Daniel Galhardo (pictured below), strategic marketing director at Embraer Commercial Aviation, considers Covid-19 among \u2018the determining factors of our century\u2019. The crisis hit airlines across the US, Canada and Latin America directly and quickly, forcing significant cost reduction measures.\u00a0<\/span><\/p>\n US domestic passenger figures fell from an encouraging eight\u00a0per\u00a0cent up in February 2020 compared to 2019, to a devastating 50 per cent down in March. Worse was to come, with the US domestic market ending the year 62\u00a0per\u00a0cent down. Commercial flying all but stopped in much of South America, with Brazil, Chile and Mexico halting almost all domestic flying at some point.<\/p>\n In Canada, where the domestic network is smaller, the story is worse than in the US \u2013 a ten-day snapshot of passengers screened at Canada\u2019s 15 largest airports in February 2021 compared to 2020 shows numbers down by as much as 92\u00a0per\u00a0cent. Placing this in the context of an operator, Porter Airlines hasn\u2019t operated a scheduled flight since March\u00a02020, making temporary layoffs inevitable for approximately 90 per cent of its staff.<\/span><\/p>\n Low-cost Southwest Airlines, by comparison, has reduced capacity but maintained service to every market it served pre-pandemic. Thanks to the US Payroll Support Program and internal cost-saving initiatives, including voluntary time-off and separation, the carrier has avoided staff furloughs.<\/p>\n Both Porter and Southwest have parked aircraft. Sixty of the latter\u2019s 737-700 aircraft were in temporary storage on 31 December 2020, plus the 34 already stored 737 MAX jets. Porter\u2019s 29-strong Q400 fleet is stored in its entirety. Even parked aircraft cost money of course, with regular essential maintenance to ensure their successful and economical return to service.\u00a0<\/span><\/p>\n Porter\u2019s director, communications and public affairs Brad Cicero says the airline is running the Q400s\u2019 Pratt & Whitney Canada engines at scheduled intervals and performing other required tasks, so that final checklist items are minimised just prior to returning to service. \u201cThe cost of treating the aircraft in this manner is relatively modest,\u201d he says, but notes, \u201cCarriers with larger fleets and varying aircraft types may take different approaches.\u201d Southwest is following an FAA-approved active storage plan.<\/p>\n Aircraft deliveries<\/b><\/p>\n Embraer reports that new aircraft acquisitions and deliveries were an early casualty as airlines concentrated on liquidity. Its North American regional airline customers, operating the E170 and 175, took fewer aircraft in 2020 compared to 2019, although the airframer is pleased to report that it still delivered 28 jets to the market in 2020. Significantly, it saw some deliveries postponed, but no cancellations due to Covid-19.<\/p>\n Now, as vaccination programmes roll out across the Americas, the seeds of a tentative beginning to recovery are being sewn. Michael Deluce, president and CEO, Porter Airlines, says: \u201cPorter will return to flying in 2021, at the right time and as conditions dictate. We have the means to weather this extended disruption and be there for an eventual recovery of travel.\u201d\u00a0<\/span><\/p>\n Brad Cicero adds: \u201cFlights will restart in phases, so the recall of team members will also be gradual and manageable. We estimate a four- to six-week ramp-up to ensure enough crew are ready to fly prior to a set date.\u201d Porter also plans to rebuild its network in phases, beginning with those routes expected to have the greatest passenger demand. \u201cThis is also for practical reasons,\u201d Cicero adds.<\/p>\n \u201cWe don\u2019t want to overburden the operation by attempting to operate a full schedule of flights on day one. Our intention is to eventually serve all former routes, but flexibility will be a key component of managing schedules for the foreseeable future. In some cases, adding flights may be necessary based on how the market reacts; other cases may call for contraction if conditions change.\u201d Having suffered relatively less, Southwest Airlines has continued to serve every city on its established network. It expects to adjust schedule frequencies as travel demand increases.<\/p>\n Embraer\u2019s Daniel Galhardo reports: \u201cWe believe airlines will return leaner than before, looking for new ways back to profitability while also rebuilding connectivity.\u201d Acknowledging the uncertainty around recovery timing, he notes: \u201cTraffic return is related to a range of external factors, including vaccine availability, disease transmission rates, quarantine policies and government\u00a0incentives.\u201d<\/p>\n Nonetheless, he points to the OEM\u2019s latest 10-year market outlook for the 150-seat market, which predicts an earlier recovery of domestic traffic. \u201cWe see it rebounding to 2019 levels by the end of 2023, with international traffic returning to its former levels around 12\u00a0months later, by 2024. Aircraft deliveries should rebound sooner, owing to changing airline strategies and the need to replace older aircraft\u00a0types.\u201d<\/p>\n Inevitably, he believes the E-Series is well placed to benefit from the demands of the recovering airlines, but he is almost certainly correct, given the family\u2019s regional pedigree and capability over longer ranges \u2013 there is likely to be value in aircraft capable of slightly longer sectors with smaller passenger numbers, right-fitting an evolving market. Indeed, Embraer claims that on a per-seat basis, the E195-E2 is as efficient as any 180-seat aircraft, while offering at least 20 per cent lower trip\u00a0costs.<\/p>\n Martyn Holmes, chief commercial officer, Embraer Commercial Aviation, is also upbeat. \u201cEmbraer understands the challenges the aviation industry faces during and following the pandemic. However, we are very confident about the future as we continue to see airlines value more than ever the flexibility and sustainability the E-Jets afford them.<\/p>\n \u201cLower capacity aircraft with highly competitive economics provide real flexibility as they face lower demand and uncertainty. Compared to a larger aircraft offering with less flexibility, a right-sized to the market aircraft offers lower risk on trip cost, aligned with improved yields, directly resulting in improved bottom-line results.\u00a0<\/span><\/p>\n \u201cMoreover, we believe the E-Jets allow carriers to restore service to more cities faster and develop connectivity to flow passengers across their networks. As the headwinds ease, airlines with right-sized aircraft will recover faster and\u00a0stronger.\u201d<\/span>\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":" The Covid pandemic has caused dramatically varied effects across the Americas. Paul Eden takes a look at a most difficult year.<\/p>\n","protected":false},"author":22,"featured_media":154427,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[35,266,40],"tags":[3127,292,3128,567],"class_list":["post-154425","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-low-cost","category-latest-news-low-cost","category-regional-review","tag-americas","tag-embraer","tag-porter","tag-southwest"],"yoast_head":"\n![\"\"](\"https:\/\/www.aviationbusinessnews.com\/wp-content\/uploads\/2021\/04\/Michael-Deluce-President-and-CEO-Porter-Airlines-684x1024.jpg\")
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