Happy New Year. Welcome to 2021.
As relieved as everyone is to have seen the back of 2020, hopes that life and, by extension, air travel will fully return to normal in 2021 remain remote.
The imposition of travel restrictions on passengers from the UK immediately before Christmas 2020 indicated how rapidly circumstances can change and how unpredictable the COVID-19 pandemic is.
Normally at this time of year we can present a laundry list of firm airline route and fleet plans for the next 12 months. Whilst many airlines do have plans for the summer season, no one knows to what extent these will be realised.
What is certain that COVID-19 has put airlines under severe financial pressure which will affect investment plans for years to come.
Yesterday, 31 December 2020, IAG confirmed that British Airways is to secure a state guaranteed £2 billion loan facility. Virgin Atlantic has not yet filed its annual accounts for the year to 31 December 2019.
Here are at least some things to watch out for in 2021.
Airport Slot Wars
For most of the past 12 months, airlines have benefited from a relaxation of “use it or lose it” slot rules.
This has benefited incumbent airlines, and particularly those that want to keep slots across Gatwick and Heathrow. And they’d like to keep it this way.
Airports and challenger airlines such as Wizz Air have other ideas. The Worldwide Airport Slot Board has proposed a compromise whereby airlines have to temporarily hand back slots for the summer season by February so new entrants can use them. Otherwise they must use their slots for at least 50% of the season, subject to exemptions for short notice cancellations due to travel restrictions.
Either way, a decision needs to be made shortly.
Ancillary Revenue Streams
COVID-19 has put not just airlines, but also airports, under severe financial pressure.
It is inevitable both airlines and airports will look at more ways to raise revenue from passengers. Gatwick and Heathrow plan to introduce passenger drop off charges. Lufthansa plans to introduce buy-on-board on short-haul flights later this year. Expect more creative ways from airlines to raise revenues.
Aer Lingus has finally received regulatory approval join the American Airlines & BA transatlantic joint business.
Whilst this will primarily benefit American Airlines & Aer Lingus at Dublin and Shannon, Aer Lingus is also expected to launch transatlantic flights from Manchester this summer, where American Airlines has withdrawn all flights.
BA’s Gatwick Strategy
BA is due restart short-haul flights at Gatwick from Sunday 28 March.
The airline has traditionally focused on point-to-point leisure traffic at the airport. There are signs of a change in approach with Accra, Doha and Islamabad moving to Gatwick. These are routes you would expect to operate from Heathrow to maximise connections. Further streamlining the Gatwick long-haul fleet may be a factor here.
JetBlue’s plan for transatlantic flights from London to Boston and New York JFK has been one of the most widely trailed route announcements.
The airline has said it will launch these routes later this year. Either way, we should at least have an announcement this year.
Back to Gatwick, Norwegian is, in theory, due to restart long-haul flights from Sunday 28 March.
Even before COVID-19 Norwegian had, through its inordinately complicated structure, been numerous financial restructurings. The group is currently going through administration processes in Ireland and Norway. It is hard to see the resumption of transatlantic flights in just under three months’ time.
Another widely hyped route launch is Qantas’ plan to operate non-stop flights to Sydney and the East Coast of Australia.
There was always something ominous about the huge amount of PR Qantas was generating before it had even placed an order for suitable aircraft. And along came COVID-19. We may finally get a firm aircraft order later this year.
Willie Walsh Joins IATA
Thought you’d heard the last from Willie Walsh after his retirement from IAG?
Not so fast. Willie will become Director General of IATA from April 2021. He of course already has a substantial media profile in the UK. Willie has already made it clear he will not pull any punches in criticising governments for failing to set up a COVID-19 testing regime for borders to reopen.