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- Tues, May 21, 2024: Saudia goes shopping
Tues, May 21, 2024: Saudia goes shopping
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In today’s issue: Saudia goes shopping, Qatar tries again, India and the UK expand their Air Service Agreement, Ryanair is rolling, and The DOJ won't block the Korean/Asiana merger
NETWORK PLANNING ROUNDUP
🔵Updating the agreement: India and the UK updated their Air Service Agreement to allow airlines from both countries to operate an additional 14 flights per week between Heathrow and Delhi/Mumbai. Currently, each country’s carriers can operate 56 weekly flights, so this expansion will raise the cap to 70.
In the short term, this will have a greater impact on UK carriers who currently operate 56 weekly flights as opposed to Indian carriers who operate just 38. In the long run, as Air India and Vistara complete their merger and take delivery of new aircraft, one would imagine they will steadily increase their capacity in the market.
🔵Second time’s the charm❓️: Qatar has submitted a second request to increase flights between Doha and Australia following their attempt to increase the flight cap between the two countries in 2023. That request was denied for reasons that were unclear and rumors emerged that Qantas lobbied aggressively against Qatar’s request at the time. With demand returning to pre-Covid levels in the broader Asia-Pacific region, it sure would make sense to let Qatar increase their flights to Australia and add some further competition.
🔵Making it work: While many of the smaller airlines in North America and Europe who aren’t part of a transatlantic JV struggle to make flying across the pond in the winter work, WestJet recently updated their schedule to reflect that they will operate their Calgary-Paris flight daily during the upcoming winter season instead of 4x weekly as previously planned. Certainly not a drastic change, but an interesting tidbit.
🔵Heading to Vegas 🎰: Aer Lingus will launch 3x weekly flights to Las Vegas in October using an A330-300. At the moment, the airline is somewhat capacity constrained given the dispute with their pilots, which has caused them to defer the delivery of their A321XLRs, and Dublin Airport’s passenger cap. Given this, they can only grow so much in the near future, and they chose Vegas for this growth.
FLEET ROUNDUP
🔵Shopping Spree 🛍️: The Saudia Group, which owns Saudia Airlines and the LCC flyadeal, ordered 105 A320neo family aircraft. Saudia will get 54 A321neos while flyadeal will get 39 A321neos and 12 A320neos. The order is being described as the largest ever in Saudi aviation history, and the delivery timeline has yet to be revealed. As Saudi Arabia attempts to rapidly scale up its tourism industry, orders like these from Saudi carriers are hardly surprising.
🔵What’s new: UAE-based LCC Air Arabia has turned to lessors to continue its fleet growth. It currently has 120 planes from the A320 family on order, which were supposed to be delivered in Q4 2024. However, the delivery date has been pushed back to H1 2025 at the earliest. As a result, the airline is turning to lessors to get some short-term relief. Another edition of the newsletter, another airline dealing with delivery delays…….
🔵Speeding up ⏩️: Breeze will remove its entire E190 fleet (10 E190s and 5 E195s) from regularly scheduled service by the end of the summer instead of the end of the year as originally planned. The airline isn't getting rid of the planes though, and will instead continue to use the aircraft to operate charter flights. Presently, Breeze is the largest charter operator for men's and women's NCAA basketball.
LOOSE ENDS
🔵In the green 🤑: Ryanair reported annual revenue of €13.44 billion (up roughly 25% YoY) and a profit of €1.92 billion (up 34% YoY) during the 2023-24 fiscal year. The airline carried more than 183 million passengers over the course of the fiscal year, surpassing pre-Covid levels.
Ryanair posted these impressive results despite having to deal with 737 MAX delivery delays and thousands of flight cancellations caused by ATC strikes across Europe. This coming summer, it will operate its largest ever schedule and sees an opportunity to capitalize on capacity constraints other airlines are facing due to the ongoing issues with A320 Pratt & Whitney turbofan engines.
🔵Make up your mind: Korean Air says that the DOJ will not block its merger with Asiana. Following the merger, the Korean/Delta JV’s share of the US-Korea market will rise from 59% to 81%. At the same time, somewhat confusingly, the DOT is currently considering ending the JV between Delta and AeroMexico even though the two airlines account for only 20% of flights between the US and Mexico and 58% of flights between the US and Mexico City. Hard to say that the logic totally adds up there….
🎧️ Things I’m Listening To
🔵 Check out this week's edition of the Airline Weekly Lounge where they break down Emirates’ recent earnings call.
📺️ Things I’m Watching
🔵 Check out YouTuber Patrick Shea’s business class review of Malaysian LCC, Batik Air.
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