Leisure travel for summer 2022 is looking strong and previous one to three-month contracts that have dominated the past 12 months, will give way to six-month plus bookings, once again.
ACC Aviation has good news to share with ACMI (wet lease – aircraft, crew, maintenance and insurance) airline operators ahead of World Routes in Milan this week (10 to 12 October). Leisure travel for summer 2022 is looking strong and previous one to three-month contracts that have dominated the past 12 months, will give way to six-month plus bookings, once again. “This is going to give the existing ACMI providers a lot of comfort, as well as newcomers to the sector,” states Director of Leasing Dave Williams. (Approximately 20% of the 60-plus start-up airlines identified ACMI as their business model.)
“Covid patterns have changed the way we go about our business – so there aren’t any clean models, or historic trends to draw on anymore. As a result, airline planning has been taking place three months at a time, throwing up even more opportunities for ACMI,” Dave Williams notes.
When the airlines ramped up in July and got their aircraft readied, they were operating on fumes – determined to respond to short notice requests they typically wouldn’t take on. They were stymied by a shortage of crew, due to staff being out of hours, off work because of COVID or needing simulator time, as well as a lack of crew on standby. All of this added to more short notice ACMI requests.
“Every airline around the world has cut back its fleet and talent resources to become as lean and efficient as possible. This has put a strain on everyone,” suggests Dave. As well as being hindered by lack of flight crew, management have faced the dilemma of whether to bring in extra crew to commit to a flying programme, even if they had 30 or so aircraft sitting idle. ACMI is the best solution – delivering the most effective, flexible way for airlines to ramp up their capacity, to plan and bolt on demand.
“Since July, we’ve seen a lot of single-aisle short term and narrowbody ACMI activity being contracted quickly from operators eager to win new business,” he added. Markets across Central Europe and Scandinavia took the lead early, with competitively priced, inclusive tour programmes from Europe. The UK was four to six weeks behind then and three months on it still hasn’t caught up. However, the good news is that several airlines are starting to recruit again for flight deck and cabin crew.
“The big airlines may have trained up to 70% of crew and planned to use 70%, but the 30% redundant crew are still redundant and if needed to go into a short notice contract, they won’t be ready. Even the big, regular airlines we work with faced crew shortages in July and August.”
To add to the challenge, Dave highlights, charter operations are much more regulated now, rendering more administration for UK airlines who must secure permits to fly inter-EU, putting them at a disadvantage against their European counterparts.
Flexibility for ACMI operators is needed
“We would like to see a more flexible approach being made for ACMI work – especially if it gets more pilots back in the workforce – and this is something we look forward to discussing with existing and future airline partners, in Milan next week. (ACC Aviation is exhibiting at World Routes next week, Stand No 21). Careful fleet and resource management is crucial for airlines who must factor in low season and high season.
“Aircraft lessors increasingly recognise this, and we’ve been seeing a lot of flexibility from them since the pandemic, offering incentives like power by the hour. But it’s not just about aircraft – it’s getting seasonal crew trained and ready.”
ACMI airlines need seasonal crew for six months’ minimum. Not two to three months, and that’s been a big dilemma.
The most popular, best-for-economics ACMI single aisle aircraft are the B737-800 or Airbus A320, offering compatible crew availability. There aren’t so many B737 classics around for ACMI. Those that have been repossessed new homes have swiftly been found for.
Widebody market driven by long-haul demand, A330 popular choice
The widebody market is driven by long-haul demand and this is slowly beginning to return. It’s still unclear what exactly the long-haul market holds, but there are many aircraft that have been retired or phased out by the bigger airlines (B747 especially) in the last 18 months.
There are plenty of A330’s on the market available from leasing companies – many on attractive power-by-the-hour rates from lessors. The A330 is an enticing commodity. “We have seen a dozen or so A330s added into European ACMI carriers in recent months and many have turned to the cargo market, secured on interim ACMI or charter cargo contracts,” says Dave. Such wide-bodied units will be popular on charter for inclusive military lift, winter tours / sports teams and supporters / music / financial / roadshows etc.
Will the long haul ACMI return in high volume? – that’s the question we can’t answer yet.
“At ACC Aviation are coming to the end of a relatively busy June to September European peak. Traditionally the winter is quieter, even in a normal non-Covid market. Hotspots are Asia Pacific for the winter and the Chinese New Year travel period January/Feb/March 2022. There is some optimism about when the market will get back to peak. Some markets, like Vietnam, have really suffered, most of the country now closed to tourists. Previously the domestic market was up 99%, but an outbreak of Covid stalled that and it’s now six to nine months behind Europe.
“Domestic flights have scaled up with people moving around more, but less so internationally. It’s very robust in the USA which is almost back to 2019 levels. Bringing volume to the lower end of the market is urgently needed – to Africa and Asia Pacific and then Europe,” continues Dave.
It’s hard to plan – but aviation is global. This gives ACC Aviation a major advantage. With offices on five continents, it can keep up with trends and respond to demand. Now it is offering aviation finance too, complementing its asset management expertise and its technical service offering making it a one stop shop for support – compelling to help airlines who need to move quickly.
ACC Aviation is celebrating 20-plus years working with airline partners. It offers wide ranging expertise to help them navigate changes in market demand brought about by the pandemic and travel restrictions as well as help them protect market share during peak season surges in demand through sourcing reliable ACMI capacity.
Tatiana is the news coordinator for TravelDailyNews Media Network (traveldailynews.gr, traveldailynews.com and traveldailynews.asia). Her role includes monitoring the hundreds of news sources of TravelDailyNews Media Network and skimming the most important according to our strategy.
She holds a Bachelor's degree in Communication & Mass Media from Panteion University of Political & Social Studies of Athens and she has been editor and editor-in-chief in various economic magazines and newspapers.