2021 – A Year of Hope
While we are just one month into 2021, airlines are seeing more reasons to be optimistic. The distribution of vaccines to prevent the further spread of the COVID-19 virus is well underway. While disruptions remain, they are not as egregious as in 2020. According to Collins Aerospace Business Development and Strategy Executive, 35-year aviation industry veteran Joel Otto, “To me, 2021 will be a year of hope. Hope that the vaccines will have an impact and that passengers get their confidence back and return to travel. Beyond that a hope for new and innovative approaches that will bring this industry back to something better than it was before 2020.” He cited airports’ leveraging of new technologies such as biometrics, RFID, artificial intelligence, and machine learning to promote a more touch-free travel experience, as well as new enhancements to aircraft cabins such as air management and air filtration systems to improve the travel experience. Otto also noted, “new opportunities for new types of aircraft in the skies for package delivery and other things.”
Reshaping Networks in the U.S.
In the U.S., airlines have been developing new networks. United Airlines, for example, began planning new direct routes as early as last summer. These include direct flights between cities in the north such as Boston, New York, Pittsburgh, Cleveland, Columbus, Indianapolis, and Milwaukee to sun-filled destinations in the south including Florida’s Orlando, home of Disney, Tampa, Fort Myers, and Fort Lauderdale. It is all about driving new revenue streams noted Citigroup’s Director of Research for Airlines in the Americas Stephen Trent. “Point-to-point activity is consistent with that pivot, which, I imagine, could persist until we see a fairly meaningful pick up in business trave and in international long-haul travel.” Other U.S. airlines looking for new ways to generate revenue include American Airlines which recently entered in a strategic partnership with JetBlue Airways to operate codeshare flight and also offer reciprocal frequent flier benefits. As a result of the codeshares, JetBlue gains 60 new Americans routes for its network and American gains 130 JetBlue routes.
New COVID-19 Guidance from IATA
Recently, IATA came out in favor of the European Union (EU) adopting a digital COVID-19 vaccination certificate which it believes will facilitate more unrestricted travel through Europe. IATA’s position is that by eliminating the obstacles of testing and quarantines, Europe will gain both economic and social benefits with this policy without compromising public health and safety. A letter signed by IATA Director General and CEO Alexandre de Juniac and addressed to European Commission President Ursula von der Leyen, in which de Juniac cited an initiative brought forth by Greek Prime Minister Kyriakos Mitsotakis for a common digital European COVID-19 vaccination certificate, read, “Prime Minister Mitsotakis’ initiative should be urgently adopted by the Commission and all member states. Vaccination is a fundamental key to safely reopening borders and stimulating economic recovery. A pan-European mutually-recognized vaccination certificate would be an important step towards giving governments the confidence to safely open their borders, and passengers the confidence to fly without the barrier of quarantine.”
U.S. CDC’s Pre-Departure Testing Order Welcomed by IATA
IATA also came out in favor of the United States Centers for Disease Control and Prevention’s requirement that all travelers to the U.S. present proof of a negative COVID-19 test taken within three days prior to their departure to the U.S. The rule went into effect as of January 26, 2021. IATA’s Vice President Member and External Relations, North America Douglas Lavin stated, “Systematic pre-departure testing is key to giving governments confidence to reopen markets without quarantine. Testing will ensure that at current infection levels, aviation will not become a meaningful vector of new transmission in the U.S. Furthermore, IATA traveler surveys show that passengers strongly support and are willing to undergo testing.” To further support safe air travel and help reduce COVID-19 infections, IATA is developing anew mobile app, IATA Travel Pass, which will help passengers access the latest information regarding requirements for COVID-19 testing and vaccines. Using the app, passengers can receive and store encrypted data to verify their test and/or vaccination results and then use the app to share this information with airlines and authorities requesting it.
Air Cargo Moves from Belly holds to Freighters.
The latest data from WorldACD shows that air cargo belly capacity in key markets has decreased on average by 51% year over year in 2020, while capacity in freighters saw a 6% increase. This change in air cargo transport was primarily due to COVID-19’s grounding of passenger flights, but offset by lower demand of approximately 15% from the prior year. General cargo rates saw an increase by 66%, while special cargo rates and express cargo rates were up 46% and 43%, respectively.