Travel News

Lufthansa’s Global Fleet Grounded by Just Four Snapped Cables - BLOOMBERG

FEBRUARY 16, 2023

(Bloomberg) -- Grounding one of the world’s largest airline fleets took little more than four snapped Internet cables in a sleepy Frankfurt suburb.

Deutsche Lufthansa AG passengers from Tokyo to New York were unable to board flights Wednesday after workers accidentally drilled through fiber cables buried some 16 feet below ground in Eschersheim.

The damage brought down Lufthansa’s IT systems, disrupting operations at its main base in Frankfurt and forcing Europe’s biggest airline by fleet size to ground hundreds of flights. While services have since been normalizing, the incident raises questions about how robust the carrier’s computer systems are.

“This should not be possible,” said Anthony Glees, emeritus professor at the University of Buckingham in England and an expert in aviation security. “Big international airlines should always have a backup system and it’s simply amazing that there wasn’t one.”

Lufthansa is conducting an internal investigation into why backup systems didn’t function, according to a person familiar with the matter. It’s possible that external IT providers were at fault for redundancy measures not working, the person said.

Still, passengers bruised by Wednesday’s disruptions should brace for more inconvenience. Ground staff at Lufthansa’s Frankfurt and Munich hubs are planning strikes on Friday in a move that will lead to hundreds of additional cancellations. The Verdi services union has called the one-day walkout due to slow progress in talks over pay and conditions for security and other staff. 

Munich Airport will be closed to regular passenger air travel on Friday, with more than 700 flights affected, according to a statement from the hub’s operator. While special flights for the Munich Security Conference will go ahead, the strikes are still bound to complicate travel for delegates attending the annual gathering of defense and foreign-policy makers.

Lufthansa isn’t the first airline to see flights grounded due to IT system failures. British Airways in December experienced hours-long delays to its services after a failure involving to flight-planning software.

Wednesday’s disruption began with an accident on Tuesday around 7 pm local time, when workers handling a drill damaged four Deutsche Telekom AG fiber cables buried near a local train station. They also spilled concrete over the cables, further complicating repairs, according to a spokesman for the telecommunications company.

Lufthansa’s global flight operations center is located on the outskirts of Frankfurt’s airport, so damage to the communications links there ripple through Lufthansa ground IT systems across the world. In Germany, air traffic control had to divert landings in Frankfurt to other airports to prevent an overflow.

Lufthansa still is tallying the exact number of flights affected and the cost of it all. Deutsche Bahn AG, the state-owned railway company that had commissioned the works, issued an apology to affected travelers.

In total, Lufthansa has around 700 aircraft. Its stable of airlines includes its namesake brand and the national flag-carriers Austrian Airlines, Brussels Airlines and Swiss. The company also operates low-cost carrier Eurowings as well as other smaller brands.

Lufthansa is scheduled to report earnings for 2022 next month. In December, the carrier raised its full-year earnings target on rebounding air travel.

(Updates with Munich airport disruption in seventh paragraph.)

Boeing says parts shortages persist, hampering plane production - REUTERS

FEBRUARY 16, 2023

By Valerie Insinna and Abhijith Ganapavaram

(Reuters) -Boeing Co is still facing parts shortages as the supply chain remained unstable and unpredictable, its finance chief said on Wednesday.

Boeing aims to increase production of its bestselling 737 MAX narrowbody jetliner from a stable rate of about 31 jets a month to 38 by the end of the year. The timeline for the ramp-up will hinge on whether MAX suppliers are stable and ready to support the higher rate, Chief Financial Officer Brian West said at a Cowen conference.

"The supply chain continues to have its moments of disruption," West said. Operations had improved at suppliers at the tier one level, or subassemblies and systems; visibility of constraints had improved at tier two, components; and tier three, parts, he said.

"We're just not there yet," West said.

Deliveries of the MAX in February were expected to drop to the "low 20s" from 35 in January, West said, then ramp back up to allow Boeing to meet its goal of delivering 400-450 MAX planes this year.

Boeing plans to boost MAX deliveries to 50 planes a month by the 2025-2026 timeframe, while at the same time creating a fourth production line in Everett, Washington. The line will initially focus on producing MAX jets with more complicated configurations, but West hinted it could also accommodate future demand beyond 50 planes per month.

The 787 Dreamliner has also experienced production lags, including pauses in production due to supply chain delays at Spirit Aerosystems, which makes the forward fuselage, West said.

"Our expectation is that they will get back to that three per month, and then as we move through the course of this year, be exiting the year more closer to five per month," he said.

Boeing intends to deliver all 100 787s in its inventory over the next two years, West said.

He said the company had confidence in its 2023 cash flow goal of $3 billion to $5 billion.

(Reporting by Abhijith Ganapavaram in Bengaluru and Valerie Insinna in WashingtonEditing by Shinjini Ganguli, Matthew Lewis, David Gregorio and Leslie Adler)

Brain Drain, Ghost Doctors And The Misfortune Of Healthcare In Nigeria - DAILY TRUST

FEBRUARY 17, 2023

Nigeria’s healthcare system has been plagued by brain drain which translates into a very poor doctor-patient ratio. Recently, it was reported that the UK licensed…

    By Ejuailo Ibrahim

Nigeria’s healthcare system has been plagued by brain drain which translates into a very poor doctor-patient ratio. Recently, it was reported that the UK licensed 91 Nigerian doctors within 15 days, bringing the number of Nigerian-trained physicians to more than 10, 200 comprising specialists, associate specialists, general practitioners and doctors in training. This figure is quite alarming considering the fact that Nigeria, with less than 30,000 practicing doctors, currently has far less number of physicians to meet the medical demands of its citizens.  

During the COVID-19 lockdown in 2020, according to the Nigerian Medical Association (NMA), about 5,000 doctors had applied for, and met the requirements to work abroad: they were only waiting for the ease of lockdown in order to leave the country to various parts of the world. Subsequently, officials from the Kingdom of Saudi Arabia were in Nigeria scouting for medical personnel to fill up available spaces in their health sector. These are doctors and other medical specialists trained in Nigeria and who were working within the country at the time.  

Some of the major reasons for the continued brain drain in Nigeria’s healthcare sector are poor welfare of the personnel, inadequate facilities and poor working environment.  

In India, for instance, despite the multidimensional challenges associated with high population, the country has been able to develop its health sector such that there is efficient service delivery. The only challenge that most citizens may face is the ability to afford it. This implies that if the majority of the citizens can afford the cost of medical care locally, then it would save the government the cost of balancing trade due to medical tourism abroad. India is one of the favoured destinations for Nigerians seeking medical treatment abroad. At the High Commission of India in Abuja, on the one hand, one of the easiest visas to process is of seeking medical care in the country. On the other hand, when applying for a visa to study a professional course, especially in the field of medicine, the process is tedious. This could partly be because these professionals would return to train other compatriots in the field thereby reducing income to the country. 

However, they are not to blame because they developed their system and their diplomats are only acting in the manner they deem as in the best national interest of their country.  

The case of a serious brain drain in Nigeria is not in doubt. Every medical personnel considers working in Europe, the United States, or the Middle East unless they lack the opportunity to leave. The only way to reduce the mass exodus is by improving welfare and emoluments of the workers within the sector.  

An efficient healthcare system can be a source of foreign exchange earnings as Nigeria would become a medical hub and an easier and more accessible destination to most people in need of medical care especially within West Africa and some parts of Africa as a whole.  

To some extent, individual attitudes towards national development are part of the problems that hamper growth in the country. In mid-January, there was another alarming report that the Zamfara State government discovered 199 ghost doctors on the state payroll of 280 doctors. The imagination that 199 ghost doctors are on the payroll of government hospitals is alarming to any well-meaning citizen. To begin with, 280 is an appalling number for physicians in a state with a population above nine million people. How many hospitals are in the state and where are these ghost doctors located? It is more disheartening that some individuals defraud the state by including non-existent physicians on the pay-roll making the challenge of fewer doctors look less macabre than it actually is from distant observation. This is at a time when Zamfara, a major state affected by banditry, is in dire need of all the possible healthcare attention it could get. 

If this is happening in Zamfara State, then how many more states could be suffering from the same challenge of ghost doctors and medical personnel in the country? Rural communities are usually the ones to bear most of the brunt as they are the places with more chances of having quacks and location of non-existent hospitals with dubious staff lists. This is devilry at its peak. These are challenges that the various state governments and policy developers must look into.  

Primary healthcare is another area of concern in national health security; ensuring a very functional primary healthcare system shall greatly reduce the rate of maternal and infant mortalities which is very poor in the country. Primary healthcare reaches most of the citizens in the urban and rural areas as the first, and in most cases, the only means of affordable healthcare to many Nigerians. If the primary healthcare system can be optimised towards better service delivery, it could save the higher echelons of healthcare the burden and need to handle many health issues of primary concern and, at the same time, reduce the rate of maternal and infant mortalities ravaging the country.  

Consequently, the government at the centre must endeavour to commit all resources towards upgrading the standard of healthcare. This stands as one of the major components of contemporary security. If the government is serious about economic diversification, then luring other African states towards medical tourism in Nigeria should be one key area that will definitely increase foreign exchange. In fact, if only to cut the humongous amount Nigerians spend on medical tourism abroad. Citing how Nigerian leaders flock abroad for medical tourism, how much could Nigeria save if the president and other elected officials get medical care locally? Thus, if the president is going to London, it should be strictly on holiday but not with an additional cost for healthcare.  

Having, at least, two medical structures as those frequented by the president constructed and functional within Abuja and similar ones (one) in each geopolitical zone of the country could save Nigeria a lot and earn more for the country in terms of foreign exchange.  If the leaders use it, it would definitely build the confidence of other African leaders to change their preferred destinations for medical tourism abroad. These are structural policy concerns that government at all levels must take into consideration with respect to revamping the health sector in Nigeria.  


Ibrahim can be reached through  [email protected]  

JFK Airport’s Terminal 1 to Reopen Saturday After Power Outage - BLOOMBERG

FEBRUARY 18, 2023

(Bloomberg) -- Terminal 1 at New York’s John F. Kennedy International Airport will reopen with limited operations on Saturday after a Thursday power outage caused flight delays, cancellations and the closing of the terminal.

“Contingent on the completion of repairs and testing, we anticipate the start of limited operations at Terminal 1 on Saturday,” Alana Calmi, a spokesperson for the Port Authority of New York and New Jersey said in an emailed statement. “Travelers should continue to check with their carriers for flight status before coming to Terminal 1.” 

About 39 flights have been canceled as of Friday afternoon, the statement said. Terminal 1 represents 5% of all JFK scheduled passenger flights, and of today’s 64 scheduled Terminal 1 arrivals and departures, 13 will operate at other JFK terminals, 12 will operate at other local airports, according to the Port Authority. 

Terminal 1 has 11 gates and serves several major international carriers including Korean Air, Air France, Lufthansa and Turkish Airlines. Some planes have been diverted to other airports, while others have returned to their points of origin. Those decisions are typically made by the airline, not the airport. 

NYC’s JFK Terminal 1 Remains Closed Following Power Outage (1)

The outage was caused by an electrical-panel failure that sparked a small fire that was quickly extinguished, according to the Port Authority.

The power outage impacted flights including Air New Zealand Ltd. Flight NZ2, which should have touched down at JFK Terminal 1 at 5:40 p.m. local time Thursday, but had to make a U-turn back to Auckland about halfway into its journey over the Pacific Ocean. 

(Updates with context throughout)

Local airlines debunk access to subsidised fuel, as Jet A1 sells at N800/litre - THE GUARDIAN

FEBRUARY 18, 2023

By Wole Oyebade

•New investments keep airlines afloat, says Okonkwo

Local airlines have denied being beneficiaries of Federal Government-subsidised aviation fuel regime, saying operators still buy at the open market price average of N800/litre.

In reaction to claims that special intervention has brought aviation fuel to N600/litre, the airlines said they had steadily weathered the storm without government’s much-vaunted support coming their way.

Recall that the House of Representatives, Ministry of Aviation, Central Bank of Nigeria (CBN) and the Nigerian National Petroleum Company Limited (NNPCL), among others, lately worked out a plan to support local operators with subsidised aviation fuel, to assuage the high operating cost and threats of a shut down by the local airlines.

But the operators, yesterday, said nothing has changed as airlines continue to battle the high cost of aviation fuel, foreign exchange liquidity crisis and high cost of operations.

Chief Operating Officer (COO) of United Nigeria Airline (UNA), Osita Okonkwo, hinted that aviation fuel currently sells at N765/litre and as much as N879/litre in the Northern parts of the country.

Okonkwo, whose airline just commemorated the second anniversary, said they came into operation when Jet A1 was less than N200/litre. But in about a year, it has climbed to N500/litre and subsequently N800-plus.

Besides fuel challenges, the foreign exchange has been a challenge given that 99 per cent of inputs in the industry is foreign exchange-based. He said: “We suffered a double-jeopardy in the area of forex. One is that of access to forex and second is availability and its cost (on the parallel market). The cost moved from N400-plus to N900/$, if you are not lucky to get from the Central Bank of Nigeria (CBN). Currently, CBN meets only 20 to 30 per cent of our needs and that takes time despite you having Aircraft on Ground (AOG) and urgently needs spare parts from abroad. It has really been difficult. Put together, what we have seen is the escalating rate of the operational cost,” Okonkwo said.

The spike in the cost of fuel and operations had also spiked airfares with airlines raising N35, 000 economy flights by 100 to 200 per cent.

“But, what we have also seen due to the economic situation in the country is that people are not flying at N70, 000. So, airlines have also reacted despite what people are saying that we are colluding to fix prices. Now, you can get tickets of N40,000 to N50,000. But I can assure you that investors are underwriting those costs because there is no airline that flies at N40,000 and still remains in business.

“That the Nigerian operators have survived the fuel crisis is again a testament to promoters and investors who continue to pump in their own capital to keep the airlines flying. There is nothing magical about the fares outside of that. Many airlines outside of Nigeria actually closed shop and many got huge handouts from the government to keep afloat, but we are not so lucky in this part of the world,” he said.

Okonkwo added that UNA built its business model around a long-haul plan and it has helped the airline to keep going, tackling all challenges on the way. He, however, advocated a special intervention fund, as is the norm in other parts of the world, coupled with well-capitalised aircraft leasing companies to serve local operators at affordable rates.

Nigeria Asks Emirates To Resume Flights - SIMPLY FLYING

FEBRUARY 18, 2023


The country’s president said Nigeria will make additional foreign exchange available for affected airlines.

The country of Nigeria hopes that flights from Dubai-based Emirates will resume soon. Nigerian President Muhammadu Buhari called for the airline's return last week and reportedly directed the Central Bank of Nigeria to produce more foreign currency available to Emirates.

The move comes after Emirates suspended flights to the West African country last year, citing the lack of progress in repatriating funds due to the country's severe dollar shortage. The airline reportedly negotiated in several meetings with representatives from the Nigerian aviation ministry to discover solutions to release the funds.

Calling on the airline

Buhari posted on Twitter earlier this week that while he spoke to United Arab Emirates President Sheikh Mohamed bin Zayed Al Nahyan to offer condolences on the death of his mother-in-law, he also informed him about the effect of suspended flights.

"I also called for a resumption of suspended Nigerian operations of Emirates Airlines," Buhari said. "I assured Sheikh Mohamed that the fund repatriation issues that led to the suspension are receiving appropriate attention. We will make additional foreign exchange available for affected airlines."

The relations between the UAE and Nigeria are essential, according to Buhari.

"Nigeria and the UAE have enjoyed excellent and beneficial relations for many years, including at the highest political levels. We can and must continue to iron out whatever issues arise between us," he said.

Buhari also mentioned that his country is mindful of the consular issues relating to the behavior of some Nigerians in the UAE. He said Nigeria will ensure the application of necessary sanctions, through the appropriate judicial process, against anyone identified to have committed criminal acts in the UAE.

What happened?

Emirates halted Nigerian flights twice last year to protest against its ticket revenue being withheld. Following several unsuccessful meetings with the government of Nigeria, the halt occurred indefinitely.

According to ch-aviation, Emirates had proposed a plan to progressively release at least 80% of its funds by the end of October 2022. When this did not follow through, the carrier pulled its routes, claiming its Nigerian operations were running at a loss and were no longer commercially viable.

On September 11th, Emirates reinstated its flights to Nigeria after suspending them on September 1st. The carrier demanded the payout of $85 million of its revenue after the Central Bank of Nigeria released $265 million to international airlines to settle outstanding ticket sales.

According to the International Air Transport Association, Nigeria topped the list of culprits worldwide by withholding $551 million of airlines' funds, which Nigerian authorities reportedly engaged with airlines to find solutions.

Photo: Emirates

Challenges in Nigeria

Repatriation issues first arose in March 2020 when the demand for foreign currency in the country outpaced its supply. Banks throughout Nigeria could not provide currency repatriations, while the country's federal government implemented a currency change. According to ch-aviation, Buhari authorized the central bank to redesign major Nigerian bank notes, but it caused a cash shortfall.

Earlier this month, the Nigerian President said he was aware of the cash shortages and hardship faced by people and businesses on account of the Naira redesign. Violent protests have also erupted in Nigeria over the scarcity of cash. This week, protesters reportedly attacked automated teller machines and blocked roads in three cities.

Nigeria Immigration To Introduce More Passport Reforms - ARISE NEWS

FEBRUARY 18, 2023

The agency has three areas of focus, which are e-border management, passport reforms and staff welfare.

Comptroller General of the Nigeria Immigration Service, (NIS), Isah Idris, has promised Nigerians to look forward to more passport reforms that would ease the pains currently associated with the system.

The CG, disclosed that the new improved passport system on introduction would deepen passports reforms in Nigeria for excellence in the discharge of NIS mandate.

Idris made gave the promise at the decoration ceremony of the agency’s newly promoted senior officers to the ranks of Assistant Comptroller Generals, (ACGs) and Comptrollers of immigration on Friday in Abuja.

He said the agency has three areas of focus, which are e-border management, passport reforms and staff welfare, of which it has continued to make improvement by ensuring that no stone is left unturned in the attainment of these targets.

He said: “Our statutory mandate as both law enforcement and service delivery agency demands that we masterly deploy our best hands across service and operational windows to ensure that we regularly and consistently make enduring impressions on the minds of those we relate with.

“We are leaving no stone unturned in our pursuit to excellently discharge our mandate through priority attention given to human capacity development and timely promotion of officers and men.”

The CGIS added that “the NIS is saddled with the management of migration thus; we have taken necessary steps including deployment of technology in the discharge of our duty.”

He however tasked the newly promoted senior officers, eleven ACGs and thirty-five Comptrollers, to bring to bear hard work, commitment, self-discipline and honesty and integrity among others, as a show of loyalty and dedication to duty.

He told the newly promoted officers that:”Promotion is a product of high level exercise, hard work, commitment, self-discipline, honesty, integrity and above all, loyalty. Loyalty is the totality of the other virtues as those who must command must first learn to obey.

“Your new ranks automatically places you in positions to make critical decisions that will determine the fate of officers and men as well as the course of progress in the Service therefore as you wear your new ranks, your coordination, perspective and focus must be absolutely service centered, nationalistic, just and fair in all you dealings.”

Public Relations Officer, (PRO), of the Service, Tony Akuneme, who was elevated to the rank of Comptroller of Immigration, told journalists that the enormous task that comes with the new ranks is a call for greater commitment and service to the nation.

He said as a spokesperson of the service, he has mentored his subordinates to take on the role of a PRO with passion, responsibility and selflessly because his new rank comes with new responsibility.

Akuneme, while expressing his happiness over the promotion, said: “All we need to carry out our tasks is dedication and passion and if you love your country, there is no way you won’t be able to put in extra effort and hours whether you are paid for it or not as long as you see the results.

“I am happy that with the help of the media, the narrative and perception of the service is beginning to change, the NIS being in the news for the right and positive reasons and I am positive that this will continue even if I am given new responsibility.”

Michael Olugbode in Abuja

Schiphol airport slumps to net loss in 2022 marked by chaos - THE CANADIAN PRESS

FEBRUARY 18, 2023

AMSTERDAM (AP) — The company that owns one of Europe's busiest aviation hubs, Amsterdam's Schiphol Airport, slumped to a net loss of 77 million euros ($82 million) last year as months of travel chaos hit its bottom line.

“Never before in Schiphol’s history have we disappointed so many travelers and airlines as in 2022," CEO Ruud Sondag said in a statement Friday.

The busy airport on the outskirts of the Dutch capital was one of several across Europe that was hit by staff shortages and soaring demand as air travel rebounded strongly from two years of COVID-19 restrictions. Airlines and airports slashed jobs during the pandemic, making it difficult to quickly ramp back up to serve the new burst of travelers.

Over the busy spring and summer periods, staff shortages at Schiphol often forced passengers to wait for hours in a long line that snaked out of the terminal, along an approach road and back into the airport.

The airport announced a compensation scheme for travelers whose vacation plans were derailed by cancellations or missed flights. In September, CEO Dick Benschop quit, saying he wanted to “give Schiphol the space to make a new start.”

His replacement, Sondag, said 2022 will “go down as a bad chapter in our own history books. But it is also a chapter we will not forget, so that all new chapters we write will be better.”

The Associated Press

Germany’s Biggest Airports Hit by Staff Walkouts Over Pay - BLOOMBERG

FEBRUARY 18, 2023

(Bloomberg) -- Germany’s two largest airports came to a virtual standstill today as ground staff stage another strike over pay, exacerbating an already chaotic week for air travel after a system outage brought down Deutsche Lufthansa AG’s operations two days ago.

Security and other ground crew in Frankfurt and Munich began their one-day walkouts early Friday, leading to 1,300 flight cancellations for national carrier Deutsche Lufthansa AG, the biggest carrier at the two hubs.

The renewed travel snags come just days after the airline’s global fleet was temporarily grounded when construction workers in Frankfurt severed a communications cable. While passengers were warned ahead of time of the pending strike today, the protests come at a time when air travel was enjoying a robust comeback from the coronavirus pandemic, leading to surging traffic. 

Verdi workers paraded through virtually empty airport halls in Frankfurt on Friday, clad in high-vis vests and waving flags. The protests are driven by the soaring cost of living after Russia’s war in Ukraine caused energy prices and inflation to jump. They risk complicating travel plans for delegates attending the Munich Security Conference — a major annual gathering of defense and foreign policymakers.

‘Complete Chaos’

Simone Perroni, an economics professor at University of Trento, arrived Thursday evening in Frankfurt on a delayed Lufthansa flight from Verona, Italy. After missing his connecting flight to Amsterdam, he had to stay the night and was told he couldn’t fly Friday due to the strike. 

“You lose hours of work and have your family waiting at home. It’s been very frustrating,” Perroni said, adding that he had to hold his planned in-person meeting in Amsterdam from a cafe in the Frankfurt airport instead.

Pardeep Parashar, an administration professional, arrived in Frankfurt Thursday night on an Air India flight from Delhi. He was supposed to fly for work to Warsaw with Lufthansa on Friday and from there to Szczecin. He still hasn’t been told when he’ll fly tomorrow or where he’ll sleep tonight.

“It’s been a terrible experience,” Parashar said. “Next time, I will fly directly to Warsaw from Delhi.”

Both Perroni and Parashar said they found out about the cancellations upon arrival in Frankfurt last night and then had to line up with more than 500 people at a service desk by three people. They waited more than four hours to be put in a hotel.

“It was complete chaos,” Perroni said.

Broader Strikes

It’s not just Germany where protests have erupted over what workers consider unfair pay amid soaring cost-of-living expenses. UK rail workers have temporarily brought large parts of the country’s train network to a virtual standstill in recent works, and in France, people are protesting plans of extending the retirement age.

Read more: Lufthansa’s Global Fleet Grounded by Four Snapped Cables

Labor union Verdi called the strike, citing dissatisfaction over collective-bargaining negotiations with the various companies and public agencies that employ ground staff. It’s demanding a pay increase of €500 ($543) a month for some workers and higher holiday-shift compensation for others.

“The employees are jointly putting pressure on the respective employers because no results have been achieved in the previous negotiations,” Verdi official Christine Behle said in a statement, pointing to another round of talks on Feb. 22.

Air traffic, particularly leisure travel, has bounced back strongly from the pandemic. The surge caused chaos at airports across Europe last summer after operators and ground personnel struggled to meet demand.

Strikes are also taking place at Stuttgart, Hamburg, Dortmund, Hanover and Bremen airports. Verdi held a similar walkout at Berlin’s main hub last month, cutting Germany’s capital off from international air travel. 

Outside the Frankfurt airport, Verdi’s Christoph Miemetz rallied the striking workers. “They’ve messed around with us for years at the airport,” he said to loud cheers. “We have tough years behind us.”

(Updates with passenger interviews beginning in fifth paragraph.)

Air France ‘Turns Page’ On Covid, Sees Higher Profit This Year - BLOOMBERG

FEBRUARY 18, 2023

(Bloomberg) -- Air France-KLM said is has “turned the page” on the coronavirus pandemic that prompted an unprecedented industry slump and forced a government bailout, predicting that it will exit state aid this year and return to full passenger capacity by the end of 2023.

The airline group reported net income of €504 million ($528 million) in the fourth quarter, compared with a loss in the same period last year, according to a statement today. Revenue reached about €7.1 billion — a record — from €4.8 billion a year earlier. 

The carrier said its medium-term ambition is to reach an operating margin of 7% to 8%, up from just 1.9% in the fourth quarter amid surging fuel prices and disruptions at the Amsterdam hub.

“We close out the year with a positive net income, having turned the page on Covid, and look to the future with confidence in our ability to address the challenges ahead,” Chief Executive Officer Ben Smith said in the release. 

Underscoring the airline’s recovery drive, Air France said it wants to fully exit the remaining state aid program by the middle of April, giving it more flexibility to resume its growth path, including possible acquisitions. The airline said it will continue to invest in its fleet this year, and will take delivery of new Airbus SE single-aisle aircraft in the course of 2023.

Air France rose as much as 4% to €1.74 in Paris, the biggest gain in more than a week. 

The global aviation industry has enjoyed a robust comeback since most countries lifted their coronavirus restrictions and people resumed travel for business and leisure. Airbus said yesterday that it’s increasing the rate of production on its largest aircraft to meet rebounding long-haul demand, and budget carriers like Ryanair Holdings Plc have said that summer bookings point to a robust summer season. 

The Dutch KLM arm was held back last year by massive disruptions at the Amsterdam hub, as the surge in travel proved too much for airlines and ground personnel to handle. As a result, the airport instituted capacity restrictions that weighed on the division’s results in the fourth quarter. 

Amsterdam Schiphol said in a separate release that it had a loss of €28 million last year despite what it called a strong recovery in traffic, and the hub’s efforts to mitigate the chaos led to additional costs of about €120 million, it said. 

“Never before in Schiphol’s history have we disappointed so many travelers and airlines as in 2022,” Schiphol Group CEO Ruud Sondag said in the release. 

(Updates with stock performance in sixth paragraph.)


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