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Alliance Airlines

How These 2 Decisions Made a World Apart Could Define the Future of Airlines

Madhu Unnikrishnan
February 5th, 2021 at 12:52 PM EST

Domestic leisure travel is sustaining the airline industry, and two airlines on opposite ends of the earth announced moves this week that signal that will be true for the foreseeable future.

Qantas is beefing up its domestic network with a new deal with regional carrier Alliance Airlines to lease three Embraer E190s. The jets will be based in Darwin and Adelaide, and will initially serve Alice Springs from both cities. Qantas has the option to expand the deal up to 11 E190s.

The aircraft has a longer range than Qantas’ Boeing 717s and, at 94 seats, half the capacity of its Boeing 737-800s. Those aircraft will be redeployed elsewhere on Qantas’ domestic network, the carrier said.

The move allows Qantas to provide more frequencies on domestic routes to capitalize on Australians choosing to vacation in the country. “Instead of one or two flights a day with a larger aircraft, we can offer three or four flights a day on the E190, which gives customers in these cities a lot more choice about when they travel,” said John Gissing, CEO of QantasLink.

Qantas has dramatically limited its international route network since Covid-19 began closing borders. It does not expect to resume flying to the U.S. and the UK until July at the earliest. The deal with Alliance allows Qantas to use its crews on the E190s. “Importantly, Alliance is keen to provide the opportunity for our international pilots and cabin crew to operate the E190s given it will be some time before overseas markets fully recover,” Gissing said.

“We know this current climate of snap border closures will pass and we want to be ready for the recovery and for what is a structurally different market to what we had pre-Covid,” he added.

Meanwhile, on the other side of the world. U.S. ultra-low-cost carrier Frontier Airlines is betting on the growth of domestic leisure travel. The airline is opening a crew base for 250 flight attendants and 140 pilots in Tampa this May.

The carrier also plans to open a crew base in Atlanta by the end of the year. “Any time we add a new crew base, it is an indicator of continued growth for our airline,” CEO Barry Biffle said. The carrier operates 20 routes from Tampa and 15 from Atlanta.

“With our low-cost structure and focus on leisure travel, Frontier is exceptionally well positioned to increase operations this year and continue to expand in these two growing markets,” Biffle said.

Frontier is not alone in expanding. “We believe it’s time to step on the gas,” Allegiant CEO Maurice Gallagher told analysts this week. The Las Vegas-based carrier recently added 21 new routes and, unlike almost all of its peers, said it anticipates turning a profit this year.

Meanwhile, large network carriers are staggering, reporting record losses and imploring the federal government to provide more aid. Airlines like American Airlines and United Airlines have said they do not predict returning to anything resembling pre-pandemic traffic for at least the next couple of years. They, too, are furiously adding domestic routes to chase whatever demand may exist.

The International Air Transport Association (IATA) says meaningful recovery, especially for international traffic, will not come until 2024. Carriers without a domestic market, like Singapore Airlines, are focusing on short-haul international, where border restrictions allow. But the fall-off in international traffic has been stark. Singapore reported full-year 2020 traffic of just under 200,000 passengers, compared with more than 10 million in 2019.

Madhu Unnikrishnan
February 5th, 2021 at 12:52 PM EST

Tags: Alliance Airlines, Frontier Airlines, Qantas

Photo credit:  Qantas

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