aid provided to Croatia Airlines last year.
Ryanair will come to Zagreb Airport sooner than planned
Ryanair has brought forward the opening of its new Lauda base in Zagreb Airport, just over a month after it was first announced. Instead of 1st September, the base will now open on 23rd July.
At the same time, Ryanair has announced two new routes to Zagreb: Malmö in Sweden and Weeze Airport near Düsseldorf in Germany. The total number of Ryanair’s new routes to Zagreb now stands at 14.
As we reported last month, Croatia Airlines is highly unhappy with Ryanair’s arrival in its base airport. The national airline of Croatia is arguing that Ryanair has been offered unfair financial terms by Zagreb Airport at Croatia Airlines’ expense.
Ryanair has responded robustly to Croatia Airlines’ PR campaign by launching an appeal to the Court of Justice of the European Union against the state aid that the Government of Croatia provided to Croatia Airlines. Croatia Airlines received a cash injection in 2020 for COVID-19 reasons, but also in 2019 to cover its operational losses.
So which routes is Ryanair launching?
Ryanair is launching 14 new routes out of Zagreb, though it has indicated that it plans to operate as many as 40 by the end of 2022, and that it wants to overtake Croatia Airlines as the busiest airline in Zagreb and all of Croatia.
The new routes are, in the order of launch date:
- Brussels Charleroi, 2nd June
- Milan Bergamo, 17th June
- London Stansted, 23rd July
- Rome Ciampino, 23rd July
- Gothenburg, 23rd July
- Oslo Sandefjord, 1st September
- Karlsruhe/Baden Baden, 2nd September
- Paris Beauvais, 2nd September
- Memmingen, 3rd September
- Frankfurt Hahn, 3rd September
- Dortmund, 3rd September
- Podgorica, 4th September
- Malmö, 4th September
- Düsseldorf Weeze, 4th September
London Stansted, Rome Ciampino, and Gothenburg are all launching on 23rd July instead of early September as originally planned. Milan Bergamo is launching in mid-June instead of July as originally planned.
How has Croatia Airlines responded?
Croatia Airlines has not made any operational moves so far to respond to the arrival of Ryanair on its home territory. The airline has held talks with Ryanair and the Croatian Government with the intention to see its own fees at Zagreb Airport reduced.
However, Zagreb Airport is not budging, at least so far. The airport has not offered any specific deal to Ryanair: it has announced an incentives program that offers major discounts on flight operations for airlines that launch new routes to the airport.
Ryanair has done exactly that: the airline has launched 14 brand new routes that have never been served out of Zagreb. But Croatia Airlines does not see it that way, and it wants its own fees at Zagreb lowered on the basis that it accounts for half of its passenger traffic.
What do you think of the emerging battle between Ryanair and Croatia Airlines? Let us know what you think in the comments below.
United expands beer, wine and snacks to nearly all flights over two hours
Starting June 1, United Airlines customers on most flights over two hours will be able to purchase beer, wine and White Claw® Hard Seltzer, making United the first major airline to offer the hard seltzer onboard its aircraft. On June 15, United will introduce a revamped menu of for-purchase snacks and brand-new premium cabin meal options on most flights over 1,500 miles and hub-to-hub flights over 800 miles or more than two hours. Customers will be able to purchase these offerings from the Buy-On-Board menu using United’s new mobile wallet technology.
New Adult Beverage Menu
United’s revamped adult beverage menu features a number of options sourced locally from United’s hubs, along with customer favorites from iconic brands. The new menu includes:
- White Claw® Mango
- Breckenridge Brewery Juice Drop Hazy IPA
- Kona Brewing Co. Big Wave Golden Ale
- Michelob ULTRA®
- Stella Artois®
- Red, white and sparkling wine options
New Snack Boxes
United’s new snack boxes offer three distinct experiences for travelers of all ages and tastes:
- Tapas Box: Hummus, bruschetta, breadstick crackers, flatbread crackers, sea salt almonds, olives, dark chocolate sea salt caramel
- Takeoff Box: Salami, apricots, gouda cheese spread, white cheddar cheese spread, multigrain crackers, cream crackers, smoked almonds, Toblerone®
- Recline Box: Pirate’s Booty® white cheddar puffs, honey mustard pretzels, gummi bears, OREO® cookies
New A la Carte Options
In addition to the popular Pringles® Classic potato chips, United is adding three new a la carte snacks to its menu to give customers a larger variety of options, including high-protein and gluten-free options. The revamped menu includes:
- Trü Frü Banana Bites: hyper-dried bananas covered in dark chocolate
- Food Should Taste Good™ Chips & Salsa Box: gluten-free, sweet potato “tortilla” chips with roasted pepper salsa
- GourmetNut Mega Omega Trail Mix: snack mix with walnuts, dried mango, almonds, cranberries, pumpkin seeds
How Contactless Payment Works:
To purchase select drinks and snack items onboard a flight, United’s contactless payment system allows customers to store their payment information in a digital wallet on the United app and on United.com prior to departure.
- Once in flight, customers can access a menu to view available items either on the United app and in Hemispheres.
- Rather than handing the flight attendant a credit card, the flight attendant will ask for the customer’s name and seat to confirm the card on file.
- Once confirmed, customers will receive their products and the card on file will be charged accordingly.
New Domestic Premium Cabin Menu Items
United is also introducing brand-new meal offerings to customers seated in domestic premium cabins on flights over 1,500 miles and hub-to-hub flights over 800 miles. The enhanced meal service includes a choice of entrees – including fresher options like egg scramble with plant-based chorizo and grilled chicken breast with orzo and lemon basil pesto – sides and dessert. United has also partnered with Eli’s Cheesecake to create a uniquely United chocolate pie flavor called “Pie in the Sky.” The meals will be served on one tray, with items individually wrapped, to limit person-to-person contact and further the safety of our employees and customers.
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