Why Wizz Air will be a structural winner from the coronavirus pandemic

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In December, nine months after Covid-19 swept around the world – plunging the air transport industry into its worst ever crisis – shares in European low-cost carrier Wizz Air reached an all-time high on the London Stock Exchange.

That the market shrugged off the grim outlook for airlines was no surprise: global indices have bounced back from their March lows as investors, flush with government stimulus, pile into risk assets and growth stock. Low-cost carriers are a compelling bet given their rapid expansion in recent years – fueled by insatiable passenger demand and the inferior cost structures of legacy rivals.

But Europe’s other budget airlines have not fared as well during the crisis. Shares in market leader Ryanair – more than three times the size of Wizz Air – fell short of their all-time-high by 14% during last month’s peak. Hybrid carrier EasyJet failed to come within even 50% of its highest-ever stock price.

For chief executive József Váradi, Wizz Air’s rising fortune in the midst of a global pandemic is recognition of the company’s obsessive focus on cost reduction, scalability and liquidity...

New charter airline Aero Georgia targets September launch

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The Caucasian country of Georgia could be served by a new charter airline as soon as this September following successful talks with two eastern European investors.

Aero Georgia is aiming to launch flights with a single narrow-body aircraft capable of carrying up to 150 passengers, Igor Aptsiauri, the company’s chief executive, told me in a telephone interview.

“This will be the first time that Georgia will have a purely charter airline,” he said.

“What we have noticed here in Georgia is that there's a very big demand for charters. And not only in Georgia … If we look at the big airlines in eastern Europe and the CIS [Commonwealth of Independent States] region, the ones that are doing more or less OK financially are all charter airlines...

This is why flights are still operating from Milan’s airports

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When Italy’s government placed the northern region of Lombardy on lockdown this weekend, many assumed that Milan’s airports would immediately halt flights.

The reason for isolating Lombardy, after all, is to slow the spread of COVID-19, the coronavirus disease that has so far infected 109,500 people worldwide, killing 3,800. Italy is by far the European country worst affected by the outbreak, with 7,375 cases and 366 deaths. Lombardy is its worst hit region.

Several countries and airlines have already taken matters into their own hands by grounding flights and cutting frequencies to northern Italy.

Yet, as of Sunday March 8th, the day that the lockdown began, Milan’s Malpensa Airport and Bergamo Airport were both insisting that it’s business as usual in their terminals. Bergamo Airport’s operator is still sharing a video that encourages its customers to #keeponflying...

South Sudan's most credible airline targets breakthrough year

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Sky Navigator, a South Sudanese virtual airline that launched operations in 2019, has laid out an ambitious plan to normalize air transport in its war-torn home nation.

The company is locally owned but relies on chartering aircraft from foreign partners due to the limited capabilities of the South Sudan Civil Aviation Authority, which lacks the ability to issue Air Operator’s Certificates (AOCs) and has ceded control of its airspace to Sudan since the two countries separated in 2011.

A pair of 12-seater Cessna Caravans is currently operated by the airline under short-term contracts with Horn Aviation of Kenya and Fly Zanzibar of Tanzania.

But managing director Cosmos Gombura is aiming to replace these units with five of Sky Navigator’s own Caravans this year – three on long-term leases and two purchased outright – as well as pressing the regulator to begin issuing local operating licenses as soon as possible...

This digital startup is stamping out the ‘tax-free shopping’ scam

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I was awestruck last year when I visited Milan’s Galleria Vittorio Emanuele II, the most famous and perhaps the most beautiful shopping mall in the world. Few can resist gawping upon entering this masterpiece of neoclassical architecture, with its sweeping mosaic tiles, palazzo-style facades and huge iron and glass dome. An even bigger shock awaits ordinary folk who glance at the prices in the posh fashion outlets lining its streets. But not everyone is left aghast. For some tourists the Galleria Vittorio is a place to spend, not gaze. And for non-Europeans, in particular, the splurging comes with the expectation of a 22% VAT refund at the airport. Yet few tourists receive their dues. By the time retailers and middlemen have had their fun, these shoppers are lucky to get 14% back. And it’s a problem that affects more than just super-rich visitors to Milan...

British Airways centenary becomes PR nightmare

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British Airways poured money into marketing this year by re-painting four of its planes in heritage liveries and running a series of TV and online advertisements hailing 100 years of flight by the flag carrier.

The campaign – which drafted in celebrities like Olivia Colman – sought to rekindle BA’s historic reputation as “the world’s favorite airline”.

Yet the company seems oblivious of the thing that made it so popular in the past: looking after customers.

Striking pilots are not due to walk off their jobs for another fortnight and BA is already in the doghouse over its chaotic handling of the situation. As well as forcing affected customers to wait for hours on its chronically under-staffed call centers, the airline has spread the misery by wrongly telling other passengers that they need to re-book...

Interview: Neil Sorahan, Ryanair CFO

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Ryanair wants to grow its existing subsidiaries rather than setting up more airlines, though management will not rule out acquisitions if rival carriers fly into difficulty during the winter season.

The Irish company has adopted a multi-brand strategy in recent months by establishing three sister carriers to Ryanair DAC: Austria-based Lauda, Poland-based Buzz and Malta Air. It has also set up a dormant UK subsidiary to minimize brexit-related disruption.

“With the airlines that we have at the moment we've got a huge amount of options,” chief financial officer Neil Sorahan told me...

How bitcoin is taking flight with Norwegian Air

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When Norwegian Air Shuttle launched budget flights to America in 2013, it forced the airline industry to look again at a market segment dismissed by many pundits as commercially fanciful: low-cost long-haul flying.

Six years on, it’s hard to say whether the gamble has paid off. The airline’s balance sheet is weaker than when it only served short-haul markets. Early competitors like WOW Air and Primera Air have collapsed. Yet Norwegian’s Boeing 787 Dreamliners still criss-cross the Atlantic daily – holding their own against a new breed of low-cost long-haul services run by Europe’s legacy carriers.

The decision by Norwegian’s founder, Bjørn Kjos, to relinquish financial and managerial control of the company has meanwhile put a younger generation of executives – including his son, Lars Ola Kjos – in charge of strategic planning.

And their opening gambit appears no less ambitious or transformative than the elder Kjos’s foray into long-haul operations...

Boeing loses another 737 MAX customer

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Tajikistan’s Somon Air has dropped plans to lease a Boeing 737 MAX, blaming uncertainty about the timeline for its re-entry to service and shattered public confidence in the model.

“The MAX has been put on hold,” chief executive Thomas Hallam told me, referring to a contract for a single leased unit that Air Lease Corporation (ALC) had been due to place with Somon this year.

The unit in question was purchased by the lessor, so the lease cancelation will not affect Boeing's orderbook.

However, it illustrates waning confidence in the MAX following two crashes in Indonesia and Ethiopia that claimed 346 lives and led to a worldwide grounding of the new aircraft type. Boeing is widely perceived to have bungled its response to the crisis by downplaying the severity of problems with its flight control systems and pressuring America’s aviation regulator to keep the model flying even after the second crash...

EgyptAir set for restructuring as questions linger over 2016 crash

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EgyptAir is aiming to reach a 100-strong fleet under a new plan led by chairman and chief executive Ahmed Adel, but the flag carrier appears no closer to explaining the loss of one of its planes in the Mediterranean Sea three years ago.

Speaking to me in Seoul, South Korea earlier this month, Adel said EgyptAir has finally “levelled off” after a series of political and security crises in its home nation. Tourism in the country was decimated by the 2011 revolution against President Hosni Mubarak and has struggled to recover in recent years, hampered by a military coup, the terrorist bombing of a Russian charter jet in Sinai, and the crash of EgyptAir Flight 804.

With Islamic State in decline across the region and Egypt’s government delivering stability at home, the flag carrier is now embarking on a “complete restructuring plan” aimed at returning to growth – albeit while providing few answers about the May 2016 disaster that claimed 66 lives...

Lebanon's MEA poised to become Airbus A321XLR launch customer

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Lebanon’s flag carrier has thrown its weight behind Airbus’s widely anticipated A321XLR project and plans to become an early operator of the type if it launches in 2023 as expected.

“Middle East Airlines is one of the first launch customers of the 321XLR,” Mohamad El Hout, the airline’s chairman, told me during the annual meeting of the International Air Transport Association (IATA) this month...

Boeing, FAA's inaction over 737 MAX must be probed

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The Boeing Company and the Federal Aviation Administration (FAA) finally bit the bullet on Wednesday and grounded the global fleet of 737 MAXs – a new aircraft type that has suffered two catastrophic crashes in recent months despite being touted as one of the safest flying machines ever built.

America’s FAA should have been the first to ground the jet on Sunday, when prima-facie evidence pointed to similarities between the loss of Ethiopian Airlines Flight 302 that day and Lion Air Flight 610 on October 29th.

Instead, the U.S. regulator was dead last among respected international agencies to make the call. It waited more than 80 hours from the time of the second crash, with President Donald Trump announcing an emergency grounding Wednesday afternoon...

The facts have spoken: Boeing's 737 MAX needs to be grounded

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‘If it ain't broke, don't fix it’ is one of my favorite maxims.

I find it odd, then, that Boeing has committed to making “an already safe aircraft even safer” by upgrading software on its 737 MAX series.

Coming on the heels of two major crashes by the type with glaring parallels – the first of which Boeing is already publicly linking to its existing software – the company’s narrative appears confused and contradictory...

Zambia's Mahogany Air eyes regional expansion via northern towns

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Mahogany Air is looking to turn Zambia’s northern border towns of Mbala and Nakonde into transit points for Burundi and Tanzania as part of a new push into international markets.

“What we are trying to do is to fly to northern Zambia and connect to the neighbouring countries,” founder and chief executive Jim Belemu told me in a telephone interview.

“So we will fly to northern Zambia, Mbala, and then from Mbala we can connect to Bujumbura [in Burundi]. There is traffic which is so untapped there. Then we are also trying to fly to the Zambian border town of Nakonde and connect from there to Dar es Salaam [in Tanzania]...

Is Kosovo about to get a national flag carrier?

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Speculation is mounting that Kosovo, the partially-recognized Balkan state that declared independence from Serbia in 2008, could soon have a functioning national airline.

The scenario is considered possible after news broke that Leyla Ibrahimi-Salahi, a Swiss national with Kosovan ancestry, has completed a takeover of Germania Flug, the Swiss subsidiary of insolvent airline Germania. The acquisition was made through her investment company Albex Aviation...

Malta's Medavia unveils plans for domestic Libyan airline

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Libyan travelers should be able to fly with a new domestic airline next year thanks to Mediterranean Aviation Company Ltd (Medavia), a charter operator and aircraft maintenance firm based in the southern European island of Malta.

Provisionally named Medlib, or Medavia Libya, the new airline is in the process of applying for an Air Operator’s Certificate (AOC) from the Libyan Civil Aviation Authority.

“The overall idea is to offer more frequent, reliable services between the Libyan cities,” chief executive Rammah Ettir told me during an interview at the company’s headquarters in Malta. “The services that are being offered at the moment are not really good and the Libyan travelers deserve much better...

Interview: Paulo Mirpuri, Hi Fly CEO

Hi Fly finds new customer for 'Save The Coral Reefs' A380

The world’s most recognizable Airbus A380 has been allocated to a new customer for the coming summer season.

The coral reef-themed jet is operated by Hi Fly, a wet-lease company that provides aircraft and crew to airlines on short-term contracts. Hi Fly acquired the double-decker plane from Singapore Airlines last year in the first transaction of its kind in the secondary market.

Having undergone maintenance work this winter the aircraft is now ready for commercial service and will be placed with a single customer during the IATA summer season, which runs from late March to late October.

Last laugh for WOW Air as Indigo swoops, Icelandair fumbles

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“Keep your friends close, and your enemies closer” was almost certainly the rationale behind Icelandair’s now-canceled decision to take over WOW Air this month.

The Icelandic flag-carrier has steadily lost market share since its lower-cost, more nimble, better marketed rival took to the skies in 2012 – copying its intercontinental hub model but with greater efficiencies and a stronger brand.

When Icelandair walked away from the deal yesterday – essentially hinting that WOW’s financial problems were terminal – pundits sounded a death knell for the younger carrier. WOW’s founder, Skuli Mogensen, had been candid that his airline was struggling amid high oil prices and market jitters over the collapse of Primera Air, another low-cost long-haul airline. Joining forces with a flag-carrier he had publicly berated for years appeared to be a final, grudging throw of the dice...

Kyrgyzstan's Air Manas targets Beijing route launch

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Air Manas is seeking permission to launch passenger flights between the capitals of Kyrgyzstan and China.

“We can fly to Beijing. We are looking for the opportunities for that and for the permits,” confirmed Mehmet Nane, chief executive of Pegasus Airlines, the Turkish low-cost carrier that owns 49% of Air Manas.

Nane told me that demand on the Bishkek-Beijing leg will benefit from Pegasus’s existing Istanbul-Bishkek service – effectively turning the Kyrgyz capital into a sixth-freedom base for Turkey-China traffic.

“When you look at Kyrgyzstan on the map it’s the center of Asia," he noted...

Somon Air delays Dreamliner in favor of 767, confirms E2 plan

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Tajikistan’s Somon Air has delayed its planned introduction of the Boeing 787 Dreamliner until around 2022, with management now seeking a 767-300ER and stepping up their focus on regional expansion with Embraer E190-E2s.

“The Dreamliner is still in our strategic plan, but the one that was announced is not going to materialize,” chief executive Thomas Hallam told me during an interview at Somon Air’s headquarters in Dushanbe, the capital of the central Asian nation. “Our timeline is now somewhere around 2022. What we need to do is to look at our core business before we look at our trans-continental business.”

Somon Air signed an MoU for one 787-8 at last year’s Dubai Air Show, with the aircraft originally expected to arrive in early 2018. The opportunity to jump Boeing’s delivery queue arose when Royal Jordanian Airlines cut back its Dreamliner commitment.

Although the wide-body was offered at a “very attractive price”, Hallam said Somon Air needs to be “realistic about economies of scale” as it pursues sustainable growth...