December 1st 2022

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January

Airlines entered the year facing a fresh challenge as a new COVID-19 variant swept across the world. Read More »

Omicron emerged in late 2021 just as governments in a number of countries were easing restrictions. One example was Singapore, which affirmed plans to reopen its border to all vaccinated travellers later in 2022. Some airlines also were ramping up capacity in anticipation of a progressive travel demand uptick.

Initial analysis found Omicron was more transmissible, but individuals vaccinated against COVID-19 tended to suffer milder symptoms and were less likely to be hospitalised.

As a result, share prices of publicly listed airlines rose 6% in the early weeks of January compared with the close of 2021, figures from the International Air Transport Association (IATA) showed.

Despite the early optimism, it is worth noting that airline share prices were 30.5% cheaper than in pre-December 2019.

During the month, Philippine Airlines (PAL) completed its financial restructuring four months after it voluntarily entered Chapter 11 proceedings in the U.S. Bankruptcy Court for the Southern District of New York in late 2021. The restructuring included US$2 billion in “permanent balance sheet reductions from existing creditors”, a US$505 million investment in long-term equity and debt financing from its majority shareholder.

The year ahead looked much gloomier for Cathay Pacific after the Hong Kong Special Administrative Region (HKSAR) government tightened quarantine requirements for pilots and cabin crew. The oneworld alliance member said January passenger capacity was 2% of pre-COVID-19 levels and cargo capacity was at 20%, with the cuts a response to HKSAR government restrictions. To add to its woes, the government said it was considering legal action against the airline for alleged non-compliance with quarantine rules.

Atlas Air put pen to paper for four 777F freighters during the month and Singapore Airlines (SIA) tapped the market for $600 million in fresh liquidity via a new bond issue.

When the 2021 Airbus and Boeing annual orders and deliveries results were published during the month, Toulouse-headquartered Airbus booked net orders for 507 aircraft and delivered 611 aircraft last year, a clear leader over rival Boeing’s 340 commercial aircraft deliveries to customers and 479 net orders in 2021.