Saturday, March 28, 2020
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Aussies coming home face compulsory quarantine

Photo: Steve Creedy

People returning to Australia from overseas could spend up to a month in isolation if they transit through another state on their way home.

Australia is introducing new regulations from midnight Saturday that require all returning passengers to be held in isolation at their first port of call in a designated facility such as a hotel.

“If their home is in South Australia or in Perth or in Tasmania and they have arrived in Melbourne, they will be quarantining in Melbourne,’’ Prime Minister Scott Morrison said.

READ: Qatar Airways defies capacity trend to fly travelers home.

Arrivals will be transported directly to the facility after completing immigration, customs and health checks.

Those that fly on to another state or territory after completing their isolation could then face another 14 days of self-isolation under state-based rules.

Australian passengers from a cruise ship docked in Western Australia are already subject to the new laws and Premier Mark McGowan confirmed passengers from other states would be quarantined in WA for 14 days “before going to their home state for a further 14-day self-isolation period”.

The states will run the isolation programs for overseas travelers, assisted by the Australian Border Force and Australian Defence Force, and returning travelers will be provided with food and accommodation.

Victorian Premier Daniel Andrews said people would be quarantined in hotels, motels, caravan parks and student accommodation.

He said authorities would try to accommodate travelers close to home but warned this might not always be possible.

The upgraded quarantine rules replace the previous system of self-isolation at home and were prompted by the number of local COVID-19 cases stemming from people returning from overseas hotspots.

“Two-thirds of the cases that we currently have are from an Australian who has come home: two-thirds,’’ Morrison said. “That is very different to what we’re seeing in other parts of the world.

“Our biggest issue, the biggest number of cases, relate to this. And as time has gone on, the risk of those who are returning from other parts of the world actually increases because more countries have the virus.”


Plane parking lots to spring up around Australia

Photo: Marcus Graff

The few people still traveling around Australia will see more parked planes than they can poke the proverbial stick at scattered around the nation’s airports from early April.

Qantas is parking more than 150 aircraft and Virgin Australia 125  as a result of the precipitous fall in demand and the need to preserve cash.

Qantas said its aircraft would be parked at airports around Australia until demand returns. A handful would also be parked overseas.

READ: Embraer brings aviation innovation to the COVID-19 flight.

Victoria’s Avalon Airport and major airports in Brisbane, Melbourne and Sydney will each have around 40 parked aircraft.

Avalon, a former Qantas heavy maintenance base, will see the majority of the Qantas Airbus A330s as well as more than dozen Qantas and Jetstar Boeing 787s.

“Around 30 Qantas and Jetstar engineers will be deployed at Avalon to ensure the aircraft are ready to fly when demand returns,” the airline said.

Brisbane Airport will have a mix of aircraft and many of them will be undergoing maintenance checks at the airline’s facilities there.

Melbourne gets a mix of Jetstar Airbus A320s and A321s and 787s as well as Qantas Boeing 737s and Airbus A380s.

Sydney is where five Boeing 747s will be parked along with a number of A380s, Qantas 737s and Jetstar A320/A321s.

Qantas said about 30 aircraft would be used as operational spares and will be spread across the network.

Virgin chief executive Paul Scurrah said earlier this week that its aircraft would be spread across airports and defense facilities.

He said airports had put aside recent rivalry to help the airline.

Also looking at a busy time during the crisis is Australia’s only long-term aircraft storage facility, Asia Pacific Aircraft Storage, in Alice Springs.




Embraer brings aviation innovation to the COVID-19 fight

Image: Embraer.

Brazilian aircraft manufacturer Embraer is using its formidable engineering and technology skills to help fight the war against COVID-19.

The plane-maker is making parts for ventilators and respirators at its facility in Sao Jose dos Campos that are designed to replace imported components.

It is one of several coronavirus projects Embraer has underway as it works with other companies and research centers to combat the virus.

It’s also developing high-efficiency filtration systems for transforming regular hospital beds into intensive care beds and studies for the development of simple, robust and portable respirators aimed at rapid implementation and availability.

READ: Qatar Airways defies capacity trend to fly travelers home.

The technology to convert regular hospital beds into intensive care beds is being developed in partnership with the Albert Einstein Hospital Sao Paulo.

Embraer is providing technical support for the use of highly efficient filters used in aircraft air conditioning to provide air quality control in the beds.

Another team is dedicated to analyzing the manufacturing control valves and flow sensors for another respirator company and help it adapt an existing respirator for use in combating COVID-19.

“The global health care system is facing an unprecedented scenario, and Embraer plans to apply its capacity during this moment of global collaboration and demand for effective and short-term solutions,’’ the manufacturer said, adding it would keep looking for ways to apply its expertise.

The Brazilian manufacturer is not the only airframe-maker to turn its mind to the coronavirus fight.

Boeing is also looking at how its plants can produce respirator parts and Airbus has been using its test aircraft to import medical supplies from China.

Meanwhile, the Brazilian manufacturer said this week it expected a further delay in a European Commission decision on a takeover deal that would see Boeing take 80 percent of its commercial aircraft business.

It now doesn’t expect to hear from the commission until the end of June.

The Europeans announced the review in 2019, citing worries about reduced competition between commercial aircraft manufacturers.


US airlines must fly to all ports to access aid payments

American aid package airlines
American CEO Doug Parker in Tulsa. Photo: American

US airlines that take up direct payments under the nation’s coronavirus relief bill will need to keep flying to the destinations they currently serve.

Details of the $US50 billion airlines will receive under the $US2 trillion CARES Act were revealed in a video to staff from American chief executive Doug Parker.

The Act has passed through the Senate and could go through the House as early as Friday US time.

READ: Alaska sees substantial flight cuts for several months.

Parker also revealed that American’s flights are less than 15 percent full, despite the fact it is flying just under half of its normal schedule.

He said American would be eligible to receive about $US12 billion from the package.

“We are confident those funds along with our relatively high available cash position will allow us to ride through even the worse of potential future scenarios,’’ he said.

Parker said $25 billion was in the form of loans for airlines and another “more interesting” $25 billion was available as direct payments.

The direct payments were conditional on the airline agreeing to retain some service to every airport in the US that has commercial air service today as well as to not involuntarily furlough any staff.

“Both of those commitments would be in place to September 30 at which time we all hope and expect this health crisis will be behind us and Americans will be flying again,’’ he said, describing the act as “exceptional bipartisan legislation’.

“Essentially, the US government is providing funds to motivate airlines to continue air service and not involuntarily furlough any team members through a period of incredibly low demand for air travel.

“There are no similar provisions in the bill for other large industries.”

The American CEO said airlines were singled out because of their importance to the US in general and after CEOS warned that flying would be seriously reduced and furloughs implemented without the assistance.

“We further let them know that, unlike most other businesses, once we materially downsized, it would take months to take start up again,” he said.

“This was because our team members would require significant training time and aircraft would need to be gradually brought back into service.”

However, there was a caveat: Parker said the $US25 billion in direct payments required airlines to meet conditions that weren’t currently well defined.

He said he was not yet positive that American would meet those conditions and receive the funds that would allow it to meet the no furlough obligation.

“But based on my personal conversations with the administration I’m highly confident they want us to be flying so I expect their terms will not be onerous.,” he said.

Warning Asia-Pacific airports could lose 1.5 billion pax to COVID-19

coronavirus airports
Photo: Changi Airport.

Asia-Pacific airports are worried a prolonged COVID-19 outbreak may lead to the loss of up to 1.5 billion passengers across the region and slash 2020 airport revenue by almost $US24 billion.

The Airports Council International Asia-Pacific also expects airports in the Middle East to see revenue drop by $US5.7 billion.

The airport industry group has urged governments in both regions to swiftly implement relief measures to safeguard airport employment and connectivity.

READ: Smaller Australian airlines issue mayday on government aid.

Analysis by ACI Asia-Pacific of preliminary weekly passenger data from January to the middle of March at 12 major hubs in the region shows traffic deteriorating by 80 percent compared to the same period in 2019.

The airports are calling for the suspension of slot usage requirements until the end of June and tax relief for the aviation sector.

This would include a temporary halt of all national and local aviation taxes.

They also want the suspension or ferment of airport operators’ concession fees to governments, revenue protection and, in some circumstances, government financial assistance.

“Legislators have to carefully balance survival and revival measures, addressing both the urgency of short-term needs with smart initiatives that will also facilitate a strong recovery down the road,’’ said ACI Asia-pacific director-general Stefano Baronci.

“Several governments are still pondering which measures to apply as the crisis unfolds. ACI Asia-Pacific strongly advocates for policy measures that benefit all parties of the aviation sectors without prejudice in favoring airlines.”

The airport plea came as Asia-pacific airlines revealed passenger numbers had fallen 43.9 percent in February ahead of sharper falls expected in March.

The Association of Asia Pacific Airlines said demand, as measured in revenue passenger kilometres, was down almost 35 percent and load factors across the region fell 14.4 percentage points to 66.6 percent for the month.

While cargo demand held up, capacity fell by a sharp 13.5 percent as belly-hold capacity fell as flights were cut over the course of the month.

AAPA director-general Andrew Herdman said every effort was being made to ensure shipments of critical relief supplies, including food and medical equipment, were being transported safely and efficiently around the world.

“Asian airlines account for over one-third of global air cargo flows, and operate large numbers of dedicated freighter aircraft,’’ he said.

“The sharp fall in passenger services has removed significant belly-cargo capacity from the marketplace. A number of airlines are now operating supplementary cargo services using passenger aircraft to meet the demand.”

Herdman joined widespread calls for governments to move faster on industry relief.

“The COVID-19 pandemic has posed unprecedented challenges, both operational and financial, to the airline industry and the wider travel and tourism sector worldwide,’’ he said

“Whilst some governments have moved quickly to provide measures of financial support, much more needs to be done to reduce the risks of permanent damage to critical sectors of the economy.”

Smaller Australian airlines issue mayday on government aid

airlines COVID-19
A REX SAAB 340. Photo: Rex

A call by Australian regional carrier Rex for urgent government assistance has been echoed by other smaller airlines warning they face imminent closure.

The regional and charter carriers have written jointly to the Australian government with a desperate plea for a financial lifeline in the face of air travel restrictions and state lockdowns.

The carriers — Air Link, Aviair, Alliance Airlines, Chartair, Fly Corporate, FlyPelican, Hardy Aviation and Sharp Airlines — warn their financial survival “can be counted in days rather than weeks”.

READ: Virgin Australia downgrade underscores need for government aid.

“The continuing existence of jobs for the many thousands of employees engaged directly or indirectly by our companies (is) now in jeopardy,’’ the letter says.

“Given the urgency of the situation we call upon government to offer our companies a lifeline. We request reconsideration of the design of its current aviation assistance packages to allow them to provide more tangible aid to a vital air transport sector struggling to cope.”

The airlines say they are unlikely to benefit from a previously announced $A715m aviation support package that offers waivers in areas such as fuel excise and air navigation charges because the relief assumes airlines are still flying when this is largely not the case.

It calls for that money to be immediately reallocated to provide more immediate and targeted financial relief.

It also emphasizes that regulatory requirements smaller airlines need to meet before they can re-open differentiates them from other small businesses.

“The Government, while repeatedly proclaiming the importance of protecting regional aviation as a vital resource for growing the economy appears, instead, to have wiped its hand of the industry at what is its most critical time,’’  they say.

“If existing operators are not protected until such time as the COVID-19 crisis resolves, restoration of regional air travel services is highly doubtful given the significant regulatory and system development barriers making entry by new operators exceedingly difficult.”

Meanwhile, Rex has indicated a move by the competition watchdog to allow it to coordinate with bigger airlines on regional routes will only work if it gets other government assistance.

The Australian Competition and Consumer Commission on Thursday granted interim authorization to Regional Express (Rex) allowing it to coordinate flight schedules with Virgin Australia and Qantas on 10 regional routes during the coronavirus pandemic.

The routes include four in NSW, one in Victoria, three in South Australia and two in Queensland.

But Rex said it would only enter discussions with QantasLink if there are meaningful assistance packages from federal, state and local governments that would “keep essential air services going”.

The carrier has previously warned it will suspend all services except government-subsidized routes in Queensland from April 6 unless it gets government help.

“The federal, state and local governments all need to act urgently and decisively to determine specific assistance packages so that the airlines can at least provide the bare minimum of essential air services to keep the communities running,’’ Rex deputy chairman John Sharp said.

“For example, Rex carries critical blood supplies daily to regional and remote communities on its network, as well as transporting COVID-19 testing samples from regional centers to capital cities for analysis. This may no longer be possible in the foreseeable future.”

Singapore Airlines aims to raise $S15 billion for COVID-19 battle

Photo: Singapore Airlines.

Singapore Airlines is shoring up its defenses against the devastating impact of COVID-19 with an offer to shareholders of up to $S15 billion ($US10.5 billion) in new equity and convertible bonds.

The company will offer all shareholders $S5.3 billion in new equity and up to a further $S9.7 billion through an issue of 10-year mandatory convertible bonds. Mandatory convertible bonds require the holder to convert the bonds into shares at a given date.

Both will be offered as a rights issue offering a significant discount of more than 50 percent on the airline’s last traded share price.

READ: Virgin Australia downgrade underscores the need for government aid.

Singapore (SIA) has also arranged a $S4 billion bridge facility with DBS bank to support its near-term liquidity requirements.

The rights issuances are subject to shareholder approval but are being backed by the airline’s biggest shareholder, state-owned Temasek Holdings.

Temasek International chief executive Dilhan Pillay said SIA had seen strong future growth before the hit from the pandemic.

“We fully support SIA’s plans to transform itself,’’ he said.

“This includes the modernization of its fleet. The delivery of a new generation aircraft over the next few years will provide better fuel efficiencies as well as meet its capacity expansion strategy.”

“The aviation sector is a key pillar of Singapore’s economy, supporting more than 12 percent of the country’s GDP and 375,000 jobs.

“The group is at the heart of the aviation ecosystem, with SIA, SilkAir and Scoot accounting for more than half of the passengers flying in and out of Changi Airport.”

SIA has described COVID-19 as the biggest challenge in its history and has joined other international carriers in taking dramatic action in response.

This included grounding 96 percent of its fleet and asking staff, including pilots, to take leave without pay.

“Since the onset of the Covid-19 outbreak, passenger demand has fallen precipitously amid an unprecedented closure of borders worldwide,’’ SIA chairman Peter Seah said.

“We moved quickly to cut capacity and implement cost-cutting measures. “

Seah said he was heartened by the strong support from staff and noted the company had worked closely with the government to bring Singaporeans home.

“At the same time, we are also working with various parties to enable our staff on no-pay leave to have other income opportunities,’’ he said.

“We are especially grateful for Temasek’s strong vote of confidence. The Board is confident that this package of new funding will ensure that SIA is equipped with the resources to overcome the current challenges, and be in a position of strength to grow and reinforce our leadership in the aviation sector.”

AirAsia shuts down most of its network

Photo: Brisbane Airport

Seven airlines flying under the AirAsia brand will see flights across their networks completely or mostly suspended as they join the battle for COVID-19 survival.

AirAsia Group Bhd announced it was “temporarily hibernating” most of its fleet across its network with AirAsia Malaysia and AirAsiaX joining other carriers in cutting flights.

AirAsia Malaysia will suspend all international and domestic flights from March 28 to April 21 while long-haul unit AirAsiaX will suspend most flights from the same date to May 31.

READ: Alaska sees substantial flight reductions for several months

Already on the ground are AirAsia Philippines (until at least April 14), AirAsia India (for 21 days) and AirAsia X Thailand (for three months).

AirAsia Indonesia has significantly reduced international flight frequencies and is continuing to fly domestically at a reduced frequency.

Like other airlines, AirAsia carriers have been hit by falling demand and government restrictions on travel.

Airlines across the globe are slashing capacity and expenses in a bid to conserve cash.

The AirAsia changes come as Bloomberg reported the group was looking at a number of options to shore up AirAsia X, including an investor, support from Malaysia’s sovereign wealth fund or shuttering the airline.

A source told the business wire deliberations were at an early stage and the company hadn’t made any final decisions.



Virgin Australia downgrade underscores need for government aid

Virgin Australia

Virgin Australia has descended further into junk territory after its credit rating was downgraded from B- to the higher-risk CCC  by S&P Global Ratings.

The rating agency also placed the airline on CreditWatch, saying this reflected its view that a default or a distressed exchange appears increasingly likely over the next 12 months.

A distressed exchange occurs when a company offers creditors new or restructured debt or a new package of securities to reduce its financial obligations.

The downgrade is in response to moves by the airline to cut domestic capacity, ground 125 aircraft and stand down 8000 staff, about 1000 of whom will be made redundant.

READ: Virgin stands down 8000 workers, cuts flying by 90 percent.

It further underscores the need for action by the Australian government to provide industry support during the COVID-19 crisis to underpin a competitive aviation industry.

The analysis does not take into account any extraordinary support from the Australian government, although it notes the government has publicly stated it is carefully considering further support measures for the industry.

It suggested help from major shareholders Etihad Airways, Singapore Airlines, Nanshan Group, HNA Group and Virgin Group is unlikely as they struggle with their own problems.

“Despite management initiating decisive measures to preserve cash, we nevertheless believe the scale of the COVID-19 exogenous shock has created an immediate and sizable cash outflow,’’ S&P said in its analysis.

“We estimate that up to half of Virgin Australia’s operating costs are fixed and that a reduction in variable costs will not offset the collapse in revenue.

“In addition, the positive working capital benefit provided by forward bookings and the Velocity Frequent Flyer business is now likely to partially unwind.

“As a consequence, Virgin Australia’s previous $A900 million unrestricted cash buffer is likely to materially reduce in the very near term.”

Contrary to comments by Qantas chief executive Alan Joyce, S&P said it believed Virgin Australia was fundamentally well managed and that the Australian domestic market dynamic was fundamentally sound.

It noted Virgin had successfully repositioned itself as a full-service carrier, had the youngest domestic fleet, a dual-brand strategy and an integrated frequent flyer business.

The agency also believed management had taken decisive action to improve the long-term viability of the airline through measures such as resetting the cost base and exiting underperforming international routes and bases.

However, it warned it could further lower the rating if Virgin Australia’s liquidity deteriorates to such an extent that a default or distressed exchange eventuated or appeared almost certain.

“Conversely, we could raise the rating if the Australian government or other parties provide timely financial support that buttresses the group’s liquidity or there is a reversal of the COVID-19 outbreak to the extent that domestic passenger volumes swiftly recover,’’ it said.

The downgrade came as the competition watchdog gave Australian airlines special dispensation to co-ordinate on some regional routes during the COVID-19 crisis.

The Australian Competition and Consumer Commission on Thursday granted interim authorization to Regional Express (Rex) allowing it to coordinate flight schedules with Virgin Australia and Qantas on 10 regional routes during the coronavirus pandemic.

The routes include four in NSW, one in Victoria, three in South Australia and two in Queensland.

But Rex has unveiled plans to cease all flying except subsidized Queensland routes from April 6 unless it gets government assistance and said it would only enter into discussions with QantasLink if that assistance was forthcoming.

The authorization will allow the airlines to share revenue, but the approval is conditional on airlines charging fares no higher than those in place on February 1, 2020, a move the ACCC says will prevent them from raising prices.

“We recognize this is an urgent request,’’ ACCC chair Rod Sims said.

“This authorization will help provide certainty for regional flight operators to support services on these routes for those who need to use them.

“We hope that this temporary measure will also support airlines’ ability to again compete with each other on these routes once the pandemic crisis has passed.”

Sims said the ACCC stood ready to assist airlines in the current crisis with other moves to co-ordinate their operations during the current crisis.

The coordination could involve arrangements such as each carrier on a route operating one daily service, with revenue shared between carriers, he said.

Or it could involve an operator suspending operation on a route to allow another carrier to maintain a viable service.

The ACCC can review the Rex authorization at any time and is seeking comment on the move.


Giant Antonov returns to the skies

A file pic of The AN-225. Photo: Antonov Airlines.

The world’s biggest plane, the Antonov AN-225, is back in the skies and may soon be making a welcome return to the cargo market.

Flightradar24 recorded a March 25 flight of just under two hours by the giant, six-engine Antonov AN-255 at its home in Kyiv, where it has been undergoing a major upgrade.

AN-225 Antonov
Flightradar24 tracked the flight.

It was spotted by AN-225 enthusiast and Popular Mechanics writer Eric Adams who said the aircraft entered the maintenance and upgrade program in October, 2018.

READ: Darwin-London history relived as Qantas oprates first non-stop flight.

“The flight lasted two hours, with the aircraft completing two laps above the Ukrainian countryside before returning to Antonov Aiport (GML),” Adams said.

“The airstrip is owned by the company and serves as the primary R&D and flight test center for its heavy-duty cargo aircraft.”

The AN-225 caused traffic chaos in Perth, Australia, when it visited in 2016 to deliver a 117-tonne power generator.

Watch the AN-225 land in Perth

Called Mriya (Dream in Ukrainian), the plane was developed for the Soviet space program to carry the Buran spaceplane and Energiya rocket.

It entered commercial service in 2001 and has set more than 240 world records during its lifetime.

The monster plane has a maximum take-off weight of 640 tonnes. is powered by six turbofan engines and a landing gear system boasting 32 wheels.



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