Frontier Airlines expands at Phoenix with 10 new routes

Frontier Airlines will launch new nonstop service from Phoenix Sky Harbor International Airport (PHX) to Philadelphia (PHL), Baltimore-Washington (BWI), Orange County, California (SNA), Seattle-Tacoma (SEA), Minneapolis-Saint Paul (MSP), Portland, Oregon (PDX), Fort Lauderdale-Hollywood (FLL), Nashville (BNA), Indianapolis (IND) and Kansas City (MCI)in November 2022 and January 2023.

With the new service, Frontier will serve 22 destinations from PHX. Frontier’s continued growth at PHX will be supported through the planned November opening of a new crew base, which is expected to initially employ up to 180 pilots and 275 flight attendants.

Service from Phoenix Sky Harbor International Airport (PHX):

SERVICE TO:

SERVICE START:

SERVICE FREQUENCY:

INTRO FARE:

Philadelphia (PHL)

Nov. 5, 2022

Daily

$89*

Orange County, California (SNA)

Nov. 5, 2022

Daily

$19*

Fort Lauderdale-Hollywood (FLL)

Nov. 5, 2022

Daily

$59*

Portland, Oregon (PDX)

Nov. 6, 2022

3x/week**

$99*

Baltimore-Washington (BWI)

Nov. 17, 2022

Daily

$89*

Nashville (BNA)

Jan. 12, 2023

3x/week**

$89*

Kansas City (MCI)

Jan. 12, 2023

3x/week**

$79*

Seattle-Tacoma (SEA)

Jan. 13, 2023

4x/week**

$49*

Minneapolis-Saint Paul (MSP)

Jan. 13, 2023

4x/week**

$39*

Indianapolis (IND)

Jan. 13, 2023

2x/week

$89*

**Service will be offered less frequently through mid-February and then offered as reflected in the grid above starting the week of Feb. 19, 2023.

Frontier Airlines aircraft photo gallery:

Spirit Airlines to restore the Fort Lauderdale/Hollywood – Managua route

Spirit Airlines today announced the resumption of its daily, nonstop service connecting Managua (MGA) and Fort Lauderdale/Hollywood (FLL).

The daily, nonstop service to FLL starts November 30 and offers connections to 26 cities across Spirit’s network.

Spirit Airlines Connection Options to/from MGA:
Aguadilla (BQN)	Cleveland (CLE)	Louisville (SDF)	San Juan (SJU)
Atlanta (ATL)	Dallas (DFW)	Myrtle Beach (MYR)	St Thomas (STT)
Atlantic City (ACY)	Detroit (DTW)	Nashville (BNA)	St. Louis (STL)
Baltimore (BWI)	Houston (IAH)	Newark (EWR)	Tampa (TPA)
Boston (BOS)	Indianapolis (IND)	Orlando (MCO)
Charlotte (CLT)	LaGuardia (LGA)	Philadelphia (PHL)
Chicago (ORD)	Latrobe (LBE)	Richmond (RIC)

The resumption of Managua service increases the airline’s international service to 29 markets across Latin America and the Caribbean, including neighboring Central American destinations in Costa Rica, El Salvador, Honduras, Guatemala, and Panama.

Spirit Airlines aircraft photo gallery:

Alaska to fly between Everett and Anchorage

Alaska Airlines made this announcement (to be operated by Horizon Air):

We’re connecting the newest commercial airport in the Seattle area with another one of our main hubs: New daily, nonstop service between Everett, Wash. and Anchorage begins Nov. 30, 2022.

We listened to our guests who live and work from north of Seattle to the Canadian border. They told us one of their top requests is a nonstop flight between Everett and Anchorage,” said Brett Catlin, vice president of network and alliances for Alaska Airlines. “There’s a significant need and demand to connect workers and businesses in the two regions —from the fishing industry to aviation—in addition to the desire for leisure travel. We’re ready to welcome our guests on this new route this fall.”

Our guests flying to and from Everett—about 20 miles north of Seattle and 70 miles south of Bellingham—have enjoyed a convenient, stress-free, upscale alternative airport experience with a lounge atmosphere.

Since our regularly scheduled service launched there in March 2019, we’ve flown roughly 1.3 million guests to and from Paine Field-Snohomish County Airport.

Flight schedule:

Start date	Cities	Departs	Arrives	Frequency	Aircraft
Nov. 30	PAE-ANC	11:05 a.m.	2:05 p.m.	Daily	E175
Nov. 30	ANC-PAE	1:40 p.m.	6:10 p.m.	Daily	E175

All times Pacific Standard Time and all flights are year-round.

With the new nonstop from Everett, operated by our sister airline Horizon Air, Anchorage becomes the farthest destination and longest flight we’ll serve from that airport, and it’s also our first route to fly north from it.

On the operations side, Horizon began operating a new 74,000 square foot hangar and maintenance facility on the Paine Field property this year that can accommodate up to four E175 aircraft at a time.

9 destinations from Paine Field in Everett

From Everett this fall and winter, we’ll fly to nine destinations: Anchorage, Boise, Las Vegas, Orange County, Palm Springs, Phoenix, San Diego, San Francisco and Spokane. For the latest flight schedules and to purchase tickets, visit alaskaair.com.

Our sister carrier Horizon Air provides most of our service at Paine Field with the Embraer 175 jet. The E175 features First Class and Premium Class, and only window and aisle seating – there are no middle seats. Guests can enjoy hundreds of free movies and TV shows available for viewing on personal devices, free texting on most flights and Wi-Fi connectivity for purchase.

“For Economic Alliance Snohomish County, the City of Everett and Paine Field, we are thankful for the rich history of business and community engagement provided by Alaska Airlines. This announcement is another example of Alaska Airlines’ willingness to be forward thinking, valuing its customers to create desired opportunities for travel and connection. This is extra sweet due to Alaska Airlines’ history: Anchorage served as the first flight location for Alaska Airlines and its founder Linious McGee back in 1932. Snohomish County is grateful for Alaska and its continued efforts at Paine Field.”

— Garry Clark, president and CEO at Economic Alliance Snohomish County.

Alaska Horizon aircraft photo gallery:

JAL Group revises its FY2022 winter schedule plans on domestic network

JAL Group has made this announcement:

JAL Group has decided on flight plan for domestic routes for the fiscal 2022 winter timetable (October 30,

As part of the JAL Group’s ESG strategy of upgrading to fuel-efficient aircraft, improving flight operations, and utilizing SAF (Sustainable Aviation Fuel), we will extend the planned flight time on flights departing from Tokyo Haneda by 5 minutes longer than before in order to expand opportunities(*1) to operate at altitudes where fuel consumption can be reduced. In addition, A350-900, which will expand its operations starting with the winter time schedule, and by operating new fuel-efficient and low-noise aircraft such as the Airbus A350-900 and the ATR42-600, we will make steady progress toward achieving our goal of “virtually zero CO2 emissions by 2050”.

We will make decisions on flight reductions due to the impact of the new coronavirus infection based on future demand trends and will make further announcements as they become available.

【KEY HIGHLIGHTS】
◆ JAL will increase flight frequency between Osaka Itami=Kagoshima route and between Osaka
Itami=Sapporo New Chitose route during peak periods.
◆ Japan Transocean Air (JTA) will increase flights on its Fukuoka=Okinawa Naha route, Japan Air Commuter (JAC) on its Kagoshima route, and Ryukyu Air Commuter (RAC) on its Ishigaki=Yonaguni route.
◆ JAL First Class service will newly begin on Tokyo Haneda=Hiroshima and Kagoshima routes.(*2)
◆ As part of our code-sharing program with Oriental Air Bridge (ORC), we will start a new code-sharing
program with ORC on the 5 routes of Nagasaki=Iki, Goto Fukue, Tsushima, Fukuoka=Tsushima, Goto Fukue
will be sold as a JAL flight from August 30.

The JAL Group will continue to provide safe and secure travel experience by enhancing customer convenience and working with customers to create a clean and hygienic environment at airports and onboard aircraft.

(*1) By ensuring flexibility in altitude and speed selection for operational efficiency, fuel consumption per flight
can be reduced.
(*2) “JAL First Class Service” will be provided on some flights. Some services will not be provided at Hiroshima and Kagoshima airports. For details, please refer to the JAL website.
Reference URL:https://www.jal.co.jp/jp/en/dom/service/f/

※The following schedules are subject to government approval.

【Flights for Fuel saving trial】 W22 4.JPG ※Departure time/Arrival time are different depends on the season. For details, www.jal.co.jp/en

【Flight Frequency – Increase】 W22 2.JPG

(*3) Flight frequency will be changed during certain periods. For details, https://www.jal.co.jp/jp/en/
(*4) For details, https://www.jal.co.jp/jp/en/

【Flight Frequency – Decrease】 W22 3.JPG

JAL aircraft photo gallery:

Emirates to reintroduce nonstop Airbus A380 services to Auckland and Kuala Lumpur in December

Emirates has made this announcement:

As travellers kick-start the search for their next holiday, Emirates is announcing that it will restore its nonstop Airbus A380 services to and from Auckland and Kuala Lumpur, starting on December 1, 2022.

The airline currently operates to both cities with a linked Boeing 777-300ER service, which makes a stop in Kuala Lumpur before continuing on to Auckland. The start of A380 flights will see both cities delinked and served with direct services to and from Dubai. The latest update to the airline’s schedule will offer customers greater levels of flexibility and much needed seat availability. The new services will also provide more opportunities to travel across the Emirates network with reduced transit times after the delinking of services, and faster connections to and from Europe, the Middle East, South Asia as well as Africa.

The nonstop services between Dubai and Auckland will also reclaim its title as the longest route on the Emirates network, clocking in 14,200 km, in addition to being one of the world’s longest non-stop scheduled commercial flights.

Emirates’ direct flight EK448 from Dubai to Auckland will depart at 10:05hrs and arrives at 11:05hrs the next day. The return flight will depart Auckland at 21:15hrs and arrives in Dubai at 05:25hrs the next day. All times are local.

Emirates’ A380 service to Kuala Lumpur, EK 346 will depart Dubai at 0330hrs, landing at 1435hrs. EK 343 will depart Kuala Lumpur at 0145hrs, arriving in Dubai at 0505hrs.

The reintroduction of the airline’s flagship A380 to Auckland and Kuala Lumpur will provide more choice for tourists looking to discover these exciting destinations, and also offers travellers a chance to experience the A380’s signature products and services across all classes. New Zealand is ramping up its visibility with a global campaign in key markets to encourage more visitors to come and re-live the country’s incredible experiences and stunning natural attractions. To promote Malaysia as a unique travel destination, Emirates recently signed a Memorandum of Collaboration (MoC) with the Malaysia Tourism Board to develop inbound visitor traffic into the country from key markets across the airline’s network.

The Emirates A380 experience remains highly sought after by travellers for its spacious and comfortable cabins, and signature products that offer travellers the best experiences in the sky like the Onboard Lounge, First Class suites and Shower Spa. The A380 experience is always rounded off by award-winning hospitality, regional culinary creations and authentic tastes, and the airline’s award-winning inflight entertainment system, ice, with more than 5,000 channels of on-demand entertainment at every customer’s fingertips.

The airline is accelerating the deployment of its flagship A380 aircraft in line with growing global demand for air travel, with 32 destinations currently being served on a scheduled basis, and more to be announced in the coming weeks and months.

Emirates aircraft photo gallery:

Lufthansa’s pilots reject the latest pay offer, could strike anytime

Lufthansa could be again facing a strike by its pilots.

The pilots, represented by the Vereinigung Cockpit union, are seeking a 5.5% pay increase according to Reuters.

Meanwhile, the company is expected to take delivery of its first Boeing 787=9 Dreamliner (D-ABPA) on August 28.

Lufthansa 787-9 D-ABPA scheduled for delivery flight from Everett August 28 pic.twitter.com/cKkwuRnhGP

— Paine Airport (@mattcawby) August 25, 2022

Lufthansa aircraft photo gallery:

Avelo Airlines is adding three new routes to Fort Myers, FL

Avelo Airlines is adding three new routes from Fort Myers, Florida in November:

Fort Myers (RSW) to Lansing, MI (LAN) starting November 11, 2022

Fort Myers (RSW) to Kalamazoo, MI (AZO) starting November 11, 2022

Fort Myers (RSW) to Raleigh/ Durham, NC (RDU) starting November 11, 2022

Avelo Airlines aircraft photo gallery:

Sun Country Airlines celebrates 40 years of flying

Sun Country Airlines is celebrating 40 years of flying with a special “40 Years of Flight” banner on several aircraft.

Over the years, Sun Country has reshaped itself many times in order to survive, endure and grow.

Currently, the company is tagging itself as “a new breed of hybrid low-cost air carrier that dynamically deploys shared resources across our synergistic scheduled service, charter and cargo businesses.”

Overview

Sun Country Airlines is a new breed of hybrid low-cost air carrier that dynamically deploys shared resources across our synergistic scheduled service, charter and cargo businesses. By doing so, we believe we are able to generate high growth, high margins and strong cash flows with greater resilience than other passenger airlines. We focus on serving leisure and visiting friends and relatives (“VFR”) passengers and charter customers and providing CMI service to Amazon, with flights to destinations in North America, Central America and the Caribbean. Based in Minnesota, we operate an agile network that includes our scheduled service business and our synergistic charter and cargo businesses. We share resources, such as flight crews, across our scheduled service, charter and cargo business lines with the objective of generating higher returns and margins and mitigating the seasonality of our route network. We optimize capacity allocation by market, time of year, day of week and line of business by shifting flying to markets during periods of peak demand and away from markets during periods of low demand with far greater frequency than nearly all other large U.S. passenger airlines. We believe our flexible business model generates higher returns and margins while also providing greater resiliency to economic and industry downturns than a traditional scheduled service carrier.

Company Facts

Number of Operating Aircraft: 43 passenger, 12 freighter
Number of Routes as of April 2022: 92
Number of Airports Served as of April 2022: 73
Number of Employees: More than 1,600 employees, predominantly based in Minnesota
Headquarters: Minneapolis, Minnesota, USA

Our Network

The map below represents our current network as of July 2022.

Community Partnerships

Sun Country Airlines remains committed to giving back to the communities in which it serves. The airline partners with local organizations that demonstrate the same shared values to celebrate the individuals who continue to make Minnesota a great place to live and visit.

Make-A-Wish Minnesota

Sun Country Airlines has been a longtime partner with Make-A-Wish Minnesota, bringing joy to children experiencing hardships. Sun Country Airlines provides flights for children with critical illnesses to help them safely arrive at their wish destinations and achieve their dreams.

In 2018, Sun Country Airlines began a 3-year commitment to donate an estimated $720,000 worth of travel to accommodate every wish kid traveling anywhere the airline flies.

Each December, Sun Country Airline’s annual “Flight to the North Pole” helps bring holiday cheer to more than 70 Wish Kids by “flying” them to the home of Santa Claus.

Everyday Heroes

Sun Country Airlines has partnered with Hubbard Broadcasting to create a one-of-a-kind recognition program called “The Sun Country Everyday Heroes” program. The program invites Minnesotans to nominate someone in their community who goes above and beyond to help others in times of need, often with little or no recognition. Everyday Heroes are selected monthly with a special spotlight on the “KS95 Morning Show,” KSTP’s “5 Eyewitness Morning News” and KSTP’s talk show “Twin Cities Live.” This hero also wins a Sun Country Airlines travel voucher valued at $500.

Hennepin Theatre Trust Spotlight Education Program

Sun Country Airlines sponsors the Hennepin Theatre Trust Spotlight Education program which honors and supports Minnesota high school musical theater students and programs. As a presenting sponsor, Sun Country Airlines donates all-expense-paid trips to New York City for up to four selected students to meet with industry professionals, participate in musical theater workshops and attend Broadway shows.

Saint Paul Saints

Sun Country Airlines is the Official Airline of the St. Paul Saints, a local baseball team that’s part of the American Association of Independent Professional Baseball. This partnership aligns two like-minded hometown brands that strive to offer family-friendly fun at a great value. For years, Sun Country has focused on bringing Minnesotans to fun places, and this partnership is an opportunity to have fun right here in Minnesota. As part of the partnership, Sun Country sponsors Travel Tuesdays, which includes a chance for fans to win free travel.

Previously the reported on its second quarter results:

Sun Country Airlines Holdings, Inc. (Sun Country Airlines), reported financial results for its second quarter ended June 30, 2022.

“Despite the second quarter being a historically seasonally weaker quarter, scheduled service TRASM in the quarter was up 29% versus the second quarter 2019 and 13% sequentially versus first quarter 2022. We generated a positive operating profit of $3.4 million and an adjusted operating profit of $4 million despite fuel prices averaging $4.39 per gallon during the quarter,” said Jude Bricker, Chief Executive Officer of Sun Country. “During the month of June, scheduled service TRASM was 44% higher than in 2019 and we generated a GAAP operating margin of almost 8%, all while we were paying $4.47 per gallon for jet fuel. We continued to see strong leisure demand in July and expect it to stay elevated through the summer travel period. We are facing the same training challenges that have impacted the rest of the industry, resulting in less scheduled service flying than we would like to have flown and negatively impacting results We are making progress on resolving these training challenges and fundamentally view them to be temporary in nature; I am as bullish as ever on all of the critical factors that will determine Sun Country’s long-term success.”

Overview of Second Quarter	Three Months Ended June 30,
(unaudited) (in millions, except per share amounts)		2022		2021⁽⁷⁾		% Change
Total Operating Revenue	$	219.1		$	149.2	46.8
Operating Income		3.4			49.8	(93.2	)
Income (Loss) Before Income Tax		(4.8	)		61.8	(107.8	)
Net Income (Loss)		(3.9	)		52.2	(107.5	)
Diluted earnings (Loss) per share	$	(0.07	)	$	0.84	(108.3	)

	Three Months Ended June 30,
(unaudited) (in millions, except per share amounts)		2022		2021⁽⁷⁾		% Change
Adjusted Operating Income ⁽¹⁾	$	3.9		$	10.8	(63.4	)
Adjusted Income (Loss) Before Income Tax ⁽¹⁾		(2.6	)		4.7	NM
Adjusted Net Income (Loss) ⁽¹⁾		(1.8	)		3.9	NM
Adjusted diluted earnings (Loss) per share ⁽¹⁾	$	(0.03	)	$	0.06	NM

	Six Months Ended June 30,
(unaudited) (in millions, except per share amounts)		2022		2021⁽⁷⁾		% Change
Total Operating Revenue	$	445.6		$	276.8	61.0
Operating Income		25.2			80.4	(68.7	)
Income Before Income Tax		1.6			85.3	(98.2	)
Net Income (Loss)		(0.3	)		69.0	(100.4	)
Diluted earnings (Loss) per share	$	0.00		$	1.20	(100.0	)

	Six Months Ended June 30,
(unaudited) (in millions, except per share amounts)		2022	2021⁽⁷⁾			% Change
Adjusted Operating Income ⁽¹⁾	$	26.7	$	12.0		123.2
Adjusted Income Before Income Tax ⁽¹⁾		13.0		0.0		NM
Adjusted Net Income (Loss) ⁽¹⁾		10.5		(1.0	)	NM
Adjusted diluted earnings (Loss) per share ⁽¹⁾	$	0.18	$	(0.02	)	NM

“NM” stands for not meaningful

For the quarter ended June 30, 2022, Sun Country reported a net loss of $4 million and a loss before income tax of $5 million, on $219 million of revenue. Adjusted loss before income tax for the quarter was $3 million⁽¹⁾. GAAP operating income during the quarter was $3 million, producing an operating margin of 1.5%, while adjusted operating income was $4 million⁽¹⁾, resulting in an adjusted operating income margin of 1.8%⁽¹⁾.

“Demand continues to be at some of the strongest levels that we have seen,” said Dave Davis, President and Chief Financial Officer. “Unfortunately, despite growing second quarter block hours by 23% versus 2019, we were undersized in the quarter due to training challenges limiting our scheduled service and ad hoc charter growth. Since signing our new pilot agreement in December of last year, we have been able to attract all of the new hire pilots we need, and attrition has been greatly reduced. We are making strong progress in expanding our training pipeline to accommodate our growth and we anticipate seeing the benefits later this year. Capacity constraints have pressured our unit costs by limiting aircraft utilization. As we hire and train new staff at a record pace for Sun Country, new flying will come at high marginal profitability as the needed assets already exist.”

Notable Highlights

Adding a third aircraft to its charter service for Caesars Entertainment in October 2022
Selected by the U.S. Department of Transportation to provide Essential Air Service (EAS) for Chippewa Valley Regional Airport (EAU) in Eau Claire, WI, beginning in December 2022
Announced new service to Grand Cayman beginning in December 2022
Airline Business awarded Sun Country with the Airline Strategy Award 2022 for Sector Leadership

Capacity

System block hours flown during the second quarter of 2022 grew by 10% year over year and by 23% versus the same period in 2019, driven by the growth in our cargo business. Staffing challenges impacted passenger service capacity with scheduled service block hours and charter block hours lower by 9% and 5% when compared to the second quarter of 2019.

Charter block hours under long term contracts remain the bulk of the charter flying performed in the second quarter. This composed 92% of total charter flying versus 51% in the second quarter of 2019. As the Company begins to normalize its aircraft utilization, it will be able to pursue more ad-hoc charter flying.

Revenue

For the second quarter of 2022, the Company reported total revenue of $219 million, which was 29% more than the second quarter of 2019. Excluding the $21 million in cargo revenue that did not exist in 2019, revenue still exceeded second quarter 2019 by $28.5 million. The Company’s scheduled service TRASM ⁽³⁾ of 11.6 cents in the second quarter of 2022 increased 29% from the second quarter of 2019 while scheduled service ASMs decreased 6%. The second quarter 2022 total fare of $173 exceeded second quarter 2019 by 23%, and included strong ancillary revenue per passenger of $50.

Charter service revenue is primarily generated through service provided to collegiate and professional sports teams, the U.S. Department of Defense, casinos, and other customers. In the second quarter of 2022, the Company’s charter service revenue was $43 million, an increase of 3% versus second quarter 2019. On a rate basis, second quarter 2022 charter revenue per block hour was 8% higher than the rate in the second quarter of 2019.

Cargo revenue consists of revenue earned from flying cargo aircraft under the Air Transportation Services Agreement (“ATSA”) with Amazon. In the second quarter of 2022, cargo revenue was $21 million, a 4% decrease versus the second quarter of 2021 due to the timing of planned heavy maintenance events.

Cost

For the second quarter of 2022, total GAAP operating expenses increased 35% versus the second quarter of 2019, primarily due to a 77% increase in aircraft fuel expense in the quarter. Adjusted CASM in the second quarter increased 15% in the second quarter 2022 versus the second quarter 2019 while total ASMs decreased 6% for the same period. Second quarter 2022 was also impacted by the new pilot agreement that was signed at the end of 2021.

Balance Sheet and Liquidity

The Company’s net debt⁽⁵⁾ on June 30, 2022 was $362 million, while total liquidity⁽⁶⁾ was $308 million.

(unaudited) (in millions)	June 30, 2022		December 31, 2021
Cash and Cash Equivalents	$	212.9	$	309.3
Available-for-Sale Securities		70.1		—
Amount Available Under Revolving Credit Facility		25.0		25.0
Total Liquidity	$	308.0	$	334.3

	June 30, 2022		December 31, 2021
Long-term Debt	$	363.5	$	277.4
Finance Lease Obligations		249.6		192.2
Operating Lease Obligations		31.6		76.0
Total Debt and Lease Obligations		644.7		545.6
Cash and Cash Equivalents		212.9		309.3
Available-for-Sale Securities		70.1		—
Net Debt	$	361.7	$	236.3

Fleet

As of June 30, 2022, the Company had 41 aircraft in its passenger service fleet, and operated twelve freighter aircraft in its cargo operation.

Guidance for Third Quarter 2022

	Q3 2022	H/(L) vs Q3 2019
Total revenue – millions	$215 to $220	25% to 28%
Economic fuel cost per gallon	$3.84
Operating income margin – percentage	3% – 5%
Effective tax rate	23%
Total system block hours – thousands	31 to 32	17% to 21%

Video:

Sun Country aircraft photo gallery:

SAS sees increased demand in the third quarter, but reports a loss

Scandinavian Airlines-SAS issued this report on the third quarter 2022.

SAS results were severely affected by a 15-day pilot strike between July 4 and July 19, causing traffic disruption and leading to some 4,000 canceled flights affecting more than 380,000 passengers. I sincerely apologize to our customers and partners who were affected by the traffic disruptions.

Overall underlying demand for travel was healthy during the summer quarter and SAS noted an increasing number of passengers eager to travel as restrictions were lifted across the globe. However, the quarter was impacted by major events that influenced the overall result. First and foremost, the 15-day pilot strike in July which had a severe effect on the overall result. In addition, we experienced major operational disruptions during the quarter which affected the whole airline industry. Lastly, on July 5, SAS voluntarily filed for chapter 11, a legal process for financial restructuring in the U.S. The chapter 11 process aims to accelerate the implementation of our transformation plan SAS FORWARD, and ultimately to enable us to become a financially strong, profitable and competitive company for years to come.

After the close of the quarter, SAS secured a debtor-in-possession (DIP) financing commitment for USD 700 million from Apollo Global Management. This substantial financing commitment is an important milestone in our transformation and it gives us a strong financial position to support our operations throughout the chapter 11 process.

MAY 2022–JULY 2022

• Revenue: MSEK 8,580 (3,982)

• Income before tax (EBT): MSEK -1,991 (-1,334)

• Income before tax and items affecting comparability: MSEK -2,081 (-1,213)

• Net income for the period: MSEK -1,848 (-1,336)

• Earnings per common share SEK -0.25 (-0.18)

SIGNIFICANT EVENTS DURING THE QUARTER

• The aftermath of the COVID-19 pandemic has led to most of the airline industry experiencing difficulty in rebuilding operations. This has led to SAS reducing its summer program by 4,000 of a total of 75,000 flights

• SAS Scandinavia’s pilot unions went on strike from July 4 to 19, resulting in the cancellation of some 4,000 flights and affecting more than 380,000 passengers

• On July 5, a voluntary chapter 11 process was initiated in the US to accelerate the transformation process in the SAS FORWARD plan is expected to lead to a financially stable and profitable airline

SIGNIFICANT EVENTS AFTER THE QUARTER

• In the beginning of August, SAS entered into a debtor-in-possession (“DIP”) financing credit agreement for USD 700 million with funds managed by Apollo Global Management. The agreement is subject to approval by the U.S. Court in mid-September

NOVEMBER 2021–JULY 2022

• Revenue: MSEK 21,173 (8,196)

• Income before tax (EBT): MSEK -6,145 (-5,580)

• Income before tax and items affecting comparability: MSEK -6,315 (-5,471)

• Net income for the period: MSEK -5,810 (-5,779)

• Earnings per common share SEK -0.80 (-0.81)

QUARTERLY RESULTS

Looking back at the third quarter, we continued to see increased demand as travel restrictions were eased and this is yet another quarter where we have noted the highest number of passengers since the pandemic started. Compared with the previous quarter passengers flying with SAS increased 30% and the flown load factor reached approximately 78%, up 11 percentage points. Our capacity increased 27% compared with the second quarter. The transformation of SAS has to continue to adapt to the new market conditions in order to be able to remain flexible, competitive and financially strong for the long term. Earnings before tax ended at negative SEK 2.0 billion, a decline of SEK 0.4 billion compared with last quarter, or a decrease of SEK 0.7 billion year-on-year. This was mainly an effect from the 15-day pilot strike.

Cost reductions across all of SAS remain in focus to secure our cost competitiveness. Total operating expenses during the quarter ended at SEK 9.7 billion and total operating revenue landed at SEK 8.6 billion for the quarter. Total revenue increased 22% compared with the second quarter, an improvement of approximately SEK 4.6 billion compared with last year, but still 37% below the third quarter in 2019, which was unaffected by COVID-19.

The cash balance at the end of the quarter was SEK 6.1 billion. Operational cash flow during the quarter amounted to an outflow of SEK 1.0 billion, compared with an inflow of SEK 0.5 billion for the same period last year.

PILOT STRIKE ENDED WITH NEW PILOT AGREEMENT PROVIDING STABILITY

SAS results were severely affected by a 15-day pilot strike between July 4 and July 19, causing traffic disruption and leading to some 4,000 canceled flights affecting more than 380,000 passengers.

As previously announced, the estimated effect of the strike was approximately SEK 100-130 million per day (US$9.5-$12.5 million) in lost earnings before tax. To date, the financial impact of the strike is SEK 1.4 billion (US$135 million). I once again apologize to all of our customers and partners affected by the traffic disruptions during this extraordinary event.

Negotiations resulted in SAS and SAS Scandinavia pilot unions agreeing to new 5.5-year collective bargaining agreements. SAS plan to offer the 450 previously redundant pilots rehire in tandem with the ramp-up of flight operations in the near term. The agreements include increased work force utilization flexibility and productivity as well as cost reductions in line with the targets set out in the SAS FORWARD plan relating to the pilots’ employment terms and conditions taking SAS one important step closer to achieving our target of SEK 7.5 billion in annual cost savings.

UPDATE ON SAS PROGRESS ON TRANSFORMATION PLAN

SAS FORWARD is a comprehensive business transformation plan that was launched in conjunction with the publication of the first quarter report FY 2022 at the end of February to secure long-term competitiveness for SAS in the global aviation industry. The plan aims to strengthen our financial position and to achieve a sustainable cost structure with an annual cost reduction of approximately SEK 7.5 billion. As part of SAS FORWARD, we also plan to raise at least SEK 9.5 billion in new equity and to convert more than SEK 20 billion of debt into common equity. The new equity and debt-to-equity conversions contemplated as part of SAS FORWARD will entail very substantial dilution to existing shareholders.

SAS has made progress in these efforts, having identified the vast majority of the SEK 7.5 billion in reduced annual costs and we have continued to invest in our digital capabilities and sustainability efforts. The 5.5-year collective bargaining agreements reached between SAS and the SAS Scandinavia pilots’ unions in July are also a key element of SAS FORWARD. During the quarter, SAS also received support for the plan from the Swedish, Danish and Norwegian governments. All three parties have agreed to convert SAS’ debt and hybrids into common shares. Denmark has also published that, potentially, it may invest new capital, subject to all stakeholders’ participation in SAS FORWARD. However, much remains to be done.

To accelerate the implementation of key elements of the plan, SAS voluntarily filed for chapter 11 in the U.S. on July 5. Chapter 11 is a legal process for financial restructuring conducted under U.S. federal court supervision. It has previously been used by a number of large international airlines to restructure. Through this process, SAS aims to reach agreements with key stakeholders, restructure our debt obligations, renegotiate our fleet contracts and emerge with a significant capital injection. SAS’ operations and flight schedule are unaffected by the chapter 11 filing and we continue to serve our customers as normal.

After the close of the quarter, SAS secured a debtor-in-possession (DIP) financing commitment for USD 700 million, or approximately SEK 7.0 billion, from Apollo Global Management. DIP financing is a specialized type of bridge financing used by businesses that are restructuring through a chapter 11 process. This substantial financing commitment is an important milestone in our transformation and it gives us a strong financial position to support our operations throughout the chapter 11 process, which is expected to take 9–12 months in total. The DIP financing is still subject to court approval.

A DEMANDING QUARTER FOR OUR CUSTOMERS

During the quarter, major operational and infrastructural challenges across numerous customer touchpoints were experienced due to the strong recovery this summer season. The whole airline ecosystem was experiencing difficulties ramping up, and challenges relating to everything from airport capacity to ground staffing were experienced during the summer.

SAS acted proactively and implemented measures to safeguard our customers’ travel plans for the summer. We consolidated and removed a number of flights as responsibly as possible and made every effort to mitigate disruption for our customers. We have rehired across the business and expanded our customer service, and we are increasingly developing automated and self-service options for our passengers.

DEVELOPMENT DURING THE SUMMER SEASON

Ticket sales ahead of the important summer season were strong but leveled off as we approached the potential start of the strike which eventually was initiated in July. The strike impacted on the overall level of tickets sold during the summer. We will now continue to work hard on rebuilding confidence in SAS and to provide our customers with the service they expect.

SAS continues to strengthen our North America network and has established direct summer routes to Toronto from Copenhagen and Stockholm. During the coming winter season, SAS will continue to operate all its pre-pandemic U.S. routes for our travelers.

LOOKING AHEAD

We are soon entering the winter season, and we remain cautious due to the prevailing uncertainties around the world. Traffic to and from Asia remains affected by COVID-19 restrictions as well as by the geopolitical situation.

Looking ahead to the next summer season we are preparing for substantial recruitments and rehirings that will be initiated in order to meet the expected increased future demand.

The FORWARD plan includes positioning SAS as a leader in sustainable aviation. SAS will continue to invest in modern fuel-efficient aircraft, sustainable aviation fuels, emerging technologies and sustainable products and services. By 2025 we will reduce our CO2 emissions with at least 25% versus 2005.

I am grateful for the hard work my colleagues at SAS are delivering, to ensure that we take the best possible care of our customers.

As always, we look forward to welcoming our customers on board our aircraft.

Anko van der Werff

President and CEO

Stockholm, August 26, 2022

SAS aircraft photo gallery:

Air New Zealand reports a loss before taxation of $810 million

Air New Zealand issued this financial report:

2022 Financial summary

Loss before other significant items and taxation of $725 million1, compared to $444 million in the prior year
Statutory loss before taxation of $810 million
Operating revenue lifts 9 percent to $2.7 billion, driven by Cargo performance
Recapitalisation completed in May, raising $2.2 billion
Liquidity of $2.3 billion as at 23 August
In a year of ongoing twists and turns, Air New Zealand has recapitalised its business and, in the last quarter, experienced greater than expected demand for travel, while managing rising costs and an ongoing pandemic.

The airline has today announced a loss before other significant items and taxation of $725 million for the 2022 financial year, consistent with guidance provided to the market in June. The statutory loss before taxation was $810 million2.

Although the financial year ended strongly following the phased reopening of New Zealand’s borders from March, the airline’s operating revenue of $2.7 billion was significantly impacted by pandemic related travel restrictions.

Cargo and domestic revenues helped lift overall revenue by 9 percent, however high fuel prices and reduced flying over much of the year resulted in a loss for the period.

Air New Zealand Chief Executive Officer Greg Foran said the airline continued to be guided by a clear strategy, moving deftly to address continued change by focusing on doing the right thing for its stakeholders.

“For customers, we’ve been focused on restoring services, maintaining a choice of fares and launching innovations to improve their journey with us. For our amazing staff we have provided one-off awards to acknowledge their continued extra mahi, and for our communities we’ve been obsessed with operational performance, which drives the reliable services they depend on,” says Mr Foran.

“For our shareholders, whose support has refuelled the business for future growth, we’ve completed a successful recapitalisation that was structured to be fair to our shareholders, including those that didn’t take up the rights offer.”

Mr Foran said cargo revenue continued to be a major contributor to the company’s performance, up 32 percent to $1.0 billion. Additional flying under the New Zealand and Australian government airfreight schemes contributed $403 million of that revenue. With borders now largely reopened, the Australian scheme has ended, and the New Zealand scheme is tapering off and will cease by the end of March 2023.

Firmly in the ‘revive’ phase of the ‘survive, revive, thrive’ journey, Mr Foran says the current environment is one of strong bookings despite ongoing challenges.

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1 Loss before other significant items and taxation represent Earnings stated in compliance with NZ IFRS (Statutory Earnings) after excluding 2items which due to their size or nature warrant separate disclosure to assist with understanding the underlying financial performance of the Group. Loss before other significant items and taxation is reported within Note 3 of the Group’s 2022 audited annual financial statements

When travel restrictions began to lift in March the company recorded a very strong recovery in bookings and revenues. This trend continues, with high booking levels through July and August. Corporate bookings are also encouraging and are trending closely towards pre-Covid levels.

Mr Foran referred to the airline’s mid-August schedule changes, which reduced seats by 1.5 percent through to the end of March 2023, as another example of doing the right thing for stakeholders.

“As we’ve been seeing overseas, travel demand is much stronger than anyone anticipated. But we’re operating in a very tight labour market with high fuel prices, tough economic conditions and the highest levels of employee sickness in more than a decade.

“Our rehiring efforts and training capability have been excellent, as has work to get our Boeing 777-300ER aircraft back flying again, but the experience for some of our customers and the impact on our front-line staff this winter has been unacceptable, so we’ve adapted yet again.

Home sweet home ✈️ ZK-OKP is officially back on home turf (tarmac) after 696 days in deep storage in the Mojave Desert 🖤 pic.twitter.com/Wprc6j7XSF

— Air New Zealand (@FlyAirNZ) August 23, 2022

“Having adjusted our schedule to provide customers with increased surety over their travel plans for the coming spring and summer, I am hugely appreciative of the work the Air New Zealand whānau has done to deliver more than 25,000 flights across June and July alone.”

The airline also made investment decisions in support of its Kia Mau strategy. These include the plan to move the Auckland workforce to its airport campus, investment in a new hangar at Auckland airport and the decision to close its Gas Turbines business unit by the middle of the 2023 calendar year.

Air New Zealand Chair Dame Therese Walsh thanked Greg and the Air New Zealand team for a year in which the airline not only managed significant challenges but also introduced changes that will deliver improved services to customers and made progress on their long-term sustainability goals.

“The airline’s continued ability to step carefully through an ongoing pandemic while looking beyond the horizon is becoming a core capability. While introducing and then removing vaccination requirements for domestic travel, there have been preparations for our New York launch and the completion of designs for our new Boeing 787 Dreamliner cabin experience.

“For our AirpointsTM members there were more than 2,000 new products added to our AirpointsTM store as well as the introduction of Flexipay, so customers can enjoy even more online shopping options. I’m especially excited about our next generation app, which will give customers a more seamless travel experience when it rolls out in the coming months.

“In April we announced ‘Flight NZ0’, a programme to engage customers as we work towards net zero carbon emissions by 2050. We were the second airline globally to announce an interim science-based target to 2030 and continue to make progress on sustainable aviation fuel and zero emissions aircraft technology.

“Throughout the year we have also made improvements to the pay and conditions for our people, settling 12 collective employment agreements, increasing the base pay of our front-line workers and restarting incentive payments to staff on individual employment agreements ensure we retain our dedicated team.”

Dame Therese acknowledged the support the airline has received from its shareholders over the course of a challenging two-year period.

“From the Crown loan provided in the early days of the pandemic, to the airfreight support scheme that helped us keep connected to key export markets, to the $2.2 billion recapitalisation completed in May which allowed thousands of shareholders to take part in refuelling the airline for success. We have had significant support from all our shareholders and for that we are truly grateful.”

Strong liquidity position with dividend suspended

As at 23 August 2022, the airline has available liquidity of $2.3 billion, consisting of approximately $1.9 billion in cash and $400 million of available funds on the unsecured standby loan facility with the Crown. The cash balance includes $200 million of issued redeemable shares which the airline intends to redeem once our recovery is further progressed.

The Board does not expect to consider payment of dividends before the airline’s earnings substantially recover, and in the context of a supportive and sustained broader economic environment and recovery.

Outlook for 2023

With borders now open to the majority of the airline’s markets, Air New Zealand expects the 2023 financial year to represent the first full year of uninterrupted passenger flying since the beginning of the pandemic.

Total flying capacity for the 2023 financial year is expected to be in the range of 75 percent to 80 percent of pre-Covid levels. On this basis, the airline anticipates a significant improvement in financial performance relative to financial year 2022.

Given the degree of uncertainty regarding volatility in jet fuel prices, the risk of a global recession, and other macroeconomic factors including inflationary pressures on costs, no earnings guidance will be provided at this time.

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