The circumstances surrounding COVID-19 are continuously evolving. We’ll be updating this page regularly with breaking news to help APEX members and others stay up-to-date on how the novel coronavirus is impacting the aviation industry. You can also subscribe to the APEX Daily Experience to receive the latest coronavirus updates and other industry news in your inbox.
Since three US airports began screening for the coronavirus in late January, APEX Media has been covering all coronavirus-related developments affecting the aviation industry. Our sources range from exclusive insights courtesy of our extensive network of members to stories reported by trusted media outlets.
Interim Guidance for Airlines and Airline Crew: Coronavirus Disease 2019 (COVID-19) – Centers for Disease Control (CDC)
Coronavirus disease (COVID-19) Travel Advice – World Health Organization (WHO)
Real-Time Coronavirus Outbreak Tracker – Worldometer
LSG Group Cuts Costs After Sales Downturn
COVID-19 is taking a “drastic” toll on LSG Group’s catering division, and the company is looking to cut costs by at least 30% this year. Chief executive officer Erdmann Rauer said the goal is to optimize the size of the organization and product range to adapt to changing market conditions. LSG Group experienced a 50% year-on-year decline in sales during the first half of the year. Data from ACI Europe shows that passenger traffic in European airports fell by 64.2% during this time.
AMS Will Begin Testing High-Risk Travelers for COVID-19
Amsterdam Schiphol will soon open a COVID-19 testing center for travelers arriving from areas that have been deemed high risk by the Netherlands’ Ministry of Foreign Affairs. Details about the cost of the testing and the time needed to receive results are unknown. The airport has mandated face masks and installed mechanisms to ensure physical distancing.
JFK Renovations Placed on Hold
A $15-billion refurbishment of New York’s JFK airport slated to begin this year has been delayed by the coronavirus outbreak. Investors and airlines were to contribute to the renovation of several terminals, but work has only begun on Terminal 8, which will expand by 70,000 square feet. When construction resumes, six terminals will be cut down to four, with more consolidated operations and a new Kennedy Central hub in the middle. Contract negotiations for these projects are already months behind schedule. Traveler volume at the facility is down 85% from average.
Iberia, United Finding New Ways to Step Up Cleaning
Iberia announced a number of improvements to its cleaning practices. The airline is using new electrostatic pistols that shoot a fine powder that reaches the most inaccessible parts of armrests, headrests, folding trays, seat folds and other areas of the cabin and kills the COVID-19 virus on contact. This is in conjunction with a daily liquid disinfectant spray and manual cleaning using recyclable bamboo cloths and mops. Wipes and liquids are trickier to safely apply in the cockpit, which is why United recently announced it would sanitize cockpits with handheld UV wands developed by the American Ultraviolet company.
Trip.com Group and AirAsia.com Partner to Spur Travel Recovery
Travel services provider Trip.com Group and AirAsia.com are combining their products and services with the goal of providing a cohesive end-to-end offering. The companies want to promote a travel revival in China and Southeast Asia by cooperating on transit information for connecting flights, membership benefits and product marketing. Trip.com Group’s premium members will also enjoy upgraded privileges on AirAsia flights when they book on Trip.com Group platforms. “This partnership with Trip.com Group demonstrates our commitment and confidence in the China market…where we remain optimistic for borders to be reopened in the near future,” said Tony Fernandes, CEO, AirAsia Group.
US Lawmakers Mull Additional $25B Payroll Support for Airlines
A tentative plan to provide US airlines with an additional $25 billion in payroll support is gaining bipartisan traction. The financial aid would be a big win for unions that have been requesting support as thousands of workers face layoffs in October once the original CARES Act funding expires. A letter to Senate leaders Mitch McConnell and Charles Schumer, signed by over a dozen senators, says that airline workers “are uniquely tethered to air travel and have been and will continue to be significantly impacted by the decline in air travel,” adding that airports should also receive support. Air travel is still down about 75% year-over-year.
Airbus Expands July Deliveries; Lufthansa Outlines Losses
Airbus managed to deliver 49 aircraft in July, including 47 A320neo family aircraft to Middle East Airlines and Vistara, up from 36 deliveries in June. Airbus’ 2020 net orders by July 31 amounted to 302 aircraft. The company said that its e-delivery option has had a positive effect on shipments by bypassing travel restrictions. Meanwhile, Lufthansa Group reported an 80% drop in year-over-year revenue over the last three months, salvaged only by its cargo and MRO divisions. The company reduced expenses by 59% in response to lowered travel demand, and 22,000 full-time jobs will be cut going forward. “We do not expect demand to return to pre-crisis levels before 2024,” said Carsten Spohr, chief executive of Lufthansa.
Airlines Reinforce Mask Rules; Italy Threatens Ryanair Suspension
Alaska Airlines, JetBlue and Spirit Airlines are among the latest airlines becoming more stringent with their face mask policies. All travelers, save for infants, are required to wear a mask from check-in to baggage claim. The three airlines join Delta Air Lines in banning face coverings with direct exhaust valves, and also do not allow face shields to be worn in lieu of a mask. Cebu Pacific is asking its passengers to wear a face shield and mask during flights beginning August 15 as part of a government mandate. Meanwhile, Ryanair is being accused by Italy’s national civil aviation authority of not following COVID-19 safety rules, such as social distancing protocols, and is threatening to suspend its permit to fly in the country.
Virgin Atlantic Files for Chapter 15 Creditor Protection During Restructuring
Virgin Atlantic has filed for Chapter 15 under the US bankruptcy code with the intention of shielding its assets in the country as it implements a recapitalization plan. It will vote on the restructuring process on August 25. Virgin Atlantic has not entered administration in the UK, but is appealing for financial aid in its home country. The airline needs $1.6 billion to keep its liquidity above a threshold specified in bondholder contracts. If available cash falls below $99 million dollars, it would have to sell its Heathrow slots against which the bonds are secured, forcing the carrier to fold.
Virgin Australia to Relaunch With 737-Only Fleet
A leaner Virgin Australia has emerged courtesy of its new owner Bain Capital. The airline will only keep Boeing 737s in its fleet, shed 3,000 staff members and discontinue low-cost subsidiary Tigerair. In a statement, the airline alluded to the importance of international flying to its business model but is forced to suspend those flights “until the global travel market recovers.” Going forward, Virgin Australia’s Airbus A330s and Boeing 777s will not be used. “We will be very focused on delivering the best value in the market for customers,” said Danielle Keighery, Virgin Australia’s chief experience officer.
DoT Consumer Complaints Analysis Reveals Refund Gripes at All-Time High
The number of customer complaints against US airlines, foreign airlines and travel agents submitted to the Department of Transportation in April rose dramatically, according to a report from Upgraded Points. US airlines saw complaints nearly quadruple, from 2,093 complaints in March 2020 to 8,146 in April 2020. For comparison’s sake, the baseline from April 2019 is 765 complaints. The overall increase can be attributed to refund complaints, which globally rose over 17,000% year-over-year. “Many other categories of complaints, like issues for the disabled, baggage problems and customer service actually decreased, no doubt due to the fact that fewer people are flying during the pandemic,” said Upgraded Points’ founder, Alex Miller.
White House Opposes Airline Face Mask Mandate
A group of 18 US House Democrats last Thursday introduced legislation that mandates face coverings on airplanes and in airports. If passed, The Healthy Flights Act would require airlines to provide masks and personal protective equipment to all customer-facing crewmembers and would also introduce a civil penalty for passengers who refuse to wear a face covering. The White House called the bill “overly restrictive” and said “such decisions should be left to states, local governments, transportation systems, and public health leaders.” Aviation industry leaders are eager for a federal requirement for passengers to wear masks.
United Will Resume 25+ Routes Next Month; More Job Cuts At LATAM
United Airlines is planning to expand its service next month with flights to Asia, India, Australia, Israel, Latin America and other locations. The airline intends to fly 37% of its overall schedule in September as compared to the same period last year. Domestically, United intends to fly 40% of its schedule. The goal is to cater to the current demand for leisure travel. Meanwhile, LATAM announced it failed to strike a deal with unions on reducing pay, and would resort to laying off pilots and flight attendants as a result. A third of the airline’s total crew is expected to be affected.
MEA Mandates COVID-19 Testing for Travel to Lebanon, Ireland May Follow
Travelers bound for Lebanon on a Middle East Airlines flight are now required to conduct a PCR test before departure. Upon arrival at Beirut Rafik Hariri International Airport they must undergo another test paid for by MEA, the results of which will be available after 48 hours. Ireland’s Minister of State for International and Road Transport and Logistics is considering implementing similar protocols. The country announced it would be introducing random testing at its airports in response to the rise in cases in other countries.
Airlines Report Billions Worth of Losses; United Cuts ExpressJet
International Airlines Group (IAG) is looking to raise €2.75 billion after losing more than €4 billion in the first half of this year. ANA announced a $1-billion loss in its first-quarter results, while Air Canada and Air France-KLM reported second-quarter losses of $1.75 billion and €1.5 billion, respectively. United Airlines Holdings board member Edward Shapiro has liquidated all of his shares in the company, amounting to more than $5.25 million. The airline announced yesterday that it will cut its contract with regional carrier ExpressJet, meaning Commutair will be the sole operator of UAX ERJ-145 aircraft.
United Implements Automated Chat Function for Cleanliness-Related Questions
As part of United Airlines’ CleanPlus program, passengers can now text “Clean” to a new United Automated Assistant and ask questions about the carrier’s COVID-19-related cleaning and safety procedures. The assistant can answer questions like, “How can I prepare for an upcoming trip?” and “Are there any changes to service during a flight?” The announcement follows the recent news that passengers on standby and upgrade lists can receive text notifications once they have been cleared and assigned a seat, further limiting unnecessary person-to-person interactions.
Gogo to Cut 14% of Workforce, Mainly From Commercial Aviation Business
Gogo is to eliminate 143 full-time positions, representing 14% of its workforce, as it continues to reduce costs and align its scale to match a lesser demand for connectivity in the face of COVID-19. The changes are set to take place on August 14, 2020, and will primarily affect the company’s commercial aviation business. Gogo will also continue certain furloughs and maintain salary reductions implemented previously. Oakleigh Thorne, Gogo’s president and CEO, said, “We do not take this action lightly, but we believe it is critical in our efforts to preserve our financial flexibility, while maintaining the quality of our service and relationships with our customers.”
Japanese Airports Debut Saliva-Based COVID-19 Testing
Haneda and Narita Airports replaced the notoriously invasive COVID-19 polymerase chain reaction (PCR) screening tests with saliva-based antigen tests yesterday. Both have comparable accuracy rates, but the antigen test delivers results in one hour compared to six hours for PCR tests. Daily testing capacity is expected to nearly double as a result. Antigen tests will be offered at Kansai Airport starting Saturday.
Airbus Cuts Costs as COVID-19 Makes “Very Visible” Financial Impact
Airbus’ half-year financial results were affected by a year-over-year halving of commercial aircraft deliveries. Revenue fell to $22 billion, 40% lower compared to last year’s figure. “We have calibrated the business to face the new market environment on an industrial basis and the supply chain is now working in line with the new plan,” said Airbus CEO Guillaume Faury. The company will slow production of the A350, of which 23 were delivered in the last six months, to five jets per month. The A220 assembly line in Quebec is expected to progressively return to pre-pandemic levels.
Singapore Airlines Issues Company-Wide Salary Cuts as Profits Evaporate
Singapore Airlines (SIA) reported its latest quarterly financial results: a net loss of $814 million, compared to the same quarter last year, with sales dropping 79%. The skeleton schedule it operated during this period had a load factor of 10%. A year earlier, the airline was over $80 million in the black. SIA will increase cost-cutting measures in the form of bigger pay cuts for the management, a 10% salary reduction for other staff, and early retirement for ground staff and pilots aged 50 and above, with at least 15 years of service. SIA released an updated flying schedule for August and September and estimated passenger capacity will rise by one percent.
No More 747s After 2022, Boeing CEO Confirms
The “Queen of the Skies” will no longer be produced come 2022, over 50 years since the first Boeing 747 rolled off the assembly line. Qantas, KLM, British Airways and Virgin Atlantic have all retired their 747s during the coronavirus pandemic. The announcement was made during the airframer’s second quarter results meeting. Boeing lost $2.4 billion in Q2 as sales fell 25%. CEO Dave Calhoun warned the slowdown may mean deeper job cuts on top of the 16,000 layoffs already planned, and production of some other aircraft, including the 737 MAX, will be slower than expected.
JetBlue Tests UV Cabin Cleaning, Looks to Bolster Confidence After Dismal Q2
JetBlue is testing eight Honeywell UV Cabin System Units across some of its hubs. The machine resembles a beverage cart and has arms that protrude at either side to shine UV-C light across the entire cabin. It can clean the cabin of a narrowbody aircraft in 10 minutes. “We’re going to be looking for how far the UV light can reach,” said Joanna Geraghty, president and COO at JetBlue. The airline lost $320 million from April through June as year-over-year revenue plunged 90%. Losses were mitigated by reduced average daily cash burn.
Spirit Anticipates Being Among First Profitable Airlines; Delta Partners With Lysol
Spirit Airlines’ second quarter financial report reveals that the company lost $364 million, but executives remain optimistic as the airline broke-even in June on an average daily cash basis. “Our leading low-cost structure positions us well to be among the first to return to profitability,” said CEO Ted Christie as he referred to the airline’s 79% load factor increase last month. Meanwhile, Delta Air Lines is partnering with the makers of Lysol and launched a new Global Cleanliness division to foster what it calls a gold standard of sanitization across touchpoints. The companies will jointly gather insights on consumers’ travel experiences to help inform the development of new disinfecting solutions, and Lysol will advise on new cleaning protocols.
IATA Predicts 2024 Rebound as World Grapples With Second Wave
IATA claims that the travel rebound has been slower than anticipated and that global revenue passenger kilometers will not return to pre-pandemic levels until 2024, a year later than previously projected. While the domestic travel picture is improving, IATA CEO Alexandre de Juniac said that most countries are still closed to international arrivals or have imposed quarantines, putting a drag on international travel “which in normal times accounts for close to two-thirds” of the industry. A surge of new infections in Spain prompted Britain on Saturday to order all travelers from there to quarantine for two weeks. Vietnam evacuated 80,000 tourists from Danang after the authorities recorded the country’s first locally transmitted coronavirus cases since April. Effective August 1, all travelers flying Etihad Airways to Abu Dhabi will be required to show a negative COVID-19 test result.
European Airlines, Airports Attempt to Increase Capacity
Ryanair declared a first quarter loss of $218 million as COVID-19 caused traffic to plummet nearly 99% from pre-pandemic highs. Skeleton flight schedules and other measures enabled the company to cut costs by 85%, which helped partially offset the drop in revenue. Ryanair hopes to resume 70% of its normal schedule in September, while Portugal’s TAP outlined its plan to resume 40% of flights by then. TAP attempted a restart in May but retreated due to low demand. The company suffered a $464-million net loss in Q1. Europe’s airports have lost almost 900 million passengers this year, according to ACI Europe. The industry group lobbied for financial relief at a recent aviation summit.
Southwest Vows to Avoid Furloughs and Benefit Cuts Through 2020
During Southwest’s Q2 earnings call, the company promised to avert layoffs, furloughs and benefit cuts of any kind for all its employees through the end of the year. Southwest executive director of Corporate Sales Bob Jordan explained that 27% of the airline’s workforce already agreed to an exit package or extended leave. Southwest ended the second quarter of this year with the strongest liquidity/cash burn ratio of the four largest US carriers. United and American airlines have already warned tens of thousands of employees that they are at risk of being furloughed once CARES Act funding expires at the end of September.
US Airlines Reveal Stricter Mask Policies
While Delta Air Lines recently announced it would allow travelers with health conditions to board without a mask following a virtual health consultation, American, United and Southwest airlines have now confirmed they are not allowing anyone over the age of two to fly maskless. “Customers and team members have been clear that they feel more safe when everyone is wearing a face covering,” Alison Taylor, chief customer officer of American Airlines said in a statement. United is asking that travelers who believe their circumstances merit an exemption contact the airline beforehand. Delta CEO Ed Bastian claims the airline has already banned over 100 people for not wearing masks.
China and UAE Make COVID-19 Tests Mandatory for Inbound Travelers
The United Arab Emirates announced that starting August 1 all inbound and transiting travelers must be screened for COVID-19 in their country of origin and present the results during check-in. Children under 12 and those with severe and moderate disabilities are exempt from the requirement. Test results will be considered valid for 96 hours. The Civil Aviation Administration of China presented a similar entry requirement, asking travelers to take a COVID-19 test within five days before boarding their flight to the nation. Chinese travelers must upload their test results using a special WeChat Mini Program, while foreigners should apply for a health declaration letter at a Chinese embassy or consulate.
American, Southwest Reveal Q2 Revenue Declines
American Airlines and Southwest Airlines reported their Q2 financials today. American saw revenue decline by 86% year-on-year and losses totalling $2 billion. CEO Doug Parker echoed a sentiment shared by United yesterday, saying it was one of the most challenging periods in the history of the company. Its cash burn was reduced by 70% to $30 million in June. The airline expects to have a surplus of 20,000 employees this fall. Revenue at Southwest declined 83% year-on-year, resulting in an overall loss of $915 million. “We expect air travel demand to remain depressed until a vaccine or therapeutics are available to combat the infection and spread of COVID-19,” said CEO Gary Kelly.
Airlines Finding Ways to Cope With Low Revenues
The second quarter of this year was United Airlines’ worst-ever, with revenue down 87% year-over-year. CEO Scott Kirby said it could have been even worse had the company not acted quickly at the beginning of the crisis to cut its schedule, complete the largest debt financing deal in aviation history and slash expenses. Elsewhere, the Belgian government will provide a $335-million loan to rescue Brussels Airlines. Yesterday, Cathay Pacific worked with Airbus to delay delivery timetables for A350 and A321neo jets it was slated to begin receiving this year, and is in talks with Boeing to do the same. Finally, Qatar Airways is saving money by temporarily grounding its fleet of 10 A380-800s.
United Airlines to Maximize Ventilation System
United Airlines announced that it would maximize air flow volume and recirculation during the boarding and deplaning process across all mainline aircraft beginning next Monday. The airline worked with Clorox and the Cleveland Clinic to identify additional ways to limit the spread of COVID-19. Meanwhile, Delta Air Lines has incorporated a new policy that requires travelers with health issues to undergo a medical screening teleconference to determine if they can fly maskless. The airline will also ask passengers with health conditions to reconsider travel.
Air India, IndiGo Announce Furlough Measures
As part of a $510-million cost-cutting scheme in the wake of lowered travel demand, IndiGo will cut 10% of staff, putting 2,400 jobs at risk. Meanwhile, Air India is tasking upper management with identifying employees to send on compulsory leave without pay for up to five years. The move has raised the ire of six employee unions who called it “abominable” in a joint letter to India’s Civil Aviation Minister Hardeep Singh Puri. In a separate statement, Air India claimed that many of its employees have caught COVID-19 and some have died; the airline will provide financial compensation to the families of the victims.
EasyJet Pilots Hold No-Confidence Vote in COO; Icelandair Strikes Crew Deal
British Airline Pilots Association (BALPA) members employed by easyJet filed a vote of no confidence in the airline’s chief operating officer, Peter Bellew, after it was announced that the carrier was planning on laying off over 700 pilots. BALPA said the move shows a “serious and widening rift between easyJet pilots and the airline’s senior management.” The airline is looking to reduce overall staff by 30%. Meanwhile, negotiations have improved between the Icelandic Cabin Crew Association and Icelandair, leading to the signing of a new collective bargaining agreement that rewards them with competitive compensation. Talks turned sour last week after the airline announced it would fire its flight attendants, temporarily replacing them with pilots.
Hawaii Airports to Implement Passenger Screening Tech This Month
The government of Hawaii has accepted a $37-million proposal by NEC Corporation of America and its partner company, Infrared Cameras, to implement passenger screening technology at publicly owned airports in the state. The rollout will be accomplished in three phases. First, temperature scanners will be installed at gates of arriving transpacific flights this month. Later, the scanners will be installed at all gates. The last phase, expected to be completed by December 31, will see facial recognition equipment be installed. This will help airport staff identify travelers with fevers. To protect their privacy, photos will not be shared with outside agencies and will be deleted after 30 minutes.
AA Looks to Cancel MAX Orders; BA Retires Boeing 747 Fleet
American Airlines is seeking to arrange new financing with Boeing on 17 737 MAX aircraft as current terms have expired or are due to expire soon. A source familiar with the matter said if the companies can’t reach a consensus on the overdue orders, American could divert existing financing to pay for Airbus jets instead. Meanwhile, British Airways is retiring its entire fleet of Boeing 747 aircraft – 31 in total – with immediate effect as the it downsizes in the wake of the coronavirus pandemic. Chief executive Alex Cruz said the decision was “heartbreaking” to make. The airline was the largest operator of the double-decker jet in the world.
ACI Europe Delivers COVID-19 Guidelines Following EASA Cooperation Agreement
Directors from ACI Europe and EASA signed a cooperation agreement today aimed at reinforcing airports’ and airlines’ adoption of a COVID-19 aviation health and safety protocol released last month. The protocol, coauthored by EASA and the European Centers for Disease Control, will be evaluated and fine-tuned. It is now complemented by ACI Europe’s Guidelines for a Healthy Passenger Experience at Airports. Olivier Jankovec, director general of ACI Europe, says the ACI document provides “concrete advice and solutions to adapt to the new normal in operations and customer service.”
United Takes Touchless Technology Across the Pond
United Airlines’ latest stop on its worldwide rollout of touchless airport technology is London Heathrow Airport. The service allows travelers to check in, add bags and pay applicable fees via the airline’s mobile app. Passengers can then scan their electronic boarding passes at United’s check-in kiosks, which automatically print bag tags, and at the gate. “We are proud to be the first airline to introduce touchless check-in technology at London Heathrow Airport,” said United’s UK director of Operations, Arvind Garcha. The technology is already available at all US airports where United has check-in kiosks.
AA Bolsters Presence in Northeast With JetBlue Alliance
A new codeshare agreement between American Airlines and JetBlue will allow the airlines to increase market share primarily in New York and Boston in hopes of fending off rivals Delta and United airlines, while speeding up their own financial recoveries. The deal also allows customers to spend and earn frequent flyer miles with flights on either carrier. “Pairing JetBlue’s domestic network with American’s international route map creates a new competitive choice in the Northeast,” said Joanna Geraghty, president and chief operating officer, JetBlue. The alliance agreement is subject to governmental review.
Airport Restaurant & Retail Association Sounds Alarm on Failing Businesses
According to a report by the Airport Restaurant & Retail Association, airport retailers and restaurateurs in the US will lose a combined $3.4 billion between now and the end of 2021. The paper describes how severely reduced traveler numbers could result in the widespread shuttering of airport businesses, and warns of the danger of reopening before customer numbers rebound. The association implores airports to grant relief on rent and fees, share CARES funding with concessionaires and extend contract agreements by at least two years to give businesses a chance to recover.
Cuomo Adds Four States to New York Travel Advisory; NYC Airports Going Touchless
Yesterday, Governor of New York Andrew Cuomo announced that the states of Minnesota, New Mexico, Ohio and Wisconsin have been added to New York’s travel advisory, while Delaware was removed. In total, travelers from 22 states are required to quarantine for 14 days when arriving in New York. JFK, LaGuardia and Newark airports are all undergoing major renovations with a new prioritization of contactless technology integration. Larger terminals will make physical distancing easier, while self-serve baggage and check-in kiosks, touch-free restrooms and contactless payment will become the norm. Newark is testing sanitized floor mats while LGA outfitted antimicrobial buttons for its elevators.
Austria Bans Balkan Countries, Ryanair Cuts Flights in Response to Irish Quarantine
Austria expanded its country ban, adding Albania, Bosnia and Herzegovina, Bulgaria, Egypt, Kosovo, Moldova, Montenegro, North Macedonia, Romania and Serbia to the list while removing the Lombardy region of northern Italy. The new decree forces Austrian Airlines and Wizz Air, which offer many connecting flights from these countries, to quickly pivot. Meanwhile, Ryanair announced it would cut around 1,000 flights between Ireland and the UK in August and September due to a local quarantine measure introduced last week that affects all travelers arriving in Ireland from the EU. The airline questioned the logic behind the restrictions, which affect travelers from countries with infection rates lower than those in Ireland.
Delta, Southwest Bemoan Unsustainable Business Environment
Delta Air Lines’ second-quarter financials reveal a $3.9 billion adjusted pre-tax loss. Revenues declined over $11 billion from the norm. Delta CEO Ed Bastian said that the company believes that a sustainable recovery is no less than two years away. The airline will retire a number of aircraft and has accelerated airport construction projects in Los Angeles, New York (LaGuardia) and Salt Lake City in an effort to shorten timelines and lower the total cost for the projects. Meanwhile, Southwest Airlines CEO Gary Kelly said more furloughs and layoffs remain in the cards unless the airline can triple its number of passengers by the end of 2020, and urged workers to take advantage of the overstaffed company’s most generous buyout packages to date.
Virgin Atlantic, LATAM and EasyJet Move Forward With Financing Schemes
Virgin Atlantic set forth the terms of a five-year business plan that will rebuild its balance sheet. Half of the $1.5-billion recapitalization comes courtesy of shareholders, with the other half sourced from investment by Virgin Group and deferrals of existing liabilities. The plan is expected to take effect during late summer. Meanwhile, LATAM Airlines Group has presented the second of two tranches of its debtor-in-possession financing proposal for court approval. The tranche amounts to $1.3 billion and was committed by Oaktree Capital Management and its affiliates. Finally, easyJet expects shareholders to approve of a $524-million share sale that will raise cash as the company waits out the pandemic.
SAA Unions, Creditors Support $1.6B Rescue Plan
South African Airways will proceed with a rescue plan that requires laying off 80% of staff and hinges on the government committing $1.6 billion dollars in aid. Creditors and unions voted in favor of the deal; labor groups were swayed by improved severance packages that were agreed to last week. The state financing portion of the plan has increased significantly compared to what the National Treasury originally set aside for the airline. Finance Minister Tito Mboweni has repeatedly voiced his reluctance to provide further bailouts to the long-struggling carrier. Public Enterprises Minister Pravin Gordhan said that private investors may relieve the burden on the state.
US Airline Employment Trends Downward; Emirates Looks to Cut 9,000 Jobs
The latest figures from the Bureau of Transportation Statistics reveal that US airline employment levels in mid-May totalled 696,534, a low not seen since April 2017 and a 2.8% month-over-month decrease. US aviation unions are pushing the federal government to add to the existing $25-billion bailout package. The COVID-19 pandemic is also responsible for upcoming job cuts at the world’s biggest long-haul carrier. Emirates president Sir Tim Clark said that the layoffs conducted thus far were insufficient. This week, 700 of the airline’s 4,500 pilots were given redundancy notices. The cuts have been focused on Airbus A380 pilots; the airline’s Boeing aircraft have lower seat counts and are easier to fill.
Cathay Pacific, Interjet Each Raise Capital to Offset Crisis
Virtually all of Cathay Pacific’s shareholders voted in approval of a plan to raise $5 billion, half of which will be raised through the sale of shares to the Hong Kong government. Thirty percent of the funds will be sourced from a rights issue. The next step for the company is to proceed with a restructuring, a process estimated to take two months. Mexico’s Interjet is also restructuring and received a $150 million injection to stabilize its financial health in the interim. The liquidity was offered by a group of investors headed by businessmen Carlos Cabal and Alejandro del Valle.
US Airlines Temper Expectations; TSA Makes Safety Improvements
Many regions in the US are struggling to keep COVID-19 levels under control, which has led to new self-quarantine mandates in some states and lessened appetite for travel. At least five US airlines have warned they would pump the brakes on future flight resumptions. United Airlines went further, saying it is considering slashing some August flights it had recently announced. The TSA screened over 600,000 travelers on Wednesday, a marked improvement from the sub-100,000 levels seen in April. A TSA whistleblower decried the infection rate among staff, which led to new health measures being implemented last week. Officers must clean or change their gloves between interactions with travelers and will wear face shields along with masks.
LCY Seeing “Massive Demand” for International Routes
London City Airport shut down for nearly three months due to the coronavirus pandemic. Now, the facility is reporting that bookings for its first post-COVID-19 international flights to destinations that have removed quarantine restrictions have “exceeded expectations.” The flights in question are operated by BA CityFlyer with service to Palma de Mallorca, Ibiza, Málaga and Florence. “It’s clear that customers value the safe, careful and speedy environment that we’ve created,” said the airport’s chief commercial officer, Richard Hill. More international routes will resume in the coming months. In an airport survey of 4,700 travelers, 79% said they were likely to travel when they are told it is safe to do so by authorities.
United Warns One-Third of Staff Face Layoffs, US Airlines Stop HK Flights
In a memo sent to staff today, United Airlines announced that 36,000 workers were at risk of involuntary furlough come October 1, the day the CARES Act contingencies that protect workers no longer apply. The majority of employees at risk are flight attendants, airport customer service staff and gate agents. Those that are let go may be called back to work once travel demand resumes. Meanwhile United and American Airlines are suspending service to Hong Kong in the face of new mandatory testing rules for airline crew members.
Digital Initiatives by Global Airline Alliances and Etihad Boost Traveler Confidence
Oneworld, SkyTeam and Star Alliance, which collectively represent over 50% of the world’s air traffic, have joined forces to produce a one-minute animated video describing new procedures and protective measures travelers can expect during their journey. “We have seen an incredible level of cooperation within the entire aviation community to implement multiple layers of protection around health and hygiene,” commented Kristin Colvile, SkyTeam’s CEO. Meanwhile, Etihad Airways has partnered with Sitata, a Canadian travel risk management company, to launch an interactive map on its website that outlines information that can impact travel arrangements across the carrier’s network.
IATA Survey Highlights Post-COVID Travel Concerns
A recent survey conducted by IATA has identified passengers’ main concerns around post-COVID-19 travel. In terms of airport experience, the majority of respondents (59%) said they were most worried about being on a crowded bus or train to get to the aircraft. In flight, 65% of respondents said their primary concern would be sitting near someone who was infected. Another popular concern was using airport and aircraft restrooms. However, 83% said they were reassured by staff wearing face masks and 74% said they believe aircraft are thoroughly cleaned and disinfected. “This tells us that we are on the right track to restoring confidence in travel. But it will take time,” said Alexandre de Juniac, IATA’s director general and CEO.
El Al Receives State Aid, AirAsia Auditors Raise Red Flag
The Israeli government is providing the country’s flag carrier with $50 million in loans. El Al also wants to raise $150 million through the sale of shares. The airline has been grounded since July 1 over disputes with labor unions. This morning, it reached an agreement with its maintenance and management divisions that will allow it to lay off 1,300 workers and save nearly $100 million in the process. A deal with pilots still needs to be reached. In other news, AirAsia’s future was called into question after auditors Ernst & Young reported that the company’s liabilities exceeded assets by more than $428 million at the end of 2019. However, they noted that the recent uptick in demand was a positive development.
US Holiday Weekend Saw Packed Planes; European Industry Faces Turbulence
During the US holiday weekend, the TSA screened more than 700,000 travelers per day, representing the highest totals since mid-March. US Senator Jeff Merkley was on a full American Airlines flight on July 6 and his discomfort motivated him to draft a bill that would enforce the blocking of middle seats during the pandemic. In Europe, Lufthansa’s executive board has approved a second restructuring program that will cut board, leadership and admin staff, as well as limit new aircraft purchases and reduce fleets. The company estimates it has a personnel surplus of at least 22,000 employees. Meanwhile, Austrian Airlines has been approved for $169 million in state grants.
CARES Act Expiry Date Looms Large for US Aviation Industry
The CARES Act stipulates that airlines accepting financial aid must avoid involuntary layoffs and furloughs until September 30, effectively delaying an unavoidable contraction of the industry. Estimates suggest US fleets could collectively shrink over 20% by 2021. Airlines have stated that involuntary employment reductions are in the cards: Delta Air Lines notified its pilot union that it could furlough 2,500 pilots later this year, while United is aiming to reduce its management and administrative staff by 30% and JetBlue said 300 employees could be laid off after October 1. Unions are waiting to see what the landscape looks like come fall, and are lobbying for an extension of the CARES Act payroll support period in the meantime.
CAAC Punishes Airlines for Carrying Infected Passengers
In an effort to open the nation’s borders while maintaining low rates of infection, the Civil Aviation Administration of China (CAAC) has imposed a policy that will suspend routes of flights that carry passengers infected with COVID-19 and allow airlines to double the frequency of routes that have not carried infected passengers for three consecutive weeks. Today, US-Bangla Airlines became the first international airline to be reprimanded by China after five passengers on the airline’s Dhaka–Guangzhou flight tested positive for COVID-19. That route will be suspended for one week. China Southern Airlines and Sichuan Airlines have also faced domestic route suspensions.
DUBZ Implements COVID-19 Testing; Collinson and Swissport to Shrink UK Quarantine?
DUBZ, Dnata’s baggage technology and logistics company, is offering COVID-19 tests to customers in Dubai looking to check in remotely. Results are delivered within 24 to 48 hours. Travelers who test negative will receive a medical certificate. Meanwhile, a proposed “test on arrival” program by Collinson and Swissport would shorten the UK’s mandatory quarantine from 14 days to 5 hours, the time it takes a lab to screen the sample. The companies have written to Transport Secretary Grant Shapps to ask for the government’s support for the program. Currently, travelers from 59 countries are exempt from mandatory self-isolation in the UK.
Qatar Airways Makes Face Shields Mandatory for Passengers
Qatar Airways announced today that passengers are required to wear face shields, as well as masks, in flight. Travelers will be handed disposable shields at either the check-in desk or boarding gate, depending on the airport, and a smaller size will be provided for children. On board, passengers will receive a kit including a mask, gloves and hand sanitiser. Cabin crew will wear disposable protective gowns over their uniforms, in addition to safety glasses, gloves and a mask. Yesterday, the airline reinstated 11 destinations worldwide, including Los Angeles, Edinburgh and Berlin. By mid-July, the airline’s network will include 430 weekly flights to more than 65 destinations.
United Defends Decision to Stop Blocking Middle Seats
“When it comes to blocking middle seats, that’s a PR strategy, that’s not a safety strategy,” United chief communications officer Josh Earnest reportedly said on a conference call. Earnest argued that, even if the middle seat is blocked, passengers are still within six feet of each other. United and American Airlines recently decided to return to selling all available seats, while most other US airlines are limiting capacity due to COVID-19. United will add nearly 25,000 domestic and international flights in August, representing triple the amount of flights in June, but only 40% of flights compared to last August.
Delta Expands Work With Mayo Clinic, Brings Back Alcohol on Some Flights
“Mayo Clinic experts are helping … to assess safety procedures, consulting on how to improve safeguards in place to protect you and designing COVID-19 testing for our full workforce,” Delta Air Lines’ CEO Ed Bastian said in an e-mail update to customers. He continued on to say that employee testing has already begun and will soon be expanded. In the same e-mail, Bastian also reiterated Delta’s commitment to fighting racism. In other news, the carrier is reintroducing single-serve beer and wines starting today for first-class and Comfort+ passengers on flights covering over 500 miles.
Iberia, Star Alliance Enhance Safety Measures
Iberia has introduced new hygiene measures alongside its summer schedule to 50 short- and medium-haul European destinations. Passengers will be required to sign a declaration of health on check-in, before completing a health form and questionnaire in flight. Passengers are also being encouraged to check their hand luggage free of charge to avoid unnecessary movement around the cabin. Star Alliance’s 26 airline members have agreed to adopt the same health and safety measures, which include providing passengers with hygiene kits and requiring or recommending face masks. The alliance has also developed a Travel Information Hub on its website to provide information about the measures.
Aeroméxico Files for Chapter 11; Air France and Air Canada Make Cuts
Aeroméxico is the latest carrier to file for bankruptcy protection, giving it a “sustainable platform to succeed in an uncertain global economy,” according to CEO Andrés Conesa. It will use this time to obtain new financing and increase liquidity. Day-to-day operations will be unaffected; Aeroméxico’s goal is to double its domestic flights and quadruple international capacity in July compared to June figures. Meanwhile, Air France aims to present a plan to trade unions to cut around 6,500 jobs over the next two years, representing 15% of employees, and conduct a further 1,000 layoffs at its HOP! subsidiary. Air Canada announced the suspension of 30 regional routes and closure of eight stations at regional airports in Canada, citing weak demand.
Airbus Cuts 15,000 Staff Amid 40% Drop in Aircraft Demand
Citing the “gravest crisis [the] industry has ever experienced,” Airbus chief executive, Guillaume Faury announced a slew of layoffs that will affect 15,000 Airbus employees, mostly concentrated in France and Germany but affecting sites around the world. The move was spurred by the company’s estimate that aviation’s full recovery would not occur before 2023 and may take place as late as 2025. “We must ensure that we can sustain our enterprise and emerge from the crisis as a healthy, global aerospace leader, adjusting to the overwhelming challenges of our customers,” said Faury. Airbus, whose commercial aircraft business activity has dropped by close to 40% in recent months, will rely on voluntary departures, early retirement and long term partial unemployment schemes where appropriate.
CDC Director Criticizes American Airlines for Ending Seat Blocking Policy
During a Senate hearing, Centers for Disease Control and Prevention director Robert Redfield testified that the organization was “disappointed” with American Airlines’ decision to stop blocking the sale of middle seats, adding that the CDC doesn’t believe it sends the right message. AA is allowing passengers of full planes to switch flights if they choose, and believes that its multi-layered strategy to traveler safety – which includes required face coverings, enhanced cleaning procedures, and a pre-flight COVID-19 symptom checklist – is adequate. United Airlines is following a similar approach, while Delta Air Lines, Southwest, JetBlue and Alaska Airlines are all limiting capacity. Alaska announced it will issue “yellow cards” to passengers who refuse to wear a mask, putting them at risk of suspension of future travel.
EU Safe List Excludes Tourists From US; Global Entry Enrollment Reopening at LAX
Citizens from 14 countries will be allowed to visit the European continent according to a list revealed today. Starting July 1, travelers from Australia, Canada, Japan, Morocco, South Korea and nine other countries will be allowed entry. UK citizens are considered European residents until the end of the Brexit transition period on December 31 and are exempt from the travel restriction. China may make the safelist should its government allow European travelers entry in reciprocity. The US and other countries with high rates of infection, including Brazil and India, are not on the list. Meanwhile, US Customs and Border Protection revealed that the first Global Entry enrollment center to reopen will be at Los Angeles International Airport on July 6.
COVID-19 Testing Clinics Open at JFK, Frankfurt
The first US airport testing clinic for COVID-19 opened at JFK Terminal 4 courtesy of XpresSpa. The testing center will be able to perform up to 500 virus and antibody tests per day and is reserved exclusively for airline and airport employees. Meanwhile, Lufthansa is offering a walk-in COVID-19 testing solution to its customers flying to or from Frankfurt Airport. The airline partnered with genetic diagnostics company Centogene to set up a sampling center that could diagnose travelers and allow them to avoid quarantine upon entrance to countries that demand pretesting. Test results are digitally associated with boarding passes.
Delta Continues Seat Blocking While Others Drop the Measure
Delta Air Lines revealed that it would continue to block middle seats and limit capacity until September 30 in an effort to offer “the highest standards in safety and cleanliness.” But last month, IATA deemed it safe for airlines to return to maximum capacity and encouraged implementing a multi-layered safety strategy that begins at the airport. American Airlines will stop blocking seats beginning July 1, but will allow customers who wish to move to a more open flight to do so for free. Air Canada and WestJet will also begin filling planes to capacity on July 1. In a recent meeting between airline executives and Vice-President Mike Pence, the Trump administration would not commit to mandating and performing temperature checks for all air travelers.
Airlines Use Google Search Data to Plan Routes During Recovery
Google’s popularity as a travel search engine allows airlines to harness its data on consumer intent via the Google Flights Reporting Center. Now, Google is offering a new tool called Demand Explorer that provides a market-wide view of consumer intent based on general flight searches, and airlines like Air France and Lufthansa are adding it to their arsenal of market research tools. “Understanding demand across the globe at route-level allows us to make informed decisions about which routes we will restart first,” said Maximilian Vietmeier, manager of Online Strategy at Lufthansa Group. Julien Mallard, e-acquisition director at Air France, added that it allows the company’s revenue management, sales and network planning divisions to anticipate market recovery.
Slow Uptick in Travel Spells Trouble for Some Airlines, Opportunity For Others
Yesterday Sabre provided a snapshot of the progress being made in the recovery of travel. Gross bookings for June are down 85% year-over-year, compared with 90% during April and May. For some airlines, the damage is unmanageable. Chile-based ONE Airlines has been forced to shutter its business, and low-cost Thai carrier NokScoot is entering liquidation after six years of flying. On the positive side, Emirates is resuming service to Athens, Osaka, Rome and Tokyo in July, growing its current network to 48 cities. Next month will also see Easyjet operate around 500 flights per day, Volaris prepare for a 15% bump in capacity and Egyptair resume non-stop flights to 29 global destinations.
Passengers Who Fail Temperature Checks Will Receive Refunds: A4A
Airlines For America (A4A) member carriers will provide refunds to any traveler who fails the TSA’s temperature screening procedure. Last month, A4A voiced its support for temperature screening, as it helps protect the health of travelers and staff while restoring confidence in air travel.
WestJet, Qantas to Undergo Drastic Restructuring, Job Cuts
WestJet has outlined its restructuring plans, announcing that 3,333 jobs will be lost as a result. The airline is streamlining office and management staff, contracting out airport operations at domestic airports (except at Vancouver, Calgary, Edmonton and Toronto) and consolidating its call center activity in Alberta. When choosing airport service partners, WestJet said it will prioritize companies that can rehire affected staff. Qantas has unveiled a three-year COVID-19 recovery plan, which will see 6,000 employees – 20% of its workforce – laid off. As part of the plan, it will immediately retire its six Boeing 747 aircraft and ground its A380 fleet for at least three years.
Lufthansa Bailout Will Be Agreed ASAP; Air Canada, easyJet Secure New Funds
Lufthansa’s $10-billion government bailout looks set to go ahead after its biggest shareholder, Heinz Hermann Thiele, dropped his opposition to the plan and the carrier received approval from the European Union regarding its proposal. Lufthansa’s management team and cabin crew union have also reached an agreement on how to provide job security while saving $556 million. Cabin crew jobs will be protected until 2023, but staff will see the suspension of pay increases, a reduction in flight hours, reduced contributions to company pensions and unpaid leave. This week, Air Canada closed two financing transactions for net proceeds of CAD $1.23 billion, and easyJet has raised approximately $520 million by issuing new discounted shares.
New York Introduces Quarantines, IATA Outlines Alternatives
New York, New Jersey and Connecticut are imposing quarantine measures on those traveling from states where COVID-19 cases are still rising. New York’s state governor Andrew Cuomo has said visitors from Alabama, Arkansas, Arizona, Florida, North Carolina, South Carolina, Texas and Utah will be asked to self-isolate for 14 days on arrival. Anyone not self-isolating could face fines. The news comes as IATA is encouraging governments to avoid implementing quarantines. It suggests opting for a layered approach instead, including standardized health declarations, and testing travelers from high-risk countries for the virus.
Leisure Airlines, Swissport Make Staffing Cuts
Lufthansa Group is to close the German arm of SunExpress in a move that will result in 1,200 job losses. SunExpress will place all its focus on the Turkish tourism market, which it believes has growth potential. Another leisure airline, UK-based Jet2, is also planning cuts. The British Airline Pilots’ Association has announced that 102 of the airline’s pilots face redundancy, some of whom have only just moved there following the collapse of Thomas Cook. Ground handling operator Swissport, which has a presence at airports across the UK, is considering cutting up to 4,556 jobs – half of its workforce – as a result of the coronavirus pandemic. Swissport CEO Jason Holt told staff, “There is no escaping the fact that the industry is now smaller than it was, and it will remain so for some time to come.”
How COVID-19 is Affecting Carriers’ A380 Plans
Airlines are taking very different paths with their A380 fleets following the outbreak of COVID-19. Emirates has confirmed that the aircraft will be taking off again on July 15 to operate flights to London Heathrow and Paris Charles de Gaulle. Having announced plans to retire its A380 fleet back in May, Air France is set to embark on a farewell flight for the superjumbo this Friday, June 26. Finally, Lufthansa is retiring half of its 14 A380s, but will keep the other half grounded until 2022, when they will decide if there’s still a market for the type at its secondary Munich base. “In Frankfurt, the chance that we will again operate any A380 is close to zero. That’s all but decided,” said Klaus Froese, CEO of Lufthansa’s Frankfurt base.
Delta Will Resume Service to China, Qatar Piles on Routes
Delta Air Lines is “excited” to resume flights between Seattle and Shanghai-Pudong via Seoul-Incheon beginning Thursday after the US Department of Transportation began allowing US carriers to fly four weekly flights to China last week. During an HBO interview, Delta CEO Ed Bastian said that passengers who are not wearing a mask on board would not be forcibly removed from flights. He added that if the government legally mandated the wearing of PPE, Delta could more easily enforce the rule. Meanwhile, Qatar is forging ahead with its plan to remain the largest international carrier in the world during the coronavirus pandemic by increasing the frequency of service on many routes. Qatar is planning on resuming service to JFK, Boston Logan, Los Angeles and Washington Dulles international airports.
Spike in COVID-19 Cases Stalls Recovery in China, Australia
The World Health Organization reported the largest single-day increase in coronavirus cases on Sunday when it added over 183,000 to its tally, which now stands at over 8.9 million cases globally. In Beijing, a second wave that began on June 11 has spread to 249 people so far and put a dent in China’s aviation recovery. Cirium recorded a 0.5% decline in tracked scheduled passenger flights by Chinese operators for June 16 compared with June 9. Meanwhile, Qantas announced the cancellation of its international flights through October due to lingering government restrictions.
Dubai to Reopen on July 7, Etihad Launches Self-Assessment Tool
Dubai will welcome visitors from July 7, provided they register their details on the COVID-19 DXB app and have a certificate showing they tested negative for coronavirus in the four days before their departure, though tests can also take place at Dubai Airport. Tourists must also sign a health declaration form before boarding to say they will bear all costs of quarantine or treatment in Dubai. Etihad Airways has partnered with Medicus AI to develop a COVID-19 self-assessment tool based on WHO guidelines that consists of 22 questions. “As flying operations begin to resume globally, we want to empower our guests to make informed decisions on travel,” said Frank Meyer, Etihad Airways’ chief digital officer.
Carriers Continue Resuming Flights, SkyTeam Announces Hygiene Protocols
Virgin Atlantic has revealed plans to relaunch an additional 17 routes from August 1 onwards, including Tel Aviv, Miami, Lagos and San Francisco, after initially announcing that limited services to Hong Kong, Shanghai and the US would begin operations on July 20. KLM is also looking to have a busy August, with plans to operate 95% of its European destinations and 80% of its intercontinental destinations, marking a 15% and 5% respective increase on its planned services for July. As a member of SkyTeam, KLM is to abide by the alliance’s new SkyCare&Protect hygiene protocols, which currently consist of 15 measures from providing digital check-in services to making sure passengers can access cleaning wipes should they desire to clean their space onboard.
Face Mask Challenges Ongoing for US Carriers, JetBlue Expands Domestic Services
Soon after Airlines for America released a statement saying that US carriers will toughen up on passengers wearing face masks, a story is circulating about a political activist being removed from an American Airlines flight for not complying with its face mask policy. However, the FAA told a Senate Committee on Wednesday that it will not mandate the wearing of masks on commercial flights as it’s a public health issue, not an aviation safety issue. In a surprise move, JetBlue has announced plans to launch 30 new domestic routes between July 23 and October 1, including its first Mint services out of Newark Airport to San Francisco and Los Angeles.
LATAM Argentina, LEVEL Europe Cease Operations
LATAM Airlines Argentina is to cease operations due to “current market conditions, exacerbated by the impact of the COVID‐19 pandemic and the difficulty of building structural agreements with local industry actors,” it said in a statement. Last month, LATAM entered its Chile, Peru, Colombia, Ecuador and US subsidiaries into Chapter 11 bankruptcy reorganization while continuing operations. Its Brazilian affiliate wasn’t included in the filing due to ongoing discussions with the Brazilian federal government about financial support. It has also been announced that Vueling subsidiary LEVEL Europe is filing for insolvency. The Vienna-based carrier, which operated six Airbus A320s, is a separate entity to long-haul International Airlines Group (IAG) member LEVEL, which currently remains unaffected.
Lufthansa Bailout in Jeopardy of Not Passing, JetBlue Layoffs
Heinz Hermann Thiele, Lufthansa’s largest single shareholder, said he was not satisfied with Germany’s proposed $10.1-billion bailout, which would give the government a 20% stake in the company, as well as two seats on its supervisory board. Lufthansa fears that low attendance at its upcoming extraordinary general meeting may not yield enough votes in favor of the aid package, which may lead to insolvency. Meanwhile, a JetBlue memo obtained by Business Insider notes the company will lay off up to 300 employees at smaller airports and outsource positions at those facilities. In an email to employees, United Airlines announced it would enhance its voluntary exit packages as not enough staff have signed onto them. Under the new deal, flight attendants would receive a $1,500 health credit – to pay for health care, including prescriptions – for every year worked, up to $45,000.
Long Journeys Take a Back Seat to Short-Haul During Early Stages of Recovery
According to IATA’s analysis of forward bookings, the demand for long-haul flying is close to zero and there is measurable pessimism toward the prospect: just 45% of travelers are willing to return to airports within two months of travel restrictions lifting. “Forward bookings into the autumn period are down 82% on normal levels,” said IATA director general and CEO Alexandre de Juniac. However, short-haul flying is beginning to resume. Norwegian announced plans to reintroduce twelve aircraft into service next month on routes across Europe. Collins Aerospace developed a HEPA filter that can be retrofitted into short-haul Dash 8 turboprop aircraft, citing increased industry demand. Five airlines have already ordered the product.
US Carriers Crack Down on Face Mask Requirements, easyJet’s Aircraft Deferral
President and CEO of Airlines For America (A4A) Nicholas E. Calio said US carriers are “stepping up enforcement of face coverings and implementing substantial consequences for those who do not comply with the rules.” From June 18, any United Airlines passenger not complying with the airline’s face mask requirement will be placed on an internal travel restriction list for a period of time determined after a review of the incident. In Europe, easyJet has deferred the delivery of 24 aircraft to between 2025 and 2027, a decision that could see the airline incur an extra charge of $120 million due to the potential inflation of labor and material costs.
Fiji Airways Gets Travel Ready
Fiji Airways has launched its Travel Ready program to prepare for the resumption of international flights. It covers safeguarding measures devised together with health authorities and other stakeholders across every customer experience touchpoint. The program will see the introduction of medically qualified Customer Wellness Champions to maintain passenger safety and promote wellness throughout the journey. Passengers will undergo enhanced health screenings on arrival at the airport, including temperature checks, and will be required to wear face masks wherever practical. “We remain flexible and can ramp up measures as necessary or as required by the countries we operate to,” said Andre Viljoen, Fiji Airways’ managing director and CEO.
New Aircraft Risks in Unusual Travel Environment
The Commercial Aviation Safety Team, comprised of the FAA, unions and airline officials, issued a spate of warnings last month over “unusual factors” caused by the recent dip in traveler demand. Less weight has resulted in tail strikes, which occur when a jet hits its tail on the runway during takeoff or landing, as well as aircraft climbing too quickly, exceeding their maximum assigned altitudes and straying off course. On the ground, parked planes are at risk of fuel contamination, and industry employees are increasingly stressed about their job situation. The FAA says it has “increased the number of information-sharing meetings we’re holding with operators.”
United Mortgages Frequent Flyer Program, Qatar and Mitsubishi Aircraft Make Cuts
United Airlines is mortgaging its Mileage Plus frequent flyer program in exchange for a $5 billion loan which will be repaid in seven years. The company spoke positively about the terms of the deal, saying it would not give up control over its operations nor offer discounted prepaid miles to raise cash, which would hinder long-term cash flow. “Even in the best of times this is a facility we’ll have some interest in using,” said a United executive. Meanwhile, Mitsubishi Heavy Industries will cut more than half of its 2,000 employees and close all of its overseas bases except for the company’s flight test site in Washington, a move that could further delay the launch of the Mitsubishi SpaceJet. Qatar Airways announced it would cut the salaries of senior and junior pilots by 25% and 15%, respectively.
Contact Tracing, Health Checks Key to Air Travel’s Recovery
The US government is asking airlines to collect contact tracing information from incoming international passengers starting September 1 and has formed an interagency group to iron out the specifics of the plan. The CDC believes airlines should be responsible for collecting tracing data, while airline groups said this was unworkable and that they would rather the data be submitted directly to government officials via a website or app. Meanwhile, GE Aviation launched a blockchain-enabled application that allows airlines and airports to verify employees and passengers’ compliance to COVID-19 medical screening, and can track the disinfection of objects as well: Passengers would be able to view the cleaning history of the aircraft, for instance.
Lufthansa, Heathrow Announce Job Losses, flydubai Pilots on Unpaid Leave
Lufthansa is planning to cut 22,000 jobs, half of which will be in Germany, as a result of the reduced demand in air travel caused by COVID-19. The airline employs 135,000 people worldwide. Michael Niggemann, Lufthansa’s labor director, said, “Without a significant reduction in personnel costs …, we will miss the opportunity of a better restart … and risk that Lufthansa Group will emerge from the crisis significantly weakened.” London Heathrow Airport has already cut a third of its managerial roles, and due to the UK’s 14-day quarantine rules, has said it cannot rule out further job reductions. Flydubai has reportedly extended its period of reduced pay for staff indefinitely and placed numerous pilots on unpaid leave.
US Airlines Introduce Health Checklists, Anti-COVID-19 Tech Proliferates
The aviation industry is continuing to introduce measures and technology aimed at preventing the spread of COVID-19. United Airlines now requires passengers to complete a “Ready to Fly” checklist, which asks whether they have had COVID-19 symptoms or had close contact with someone who has COVID-19 in the past 14 days; and if they have been diagnosed with the virus in the past 21 days. Alaska Airlines will introduce a similar checklist on June 30. Delta Air Lines has announced a Global Cleanliness division, Abu Dhabi International Airport is deploying touchless elevator technology designed and manufactured by UAE startup Meta Touch, and Priority Pass owner Collinson has partnered with Grab on a digital ordering solution for food and beverage in airport lounges.
More Airlines Spell Out Cabin Safety Commitments as Number of Travelers Rises
The TSA had its busiest weekend since March, screening over one million travelers. Air traffic in Europe also increased with Eurocontrol reporting a 13% week-over-week bump. Alaska Airlines is the latest carrier to publicize updated sanitization policies: The airline put in place nearly 100 different measures that form its Next-Level Care plan. Face masks will be mandatory, flights will be capped at 65% capacity, aircraft will be cleaned using electrostatic sprayers and onboard service will be limited. Meanwhile WestJet and Eurowings have released videos explaining their safety measures. WestJet will implement temperature checks, seat distancing and aircraft fogging, while Eurowings is promoting distancing measures for passengers and crew.
Chinese Business Travelers Can Bypass Singapore Quarantine
Singapore is testing a “fast lane” for qualifying business and government travelers arriving from certain Chinese territories that will allow them to bypass a mandatory 14-day quarantine. The process involves obtaining itinerary approval from the government, undergoing COVID-19 tests before and after landing and an isolation period of 24-48 hours. They are barred from taking public transit and must install a contact tracing app on their phone. Singapore’s fast-lane concept may be applied to visitors from other countries in the future. In other news, Gatwick Airport is set to reopen its North Terminal after a two-month closure. The move comes as easyJet, Wizz Air, Ryanair, Belavia, Vueling and Blue Island resume services there.
Financial Aid Continues to Flow in France, Hong Kong, Austria
The French government is providing its local aerospace industry with $17 billion, a figure that includes $7.9 billion in loans previously set aside for Air France as well as support to keep Airbus and smaller companies competitive. Finance minister Bruno Le Maire said the sector is critical for the country’s sovereignty, jobs and economy: “We won’t let the world aeronautical market be shared between China and the United States.” Meanwhile, Hong Kong will provide a $5-billion bailout for Cathay Pacific in exchange for a 6% stake in the company and two “observer” seats on the board of governors. And Austria will back Lufthansa’s Austrian Airlines by providing it with $508 million in loans and grants, which should save the majority of the company’s 7,000 jobs.
IATA: Airlines Will Lose $84B in 2020
According to a financial outlook released by IATA, airlines are expected to lose $84.3 billion in 2020 for a net profit margin of -20.1%. Revenues will fall 50% to $419 billion from $838 billion in 2019. In 2021, losses are expected to be cut to $15.8 billion as revenues rise to $598 billion. Many US airlines have said in federal filings that they have given out more credits than usual, and Alaska Airlines told investors last week it has between $500 million and $600 million in outstanding travel credits, about 10 times above average. The company can’t predict when travelers will use the credits, leaving issues of cash burn and obtaining fresh revenue up in the air.
Airline Stocks Rebound; DOT Unblocks Chinese Airlines and Issues CARES Service Exemptions
Airlines that detailed plans for increased summer flying saw their share price jump. The NYSE Arca Airline Index, which tracks 16 airlines, mostly US-based, is up nearly 50% this week – its biggest weekly percentage gain ever. On June 5, the US reversed its decision to block Chinese commercial air carriers and will restrict them to two flights each into the US per week. The move comes after China eased its own foreign flight restrictions. The DOT also granted nearly all requests for exemption from CARES Act air service requirements at airports where load factors were low.
Legal Action Threatened Over UK Quarantine; Airbus May Sue Over Non-Deliveries
British Airways, easyJet and Ryanair have started legal proceedings against the UK government over today’s introduction of a mandatory 14-day quarantine for incoming travelers. Meanwhile, Airbus warned that it may sue airlines that are not taking delivery of new aircraft, although chief executive Guillaume Faury hopes to avoid this through compromise. Airlines continue to cut costs: United Airlines plans to close its Hong Kong, Tokyo and Frankfurt international flight attendant bases in October, and AirAsia Group will lay off 30% of its staff as founder Tony Fernandes considers selling a 10% stake in the airline to raise cash. Swissport Belgium, the Brussels Airport ground handler, declared bankruptcy seven days before flights were to resume, leaving the airport scrambling to find a short-term solution.
IAG May Challenge UK Quarantine Rule in Court
Outgoing IAG CEO Willie Walsh has called the UK government’s 14-day quarantine rule for incoming travelers irrational and disproportionate, adding there was a lack of consultation prior to the legislation being enacted. IAG is considering launching a legal challenge on the matter. Meanwhile, airlines around the world are putting restart plans in place. Virgin Atlantic will resume a handful of routes out of Heathrow starting July 20, Emirates and Etihad Airways will operate transit flights in the UAE now that the government has lifted its ban on such services, and Pegasus Airlines will be operating 39 domestic routes to 27 destinations in Turkey starting today. However, Lion Air has suspended all flights mere days after restarting service because many travelers did not complete the required COVID-19 documents.
First Companies Sign Up to EASA’s COVID-19 Protocol, Greece Relies on EASA Info as International Travel Resumes
Aegean Airlines, easyJet, Wizz Air and seven European airport operators are the first to sign up to a program that will monitor the implementation of EASA’s COVID-19 Aviation Health Safety Protocol jointly developed with the European Centre for Disease Prevention and Control (ECDC) and released on May 20. EASA has also updated its list of high-risk airports based on information from the World Health Organization. Once international travel resumes in Greece on June 15, the country will use the list to determine which passengers are tested for COVID-19 on arrival. Those from high-risk areas must stay in a hotel overnight to wait for their test results. If negative, they must self-isolate for a week at their chosen destination. If positive, they face a supervised 14-day quarantine in Athens.
China Eases Flight Restrictions on Foreign Carriers
The Civil Aviation Administration of China (CAAC) announced today that it will ease restrictions for around 95 foreign carriers, allowing weekly flights to one destination starting on June 8. This development follows yesterday’s news that the US Department of Transportation banned Chinese airlines from touching down in America from June 16. Prior to this, the CAAC in March said international airlines could fly no more capacity to China than they did on March 12, effectively banning US airlines since they weren’t operating flights to China at that time. In May, the CAAC denied applications from Delta Air Lines and United Airlines for authority to resume passenger flights between the countries.
Airlines Outline Plans as Travel Anxiety Decreases
Research from Skyscanner shows that levels of traveler unease are at their lowest point since the beginning of the coronavirus pandemic. Last month, American Airlines saw a 71% increase in customers compared to April levels. It is planning to fly 55% of its domestic schedule and nearly 20% of its international schedule in July as compared to the same period last year, and will begin reopening lounges. Delta Air Lines will continue to limit capacity and block middle seats until September 30 to encourage physical distancing. Meanwhile, Lufthansa said it will operate at 40% capacity by September, as it serves the majority of the destinations in its network with smaller aircraft.
Southwest Offers Buyout Packages, Greece Bans Qatar Travel
In a letter to employees, Southwest Airlines CEO Gary Kelly said the company was headed for a 30% capacity reduction in the fall and was “overstaffed.” To bring employee numbers down voluntarily, Southwest is offering a buyout package to 10-year veterans of the company consisting of one year’s pay and four years of flight privileges if they opt for early retirement. Pilots would get paid about two-thirds of their average salary for five years or until they hit 65, whichever comes first. In other news, Greece is suspending flights to and from Qatar until mid-June after a Qatar Airways flight yesterday brought 12 travelers to Athens who tested positive for COVID-19.
United, EasyJet, Frontier Poised for Bullish Return to Skies
United Airlines is planning to resume some international services next month, bringing total capacity up to 25% compared to the current 10%. Frontier is aiming to get 75% of its fleet back to service by July. CEO Barry Biffle said that the ramp-up will be fueled by people visiting friends and family and alluded to the advantageous position of low-cost carriers like Frontier that focus heavily on leisure markets. EasyJet is also hoping to benefit from a potentially busy summer season by restoring 50% of its route network in July and 75% in August. Italy is reopening its borders to European travelers, and Qatar Airways will resume services to Venice on July 15.
Aerolineas Argentinas Reduces Two-Thirds of Workforce; African Airlines in Crisis
A sustained lull in travel demand has caused a 97% decrease in revenue for Aerolineas Argentinas since the start of the coronavirus outbreak, prompting the company to furlough between 7,000 and 8,000 employees, which amounts to two-thirds of the airline’s workforce. The furlough is expected to last through June and July. Meanwhile, the African Airlines Association reports a 90% year-over-year passenger traffic reduction for the month of May and predicts a recovery period commencing in Q3. Lufthansa posted a first-quarter net loss of $2.35 billion and pledged a wide-ranging restructuring as it seeks to repay the bailout it recently received from the German government. Brussels Airlines will reduce its fleet by 30% and its workforce by one quarter, while Austrian Airlines’ fleet and personnel costs are to be cut by 20%.
Dozens of Airlines Resume Service, ICAO Council Adopts “Take Off” Guidelines
Data from OAG shows that global airline capacity this week is up by nearly 16%, but cancellations and capacity adjustments will remain the norm. ICAO’s Aviation Recovery Task Force released a report aimed at harmonizing COVID-19 related measures across the aviation industry. Recommendations include separated seating, reducing carry-on baggage and cabin touchpoints and designated lavatories based on seat assignment. Meanwhile, Lufthansa’s supervisory board has voted in approval of a $10-billion bailout which would give the German government a 20% stake in the company and two board seats, while obliging the airline to transfer up to 24 takeoff and landing slots at Frankfurt and Munich airports to rival carriers.
Superhero Masks, Airfare Refunds, COVID-19 Accelerator
Easyjet tapped Irish artist Will Sliney, known for contributing to Marvel comics, to design two face mask covers that young travelers will receive for free this summer. “I have used a combination of a lion animal character and a futuristic pilot to … bring out the inner superhero in all young flyers,” said Sliney. The airline has confirmed that some flights will resume starting June 15. Meanwhile, Thai Airways informed customers that it has been prohibited from issuing refunds as it undergoes debt rehabilitation proceedings. SimpliFlying is now curating market-ready technologies that address COVID-19 in an accelerator meant for airlines and airports looking for urgent solutions on everything from sanitization to contact tracing.
United, Emirates Confirm Job Losses
United Airlines is to cut 13 of its 67 officer-level jobs on October 1, the day after the government’s restrictions on layoffs for carriers receiving federal aid expires. The carrier said the 13 employees would include those working on the airline’s network, regional hubs and in community engagement. United is set to resume flights to 11 long-haul destinations, as well as 16 destinations in the Caribbean and Latin America, in July. Emirates has also confirmed some job losses, with president Tim Clark stating during the virtual Arabian Travel Market that “by the summer of next year, we will start to see an uptick, quite a large uptick, in demand for travel,” but it could take until 2023 or 2024 to return to normality.
Etihad Airways, Turkish Airlines Appoint Wellness Ambassadors and Hygiene Experts
Etihad Airways has launched a new program, Etihad Wellness, which sees a team of trained multilingual wellness ambassadors provide travel health information to passengers via e-mail 24/7. The service, which will soon be expanded to web chat, is in addition to an online guide to Etihad’s ongoing hygiene initiatives. Wellness ambassadors are also being introduced at Abu Dhabi International Airport and will be present on board flights once travel restrictions are lifted. As Turkish Airlines resumes domestic travel, it has introduced new procedures for passengers. Temperature checks will be conducted at the airport and an appointed hygiene expert will be present on board each flight .
ANA Takes on Fresh Debt, Airlines Resume Flights
All Nippon Airways Holdings has taken on $3.3 billion in debt financing courtesy of the Development Bank of Japan to be repaid over the long term. Meanwhile, Norway’s government is finding the COVID-19 crisis is lasting longer than anticipated and plans to extend a state guarantee for loans to airlines by four months until the end of October. Iberia will ramp up short- and medium-haul flights from July 1, with over 50 destinations in Spain and Europe set to be served by August. Austrian Airlines aims to operate to around 40 European destinations by the end of June, and long-haul services by July. TAP Air Portugal will resume its North American services on June 4.
PPE Options for Travelers, Employees Run the Gamut
Masks and sanitizing kits are a must-have for travelers and industry reps, as evidenced by the number of companies producing them. Gategroup company deSter is expanding its offering of hygienic products to address the new travel reality, manufacturing wipes, mouth masks and gels in-house along with health kits to create a “robust supply chain.” Faced with lowered demand, Luggage Point is diversifying its operations by launching a new product from its subsidiary business, Enviro-Point: a portable hygiene kit that includes face masks, gloves, disinfectant wipes and hand sanitizer. SPIRIANT is partnering with premium hygiene brands to expand its amenity kit lineup. And United Airlines has delivered 7,500 face masks to its workers in San Francisco that were upcycled from old uniforms.
American Airlines, easyJet Staff Face Job Cuts
American Airlines revealed plans to cut its management and support staff by 30% in a letter sent to employees on Wednesday. Following this, the carrier will offer frontline workers, including flight attendants and pilots, voluntary leave and early retirement options. Despite the challenges caused by COVID-19, CEO Doug Parker said American will not consider bankruptcy, claiming it shouldn’t view “its failure” as a financial tool. EasyJet has also outlined plans to downsize its workforce by 30%. “We will continue to remove cost and non-critical expenditure at every level. We will be launching an employee consultation over the coming days,” stated Johan Lundgren, easyJet’s CEO. Kuwait Airways is reportedly planning to lay off 1,500 expatriate employees, the equivalent of 25% of its workforce.
Boeing Laying Off Thousands of Workers, Airlines Continue to Face Obstacles to Recovery
Boeing will cut 6,770 US jobs this week, with around 4,000 more layoffs expected over the next few months due to low demand resulting from COVID-19. Around 5,000 employees have already accepted voluntary leave. Meanwhile, Virgin Atlantic will continue to ground flights until at least August as a result of the UK’s mandatory 14-day quarantine for all incoming travelers, which goes into effect June 8. Air France-KLM CEO Ben Smith announced the airline will be cutting 40% of French domestic flights by next year in accordance with the environmental conditions included in a $7.7-billion bailout provided by the French government.
BLR Goes Contactless, Domestic Flights Resume in Saudi Arabia
Bangalore International Airport Limited has transformed the traveling experience at Kempegowda International Airport in Bengaluru into a touchless and sanitary one. All travelers will undergo temperature screenings and use boarding pass scanning terminals, print their own luggage tags and wear a new mask before boarding, handed out by airline staff. Travelers can also enjoy contactless dining and retail through the use of ordering apps and digital payments. In other news, Saudi Arabia is easing domestic flying restrictions starting on Sunday by resuming 60 flights per day.
LATAM Seeks Bankruptcy Protection, Lufthansa Gets $10B in Government Aid
LATAM filed for Chapter 11 bankruptcy today, a move that provides the carrier with time to restructure and formulate a plan to pay creditors. Existing shareholders have committed $900 million in additional financing; the company never received emergency funds from governments of South American countries in which it operates, but talks are ongoing. Meanwhile, Lufthansa has accepted nearly $10 billion in bailout cash from the German government, which will save as many as 10,000 jobs. The government will receive a 20% stake in the company, which it intends to sell by the end of 2023. Germany is also injecting over $6 billion in non-voting capital. Ryanair condemned the state aid, likening it to special treatment that makes competition difficult.
US Travel Down 94% From Last Year, Government Allows Airlines to Halt Service
While the TSA screened the most travelers last week since the start of the COVID-19 pandemic, the uptick represents 6% of last year’s figures and US airlines are collectively burning through $10 billion per month. The US government has allowed 15 airlines to temporarily halt service to 75 airports experiencing low demand, provided at least one carrier was serving each of them. Meanwhile, Mitsubishi Aircraft announced it will cut hundreds of jobs in Washington state and shut down its US SpaceJet operations amid reported corporate losses for the last fiscal year.
Self Scanning Passports, Group Temperature Screening
To curb the hundreds of reported cases of coronavirus among TSA agents, the agency is introducing new screening procedures. Travelers must scan their own boarding passes and help minimize the number of personal belongings that agents must touch. This includes placing any food in clear plastic bags. Should an alarm be triggered, travelers will be directed back outside of security to remove the items and put their bag through the X-ray screening again themselves. Meanwhile, Heathrow Airport is testing a new temperature screening system in its immigration hall which uses cameras to detect the temperatures of multiple people at once. If proven practical and well-received, the equipment may be rolled out across the airport into departures, connections and staff security check areas.
Airlines Leveraging Customer Service 2.0 During COVID-19
During the peak of the COVID-19 crisis, airlines faced a barrage of customer service requests from travelers who had their plans upended. Carriers armed with automation tools in the form of chatbots, digital assistants and artificial intelligence were able to provide a higher standard of service even as requests soared, and saved on costs. WestJet’s virtual assistant, Juliet, for instance, dealt with a 1,671% increase in support tickets on Facebook Messenger and WhatsApp during the first weeks of the COVID-19 outbreak in North America. It successfully resolved 87% of cases. Similarly, AirAsia’s AVA chatbot and the team behind it were said to be handling ten times the normal number of queries: up to 500,000 per day in April.
LATAM, Volotea, Virgin Australia Increase Schedules
LATAM Airlines Group is planning a modest increase in international and domestic flying in the next two months. Currently operating at 5% capacity, June would see capacity rise to 9% and reach 18% in July. In response to the new economic reality that clients and their families are facing, customers will enjoy flexible flight options and savings of up to 20% on tickets. Meanwhile, Volotea announced 40 new domestic routes slated to begin operation on June 16. Founder and CEO Carlos Muñoz said that “flying protocols are becoming clearer” and is betting on the resurgence of domestic travel. Meanwhile, Italian airports are set to reopen on June 3. And Virgin Australia added 12 flights to its weekly schedule to serve more essential travelers and carry more freight in the nation.
Airlines Continue to Implement New, Branded Health and Safety Measures
Emirates has introduced new measures for employee and customer safety to coincide with the resumption of passenger flights to nine destinations. These include the provision of complimentary hygiene kits consisting of masks, gloves, antibacterial wipes and hand sanitizer. In a similar move, United Airlines has implemented new health and safety measures, branded United CleanPlus, in partnership with Clorox and academic medical center Cleveland Clinic, and will be providing passengers with United CleanPlus amenity kits. Qantas has dubbed its new measures the Fly Well program, which will be rolled out on June 12. Although not mandatory, masks will be given out to everyone on board. All three airlines are also implementing social distancing measures and touchless checkpoints. Meanwhile, JetBlue has decided to keep its middle seats blocked until at least July 6.
Restructuring and Management Shakeup at Norwegian Complete
Before the COVID-19 crisis, Norwegian was projected to deliver its strongest-ever financial results thanks to efforts undertaken in 2018 to return to profitability. Now the airline is undergoing another restructuring, which has resulted in a total of $1.28 billion of debt converted to equity. A state loan guarantee of $300 million was approved today as Norwegian CEO Jacob Schram announced a new management structure. “In order to run a profitable and sustainable company going forward, I will build the commercial part around two distinct entities with clear [profit and loss] responsibilities,” said Schram. The company will place a greater focus on employees, customers and efficient operation.
New Safety Campaigns From A4A, EASA
A new video released by Airlines For America (A4A) as part of its new public awareness campaign demonstrates the various measures currently being employed by member airlines to reduce the spread of COVID-19. The association is hoping to convey to travelers that airlines are “coming together” and exceeding CDC guidelines in many cases. Meanwhile, the European Aviation Safety Agency and the Centre for Disease Prevention and Control published their Health Safety Protocol for the industry in Europe. EU countries are expected to abide by the guidelines as travel picks up. The document recommends reopening airport shops and restaurants as long as physical distancing is in place, and suggests airlines limit onboard services such as duty-free sales and food and drink service.
American Carriers See Small Uptick in Ticket Sales
Projections released by American, Southwest, Delta and United airlines demonstrate hope for the near future as bookings outpace cancellations and load factors improve. American Airlines plans to reduce capacity cuts in June to 70%, down from 80% in April and May. Southwest’s operating revenues in May are expected to fall between 85 and 90 percent, less than anticipated. Delta will add about 100 flights next month. United will cut capacity by 75% in June, a 13% improvement over this month. The carrier is notifying passengers when their flight is going to be crowded in advance and, like American, is blocking seats “where possible.” Southwest will block about one-third of seats while Delta is capping flights at 60% capacity.
Screens Provide Protection in Airports, Aircraft
Delta Air Lines is manufacturing 150 plexiglass barriers per day, to be installed in all check-in lobbies, departure gates and Delta Sky Club counters at Delta’s US hub airports by June 1, and at all US locations in the weeks following. Meanwhile, Autostop Aviation is satisfying demand for protective screens affixed to aircraft seats. The company reports that it has completed trials on several aircraft and secured airline approvals. Autostop CEO Jon Robinson said that travelers “can now be assured that airlines are doing everything to ensure a protective customer experience.” The company will supply EASA permits to airlines looking to install the protective dividers.
Airlines Propose Capacity Increases for June
Global airline capacity increased by 6% this week, powered by an uptick in Indian domestic travel and a 120% increase of seats in South Asia. Yesterday, Delta Air Lines announced its plan to add around 100 more daily flights in June, which would result in a schedule 85% smaller than what it offered last year. Some transatlantic and transpacific routes on the schedule were added in anticipation of foreign governments’ relaxation of travel restrictions. Air France will also gradually increase service to and from French metropolitan areas and Europe next month. Thai Airways was forced to suspend international flying until June 30 due to government restrictions.
TSA’s Plan to Take Passenger Temperatures Raises Questions
On Friday, the Wall Street Journal reported that the TSA is ironing out a plan that will see agents check travelers’ temperatures in roughly a dozen airports. Some have questioned whether temperature screening falls under the TSA’s mandate. Airports and airlines also expressed concern over how to proceed with travelers who have high temperatures. The TSA downplayed the report, saying it had not made any firm decisions over new screening measures. The US lags behind other nations that have initiated temperature checks, including India, China, South Korea and Russia.
Thai Airways Waits on Acceptance of Rehab Plan, Delays Q1 Financial Results
Thailand’s government is planning to submit a rehabilitation plan for Thai Airways to a bankruptcy court tomorrow, marking a move away from a previous rescue plan which saw the carrier seeking a loan of $1.81 billion guaranteed by the government to help it through COVID-19. The carrier has been given an extension on the deadline to submit its first quarter financial results to the Stock Exchange of Thailand. It claims that, since more than half of its total revenue comes from foreign branch offices, it has been challenging to prepare the necessary accounting documents due to travel restrictions and closed borders.
Grim Q1 Earnings Reported by Airlines
Cathay Pacific transported an average of 500 passengers per day in April as it operated a skeleton schedule with 97% capacity cuts. The company reported a net loss of $580 million for Q1 and predicted that there would be no meaningful recovery to its business for an extended period. Korean Air reported a $46 million Q1 loss, a figure it says was mitigated by lower operating costs. It expects its cargo business to remain profitable through Q2. Singapore Airlines expressed a similar sentiment as it reported its first annual net loss in its 48-year history, to the tune of $148 million. In the UAE, Air Arabia revealed its first quarter profits declined 45%, but the company was still in the black by $19 million.
Aviation Companies Step Up Cleanliness Initiatives
With traveler confidence largely hinging on the assurance of cleanliness, a number of companies are implementing new strategies aimed at fending off coronavirus. Yesterday, Boeing appointed 30-year company veteran Mike Delaney to lead its Confident Travel Initiative, which will work with partners and experts to “enhance aircraft cleanliness procedures and identify other areas to further reduce the risk of airborne illness transmission.” Long Island MacArthur Airport installed continuous pathogen reduction technology, which emits trace levels of hydrogen peroxide to kill airborne pathogens in the terminal. Smiths Detection has launched an ultraviolet light kit to destroy microorganisms in baggage trays. AirAsia is installing contactless payment systems and touchless kiosks at airports it serves.
Russian Government to Provide Airline Aid, US Relaxes CARES Act
The Russian government has issued an order to distribute over $315 million in state funds to airlines suffering losses as a result of COVID-19. The Aeroflot Group, which is 51.2% state-owned and includes Aeroflot, Aurora, Pobeda and Rossiya, is set to receive a third of the financial aid, while the rest will go to other major carriers including the S7 Group, UTair and Ural Airlines. In the US, the DOT is relaxing airlines’ obligations under the CARES Act. Airlines will be allowed to exempt 5% of the locations in their service obligation list or five locations, whichever is greater, providing they submit their requests to DOT by May 18.
Azul, Qatar Plan Aircraft Deferrals
Brazil-based Azul Linhas Aéreas has delayed the delivery of 59 Embraer aircraft until 2024 or later. The aircraft, which have a total list price of $4.16 billion, were due to be received by the airline between 2020 and 2023. “With this support, we are able to ensure that we have the liquidity and the resources required to optimize the airline for the future,” said Azul CEO John Rodgerson, in a press release. Qatar Airways is in talks with Airbus and Boeing to defer aircraft orders for “several years,” with CEO Akbar Al Baker also revealing plans to reduce the carrier’s fleet by 25%.
More Airlines Plan to Resume Flights
More airlines are planning to resume flights as the toughest lockdown measures begin to be eased around the globe and borders reopen. Emirates will operate scheduled services to nine international destinations from May 21. It will also offer connections in Dubai for customers traveling between the UK and Australia. Flydubai is now offering bookings for journeys after June 5 to destinations including Bahrain, Georgia, Jordan and Oman. Korean Air is also set to expand its international operations in June to 146 flights per week on 32 routes, compared with 55 flights per week on 13 routes in May.
US Senators Introduce Act to Force Airlines to Issue Refunds
The US Department of Transportation fielded over 25,000 complaints in April – more than 15 times above average. The majority of issues were related to airline refunds, prompting the DOT to reiterate the need for carriers to issue cash refunds to travelers when flights are canceled. Refund polices of tickets already sold cannot be changed. Travelers with non-refundable tickets looking to modify or cancel their trip due to health concerns are not eligible for refunds, the DOT noted. The Cash Refunds for Coronavirus Cancellations Act is being introduced today. If it passes, airlines would be required to provide refunds for canceled flights, as well as to customers who cancel bookings.
Europe Plans New Air Travel Protocol
Europe’s aviation safety authority will work alongside the European Centre for Disease Prevention and Control to set a new health and safety protocol for air travel, which should include measures on strengthening ventilation and air filtering, new cabin procedures and more. The European Commission also noted that airports and airlines are “not qualified” to provide passenger health screening services. Meanwhile, Spain is enforcing a 14-day quarantine for incoming overseas travelers beginning May 15. Brussels Airlines announced plans to cut 25% of staff and 16 aircraft in its fleet to help mitigate losses of over $1 million per day. TUI Group also revealed a 30% cost-cutting program that will make the company more efficient.
Allegiant Air Believes It Will Benefit First From Travel Rebound
Despite reporting a $33 million loss in Q1 during an earnings call yesterday, Allegiant Air CEO Maury Gallagher struck a hopeful tone that the long-term picture would be rosier. He noted that the airline has enough liquidity to withstand the crisis, and that Allegiant’s low-cost product would be a perfect fit for domestic travelers exiting lockdown and eager to save money. “Historically, coming out of downturns, leisure customers have been the first to return,” Gallagher said. The company also plans on purchasing used aircraft from recently-bankrupt airlines and retiring 10–15 Airbus jets in its fleet while recycling their parts.
Ryanair Plans Resurgence in July
Ryanair will instill a 40% capacity bump starting July 1, contingent on government restrictions on intra-European flights being lifted and safety measures being implemented at airports it serves. The plan, which involves operating 1,000 flights per day, will cover 90% of its geographic network. Its new health policies include mandatory online check-in, face masks for passengers and crew, cashless in-flight sales and use of the lavatory upon request to eliminate lineups. The airline is planning to cut 3,000 staff members. Meanwhile, Etihad Airways announced plans to reinstate its Melbourne–London link starting Friday, with return service commencing a week later. WestJet confirmed it will only operate domestic routes until at least the last week in June.
IndiGo Eyes Virgin Australia, Branson Raises Cash
IndiGo’s Rahul Bhatia is the latest party interested in a takeover of Virgin Australia, according to a source familiar with the matter. IndiGo is a champion of the ultra low-cost carrier model and Bhatia would presumably run the Australian airline using the same approach, but the bid is being prepared by Bhatia’s private holding company InterGlobe Enterprises and IndiGo is denying any direct involvement. The full list of non-binding takeover offers will be revealed on Friday. Virgin Group founder Richard Branson is fighting to ensure his other businesses weather the COVID-19 storm by selling as much as $500 million worth of stakes in Virgin Galactic. The bulk of liquidity will go towards Virgin Atlantic, currently in talks with lenders to secure its future. The airline announced its summer 2021 schedule today.
COVID-19 App as Travel E-Pass in India, TSA and SIA Mandate Masks
The Indian government may require air travelers to prove their health status via a mobile app called Aarogya Setu. Prime Minister Narendra Modi called the software “an essential tool in the fight against COVID-19,” referencing the success of contact tracing apps in Singapore and South Korea. Singapore Airlines has joined the increasingly large chorus of carriers, including all Airlines for America (A4A) members, in mandating face masks for passengers. A4A also endorsed traveler temperature screening, and the TSA is now requiring that employees wear facial protection while screening. In the UK, Prime Minister Boris Johnson promised to impose a 14-day quarantine period for incoming travelers “soon.” Airlines UK said the move would “effectively kill” international travel for the country and cause damage to the economy.
Avianca and 39 Subsidiaries File for Chapter 11 Bankruptcy
Avianca Holdings, owner of the second-largest airline in Latin America, filed for Chapter 11 bankruptcy protection today as a result of the “unforeseeable impact” of the coronavirus pandemic. The company intends on successfully emerging from court-supervised reorganization and will seek liquidity from the Government of Colombia and other key markets. According to CEO Anko van der Werff, Avianca can rehire furloughed employees “when government-mandated air travel restrictions are lifted.” In other news, Qantas is delaying the delivery of long-haul jets until the travel market regains clarity. It will defer its last three Boeing 787-9 aircraft and an Airbus A321neo. Qantas has not kept middle seats empty on repatriation missions. CEO Alan Joyce would like to see the same policy applied to normal flights to keep airfare low.
Frontier Changes Policy Amid Backlash, Airlines Looking to Raise Funds
Frontier revised its COVID-19 policies to include temperature screenings for all passengers, while canceling its paid vacant middle seat option after facing backlash from travelers and Congress. The airline will now block middle seats from being sold by default. Airlines around the world are actively shuffling their operations to adapt to lower demand for travel. The Argentinian government has fast-tracked the merger of Aerolineas Argentinas and Austral in order to keep the former flag carrier afloat during “several critical months.” The Italian government is providing $3.26 billion in capital for the newly nationalized Alitalia. Facing a liquidity crisis, Korean Air is examining whether it can sell its three core businesses: its in-flight meal service, mileage program and aircraft maintenance division.
IAG, Lufthansa Announce Tentative Plans to Increase Service
British Airways is exploring the possibility of operating at 50% capacity starting in July, when other IAG-owned airlines intend to operate 1,000 flights per day. IAG CEO Willie Walsh, who delayed his retirement until September 24, believes that a return to full capacity will only transpire in 2023. Iberia chief executive Luis Gallego will replace Walsh. Lufthansa Group, which is in the process of negotiating a $9.78-billion bailout with the German government, will operate 80 additional aircraft in June to respond to growing demand. Spirit Airlines and jetBlue are seeing small signs of improvement as well, noting that bookings for May have outpaced those in April.
JetBlue Delays Launch of London Routes
JetBlue CEO Robin Hayes announced yesterday that the airline will be postponing the launch of its London routes, citing a “timing impact” amidst the coronavirus outbreak. “We’re probably going a little later than we intended. But the market will recover at some point and the need for us to enter that market and bring more competition is still as relevant in the future as it was in the past,” he said, on the carrier’s Q1 earnings call. Hayes added that the next two to three years will be focused on repairing the airline’s balance sheet.
Indonesia to Resume Domestic Flights, Malaysia Airports Updates Its Procedures
New regulations in Indonesia allow certain people to travel despite an ongoing ban. Those exempted from the ban include state officials, private sector workers, employees of certain state-owned enterprises, repatriated Indonesian nationals, those needing emergency medical care and family of a deceased individual. Prior to departure, travelers must provide a return ticket and a negative COVID-19 test result or health documents from a hospital or clinic. As such, several Indonesian airlines are now resuming domestic services, including Garuda Indonesia, Lion Air, Wings Air and Batik Air. Meanwhile, Malaysia Airports have said passengers will not be allowed access to terminals without a face mask and that they should arrive three hours early to accommodate new procedures.
IAG, JetBlue Report Significant Q1 Losses Due to COVID-19
International Airlines Group (IAG) has reported operating losses of $577 million for the first quarter of 2020, most of which occurred in the last two weeks of March, said CEO Willie Walsh. He warned that results for the current quarter, during which capacity has decreased by 94%, will see “significantly worse” losses. IAG does not predict a “meaningful return” of passengers until July, but is expecting to carry just 50% of passengers in 2020 compared to 2019. As such, it will defer delivery of 68 aircraft. JetBlue, which has seen a similar decrease in capacity, has posted a $268-million quarterly loss, and revised its order book with Airbus to save $1.1 billion in aircraft spending through 2022.
Cons Outweigh Pros of Blocking Middle Seats, IATA Says
Considering the minimal risk of viral transmission aboard aircraft, IATA has spoken out against leaving middle seats vacant. IATA director general and CEO Alexandre de Juniac is advocating for a layered approach to biosecurity that “keeps the cost of flying affordable.” Face masks for passengers and crew, temperature screenings, distancing during boarding and deplaning and increased cleaning are measures that “reduce the already low risk of onboard transmission” without reducing load factors well below the break-even level and thereby increasing fares by as much as 54%. Meanwhile, IATA is appealing for $10 billion in assistance for the African travel and tourism sector. De Juniac noted that the COVID-19 crisis “could take Africa’s development back a decade or more.”
United Will Cut Staff After CARES Period, GE to Lay Off 13K Employees
According to an internal memo, United Airlines will lay off 30% of management staff in October. United is restricted from firing employees until September 30 under the terms of the CARES Act, but with costs outweighing revenue by billions of dollars, the company must take “strong and decisive action” to stay afloat in the long term, said Kate Gebo, the airline’s executive vice-president for Human Resources and Labor Relations. Up to 30% of United’s pilots could also be displaced, according to a separate memo. The airline also reduced the maximum value of flight credits offered to travelers who voluntarily give up seats on overbooked flights from $10,000 to $2,500. Meanwhile, as part of a $3 billion cash savings plan, GE Aviation will fire 25% of its workforce representing up to 13,000 individuals.
Qatar Airways to Ramp Up Service by End of Month, Cut Jobs
Qatar Airways has maintained flights to at least 30 destinations during the COVID-19 crisis and now feels confident to begin planning the gradual reintroduction of additional service. The company aims to have 80 destinations in its schedule by the end of June, including 23 in Europe, four in the Americas, 20 in the Middle East and Africa and 33 in Asia Pacific. By the end of May, the airline plans to grow its network back to over 50 destinations, resuming services to Manila, Amman and Nairobi. The carrier will not be immune to staff cuts: In an internal memo, CEO Akbar Al Baker revealed that the company would need to seek government aid and “make a substantial number of jobs redundant – inclusive of cabin crew.”
Heathrow Will Share Results of Bio-Screening Trials, Iberia to Test Staff for COVID-19
Heathrow Airport will begin testing UV sanitizing, contactless security procedures and equipment, and camera-assisted temperature screening with the aim of setting an international standard. The airport’s operator is looking to examine both the effectiveness of the solutions and passenger sentiments toward them, and will share their results with other airports in order to reach a consensus on what protective measures are required once travel restrictions are eased. In order to protect its employees from COVID-19, Iberia will administer a voluntary blood test to detect antibodies in employees returning to work after a furlough. Those returning to work from sick leave must be tested for coronavirus. The company also ramped up disinfection procedures, issued PPE to employees and is encouraging remote working.
Airlines Compete to Earn Traveler Confidence
A survey of over 2,000 Americans reveals that 75% feel uncomfortable flying on an airplane, while over a third of respondents want mandatory masks, distancing measures and temperature screening during their journey. Airlines and airports are listening. Frontier Airlines is offering a $39 seating upgrade that guarantees an empty middle seat. Air Canada will introduce an initiative called CleanCare+, which encompasses mandatory temperature checks, more personal space in economy class and other sanitization protocols. Many airlines are now mandating face masks for passengers, with KLM being one of the more recent to do so. Pittsburgh International Airport announced the implementation of autonomous cleaning robots, while United Airlines is exploring touchless luggage kiosks.
Coronavirus Claims Virgin Atlantic’s LGW Operations and Qantas’ Project Sunrise
Virgin Atlantic made an announcement this morning that pilots’ union Balpa described as a “bombshell”: The airline will end its operations at Gatwick Airport and cut more than 3,000 jobs in the UK. The airline said that COVID-19 is the most “devastating” challenge it has ever faced, and is applying for emergency government loans. Balpa general secretary Brian Strutton noted that the union “will be challenging Virgin very hard to justify this.” British Airways, Gatwick’s second-biggest carrier, has indicated that it also might not restart its operations there. Meanwhile, Qantas has halted Project Sunrise, thereby pausing its order of 12 Airbus A350-1000 jets that were to fly 18–20-hour direct flights starting in 2023.
Buffett Sells Billions Worth of US Airline Shares
After disposing of airline investments worth billions of dollars, Berkshire Hathaway chairperson Warren Buffett noted that the CEOs of United, Delta, American and Southwest airlines were “excellent” and not to blame for their financial downturn. While uncertainty reigns in the industry, other private equity firms have shown confidence in online travel companies. Tough times continue for Boeing as United Airlines informed the airframer it will be taking less than half of the new 737 MAX jets it originally ordered. Rolls-Royce, in turn, is seeing less demand for its engines and announced plans to cut 8,000 jobs in the UK, or 35% of its workforce in that country. According to the South African government, the country’s flag carrier is “dead” and will be replaced by a new “financially viable and competitive” airline.
VIE Offers COVID-19 Test, Heathrow Eliminates Another Terminal
Travelers entering Vienna are required to present a negative COVID-19 test result from a maximum of four days earlier in order to avoid 14 days of government-mandated self-isolation. Vienna International Airport is now offering onsite tests that can provide a diagnosis and medical certificate in three hours or less for a cost of around $200. Meanwhile, Heathrow Airport, which is using only one runway, has closed Terminal 4 after shutting down Terminal 3 in late April. Southwest and Japan Airlines are the latest to introduce new health policies, including blocking middle seats in aircraft and requiring passengers to wear face masks.
More Airlines Receive Cash, Air France Bailout Has Green Strings Attached
The French government set out a series of environmental expectations for Air France in exchange for providing a multibillion-dollar loan. The carrier must halve its overall carbon-dioxide emissions per passenger kilometer by 2030 compared with 2005 levels. For domestic flights, this must be accomplished by 2024. Another condition orders a reduction of service for flights of less than two-and-a-half hours when a viable rail alternative is present. Meanwhile, Swiss International Air Lines and Edelweiss will receive $1.56 billion in government loans, Iberia and Vueling have secured financing for $823 million and $285 million respectively, and Hawaiian Airlines is in line for $654 million in CARES funding.
Delta Extends Face Covering Requirement to All Customers
Following an announcement requiring employees to wear face masks, Delta Air Lines is now asking all customers to take this protective measure, starting May 4. The move is in line with CDC best practice guidelines. The company is also implementing employee temperature checks, enhanced cleaning measures and electrostatic spraying procedures to disinfect employee work and break areas. Frontier and Alaska airlines are also asking all customers to wear face masks. The carriers blocked seats in their aircraft and have stepped up cleaning efforts in the cabin. APEX has revised its list of COVID-19 best practices and is advising everyone to wear face coverings during air travel.
Boeing Scales Back Production Rates, Confirms Layoffs for 10% of Workforce
In a letter to employees, Boeing president and CEO David Calhoun revealed that the production rate for its 787 aircraft will be reduced to 10 per month in 2020 and to seven per month by 2022, with the combined 777/777X production rate also dropping to three per month in 2021. Production rates for its 767 and 747 aircraft will remain unchanged. As a result, Calhoun said Boeing will reduce its workforce by approximately 10 percent through a combination of voluntary and involuntary layoffs and natural turnover, with its commercial airplane and service businesses set to be some of the hardest hit. Despite this, the OEM reported a revenue of $16.9 billion for Q1 of 2020, and Calhoun predicts 737 MAX deliveries will resume in the third quarter of this year.
PAC Confirms Staff Furloughs, JetSuite Files for Chapter 11 Bankruptcy Protection
Panasonic Avionics has confirmed it has taken measures including “workforce reductions and furloughs” as well as “temporary reduced work schedules” for remaining employees. Private jet charter company JetSuite has filed for Chapter 11 bankruptcy protection in the US, although its commercial sister company, JSX, which uses reconfigured regional jets for scheduled flights from private aviation terminals, continues to operate. Having received approval for CARES Act funding, JSX is not under bankruptcy protection. IATA reported that global air traffic figures for March were down by over 50% year-on-year, with director general Alexandre de Juniac explaining, “Demand was at the same level it was in 2006 but we have the fleets and employees for double that.”
BA May Cut 12,000 Staff, Lufthansa Group Mulls Bankruptcy
As part of a restructuring program that is set to last until travel demand increases, British Airways is proposing 12,000 layoffs. In a letter to employees, CEO Alex Cruz rationalized the decision by noting that a government bailout was not on the table and short-term loans “will not address the longer-term challenges” faced by the company. Meanwhile, Lufthansa Group is reportedly considering bankruptcy as an alternative to state funding. Yesterday, reports surfaced that Germany was set to dole out $9.76 billion to the airline group. Creditor protection would allow the company to restructure without sacrificing equity, board seats and other provisos to the government.
AirAsia Unveils Protective Suits for Cabin Crew
AirAsia cabin crew will wear new hooded uniforms consisting of additional protective gear including a visor and a medical mask. Designed by Filipino fashion designer Puey Quinones, the PPE was launched last Friday on a recovery flight from Bangkok to Manila. The airline resumed its scheduled domestic flights today in Malaysia. Meanwhile, the National Air Carrier Association in the US proposed a plan outlining the steps needed to ensure that the airline industry can restore public confidence and be a safe catalyst for economic recovery. Called SAFETY, the plan calls for sustained access to economically viable travel, increased screening and airline flexibility.
Hong Kong Airport Introduces Suite of Disinfection Tech
Airport Authority Hong Kong is protecting travelers and staff from COVID-19 with the help of full-body disinfection machines, antimicrobial coatings and cleaning robots. The enclosed disinfection booth, called CLeanTech, is used by staff who take part in public health and quarantine duties. The 40-second sanitizing procedure consists of photocatalysts, nano needles and sanitising spray. Staff are also spraying an invisible coating on all high-touch surfaces, which destroys germs, bacteria and viruses. Finally, autonomous cleaning robots equipped with ultraviolet light sterilizers and air sterilizers are being deployed around-the-clock in restrooms and main areas in the terminal.
JetBlue, American Implement Mask Rules
Yesterday, JetBlue announced that all passengers will be required to wear face masks starting May 4. The policy, which JetBlue president and chief operating officer Joanna Geraghty called “the new flying etiquette,” is modeled after CDC guidelines that indicate all individuals should wear a face covering in public to help slow the spread of COVID-19. American Airlines said that its flight attendants would be required to wear face masks as of May 1. The airline will also implement deep-cleaning measures on all flights instead of just on longer stops, and will distribute sanitizing wipes or gels and face masks to customers.
Slight Uptick in Travel Comes as Airline Revenue Evaporates
Insights from ForwardKeys show that in the year leading up to April 19, air travel fell to exactly half of what it was last year during the same period. However, data from OAG shows that global airline capacity this week is up 2% compared to last week, prompting OAG analyst John Grant to note the industry “may have reached the bottom.” Chinese carriers are adding capacity ahead of a holiday this week, and Wizz Air announced it plans to restart flights from its bases in Timisoara, Romania, and London Luton on May 1. Other carriers are facing a bleaker outlook. ANA Holdings’ operating profit for the past 12 months, ending March 31, fell 63%, SAS is looking into cutting up to 5,000 full-time positions and Aeroméxico is seeking government aid.
Heathrow Director Speaks Out on COVID-19 Impact
After a record year, Heathrow Airport is facing a difficult business landscape. According to Amanda Owen, the airport’s health and safety director, travel restrictions have caused passenger numbers to drop by 90% and furloughs are widespread. The airport is taking this time to sew the seeds of innovation and prepare for an eventual return to normalcy. Heathrow is investing in a next-generation security program, studying ways to implement health screening procedures and social distancing, facilitating repatriation flights and upscaling cargo operations, which have increased by 666%.
Airbus Furloughs 3,200, Air France-KLM Gets Government Bailout
Airbus announced it will furlough half of the workforce at its factory in Broughton, UK. Airbus CEO Guillaume Faury warned the company’s 135,000 employees to brace for further job cuts. Air France will receive $7.6 billion in loans from the French government, with conditions on profitability and the implementation of environmentally sustainable policies. The Dutch government is offering as much as $4.34 billion to KLM with strings attached, as well. Meanwhile, Norwegian Air is aiming to save cash by asking creditors to forgo debt in exchange for shares. The airline will also reduce its fleet by one-third and maintain a minimal schedule of domestic routes for the rest of the year.
Boeing Backs Out of Embraer Tie-Up
Embraer is in damage-control mode after Boeing announced it was taking a $4.2-billion deal to buy 80% of Embraer’s commercial aircraft division off the table. The proposal was two years in the making. Boeing claims that negotiations fell through, but Embraer is seeking reparations from what it calls “a systematic pattern of delay and repeated violations of the master transaction agreement” on Boeing’s part. Embraer’s immediate aim is to reassure investors that it can manage on its own in the interim, citing cost-cutting measures and solid liquidity.
US Government May Buy Discounted Airline Tickets in Bulk
President Donald Trump suggested that “buying four of five years’ worth of tickets” for government travel would be beneficial for all parties involved: Airlines would receive a much-needed cash infusion while the government would enjoy discounted prices. On Friday, Delta Air Lines became the first carrier to receive approval from the FAA to store cargo, including PPE and medical equipment, in overhead bins. Delta CEO Ed Bastian expressed support for requiring immunity passports if it increases traveler confidence, but the WHO said this morning that no study has correlated the presence of COVID-19 antibodies with subsequent immunity.
Indonesian Travel Ban Forces Garuda to Further Cut Costs
Indonesia banned all domestic and international air travel until June 1, placing a bigger strain on the country’s airlines. Flag carrier Garuda Indonesia expects to see a 33% decline in its total revenue for the first quarter of 2020 and says it has begun negotiations with lessors to delay payment on leased aircraft and to extend their lease periods. It will also seek loans and begin cost cutting and capacity reductions. Meanwhile, Korean Air will receive a $971 million cash infusion from two state-owned banks. The airline said 70% or more of its employees will take a six-month leave of absence. Airbus did not deliver its proposal for an 84-acre MRO campus at Thailand’s U-Tapao airport, effectively backing out of a joint venture it was to embark on with Thai Airways, citing the impact of COVID-19.
Lufthansa in Need of Financing, United Plans Distancing Measures
Ongoing contract liabilities and refunds of canceled tickets have left Lufthansa Group in urgent need of cash. The company’s revenue dropped 47% in March, and it expects to post a first-quarter loss of $1.3 billion. More severe losses are predicted to follow, and the management board is seeking government aid. United Airlines will restrict adjacent seat selection, board fewer customers at a time and will require flight attendants to wear masks in addition to practicing social distancing. Once the coronavirus lessens its grip on Australia and New Zealand, the countries plan on opening their borders to create a trans-Tasman bubble that may also include Singapore.
SimpliFlying Report Predicts Post-Coronavirus Passenger Experience
In a new report called The Rise of Sanitised Travel, SimpliFlying CEO Shashank Nigam said he believes that the scale of COVID-19’s impact on traveler confidence will be on par with that of 9/11, and outlines 70 elements of the air travel experience that could be affected by the virus. The report predicts that all luggage will be disinfected and passengers will have their temperatures taken prior to boarding. It also suggests the end of the in-flight magazine and that janitors will be introduced to continually disinfect the cabin. Low-cost carriers, which base their business models on quick turn times, will face a challenge as enhanced cleaning regimes become de rigueur.
Delta Won’t Bail Out Virgin Atlantic; Virgin Australia Looks to Restructure ASAP
Delta Air Lines’ CEO Ed Bastian has said it will not be investing further funds in Virgin Atlantic, in which it owns a 49% stake. In an interview with CNBC, Bastian stated, “If they are required to go through an administration process in the UK, I’m confident they could re-emerge.” However, Bastian also said Delta had no plans to reduce or sell its stake in the carrier. Down under, Deloitte said it plans to sign contracts with the new owners of Virgin Australia by mid-June and revealed that there are currently ten interested buyers, including Richard Branson’s Virgin Group.
EU Commission to Release Air Travel Guidelines in Mid-May
Speaking yesterday, European transport commissioner Adina Vălean said that the European Commission will release guidelines regarding the reopening of air travel in mid-May. There are no specifics as yet, but Vălean suggested there will be rules pertaining to social distancing, sanitization and the wearing of protective equipment both in airports and on aircraft. On the same day, Ryanair CEO Michael O’Leary denounced the idea of leaving the middle seat on aircraft free, calling it “idiotic.” Last week, the FAA said it planned to update its guidelines together with the US Centers for Disease Control and Prevention, but that the guidelines will not be mandated.
Airlines Contend With Stark Travel Realities
Delta Air Lines reported a pre-tax loss of $607 million for the first quarter of 2020. Air Canada has suspended all flights to the US in lockstep with a 30-day extension of border restrictions between Canada and the US. The South African government is deferring to unions to come up with a solution to avoid the collapse of South African Airways, suggesting furloughs and employee benefit sacrifices. Austrian Airlines plans to retire three of its Boeing 767 aircraft and all seven of its Airbus A319s by 2022 as part of a post-coronavirus action plan. Singapore Airlines announced its 96% capacity cut will extend into May. Due to a complete erosion of revenue, Air Mauritius entered voluntary administration today.
Gogo Meets COVID-19 Air Traffic Dip With Furloughs, Pay Cuts and CARES Application
As of May 4, Gogo will furlough approximately 60% of its workforce and reduce salaries for most other employees in an effort to offset the impact of COVID-19 on its business. Reduced traffic in Gogo’s commercial airline segments – which account for the majority of its revenue – is projected to result in a 60-70% reduction in sales for the month of April, compared to the previous year. Gogo also announced today that it has applied for an $81-million grant and $150-million loan under the recently enacted CARES Act. If government aid is granted, Gogo will amend the above personnel actions to comply with the terms of that assistance.
Boeing Shuffles Leadership as Industry Braces for Slow Recovery
Boeing announced a corporate restructuring aimed at streamlining functions and positioning the company for post-COVID-19 success. Greg Smith, Boeing’s CFO and EVP, Enterprise Operations, will lead the new Enterprise Operations, Finance and Strategy group that consolidates manufacturing, supply chain and operations, finance, enterprise performance, strategy, enterprise services and administration teams. Similar moves were made in the legal, compliance and trade ethics departments. The industry is set for a slow recovery, according to IATA. An economic recession and lingering safety concerns pose a “double whammy” for traveler confidence, according to CEO Alexandre de Juniac, who called on governments and the industry to quickly incorporate confidence-boosting measures.
Trump Bans Immigration, Virgin Australia Enters Administration
Citing the need to protect jobs in the wake of the COVID-19 pandemic, President Trump announced via Twitter that he will sign an executive order to temporarily suspend immigration. It is unclear whether the decree would apply to permanent residents. The US has the world’s largest number of confirmed COVID-19 cases, with more than 720,000 infections and 41,000 deaths. Meanwhile, Virgin Australia officially entered voluntary administration and is seeking new buyers and investors. CEO Paul Scurrah expressed hope that the airline would continue flying after the pandemic has passed. Hungary-based Wizz Air confirmed that it is eligible to receive funding from the British government’s Covid Corporate Financing Facility because it operates a UK subsidiary.
Airbus Continues to Deliver as Oil Prices Drop
Airbus is using a process it calls e-Delivery to deliver aircraft without requiring its customers to travel. Pegasus Airlines is the latest recipient of jets via this process, which comprises three main stages: technical acceptance completion tasks delegated to Airbus or to a local third party, electronic transfer-of-title and the ferry flight. Airbus head of Contracts Delivery Alain Vilanove believes that at least 30% of deliveries will be completed this way in the future because it saves time and money. Airframers will be challenged by the recent oil price crash. Normally, fuel-efficient aircraft are a major selling point, but the low price of jet fuel makes this less intriguing.
Virgin Australia, South African Airways Battle Insolvency
Virgin Australia has reached the end of the line financially. The company’s board of directors held an emergency meeting today to discuss entering voluntary administration and appointed Deloitte as the insolvency practitioner. Trade unions pleaded for the government to consider bailing out the airline. CEO Paul Scurrah is expected to address the company’s future tomorrow morning. South African Airways is also facing an untenable situation as the coronavirus wiped out virtually all travel demand. The carrier is planning on terminating the contracts of all of its 4,700 employees and liquidating aircraft, real estate and landing slots. Finally, four of Norwegian Air‘s staffing companies are filing for bankruptcy, affecting 1,571 pilots and 3,134 cabin crew based in Sweden, Denmark, Finland, Spain, the UK and the US.
Airlines Freeing Middle Seats to Help Limit Spread of COVID-19
Delta Air Lines and easyJet announced they will temporarily leave middle seats empty to support physical distancing efforts, with Delta also boarding passengers by row, from the rear of the aircraft to the front. Alaska Airlines, Spirit Airlines and Qantas have also abolished booking middle seats, while American Airlines is blocking off 50% of its middle seats and JetBlue is blocking about a third of seats based on aircraft type. Starting today, travelers arriving in or departing from Canada will have to prove they have a non-medical mask or face-covering with them during the boarding process; if they can’t, they can be prevented from continuing their journey.
Boeing Puget Sound Facilities to Reopen, DoT Rules on Service Exemption Requests
Boeing is poised to phase in 27,000 employees in its Puget Sound-area factories starting next week after being shut down for a month. “This phased approach ensures we have a reliable supply base, our personal protective equipment is readily available and we have all of the necessary safety measures in place to resume essential work for our customers,” said Boeing Commercial Airplanes chief executive Stan Deal. The US Department of Transportation has ruled on jetBlue’s and Spirit Airlines’ applications for CARES Act minimum daily service requirements exemptions: JetBlue may only cut service to two of the 12 destinations that it requested, while Spirit’s request to drop 25 destinations was denied. Meanwhile, Cathay Pacific laid off 286 employees after announcing the closure of its bases in the US.
UN Lands First COVID-19 Cargo Mission in Ethiopia
The first of the United Nations‘ Solidarity Flights carrying urgently needed medical equipment has arrived in Addis Ababa. An Ethiopian Airlines charter brought one million face masks, along with gloves, goggles, ventilators and more to the area courtesy of the World Food Programme and the World Health Organization. Officials say the shipment will help 30,000 patients get tested and treated by adequately protected healthcare workers. The UN hopes to send 100 million medical masks and gloves, up to 25 million respirators, gowns and face shields, and 2.5 million diagnostic tests to 95 of the most vulnerable countries.
Malaysia Airlines May Merge With AirAsia, Virgin Australia Receives Bids
The Malaysian government has been seeking a strategic partner for Malaysia Airlines since last year, and the search has become more urgent during the coronavirus pandemic. A merger with AirAsia, which is set to resume domestic flying on April 29, is on the table. Virgin Australia has received acquisition bids from two private equity firms. While the Australian government is funding domestic flights, the airline will operate on a break-even basis. Virgin Australia would still require a government bailout, which seems unlikely to happen.
Airlines Chart Path Forward With Financial Help
Yesterday, United Airlines released an open letter to employees that outlined its acceptance of $5 billion in CARES assistance. While this means the company won’t be issuing involuntary furloughs or pay cuts prior to September 30, United is encouraging voluntary leave and is warning of reduced working hours as it grapples with 90% capacity cuts in May. Qatar Airways continues to raise money to fund repatriation flights, with its latest deal securing $850 million from Standard Chartered. Qatar used seven Boeing 787-9 aircraft as collateral for the deal. The Australian government is funding key domestic flight routes for Qantas and Virgin Australia over the next two months, effectively ungrounding the latter airline’s fleet.
APEX/IFSA Advocates Financial Aid For EU Airline Suppliers
APEX/IFSA CEO Dr. Joe Leader has written an open letter to Adina Vălean, European Commissioner for Transport, to request financial support for airline suppliers and vendors. “We at IFSA/APEX are concerned that when the EU and the world recovers from the COVID-19 pandemic and air travel returns to normal, key airline supplier partners will not be available for the rebound,” it reads. The letter follows a similar version sent to Senate Majority Leader Mitch McConnell in the US on March 19.
Air Arabia Abu Dhabi to Launch as Planned, Ryanair CEO Bullish
Air Arabia and Etihad Airways revealed they will go ahead with the launch of their joint venture low-cost carrier, Air Arabia Abu Dhabi, in Q2. Ryanair CEO Michael O’Leary expressed a bullish prediction for post-COVID travel recovery and predicted that a proliferation of seat sales will benefit low-cost carriers in 2021. EasyJet noted that bookings for next winter are well ahead of pace, but expects to report first half losses in the range of $450 million to $475 million for the first half of this year. Meanwhile, Norwegian Air revealed it cannot pay April wages to its employees. Thailand extended its ban on international passenger flights until April 30.
US Airports Eligible for $10 Million in Funding
All commercial service airports, all reliever airports and some public-owned general aviation airports in the US are eligible for a share of $10 million in CARES Act funding to go towards airport capital expenditures, operating expenses including payroll and utilities, and debt payments. The FAA will use a streamlined application and process to make funds immediately available for critical airport needs as soon as the airport sponsor executes a grant agreement. The CARES Act also includes financial assistance for US airlines totalling $50 billion, and $3 billion for airline suppliers.
US Airlines Accept CARES Aid Packages
Despite the controversy caused by the grant structure applicable to the largest US carriers, 10 major airlines have confirmed they will accept financial aid under the CARES Act. They can only accept 70% of the funds as grants, while the remaining 30% will be provided as a low-interest loan. American will receive an aid package worth $5.8 billion in grants and loans, and Delta will receive $5.4 billion. Southwest noted that it is set to receive $3.2 billion and JetBlue revealed it is getting $935 million in assistance. The other airlines accepting aid are United, Alaska Airlines, Allegiant Air, Frontier Airlines, Hawaiian Airlines and SkyWest Airlines. Spirit Airlines and regional carriers Republic and ExpressJet are still negotiating terms with the Treasury Department.
[VIDEO] Emirates Pioneers Airport COVID-19 Testing
Emirates and the Dubai Health Authority are partnering to offer COVID-19 tests for departing passengers. The project began today prior to a flight to Tunisia. Blood samples were taken in the group check-in area at Dubai International Airport and results were available in 10 minutes. According to Adel Al Redha, Emirates’ chief operating officer, the goal is to scale the initiative to “provide immediate confirmation for Emirates passengers traveling to countries that require COVID-19 test certificates.” The airline also installed protective barriers at each check-in desk to ensure physical distancing and is requiring travelers to wear their own masks when at the airport and on board aircraft.
Stats Paint a Picture of Aviation’s Current Situation
Through a collection of statistics, Scott McCartney from the Wall Street Journal reveals the depth of the crisis currently facing the travel industry. The article predicts a recovery window longer than the six years it took to rebound from 9/11 because the corrective measures that need to be instilled as a result of the pandemic are less clear. Other figures include a 95% decrease at New York airports compared to last year, a 73% decline in global airline capacity measured in seat-miles and the grounding of 60% of aircraft worldwide.
IATA Predicts 55% Decline in Passenger Revenues
IATA’s analysis of the coronavirus pandemic’s effect on airline passenger revenues from March 24 was updated yesterday, forecasting a further decline of 11% compared to 2019 numbers, totalling $314 billion in lost revenue. CEO Alexandre de Juniac said that a U-shaped economic recovery was more likely than a V-shaped one. Chinese airlines reported a total loss of $4.8 billion in the first quarter. Boeing posted 150 order cancellations for the 737 MAX aircraft in March. The trend may widen in scope: A report by Cowen Research predicts airlines will end up retiring between 800 and 1,000 aircraft this year, and lay off around 100,000 workers after the CARES workforce protection clause ends in September.
Senators Against Requiring Airlines to Repay 30% of Grants
Senators Edward J. Markey and Richard Blumenthal, members of the Commerce, Science, and Transportation Committee, have expressed concerns about reports suggesting the Treasury Department will require airlines to repay 30% of any grants they receive under the worker support section of the CARES Act. Markey and Blumenthal worry that the measure could discourage airlines from accepting the aid, ultimately hindering their ability to retain workers. Industry furloughs continue: Triumph Group laid off 200 additional staffers and will furlough 2,300 workers in response to the shutdown of Boeing’s commercial aircraft production facilities, and General Electric is planning to furlough half of its aviation unit’s engine manufacturing staff.
India Extends Lockdown, More Airlines Fight for Survival
Yesterday, the Indian government extended the country’s suspension of all commercial flying by two weeks. The lockdown, which began on March 24, is expected to end May 3. Virgin Australia released a stock exchange statement asking for a two-day trading halt while the company makes decisions regarding “financial assistance and restructuring alternatives.” Norwegian Air shares tumbled this morning, with the company’s future hinged on creditors converting as much as $4.3 billion in debt in order to meet access terms for state aid. While Wizz Air is confident about the strength of its balance sheet, executives were forced to cut one-fifth of staff and return older leased aircraft to try to lower costs during the coronavirus pandemic.
PGL-Condor Deal Falls Through
Polish Aviation Group (PGL), parent company of LOT, withdrew from its intended plan to acquire rival carrier Condor and form a leading European aviation group. Sources say that PGL had made the completion of its takeover deal contingent on financial guarantees that the German government considered unacceptable. Condor said there were various options about future ownership on the table and it was in talks about state aid to help navigate the coronavirus crisis. In September, Condor accepted a bridging loan from the German government after the collapse of parent company Thomas Cook.
NRT Has Beds for Travelers Awaiting COVID-19 Results
To contain the spread of COVID-19 in Japan, the government declared a state of emergency. As a result, All Nippon Airways and Japan Airlines have cut domestic schedules by roughly half, while AirAsia Japan halted all domestic flying until April 30. Travelers arriving at Tokyo Narita Airport from international destinations must be tested for COVID-19. Test result backlogs have extended the typical six-hour wait time to as many as 48 hours. A cardboard box with a futon and quilt are provided to travelers who must camp in the baggage claim area until their health status is confirmed. The government is charging $140 for the service. Beverages and snacks are provided.
Global Airline Capacity Dips Below 40 Million
In response to the COVID-19 pandemic, airlines around the world have slashed capacity to just 39 million seats. In the US, airline travel has dropped by 96%. Even after support from the French government, Air France-KLM is reportedly losing $27 million per day and has enough cash to survive until June. On April 10, easyJet reached an agreement with Airbus for the deferral of 24 aircraft deliveries. One day later, Airbus decided to postpone plans to build a new A321 assembly line in Toulouse.
American Airlines Announces Staff Cuts, WestJet Rehires Employees
In an attempt to save costs, 13,500 American Airlines pilots and flight attendants agreed to take voluntary leave or early retirement during the months of April and May. The airline’s business is severely reduced in the New York area. Air Canada removed economy class seats to increase cargo space in three of its largest aircraft. WestJet announced it will rehire 6,400 employees thanks to the Canadian government’s wage subsidy program. Meanwhile, Air Belgium announced the suspension of its commercial operations until June 3.
JetBlue and Spirit Raise Concerns Over CARES Requirements
JetBlue Airways and Spirit Airlines are the first two carriers to apply for exemptions under the CARES Act minimum daily service requirements aimed at securing domestic networks. JetBlue argues that its fragile liquidity will be further threatened by the requirements “with no commensurate public interest benefit.” The airline wants to continue previously planned service reductions to 11 more cities, and also announced plans to consolidate services in Boston, LA, New York, San Francisco and Washington. Spirit mentioned it too is in “survival mode” and has requested temporarily dropping 26 cities from its network that it deems “well-served by numerous other airlines.”
Global Airlines Adjusting Course Amid Sustained Drop in Demand
With Hong Kong Airport largely deserted due to travel restrictions stemming from the coronavirus pandemic, the government is stepping in with a $18-billion support package. It will subsidize monthly pay and buy 500,000 tickets from four Hong Kong-based airlines with a view to giving them away during a future recovery campaign, in addition to other rescue measures. Meanwhile, Virgin Australia will only fly once daily starting tomorrow, citing dried-up demand for its already pared-back schedule. Norwegian has called a shareholders’ meeting for May 4 to vote on plans to convert debt to equity in order to meet the requirements of a Norwegian state guarantee program worth $265 million. Thanks to a government emergency wage subsidy, Air Canada plans to rehire 16,500 laid-off workers.
Airbus Reduces Production, Shifts Focus to Supporting Fight Against COVID-19
After Boeing shut its South Carolina site, thereby halting production of its 787 aircraft, Airbus has announced that it is reducing its production rates by roughly a third in line with the knock-on effects of COVID-19. In a press release, the OEM said the aim is to “meet customer demand while protecting its ability to further adapt as the global market evolves.” Airbus has also been dedicating resources to creating and delivering equipment to protect healthcare workers from the virus.
DOT Eases CARES Act Requirements
Yesterday the US Department of Transport made the contingencies of the CARES Act less rigid. Originally, airlines receiving aid were to continue serving domestic destinations they had been serving on March 1. The date has now shifted to the last week of February or the first week of August 2019, after airlines highlighted that seasonal services vary throughout the year. The DOT also made a change that will make it easier for small carriers to qualify for funding. For previously served destinations that meet certain criteria in terms of frequency of operations, American, Delta, Southwest and United will be required to maintain at least five flights per week to each destination, while the remainder of US airlines only need to maintain a minimum of three weekly flights to each destination.
Wuhan Airport Reopens, Lufthansa Closes Germanwings
Wuhan Tianhe International Airport opened its doors for the first time since January 23, when authorities put the territory on lockdown in an attempt to fend off COVID-19. Travelers can now freely enter or leave the region provided they demonstrate no symptoms. The virus has lessened its grip over China and is wreaking havoc over other nations, leaving airlines in dire straits. Lufthansa Group will retire or decommission 42 aircraft across its main brand and subsidiaries Lufthansa CityLine and Eurowings. It is also discontinuing Germanwings’ operations. The group has held talks with the German government on providing liquidity, and is reportedly working on a package to raise money from the debt and equity markets.
Airlines Slash Flights to New York
New York has become the epicenter of the coronavirus pandemic in the US, with 35% of cases concentrated in the state. John F. Kennedy International, Newark Liberty International and LaGuardia airports decided to operate only eight hours daily due to large reductions in demand. United Airlines, Delta Air Lines, jetBlue and Spirit Airlines have drastically reduced their capacity in the area, with the latest announcement coming from American Airlines cutting service by 90%. The majority of New York’s arriving air passengers are medical first responders. United is flying medics into New York for free.
Long Road Ahead to Rebuild European Aviation Industry
IATA’s latest analysis shows that 25 million jobs are at risk of disappearing with plummeting demand for air travel amid the COVID-19 crisis, including 5.6 million in Europe. Eurocontrol has agreed to defer airline payments of up to $1.2 billion in European air navigation fees. EasyJet confirmed last night that it had secured a $740 million loan from the Covid Corporate Financing Facility, and drew down $500 million from its revolving credit facility. More than 250 organisations from 25 countries have published an open letter criticizing governments for providing airlines with financial assistance without social and environmental conditions embedded.
Feds Mandate Refunds as Airlines Propose Creative Credit Schemes
The US Department of Transportation reaffirmed the requirement for airlines to issue refunds when flights are canceled. United Airlines and jetBlue have previously insisted that mass flight disruptions resulting from the outbreak of COVID-19 amount to exceptional circumstances, and were reluctant to issue refunds. American Airlines is currently offering travel vouchers worth 120% of the value of the ticket alongside the traditional refund option. United recently amended its frequent flyer program to extend members’ status until January 31, 2022. Delta made a similar announcement, extending benefits for SkyMiles Medallion members until 2021. Delta is also extending its rebooking window to up to two years for customers booked for travel through the end of May.
Russia Bans Travel, UAE Gradually Lifts Restrictions
There are now over 1.2 million cases of COVID-19 around the world, over 6,000 of which are in Russia. On Friday, the country banned all inbound and outbound flights, even repatriation missions, as it seeks to limit the spread of infection. An Aeroflot flight from Moscow to New York was canceled on Friday at the very last minute and left passengers stranded. Emirates and Etihad Airways have resumed some flights to Europe and Asia only for foreign citizens who wish to leave the UAE; incoming travelers are not allowed. Meanwhile, Boeing announced that it would extend the temporary suspension of widebody jet production in Puget Sound, Washington, to protect the health of its employees.
How COVID-19 Could Change Air Travel Forever, According to FTE
APEX’s Future Travel Experience (FTE) has painted a heavily researched picture of what air travel may look like following the COVID-19 pandemic. Among the predictions are new queuing rules, enhanced aircraft cleaning procedures and an ever-more important role for airline apps. As travelers become wary of touching surfaces, from check-in kiosks to in-flight entertainment screens, there is an opportunity for an airline’s app to act as a remote control. Last week, FTE announced that it is adapting to the new work-from-home reality by hosting virtual events in the coming months.
Alitalia Receives $540M in Government Aid
After providing multiple bailouts and announcing plans to take over Alitalia, the Italian government is injecting another $540 million into the airline. Alitalia is the only airline in Italy operating under a public service obligation agreement, and thus will be the sole recipient of funding. Air Dolomiti, Blue Panorama and Neos claim they should also be receiving a share of this financial assistance. The government plans to eventually shrink Alitalia’s 113-aircraft fleet to a maximum of 70 to save on costs. Alitalia will also furlough an additional 2,900 employees until October 31, which amounts to half of its workforce.
Qantas Axes IFE, Wi-Fi and More to Cut Costs
Qantas has shut off its free high-speed in-flight Wi-Fi in order to cut costs as it grapples with an 80% reduction in capacity caused by the coronavirus pandemic. The Australian flag carrier also pulled the plug on its in-flight entertainment offering of over 1,000 hours of content to avoid monthly licensing fees. Both Qantas and Virgin Australia nixed free meals on all flights, scaling back the offering to a complimentary bottle of water and snack. This move also helps limit the spread of germs.
More Reductions Across LATAM, Cathay and Ryanair
April brings more cuts to LATAM Airlines Group and Cathay Pacific. LATAM announced a 95% reduction in operations for the month, and said it would not operate any flights to or from Europe. Chief commercial officer Roberto Alvo assumed the role of CEO on March 31, after the change was announced in September. Meanwhile, Cathay Pacific is planning on cutting capacity by 97% as its passenger numbers are markedly down. Ryanair has cut all pay by 50% for April and May, as the airline is currently operating less than 20 flights a day, compared with a usual schedule of more than 2,500. Starting Monday, London Heathrow will only operate one runway at a time. The airport receives 41% of the UK’s pharmaceutical products.
EASA Recommends Less A/C in Cabin
Aircraft operators should regularly turn off recirculation fans to accelerate internal and external air exchange. This would limit the potential spread of coronavirus, according to a recent bulletin published by European Union Aviation Safety Agency. The document also suggests that surgical masks should be worn at all times by crew members having direct contact with passengers and recommends spacing passengers throughout the cabin. Airlines should support passenger-tracing and epidemiological investigation measures if the presence of coronavirus on a flight is confirmed.
IAMA Sets Up Virtual Think Tank to Ease COVID-19-Related Challenges
The Independent Aircraft Modifier Alliance (IAMA) has launched a virtual think tank, called IAMA VTT, to help airlines and lessors maintain the airworthiness and safety of their aircraft in anticipation of their return to service after the COVID-19 crisis is over. As part of IAMA VTT, the alliance will host a series of virtual discussions and give alliance members, airlines and lessors access to an online catalog of crisis-related products and services. “IAMA members are experiencing the effects of COVID-19, and we want to help the aviation industry get past this situation by offering our significant technical resources to facilitate crisis resolution,” said Marc Pinault, IAMA chairman and CEO of Eclipse and Eclipse Technics.
FTE Updates 2020 Schedule, Adds Virtual Events
Future Travel Experience, part of the APEX family, has adapted its schedule for upcoming events in response to the COVID-19 pandemic. FTE EMEA/Ancillary is cancelled, FTE Global is postponed until December and FTE APEX ASIA EXPO will go ahead as planned in November. Other changes include complimentary registration options for airlines and airports, as well as the addition of several virtual events, including two focused on solutions for dealing with the impact of COVID-19 on the aviation industry.
AIX Closes Doors on 2020 Show
Due to the continued escalation of COVID-19 globally, Reed Exhibitions has announced that the next edition of Aircraft Interiors Expo (AIX), as well as the adjoining World Travel Catering & Onboard Services Expo and Passenger Experience Conference, will now take place April 12-15, 2021, in Hamburg. All registrations for the 2020 events will be canceled. Katie Murphy, portfolio director at Reed Exhibitions, cited the “ongoing uncertainty in the industry and the immense pressure” faced by exhibitors as the main factors in the decision. Organizers said they are intent on keeping event participants connected over the coming months.
US Flight Attendants Decry Federal Airline Ownership
In a letter addressed to the Treasury Department, various US flight attendant unions raised a flag about a clause in the CARES Act that gives the government the option to gain equity from airlines in exchange for grants. They say that such a condition could dissuade airlines from accepting grant money and put their jobs at risk. Meanwhile, British Airways will be suspending 36,000 staff, Oman Air permanently terminated hundreds of cabin crew, SriLankan Airlines is suspending all operations for nearly two weeks and Vietnam is suspending all passenger flights to the country until April 15.
Boeing, Southwest Continue Downsizing
To prepare for a possibly lengthy contraction in demand for Boeing’s products as a result of the coronavirus pandemic, CEO Dave Calhoun said the company will roll out a voluntary layoff plan “that allows eligible employees who want to exit the company to do so with a pay and benefits package.” Wide-body jetliner production could tumble by 60% over the next three years, and a potential grounding of US domestic flights, which President Donald Trump said he was pondering, would exacerbate the situation. Meanwhile, Southwest Airlines announced its intention to apply for federal aid, joining American Airlines. Southwest deepened its capacity cuts to 40% from May through June.
German Government Could Take Over Condor, Own Stake in Lufthansa
With the plan for LOT Polish Airlines to purchase Frankfurt-based Condor Airlines likely to fall through, Germany may move to nationalize the airline. Sources familiar with the matter said that LOT has issues with the deal financing, and Germany would sell the airline once the COVID-19 pandemic eases. In January, LOT agreed to buy Condor for $328 million. Reuters also reports that Lufthansa is in talks with the German government to give up equity in exchange for billions of euros in state aid. The airline has moved 87,000 crew and ground staff to reduced working hours.
APEX Supports Members Applying for CARES Stimulus Funds
APEX has reached out to all of its member companies, highlighting important financial assistance information and deadlines released by the US Treasury Department yesterday. As part of the CARES Act, up to $53 billion in funds and loans are available to eligible companies in the air travel sector. “APEX/IFSA members reaching out personally to Congress deserve our deepest thanks,” said APEX/IFSA CEO Dr. Joe Leader. “The US CARES Act provides a vital lifeline to airlines, suppliers and businesses that we hope other governments around the world follow.”
Relations Between US Airline Stakeholders Turbulent
IATA’s latest analysis reveals that “airlines cannot cut costs fast enough to stay ahead of the impact” of COVID-19, and predicts tens of billions of dollars in losses during the second quarter. IATA’s director general and CEO Alexandre de Juniac praised the countries that have allowed airlines to issue travel vouchers instead of refunds, while several US senators have lambasted domestic airlines for doing just that. One stipulation of the CARES Act is that airlines accepting aid cannot reduce workforces before September 30, but some workers at Delta, United and American who are having their hours and pay reduced are describing the cuts as effectively the same as furloughs.
European Companies Unite to Fight Coronavirus
The VentilatorChallengeUK consortium, consisting of aerospace, automotive and medical businesses across the UK, has been formed to expedite ventilator production for the National Health Service, which has ordered 10,000 units. The participating aerospace companies include Airbus, BAE Systems, GKN Aerospace, Meggitt, Renishaw and Thales. Airbus’ facilities in Spain have pivoted to producing 3-D-printed visor frames for healthcare professionals. The EU announced that airport slot requirements, which oblige airlines to use at least 80% of their takeoff and landing slots in order to keep them the following year, will be suspended until October 24.
US Airlines Suggest Cash Disbursement Scheme
In a letter addressed to the US Treasury, US airline executives urged the government to release the $58 billion in loans and grants earmarked for them, which form part of the $2-trillion stimulus package, as soon as possible. Treasury faces an April 1 deadline to issue procedures to airlines to apply for grants. The airline executives suggested that grants be allocated based on salaries and benefits paid by carriers from April 1 through September 30, 2019, while loans be divided by each carrier’s pro rata share of “system available seat miles” for 2019 operations. Airlines that benefit from the stimulus package must continue flying to each destination they serve, and airline executives are reportedly considering consolidating operations in smaller markets to avoid flying nearly-empty planes.
Virgin Australia Wants Bailout, Emirates Will Receive One
While Virgin Australia claims it has enough cash on reserve to weather a six-month restricted travel situation, it is also warning the government that it may eventually need a $1.4-billion loan. Cognizant of the fact that the Australian government “can’t pick winners and losers,” Virgin Australia CEO Paul Scurrah outlined a comprehensive support plan in which Qantas, with three-times-higher revenue, would receive $4.2 billion in support. The government of Dubai announced it would inject funding into Emirates, which suspended passenger operations this month. Further details have yet to be announced, and it is unclear if flydubai would also receive government assistance.
Companies Continue to Scale Back, While Some Resume Critical Operations
While Airbus was forced to wind down its production in Spain until April 9 as a result of government measures restricting non-essential activity, the airframer still managed to operate an air-bridge flight from Madrid to China. It sent an Airbus A330-200 tanker to collect over four million face masks to be donated to health systems in France, Germany, Spain and the United Kingdom. Meanwhile, Embraer has resumed critical operations in Brazil. Employees have been on paid leave since March 24. Air Canada temporarily laid off 16,500 employees as part of a cost-reduction plan, while Lufthansa will introduce part-time working for cabin, ground staff and management in Frankfurt and Munich.
Companies Donate Resources to Frontline Medical Effort
Furloughed staff at Virgin Atlantic and easyJet are being encouraged by their employers to donate their time at temporary critical care field hospitals (known as Nightingale Hospitals), which are being set up in the UK to help the fight against coronavirus. Duties would include changing beds, tending to patients and assisting doctors and nurses. Meanwhile, Monty’s Bakehouse employees are staffing the kitchen in the East Surrey Hospital and preparing hot snacks for frontline workers. Qatar Airways, one of the few airlines that has maintained its scheduled commercial passenger services, announced it would eventually need government support. The airline reported last week that it is donating $150 million to support United Nations efforts to help combat the coronavirus outbreak in the Gaza Strip.
After Hundreds of Repatriation Flights, EasyJet Grounds Fleet
After performing over 650 “rescue flights” over the last two weeks, easyJet will proceed to ground its fleet of 340 aircraft indefinitely. The company’s decision is part of a cost-cutting plan intended to mitigate the economic damage caused by the coronavirus pandemic, which has led to national lockdowns across Europe. EasyJet cabin crew will be furloughed for two months and, thanks to government intervention, will retain 80% of their salary. In another statement, the airline’s founder and largest shareholder Sir Stelios Haji-Ioannou threatened to fire one board member every seven weeks unless a $5.6-billion order of new aircraft from Airbus was canceled.
Airlines Request Exceptions to Refund Rule
According to European legislation, airlines are required to issue refunds to travelers affected by canceled flights. But due to financial constraints caused by the coronavirus pandemic, many airlines are suspending refunds or dealing with them on a case-by-case basis. IATA is suggesting that regulators allow vouchers to be distributed instead of refunds. Airlines UK agrees, and added that “carriers should be permitted to defer [refunds] until the crisis period is over and as defined by air traffic volumes, rather than time period.” The Canadian Transportation Agency recommended adopting the voucher solution for the benefit of the “operational realities” of the country’s airlines.
Singapore and United Airlines Secure Major Loans
Singapore Airlines’ majority shareholder, government-owned Temasek Holdings, said it would underwrite the sale of shares and convertible bonds for over $10 billion. DBS Group Holdings, Singapore’s largest bank, also provided a $2.8-billion loan to the airline. This financing package is the largest provided to any airline since the COVID-19 outbreak caused travel demand to plunge. While Singapore Airlines has cut its capacity by 96%, investors were confident that the company was well-positioned for growth beyond the current crisis. Meanwhile, United Airlines will borrow $500 million from Goldman Sachs Bank in the form of a one-year secured term loan.
China Sets Limits on Flights, Entries
The Civil Aviation Administration of China will enforce new travel restrictions on March 29. Chinese airlines may only operate one international route once per week, while foreign airlines are allowed to maintain one route to China with no more than one weekly flight. Starting Saturday, the Chinese Ministry of Foreign Affairs will prohibit foreign nationals and non-Chinese citizens from entering the country, even those who have a valid visa or residency permit. The moves come as China is experiencing an increase in the amount of imported cases of COVID-19. All but one of 55 new cases reported in China yesterday originated overseas, stoking fears of a second major outbreak in the country.
Senate Earmarks $58B in Relief Funds for Aviation Industry
Last night, every member of the US Senate voted in favor of enacting a $2-trillion coronavirus relief package. A total of $58 billion has been earmarked for the aviation industry, with $25 billion in loans and loan guarantees going to passenger airlines and an additional $25 billion going to grants to pay workers through September. Cargo air carriers have been allotted $8 billion in relief funds. Furthermore, a list of companies critical to maintaining national security will receive $17 billion in loans; Boeing is reportedly on that list. The aid package prohibits stock buybacks and share dividends for at least a year after the loans have been repaid and restricts executive compensation.
Several Airlines Trade Passenger Capacity for Cargo
Shuttered borders and strict health ordinances in the face of the COVID-19 crisis have led to a stark reduction in business and leisure travel for airlines. But they are also facing an upswing in demand on the cargo side of their operations. With their freighters full, many airlines are deploying more passenger aircraft than usual to make up the difference and deliver essential goods. American Airlines recently flew its first cargo-only flight since 1984, while United Airlines is using its Boeing 777 and 787 fleet to run 40 charter flights each week. Etihad Airways, Air Canada and Aeroméxico have announced similar moves, while Lufthansa, Austrian Airlines and LATAM have even been loading up passenger seats with cargo.
Qatar Airways Presses A380 Back Into Service to Meet Repatriation Demand
With the grounding of Emirates and Etihad Airways, as well as widespread travel bans in cities around the world, Qatar Airways finds itself in the unique situation of increasing its service. Qatar is now focused on getting travelers home from over 70 destinations linked via its hub at Doha’s Hamad International Airport, which remains open to passengers in transit. With a steady increase in bookings this week, Qatar has ungrounded its fleet of A380s. The jumbo jets are being deployed on key routes including London, Frankfurt and Paris. “I don’t think any of us imagined a week ago that we’d be putting the A380s back in the air,” said CCO Simon Talling-Smith.
US Senators Iron Out $2T Stimulus Deal, UK Holds Back Funding for Airlines
The White House and Senate have agreed on a $2-trillion stimulus plan aimed at easing the economic burden posed by the coronavirus in the US. Details of the bill, the largest relief package in American history, are expected to be revealed once it passes. In a statement released yesterday, IATA reaffirmed the urgent need for governments to provide financial support, loans and tax relief to airlines as it estimated annual passenger revenue will fall by $252 billion – more than double its initial prediction – if travel restrictions remain in place for three months. UK chancellor Rishi Sunak took a contradictory stance yesterday, telling airlines to find funding elsewhere and only turn to the government as “a last resort.”
Latest Airline Cuts
WestJet, Canada’s second largest airline, announced that 6,900 of its 14,000 employees are being laid off, with 90% leaving voluntarily to support the company’s survival. Air Transat also announced temporary layoffs in effect for 70% of its staff. Alaska Airlines will cut 200 flights per day through March and park 30 jets, out of its mainline fleet of about 230 aircraft, until further notice. GoAir will cut salary for all of its employees for the month of March, mirroring similar moves made by Air India and IndiGo after India grounded all domestic flights. In a new round of debt funding, Qantas obtained a 10-year, $625-million loan secured against seven Boeing 787-9s.
Senate Stimulus Bill Expected to Pass Soon
Partisan bickering gave way to progress as representatives on Capitol Hill negotiated a bill that could inject $2 trillion into the US economy. Financial aid for the airline industry was one of the topics of the negotiation, which lasted until midnight last night. Yesterday, House Speaker Nancy Pelosi unveiled the Democrats’ version of a stimulus package that would dole out $37 billion in grants and $21 billion in loans to carriers. Airline contractors would receive $3 billion for payroll support grants, while airports would collect $10 billion in grant funding. In exchange, airlines receiving aid would have to start offsetting their carbon emissions in 2025 and reduce their overall emissions by 50% by 2050. Whether these requirements end up in the final version of the bill remains to be seen.
Airlines Continue to Pare Back Schedules
Flydubai, Aegean Airlines, Turkish Airlines and KLM are among the latest carriers to adjust their schedules as a result of a COVID-19 containment policy. As of Thursday, Flydubai will suspend all operations and Aegean Airlines will ground all international flights. Turkish Airlines will pause almost all international flights from March 27 until April 17; flights to New York, Washington, Hong Kong, Moscow and Addis Ababa are exempt. KLM will operate flights to 57 destinations at 10% capacity from March 29 until May 3. Based on the extrapolation of China’s three-month viral containment experience, Ryanair foresees the grounding of all its flights in April and May.
Experts Create Coronavirus Flight Cancellation Tracker
As the COVID-19 pandemic persists, members of the aviation community are volunteering their efforts toward disseminating valuable data. What started as a mechanism to track flight cancellations on a route-by-route basis quickly evolved into a comprehensive spreadsheet listing the capacity cuts of the world’s major airlines. “We’ve heard from large and small aviation-related companies as well as individuals that have used the information to help guide their planning,” said Seth Miller, APEX Media contributor and founder of PaxEx.aero.
APEX and IFSA Urge Suppliers to Contact Congress About Financial Aid
APEX and IFSA are encouraging airline vendors and suppliers to reach out to the US government today to secure financial relief during the COVID-19 pandemic, which so far appears to be allotted primarily to airlines. “Every call to every lawmaker in your area makes a huge difference,” said APEX/IFSA CEO Joe Leader. The associations are already actively reaching out to the Trump administration and congressional leadership themselves with letters that argue, “Without government support, thousands of jobs will be lost, and many suppliers will not survive to be in a position to support the industry’s recovery.”
Branson Invests in Virgin, Sabre Makes Cuts and Airbus Resumes Activity
Richard Branson’s host of companies in the travel sectors are in a battle for their survival, according to the business magnate. In order to protect 70,000 jobs at Virgin Group, which includes the largely grounded Virgin Atlantic airline, Branson is injecting $250 million. Meanwhile, Sabre announced a plan to cut costs in the face of “challenges beyond what has been experienced before,” according to CEO Sean Menke. The cuts range from offering voluntary unpaid leave, severance and early retirement to staff across the world to scaling back its third-party contracting and vendor costs. As for Airbus, production in France and Spain will resume as planned after implementing stringent antiviral measures.
UAE, Singapore and Hong Kong Will Ban Visitors
Singapore and Hong Kong will ban all transit passengers and visitors starting March 24 and 25, respectively. The United Arab Emirates will adopt these measures and suspend all passenger flights into and out of its territory as well, starting March 25. Such measures have a crippling effect on flag carriers. Singapore Airlines announced it will cut 96% of capacity until the end of April, while Emirates and Etihad Airways have completely grounded their fleets. The latest statistics reveal that local transmission of COVID-19 in these countries are trending downward, while imported cases are behind the uptick in infection rates.
China Airlines Mandates Face Masks for Passengers
Due to what the airline is labeling epidemic prevention measures, China Airlines is requiring all travelers to wear face masks beginning at check-in. They can only be removed during the flight when eating or drinking. Also, all travelers will have their temperature taken; those with a forehead temperature above 99.5°F will not be allowed to board. The airline claims that these measures will help protect the health of passengers and crew.
Governments Worldwide Begin Assisting Cash-Strapped Airlines
Yesterday the US Senate proposed loans destined for the airline industry amounting to $58 billion. Emphasizing that the package does not constitute a bailout, the government could receive warrants, stock options, or stock as a condition of assistance. In Northern Europe, three countries have earmarked funds for national airlines. Norway offered $537 million in loan guarantees, with half available to Norwegian Air; Finland’s government has provisionally agreed to provide a state guarantee of up to $642 million to assist flag-carrier Finnair; and Sweden approved a proposal to issue credit guarantees of up to $488 million to airlines, of which 30% will be allocated to Scandinavian Airlines. Air New Zealand has also secured standby funding of up to $511 million.
Delta Increases Cuts to 70%, Cathay Suspends 96% of Flights
In an unprecedented move for the company, Delta Air Lines will cut capacity by 70% “until demand starts to recover.” Half of Delta’s fleet, comprising more than 600 aircraft, will be grounded. In a memo, CEO Ed Bastian expressed gratitude to the roughly 10,000 Delta employees who have taken voluntary leave and encouraged more workers to do the same. The stark drop in travel demand and increasing number of travel restrictions have hampered Cathay Pacific even more significantly – the airline will cut 96% of flights in April and May. After announcing the suspension of most international and US flights, Air Canada decided to temporarily lay off more than half of its 9,750 flight attendants.
Qantas Initiates Unpaid Leave Until End of May for Two-Thirds of Employees
The Australian government’s decision to close its borders to foreign visitors has left Qantas little choice but to suspend all international flights. With 150 aircraft in its fleet grounded, the company instituted a period of unpaid leave until the end of May for two-thirds of its 30,000 employees, who may draw from their leave balances in the interim. Senior management and board members will no longer take a salary. CEO Alan Joyce acknowledged that these “difficult decisions” were necessary for the survival of the airline, currently grappling with an unprecedented drop in demand. “Our strong balance sheet means we’ve entered this crisis in better shape than most and we’re taking action to make sure we can ride this out,” he stated.
More Countries Lock Down Borders
Mirroring recent moves made by Australia and other countries, Taiwan and New Zealand have closed their borders to foreigners. Taiwan hopes to reduce its uptick in imported COVID-19 cases; it is experiencing a slower rate of local transmission. In a statement, IATA echoed APEX’s call for government aid during this crisis, specifically appealing to governments in Africa and the Middle East to provide emergency support to airlines as they “fight for survival.” Chicago’s Midway International Airport is facing hundreds of cancellations after several air traffic control technicians tested positive for COVID-19. JetBlue announced it will cut 40% of its capacity, and Allegiant Air will cut 35%. For Americans who have not been able to renew their driver’s licenses, the TSA is allowing the use of expired licenses as acceptable identification.
Boeing Calls for $60B for US Aerospace Manufacturing Sector
Boeing is seeking at least $60 billion in government aid for the aerospace manufacturing industry, which it says will be one of the most significant ways to help airlines, airports, suppliers and manufacturers remain in good financial standing as the coronavirus further strains their businesses and puts 2.5 million jobs at risk. Boeing’s request comes the same day President Donald Trump pledged to assist Boeing and travel-related industries. Some countries have already mobilized aviation industry relief funding. Today, Australia pledged $430 million in a package that involves fee waivers on aviation fuel excise, domestic airline operations charges and regional aviation security charges. Meanwhile, Taiwan will make nearly $1 billion in subsidies and loans available to carriers. Singapore and China have already rolled out similar measures.
Trans States Airlines Folds Earlier Than Anticipated
Regional carrier Trans States Airlines is the first US airline to fold due to the impact of COVID-19. While the company had said at the end of February that it would be entering its last year of operations, current circumstances have forced it to announce that it will halt operations on April 1. The US and Canada have finalized a deal to close their shared border to non-essential travel. Canadian airline WestJet announced it would suspend all international flights as of March 22, while Sunwing Airlines and Air Transat plan to suspend all operations. Overseas, Brussels Airlines revealed it will suspend all operations from March 24 to April 19, and Virgin Australia will only fly domestic between March 30 and June 14.
APEX Calls for $250B in Government Support for Aviation Industry
APEX is advocating that $250 billion be issued in global government support for the aviation industry, with 80% going directly to airlines and 20% allocated to airline suppliers. The call both endorses and builds upon a proposal from Airlines for America for $58 billion in financial support for airlines in the United States ($50B for passenger carriers and $8B for cargo carriers). “The economic impact on the global airline industry already surpasses the economic events of 2001 and 2008 combined,” explained APEX CEO Dr. Joe Leader. “Global governments must react in a coordinated manner to support their airlines in each nation.”
US Mulls Domestic Travel Ban
With the total number of COVID-19 cases in the US having grown to nearly 3,500, the US department of Homeland Security is considering a ban on domestic flights. The details, including its length and start date, have yet to be ironed out. The ban would not apply to cargo planes, which IATA noted yesterday were “essential” in the efforts to curb the pandemic and deliver medicines, medical equipment and other supplies. American commercial carriers that bolstered their balance sheets after the last important recession may be better prepared for a shutdown, according to Henry Harteveldt, president of Atmosphere Research. He stresses that government aid will prove crucial to avoid bankruptcy.
EU Considers Widespread Border Closures
Yesterday, the president of the European Commission proposed a 30-day ban on nonessential incoming foreign travel for a month. Ursula von der Leyen asked 30 countries, along with Britain and Ireland, to sign off on the proposal, one of the strictest coordinated efforts aimed at containing the virus. The Airport Operators Association fears that some UK airports could shut down within weeks unless the government comes through with rescue funding and cuts taxes, fees and other costs. Qantas and subsidiary Jetstar, Norwegian and LATAM have all drastically reduced their flight schedules. Airbus announced it would halt production at its French and Spanish facilities, including its main Toulouse assembly line, for four days as it implements stricter hygiene measures.
US Airlines Feel Pinch of Social Distancing
Over the weekend, the US Centers for Disease Control and Prevention recommended that gatherings of 50 or more people be canceled or postponed for a period of two weeks. United Airlines’ top two executives said that running an airline is “nearly impossible” under such circumstances, and planned to cut its capacity by half over the next two months. American Airlines also announced it would cut 75% of its international capacity through May 6, while keeping its short-haul schedule intact. The US travel ban on Europe, which went into effect at midnight last Friday, has been expanded to include foreign nationals arriving from Britain and Ireland. US residents seeking entry from the affected nations would be required to self-quarantine for a period of two weeks.
Flight Cancellations Deepen Around the World
The coronavirus pandemic continues to put global airlines to the test. Ryanair and easyJet announced major cuts to their flight schedules, but both companies noted that their balance sheets are strong enough to survive the effects of the pandemic on travel demand. The Danish and Latvian governments have enforced lockdowns of their borders, prompting Scandinavian Airlines to halt almost all traffic and airBaltic to cease all flights. Austrian Airlines announced it will cancel all flights until at least March 28. IAG Group chief executive Willie Walsh announced he will not retire in ten days as expected in order to allow his successor, Luis Gallego, the opportunity to steer Iberia through the crisis for the next few months.
US Travel Ban on EU — Airlines Cap Soaring Fares
The US government’s suspension of travel from most of Europe caused demand for flights, and ticket prices, to skyrocket as foreign nationals on both sides of the Atlantic tried to get home during the short time between the President’s announcement and the start of the ban. In response to the issue, United Airlines, American Airlines and Delta Air Lines each announced they would cap fares affected by the travel suspension to about $1,000. The ban does not apply to US citizens, but Americans returning from Europe must pass through one of eleven Centers for Disease Control and Prevention-approved airports. Yesterday, American Airlines announced it would further cut flights, reducing international capacity by 34% during the peak summer travel season, including a 50% reduction in transatlantic capacity for the month of April.
IATA: Airlines Need Crisis Assistance During Outbreak
In response to the US travel ban on Europe, IATA warned of wide-ranging economic fallout. Director general and CEO Alexandre de Juniac noted that airlines will suffer “enormous cash-flow pressure” and that governments need to explore extending lines of credit, reducing infrastructure costs and lightening taxes to avoid a “sectoral financial crisis.” Norway has moved to suspend its airline taxes and passenger fees. Feeling the effects of a cash crunch, Air France-KLM has withdrawn $1.2 billion available from its revolving credit facility. In Australia, the government warned citizens to avoid all but essential overseas travel as COVID-19 continues to spread. Virgin Australia will further pare back its domestic services by 7% in the final quarter, from April to June.
US Bans Travel From 26 European Countries
Starting tomorrow, those seeking entry into the US who have been in the Schengen Area up to 14 days prior will be denied access. The 30-day ban was stipulated in a presidential proclamation made yesterday that addressed the COVID-19 pandemic. It noted that the Schengen Area currently has the largest number of confirmed cases outside of China, and the free flow of people in the area makes it difficult to contain the disease’s spread. ACI Europe, which represents the continent’s several hundred airports, has warned that the pandemic will cause them to go into a “full-blown crisis” as passenger numbers are expected to fall 7.5% in 2020.
LATAM, Finnair and Others Reduce Schedules
LATAM Airlines Group announced a 30% reduction in international flights due to lowered demand and travel restrictions. The measure will apply principally to flights from South America to Europe and the US between April 1 and May 30. Finnair also announced that all flights to the US and Delhi for the next month have been canceled. AirBaltic has canceled a total of 580 flights from March 31 until the end of May, and will temporarily cut 250 staff members. Kuwait will become the first country in the world to suspend all commercial air traffic as of March 13. Vietnam has increased restrictions on British and European nationals visiting the country. In the US, the TSA has advised passengers to avoid placing their personal items in the bins at security and keep them in their carry-ons.
China Acts in Face of Stark Drops in Demand
As the coronavirus takes its toll on China’s aviation industry, the country’s civil aviation administration announced a total of 16 countermeasures that touch on everything from providing financial support to domestic carriers, to reducing airport parking fees and increasing infrastructure investment. The contagion continues to have far-reaching effects, with airlines and governments around the world exercising caution; the cabin crew aboard Singapore Airlines must now wear surgical masks. A crucial hurdle for many airlines has been the reduction in travel demand, which United Airlines estimates will amount to 70% in some territories. Norwegian Air canceled 15% of its total capacity yesterday, while Lufthansa has grounded at least 150 aircraft.
APEX Encourages Tax Relief for Airlines During COVID-19 Crisis
The Airline Passenger Experience Association is encouraging governments worldwide to issue immediate tax relief for the airline industry due to the unprecedented disruption caused by COVID-19 (the novel coronavirus). As such, APEX has put forward three recommendations, including reducing all possible global tax burdens on airlines, suspending “hidden taxes” such as forced slot and gate utilization, and removing new aviation taxes or penalties. “APEX’s recommendations for governments reducing taxation, penalties and slot/gate bureaucracy in the middle of a crisis will go a long way toward ensuring economic recovery,” said APEX CEO Dr. Joe Leader.
Delta and American Expand Cuts
As the coronavirus spreads in Europe and North America, demand for travel continues to reduce. Delta Air Lines will cut international flying by as much as 25% and domestic capacity between 10% and 15%. American Airlines is acting similarly, saying it will shave 10% off its international flying during the peak summer season, and cut transpacific flying capacity by 55%. American also extended its suspension of service to China to October. Meanwhile, Qantas Group announced a 23% reduction in capacity for its international network. It will ground eight of its 12 Airbus A380 aircraft, replacing them with smaller jets and reducing the frequency of flights. For the rest of the financial year, the company’s executives and board will take a pay cut.
Korean Air Facing Uncertain Future as Restrictions Grind On
With over 7,000 COVID-19 cases, South Korea is one of the most severely affected countries outside mainland China. A large part of the world has restricted travel to the area, and Korean Air is feeling the brunt of the damage. Woo Kee-hong, the airline’s president, revealed that 80% of the carrier’s international capacity had been cut, a far cry from the 18% suffered during the 1997–1998 Asian financial crisis. Furthermore, only 45 aircraft out of its fleet of 145 are currently flying. Considering the unpredictable nature of the situation, he mentioned the possibility that the company may reach a point when its survival comes into question.
More Flights Cut as Cases Surpass 100,000 Mark
With the tally now standing at over 100,000 cases and nearly 4,000 deaths worldwide, the coronavirus continues to cause turmoil for the airline industry. As a result of travel restrictions affecting Hong Kong and Japan, Cathay Pacific suspended flights between the destinations for much of the month. AirBaltic has also cut flights to and from Milan and Verona until the end of April. Yesterday, the airline learned that a passenger on Flight 630 from Milan was infected with the COVID-19 virus. Norwegian Air’s stock price dropped to a 15-year low on Friday as near-term estimates put the company’s financials in the red. The airline has already slashed dozens of flights and cut costs due to COVID-19 fears, but analysts predict the company will require a bailout to stay afloat.
IATA Raises Coronavirus Impact Projections
The spread of COVID-19 to over 80 countries has prompted IATA to update its economic impact estimates. The association now projects 2020 global revenue losses for the passenger business of between $63 billion and $113 billion, depending on whether the virus can be contained or continues to spread. GE Aviation is anticipating a $200–$300 million first-quarter hit from the coronavirus outbreak and has implemented a hiring freeze and cost-cutting measures. More flight cuts have been announced by Aeroflot, Air Astana, and Lufthansa Group, which announced today its capacity would be reduced by up to 50% in the coming weeks. Meanwhile, Virgin Atlantic announced it will cut executive pay and postpone the launch of flights between Heathrow and São Paulo.
Trump Reassures Travelers; United and JetBlue Announce Cuts
President Donald Trump heeded the call from airline executives who urged him to reassure American travelers when he made a statement yesterday claiming, “it’s safe to fly.” Executive members of the trade group Airlines for America met with the President and Vice President Mike Pence yesterday to discuss the industry’s response to the coronavirus outbreak. Pence was selected to lead the US government’s coronavirus response. Meanwhile, United Airlines announced a 10% reduction in US and Canadian flights and a 20% reduction in international flying in the month of April, with similar cuts planned in May. JetBlue said in a memo Wednesday that it was cutting capacity by approximately 5% in the near term.
American Airlines, Finnair and Asian Carriers Instill More Cuts
American Airlines suspended its daily flight between Seoul and Dallas because of a drop in demand in the wake of the coronavirus outbreak in South Korea. The flights are scheduled to resume April 25. A chorus of other airlines have announced service disruptions: Finnair is canceling flights to mainland China, South Korea and Milan; Korean Air is suspending most European and US flights through April; All Nippon Airways is suspending service to China until mid-March; Japan Airlines is cutting flights to Taiwan and South Korea; and both Thai Airways and Singapore Airlines are implementing widespread service reductions. The Indian government also announced that all passengers arriving on international flights will be required to go through medical screening while entering India.
APEX/IFSA CEO Addresses Coronavirus and Accessibility in Congress
APEX/IFSA CEO Dr. Joe Leader reassured members of Congress and the general public during a hearing yesterday that it is safe to fly despite the COVID-19 outbreak. He outlined nine steps that airlines should be taking, including ensuring clear communication with passengers and staff, implementing aircraft decontamination procedures and allowing broader waivers for booking changes and cancellations, which several airlines have already done.
Emirates Becomes Latest Airline to Offer Unpaid Leave
Travel restrictions put in place as a result of the COVID-19 outbreak have severely impacted Emirates’ operations, prompting COO Adel Al Redha to issue a statement. The carrier is asking staff to take unpaid leave for up to a month at a time, adding that many employees wish to exercise this option. Emirates has already canceled flights to Iran, Bahrain, and most of China. Yesterday, IATA’s vice-president for Africa and the Middle East, Muhammad Ali Albakri, said that “support from governments” was necessary to help airlines in the region cover their operating costs.
Corporate Travel Set to Decline, Says GBTA
The Global Business Travel Association has estimated the coronavirus outbreak could cost the industry almost $47 billion a month. A survey of its members, which include 9,000-plus business travel professionals, revealed that 31% expect travel to resume in the next three months. Amid the weakened air travel demand, Cathay Pacific has canceled more than three-quarters of its weekly flights in March, and American Airlines and British Airways have both decided to waive change fees. American also suspended flights to Milan. Meanwhile, IATA announced a temporary suspension of its rules governing airport slots, which dictate that airlines must fill at least 80% of their slots or risk losing their allocation.
easyJet, British Airways React to Dwindling Demand
Mirroring Lufthansa’s recent actions, easyJet will be cutting costs, freezing recruitment, promotion and pay, and offering unpaid leave as a result of the coronavirus’s impact on travel demand. easyJet will be canceling select flights, especially those on Italian routes, it revealed in an investor update. British Airways also announced that it would cancel some flights to and from Italy, Singapore and South Korea.
Lufthansa Implements Hiring Freeze and Unpaid Leave to Mitigate Coronavirus Losses
After Lufthansa stock dipped 13% this week as the coronavirus took a toll on its financials, the company announced it will reassess, suspend or defer all new hires. The airline group will also offer unpaid leave and more part-time work to employees, while pursuing administrative cost-cutting. Earnings figures will be announced at its annual results press conference on March 19. The Frankfurt-based group said 13 of its aircraft were grounded, after it canceled all flights to and from mainland China operated by its flagship airline, as well as by Austrian and Swiss, until March 28.
UAE Stops All Flights to Iran for One Week
Iran has become the epicenter of coronavirus in the Middle East, prompting the UAE Civil Aviation Authority to suspend flights to all Iranian cities for a week. The ban, similar to the one the UAE imposed on flights to and from China, minus Beijing, may be extended by another week. A total of 12 Iranians have died from the disease, with 60 confirmed cases. The nearby nations of Bahrain and Kuwait have also suspended flights to other affected countries. There are now 80,377 cases of the virus worldwide and 2,707 deaths.
Chinese Government Poised to Take Over HNA Group
HNA Group, which directly controls or holds stakes in a number of Asian carriers including Hainan Airlines, may be seized by the government of Hainan and have its assets sold to the nation’s three major flag carriers. The report, which began circulating last week, comes from anonymous sources familiar with the matter. HNA Group’s focus on acquiring non-aviation assets in recent years has left it short of cash and the conglomerate’s debts are mounting as a result of the coronavirus outbreak, but China is intent on containing the downward economic spiral. None of the companies involved have provided a comment.
IATA Predicts Quick Recovery After Sharp Decline in Demand
A report from IATA demonstrates a potential 13% full-year loss of passenger demand for carriers in the Asia-Pacific region, and claims that airlines around the world could lose a total of nearly $30 billion in revenue this year. The association forecasts a similar impact on demand as that experienced during the SARS outbreak: a sharp decline followed by an equally quick recovery. Over 200,000 flights have now been canceled or proactively removed from schedules to, from and within China due to the coronavirus, according to Cirium. British Airways announced an extension of its flight cancellations to Beijing and Shanghai until April 17, and temporarily suspended one of its two daily flights to Hong Kong until March 31. Meanwhile, EgyptAir announced it will resume flights to and from China starting February 27.
FlightHub and JustFly Automate Coronavirus Refund Requests
Sister online booking websites FlightHub and JustFly launched an automated hotline to quickly respond to cancellation, rescheduling and refund requests in the wake of the coronavirus outbreak. The team of developers created a matrix table that includes all possible combinations of reservation attributes that are eligible for a refund, as guided by respective airline policies. As of February 11, 5,000 refunds had been instantaneously processed – no verbal communication required. At some points, over 200 refunds were processed per hour.
Updates From Air New Zealand, Qantas and Asian Airports
Air New Zealand plans to resume its Shanghai route starting March 30 and its Hong Kong services throughout April and May, both with reduced capacity. The plan is dependent on New Zealand’s government lifting a Chinese travel restriction. Meanwhile, Qantas announced it will reduce its flights to Hong Kong through to at least June 2020 to better match current demand. According to data from Boyd Group International, China’s airports are projected to face a 30% drop in passengers in 2020. Retail, food and service concessionaires at Singapore Changi Airport will be offered a 50% rebate on their monthly basic rental costs for six months to ease the financial burden caused by the decline in passengers there.
Coronavirus Leads to More Capacity Cuts for Cathay Pacific
Cathay Pacific increased its predicted reduction in capacity over the coming weeks from 30% to 40% as a result of a substantial drop in travel demand amid the spread of the COVID-19 virus. The cuts will likely extend into the month of April. Earlier this month, the airline suspended its flights to London Gatwick, Rome, Washington DC, Newark, Male, Davao, Clark, Jeju and Taichung. Cathay said its financial results for the first half of 2020 will be significantly lower compared to the same period last year. Singapore Airlines also announced a temporary reduction in flights across its global network starting February 24 through May. The coronavirus has infected a total of 73,433 people worldwide and killed 1,866.
Coronavirus Will Be More Damaging for Airline Industry Than SARS, ICAO Says
The International Civil Aviation Organization (ICAO) has released insights into the economic impact of the coronavirus thus far on international travel. Among the statistics: 70 airlines have canceled all international flights to and from mainland China and 50 airlines have curtailed related air operations, resulting in an 80% reduction of foreign airline capacity to and from the country. Initial gross operating revenues for airlines worldwide are expected to be reduced by $4–5 billion in Q1. ICAO expects COVID-19 to have greater economic impacts than the 2003 SARS epidemic.
APEX Releases Official Statement on Coronavirus
Unless traveling in high-risk areas affected by the COVID-19 novel coronavirus, APEX encourages normal air travel with heightened vigilance, in line with guidance from the World Health Organization. In an official statement, APEX CEO Dr. Joe Leader said that “flights worldwide remain safe overall,” as the response from airlines and governments has been strong, and 99% of cases are concentrated in mainland China. In addition to the efforts being made by the industry to thwart the spread of COVID-19, it remains imperative that travelers do their part to reduce the risk of spreading illness. Frequent hand-washing and sanitizing, coughing into one’s elbow, and self-reporting after being in a high-risk area should ensure flying remains safe.
American Airlines Extends China Flight Suspension
The coronavirus outbreak, which to date has killed over 1,100 people and infected approximately 45,500, has led American Airlines to continue canceling flights to China and Hong Kong. Citing dwindling demand, flights between Dallas / Los Angeles and mainland China, as well as flights between LAX and Hong Kong are now suspended through April 24. Flights between Dallas and Hong Kong are suspended through April 23. Earlier this month, United Airlines canceled all flights to and from Hong Kong until February 20 due to a “continued drop in demand.”
Coronavirus Casts Shadow Over Singapore Airshow
The Singapore Airshow will go on, but 70 firms decided to not make an appearance at Asia’s top aerospace event amid concerns related to the coronavirus. With the disease estimated to have reduced the number of flights scheduled to operate to, from and within China by 24%, and the number of flights actually operated having been slashed by 50% compared to seasonal levels, Asian airlines are bracing for a grim financial picture this year. Embraer commercial aviation head John Slattery mentioned he is hopeful that the virus, which has claimed over 900 lives, will taper off in the next few weeks.
Hong Kong Airlines to Cut Jobs Due to Coronavirus
Following a similar decision taken by Cathay Pacific, Hong Kong Airlines will cut 400 jobs and reduce its daily operations by 63% starting February 11 and continuing until March. It has also asked its ground staff to take a minimum of two weeks unpaid leave per month, or switch to working three days a week between February 17 and June 30. An airline spokesperson believes the coronavirus will cause weakened travel demand to persist into the summer and said the carrier needed to take action to stay afloat. The virus has infected more than 31,000 and claimed 636 lives so far in China. There are 320 cases reported in 27 countries.
Cathay Pacific Cuts Flights, Asks Workforce to Stay Home in Wake of Coronavirus
The coronavirus outbreak has caused a steep decline in demand for flights with Hong Kong-based carrier Cathay Pacific. The company has asked its 27,000 employees to take three weeks of unpaid leave as a result, to be carried out on a voluntary basis between March and June. Cathay plans to cut its global capacity by 30%, including reducing 90% of its flights into mainland China over the next two months. United Airlines is experiencing a similar drop in demand and announced it will be canceling all flights to and from Hong Kong from February 8 until February 20.
US Tightens Travel Rules as Coronavirus Cases Climb
The Trump administration imposed a new set of travel restrictions which took effect on Sunday, prohibiting foreigners who have been in China in the last 14 days from entering the United States. Exemptions include whether they are an immediate family member of a US citizen or a permanent resident. Travelers who fall under the restrictions will be rerouted to one of 11 airports for enhanced screening. Airline staff will be tasked with questioning travelers about their recent travel history. Department of Homeland Security acting secretary Chad Wolf said “it’s imperative that individuals honor self-quarantine directives to help protect the American public.”
Pilot Association Sues American Airlines Over Flights to China
The union representing American Airlines pilots filed a lawsuit yesterday in which it accused the carrier of negligently and intentionally exposing its members to the coronavirus by continuing to operate flights to Beijing and Shanghai out of Dallas. American said Wednesday that it would only suspend flights between Los Angeles and mainland China starting February 9. Yesterday, the World Health Organization declared the coronavirus a global health emergency, which gives it the authority to question countries over unnecessary travel.
Asian Airlines Scale Down In-Flight Service to Stem Coronavirus Outbreak
Some Asian airlines are reducing in-flight services on certain short-haul routes in order to limit the spread of germs as the region contends with the coronavirus outbreak. China Airlines has replaced tablecloths, napkins and head pads with disposable alternatives. Cathay Pacific is servicing a hot snack in economy rather than a tray service, and serving business-class courses all at once.
Airlines Cancel Flights to China to Limit Spread of Coronavirus
With the Chinese coronavirus now having claimed over 130 lives, US airlines are beginning to modify their flight schedules. American Airlines will suspend flights from Los Angeles to Shanghai and Beijing from February 9 through March 27. Yesterday, United announced it would cut 24 flights between the US and China during the first week of February. Delta remains the only domestic airline with nonstop flights to China that has not adjusted its schedule. Globally, Finnair, Cathay Pacific and Jetstar Asia are reducing the number of flights to China while British Airways, Lion Air and Seoul Air have canceled them entirely.
Coronavirus Screening Expands to 20 US Airports
As the Wuhan coronavirus spreads, and the State Department prepares to evacuate US government personnel and private American citizens from the epicenter of the outbreak, the Centers for Disease Control (CDC) announced a move to monitor additional US airports, bringing the total number of facilities performing enhanced screening to 20. About 240 Americans are expected to fly to Ontario, California, from Wuhan tomorrow on a US government-chartered evacuation flight. More than 100 people have died from the disease, and five cases have been confirmed in the US. The State Department and the CDC have both cautioned against nonessential travel to China.
Germ-Killing Robot May Combat Coronavirus at US Airports
Dimer, the manufacturer of GermFalcon, is offering its services at no expense to airlines at airports currently screening travelers for the coronavirus. Los Angeles, San Francisco, and John F. Kennedy international airports will benefit from the germ robot’s strategically placed ultraviolet-C lamps designed to quickly and safely disinfect interior aircraft surfaces. Authorities in Wuhan, China, the virus’ epicenter, have closed the local airport and locked down all public transportation in an attempt to fend off the virus.
Three US Airports to Screen Passengers for Coronavirus
A live animal market in Wuhan, China was the likely source of a novel coronavirus outbreak that has spread to over 200 people in the country and claimed three lives. Health authorities have found evidence of human-to-human transmission of the disease. In an effort to contain the respiratory virus, screenings have begun at Los Angeles, San Francisco and John F. Kennedy international airports. The pressure to mitigate the risk of an outbreak is heightened as Lunar New Year, the largest human mass migration in the world, approaches.