Wednesday, May 15, 2024
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Boeing and Airbus battle severe liquidity headwinds

Boeing

Boeing and Airbus are both battling severe liquidity headwinds with the US plane-maker chasing a multi-billion-dollar bond issue, with investment banks, to keep it flying as moves to cull 10 per cent of its workforce.

Across the Atlantic, its arch-rival Airbus is warning of the “gravest crisis the aerospace industry has ever known.”

The gravity is illustrated by the leap in stored aircraft from 1,851 in December to 13,981 today.

Boeing is lining up banks to market a potential offering of US$10B or more if market conditions are favourable.

READ: Emirates ramps up COVID-19  refunds.

It is also considering applying to the US Treasury under the US$17B program for companies critical to national security.

New York aviation analysts Bernstein says however that it does not “believe that either Boeing or Airbus is headed for a critical liquidity situation unless the coronavirus crisis extends substantially into next year.”

It adds that Boeing was already in significant pain over the grounding of the MAX but benefits from over US$3 billion a year in cash from its defence businesses.

Bernstein says that despite the MAX crisis Boeing started the year “with US$9.5 billion in cash on its balance sheet but has since raised debt to add US$13.8 billion and has a US$9.6 billion revolver that is untapped.”

“It also cancelled its dividend that would have been over US$4 billion and has now cancelled the (merger with) Brazil-based Embraer, a deal worth US$4.2 billion.

Bernstein said that it expects Boeing’s free cash flow to be negative US$15 billion for 2020.

“While this is all substantial, we still expect the company to have adequate cash to make it through.”

Boeing’s backlog is 5049 aircraft but it suffered 379 cancellations this year.

Airbus’ situation is different and while it has access to €30 billion in liquidity, the main issue will be its ability to flex employment levels says, Bernstein.

“We are not expecting Airbus to hit a critical point, despite warnings from management.”

Yesterday Airbus Chief Executive Officer Guillaume Faury said at the company’s 1st quarter earnings call that it is “implementing a number of measures to ensure the future of Airbus.”

These include bolstering available liquidity, adapting production rates, concentrating on cash containment and its longer-term cost structure to ensure it can return to normal operations once the situation improves.

Airbus backlog is 7,650 aircraft.

The upside for both giants is that many of their major customers, like Emirates, are being funded by governments.

Air New Zealand voted most trusted brand downunder

Air NZ
Photo: Air New Zealand

Australians and Kiwis have chosen Air New Zealand as their most trusted, respected and admired company.

The airline said that “quiet skies haven’t stopped Aussies sharing their love for the Kiwi airline, making it four consecutive years Air New Zealand has topped The RepTrak Company’s annual reputation ranking in Australia.

Air New Zealand has also claimed the top position at home, pipping Toyota New Zealand, The Warehouse and KiwiBank in RepTrak’s New Zealand ranking.

SEE the best 747 air-to-air videos

In ranking first in both Australia and New Zealand, Air New Zealand has continued to outperform on reputation pillars such as innovation, citizenship, products and performance.

Air New Zealand Chief Marketing and Customer Officer Mike Tod says the news is heartening as the airline faces the most disruptive period in its 80-year history.

“This award belongs to our hardworking people, who despite deep uncertainty about the future, continue to represent our nation and airline with pride, serving our customers with outstanding dedication.

“Our Aussie connection began 80 years ago, when we took our first flight to Sydney’s Rose Bay on 30 April 1940. Australia is Air New Zealand’s largest international market and before COVID-19, at peak times we operated around 375 flights a week across the Tasman.

“While we’re down to a handful of international services and a fraction of our domestic flying for essential travel and cargo, we’ve been overwhelmed by messages of support and care from customers. Thank you Australia, and New Zealand, for continuing to put your faith in us. Our Air New Zealand family can’t wait to welcome you onboard again, when we can.”

Chief Executive Officer for The RepTrak Company Kylie Wright-Ford says the high esteem in which Australians and New Zealanders hold Air New Zealand will stand the airline in good stead as it continues to navigate the ongoing COVID-19 disruption.

“In times of crisis and uncertainty, having a consistently excellent reputation – as Air New Zealand does – is invaluable. Based on more than 20 years of providing data and actionable insights to companies globally we know people will continue to support companies that have stronger reputations.”

Further commentary on the RepTrak Australia and New Zealand rankings is available here.

Emirates ramps up COVID-19 refunds capabiliy

Emirates
Photo: Emirates

Emirates has ramped up its capability to process refunds, reaffirming its commitment to customers and travel trade partners impacted by travel disruptions caused by the COVID-19 pandemic.

With nearly half a million refund requests pending to manage, the airline has taken proactive steps to restructure its backend procedures and boost resourcing to accelerate the processing of refunds.

READ: Beautiful words from a 747 pilot as he gazes upon the earth.

Putting this in perspective pre-pandemic, Emirates processed an average of 35,000 refund requests in a month but now it is gearing up to handle 150,000 per month and aims to clear its current backlog by early August.

Sir Tim Clark, President Emirates Airline said: “It is a difficult time for us, as it is for all airlines. We are dipping into our cash reserves by being proactive in processing refunds, but it is our duty and responsibility. We would like to assure our customers and trade partners that we will honour refunds, and that we are doing our best to speed things up.

Emirates President Tim Clark
Sir Tim Clark

“The situation was dynamic in the early weeks of the pandemic, but we have since re-written our COVID-19 waiver policy into a simple, globally-applied approach that puts customers first. We’ve also proactively contacted those of our customers who had submitted earlier requests for refunds or booking changes, to let them know of the new options available to them.

“We sincerely hope that our customers and trade partners will choose to book and fly with Emirates again at a later time. For those who have opted to hold their tickets or exchange it for travel vouchers, we look forward to welcoming you on our flights again soon. Announcements will be made whenever we are able to resume services.”

Customers who wish to request travel vouchers or refunds can easily do so via an online form on Emirates’ website or contact their travel booking agent for assistance.

Emirates offers three options to its customers affected by flight cancellations and travel restrictions:

  • Simply keep their existing ticket for up to 24 months, and call to reschedule their flight when they are ready to fly. Emirates has extended this option to apply to any ticket booked on or before 30 June 2020, for travel on or before 30 November 2020.
  • Exchange the unused portion of their tickets for a travel voucher equivalent to the amount paid for their original booking. The travel voucher can be utilised for any Emirates product or service, with no change fees, providing customers more flexibility to reschedule when they are ready to travel again.
  • Refunds. Customers who have opted to keep their ticket or opted for a travel voucher can still apply for a refund if they are unable to travel. There will be no refund penalties.

Customers who have booked through travel agents should contact their agent for assistance where the same options will apply.

More information on Emirates’ waiver policy and its latest flight and business information relating to COVID-19 can be found here:

Beautiful words from a 747 pilot as we grapple with COVID-19

COVID-19

Beautiful words from 747 pilot, Christiann van Heijst, as we grapple with COVID-19.

Here are Christiaan’s thoughts from 40,000ft……

“Lockdowns, isolation and security measures across the world for over a month now. Global society came to a total standstill after the uncontrolled outbreak of this strange and new virus.

“Deserted streets, empty airspaces, entire populations locked in their homes and a gigantic economic crash that leaves us with more questions than answers.

“Flying as a long-range cargo pilot I appreciate my flights even more than before as passenger flights have been grounded overnight. Entire fleets parked indefinitely, tens of thousands of airline employees discharged or furloughed.

“And yet here I am skimming through the stratosphere, one of the very few and fortunate ones to keep on flying. Armed with masks, gloves and disinfectant gels we continue to provide medical supplies, food, toilet paper and other essential goods by airbridge across oceans and continents.

Christiaan van Heijst

“The clouds, the calming blue ocean, the glow of Earth’s atmosphere slowly blending into the infinite void of space. Well, technically space is not looking entirely empty this time: the moon rises on schedule. As she did undisturbed for billions of years and will continue to do so for many more.

“In a way, it is reassuring to see that the universe really keeps ongoing, with or without lockdown and virus: clouds form, grow and dissipate. Meteors trail across the stars and aurora dances vividly in the midnight sky.

No matter how bleak or depressing life may seem to many of us right now, try to keep in mind that we will get through all of this eventually. Just like the moon evolves through her phases and hides again in shadows, only to start her silent show of light and darkness all over again.

“Hold on and keep strong. We’re in it together (with some distance please) and perhaps we’ll gain an unprecedented sense of harmony and a much-needed sense of actual vulnerability instead of the vague gloom we have been hearing for so long.

“Have a nice weekend and stay safe!

“And if you can’t sleep at night; open the curtains and look up to those twinkling stars. You might even see a solitary silver bird up there, glimmering by the spell of moonlight.

Christiaan is one of the world’s leading aviation photographers and more of his work and more close encounter (s) can be found here.

You can follow Christiaan on Instagram here: @jpcvanheijst

Airport blocks Virgin Australia plane with bulldozer

Virgin Australia

Perth Airport, in Western Australia, is blocking four Virgin Australia aircraft to protect its financial exposure after the airline was placed in administration this week.

The airport has confirmed it has taken liens on four Virgin aircraft, though some of those do not currently have engines.

One aircraft, which is not in use, is being blocked by an airport vehicle to prevent a tow bar being attached. A bulldozer is blocking the movement of another.

SEE Amazing pictures of grounded Jetstar and Qantas aircraft 

Perth Airport is owed A$16 million by Virgin Australia, which comes on top of A$20 million that Qantas has refused to pay on outstanding invoices.

The airport had previously confirmed it expects a loss of A$100 million in revenue for the next three months due to the impacts of COVID-19.

A spokesman said the airport was “working cooperatively with Virgin’s administrators to try to help the airline come through the current coronavirus crisis.”

“Virgin has significant outstanding invoices from Perth Airport for airfield and terminal use charges — money the airline has already collected from its passengers and the FIFO sector,” he said.

Virgin Australia

“While Perth Airport is working with the Virgin Australia administrators, it also needs to protect its own interests.

“Perth Airport has taken liens over a number of Virgin aircraft — a standard practice in these situations. The aircraft affected are not being used for current FIFO or interstate operations and have been parked at Perth Airport for some time now.

“There will be zero impact on the State’s resources sector.

“At this point in time, we continue to facilitate Virgin’s FIFO flights through T2 while we try to secure an agreement with the administrators.”

Virgin Australia is continuing to fly about 180 mainly FIFO flights each week.

The airport said that “maintaining a two-airline system in Australia post-COVID-19 is absolutely essential for the aviation and tourism sectors, and the broader economy”.

But Qantas has hit out at Perth Airport.

A spokesman said “even by Perth Airport’s standards, this is extraordinary behaviour. Protecting your interests is one thing but parking a bulldozer in front of an aircraft while saying you’re  ‘working to secure an agreement’ is ridiculous.

“It’s no way to treat a customer of 20 years. This kind of action is deeply worrying for all users of Perth Airport. ”

“We have our own dispute with Perth Airport over excessive charges, which has been going through the courts for over a year. As part of that, they refuse to negotiate and pay up on the terminal (Terminal 4) they have effectively taken back from us, which is valued at well over $150 million. How would they feel if we took the same approach to collections as them?” the spokesman said.

However in a tit for tat exchange a Perth Airport spokesman responded;

“Perth Airport is on the record as repeatedly trying to seek a commercial resolution with Qantas and has made multiple offers to achieve this, all of which have been rejected by Qantas.

“In relation to Terminal 4, we are following an agreed joint independent valuation process. Qantas is fully aware that an independent valuer has been agreed and appointed because they have been involved in the process.

“We are puzzled by Qantas’s latest comments and the motivations behind them,” the spokesman said.

Today, administrators from Deloitte said that from their initial review of the books and records of the airline’s companies, they had identified about 10,247 known creditors, including about 9020 employees.

It noted that “this is likely to change as more information becomes available”.

The administrators said they expect the total number of creditors to be more than 12,000.

The initial review of debts totalling A$6.9 billion was made up of:

  • Lenders under secured corporate debt and aircraft financing facilities — A$2,283,639,303
  • Unsecured bondholders — A$1,988,250,000
  • Trade creditors — A$166,704,085.69
  • Aircraft lessors — A$1,883,914,848
  • Landlords — A$71,209,929 and
  • Employees — A$450,777,961

Air New Zealand donates excess food to front line workers

Air New Zealand

Air New Zealand has donated more than 52,000 inflight snacks to local essential workers and charities to show its appreciation for those on the front line.

The airline says its reduced flying schedule has resulted in a large quantity of excess inflight snacks.

READ: Emirates flight attendants cover up to fight COVID-19

More than 190 boxes of Cookie Time cookies and One Square Meal bars were shipped to essential workers at police stations and hospitals, as well as charities and social enterprises such as Eat My Lunch, KidsCan, Ronald McDonald House Charities, Women’s Refuge, Refugees as Survivors New Zealand and Everybody Eats.

Air New Zealand General Manager Global Brand and Content Marketing Jodi Williams said “it’s great to give a koha to fellow essential workers and local charities who have been supporting the community and keeping Aotearoa running throughout this challenging time.

“It’s been a demanding few weeks for the entire country, but especially for local charities and our essential workers who turn up to work every day to keep our communities safe. I’m pleased Air New Zealand can provide a little bit of sustenance as a small thank you to those on the front line.”

Air New Zealand General Manager Supply Chain Chloe Surridge says the airline continues to factor sustainability into its supply chain – including how items are disposed of.

“Gifting these snacks is a great way to acknowledge the incredible work of our essential workers and social enterprises as well as providing extra resource for charities supporting the community with food donations at this time. It’s great to be able to gift a product that would have otherwise gone to waste,” said Ms Surridge.

Amazing photos of grounded Jetstar and Qantas aircraft

qantas

Some amazing photos have been taken of grounded Jetstar and Qantas aircraft.

Ingrid Henriksen Photography has taken these incredible photos of the grounded jets at Avalon Airport in Victoria.

Ingrid writes: “Thank you, everyone, for your overwhelming response to the images from last Sunday’s flight over Avalon!

“Due to so many requests, a selection of these photographs can now be purchased as prints in a range of finishes and sizes, on my website.

 

Emirates flight attendants -and passengers – to cover up to fight COVID-19

COVID-19

Emirates flight attendants -and passengers – are to cover up to fight COVID-19.

The airline is dramatically stepping up precautionary measures at the airport and onboard to ensure the health and safety of its employees and customers.

All cabin crew, boarding agents and ground staff in direct contact with passengers will now don personal protective equipment (PPE) which includes a protective disposable gown over their uniforms, and a safety visor, in addition to masks and gloves.

At Dubai International airport, gloves and masks are mandatory for all customers and employees.

SEE Moonlight over Prince Wiliam Sound 

Thermal scanners monitor the temperatures of all passengers and employees stepping into the airport. Physical distancing indicators have been placed on the ground and at waiting areas to help travellers maintain the necessary distance during check-in and boarding.

The airport team has also installed protective barriers at each check-in desk to provide additional safety reassurance to passengers and employees during an interaction over the counter.

Onboard Emirates’ flights, seats are pre-allocated with vacant seats placed between individual passengers or family groups in observance of physical distancing protocols.

Emirates has also modified its inflight services for health and safety reasons. Food and beverages continue to be offered in the form of bento-styled boxes to reduce contact between the crew and customers during meal service and minimise the risk of interaction. The personal boxes provide customers with sandwiches, beverages, snacks and desserts.

Similarly, to reduce the risk of spreading the virus by touch, magazines and other print reading material are temporarily unavailable.

Cabin baggage is currently not accepted on flights. Carry-on items allowed in the cabin are limited to laptop, handbag, briefcase or baby items. All other items have to be checked in, and Emirates will add the cabin baggage allowance to customers’ check-in baggage allowance.

Customers have to wear their masks and gloves throughout their journey from check-in until they disembark.

All Emirates aircraft will go through enhanced cleaning and disinfection processes in Dubai, after each journey.

 

Moonlight and aurora over Prince William Sound from a 747

Alaska

Moonlight and aurora over Prince William Sound from a 747 cockpit.

Another stunning photo from 747 pilot Christiaan van Heijst.

SEE: Stunning images of Himalayas 

Christiaan takes up the story:

“Cruising along Anchorage’s Northern Lights Boulevard, this time by plane and quite literally.

Glaciers, mountains, whales, taildraggers, halibut, Alaskan Amber and views that leave even the most unconcerned visitor breathless.

This specific southern part of Alaska’s mountainous coastline is one of the most spectacular nature reserves I’ve ever had the chance to visit: countless glaciers, fearsome mountains and wildlife scenes that seem to come straight from a National Geographic documentary.

I was fortunate to do some whale-watching & glacier tours here with colleagues, road-tripped across the scenic highways of the Kenai Peninsula, to Whittier and Seward by myself or with friends, flew with a small plane across the rough and unforgiving Denali landscapes and witnessed the Alaskan magic both by day, night, dawn and dusk from the comfort of my 747 cockpit.

Every single second of those trips was wonderful and fascinating, absorbing the impressions from a place on Earth where nature defines the life of man, instead of the other way around.

I profoundly miss Alaska, though I’m sure I’ll be back again one day soon. Checking up on my awesome friends there, making sure the local beers still taste good, renting a car and heading ‘out there’ by myself with my camera in reach.

Mountains that dominate the view from the city of Anchorage, wildlife roaming into the streets whenever they please, bears on the hunt for food around the airport.
The Final Frontier, the wild that already starts before you leave the city of Anchorage. I love it.

I look at the moon-lit glaciers and clouds below, mesmerise at the glowing aurora above. The raw beauty of mother nature, combined with one of the most profound and underappreciated achievements of 20th-century achievements: aviation. And at its pinnacle the glorious 747.

Yes, I am biased and I don’t care.

Good luck Alaska, take care, stay safe and I cross my fingers everything will be back to normal again soon. Love from the Netherlands.”

Christiaan is one of the world’s leading aviation photographers and more of his work and more close encounter (s) can be found here.

You can follow Christiaan on Instagram here: @jpcvanheijst

Virgin Australia to have major network post administation

Virgin Australia

Australian treasurer Josh Frydenberg is pushing for a new Virgin Australia to have a major network and be a robust competitor to Qantas as KordaMentha reportedly circles to take over as administrator.

Mr Frydenberg said the government wants “to encourage as widest service as possible across the country, not just for tourism but also for freight routes and Virgin was performing that important service.”

“What we will do and what we have already started to do is engage with the ACCC as the regulator of competition across the economy to ensure that major market power is not abused and that Virgin, on the other side of this coronavirus crisis, can continue to operate and not be squeezed out of the market.”

SEE: In-flight entertainment in the golden age of flying 

A robust Virgin Australia is very important to WA with its Perth-based fleet of 6, 162-seat A320s and 14, 100-seat Fokker 100s serving a host of regional towns and FIFO destinations across the state.

While, Queensland and NSW fight over where the airline should be based post-administration, Perth remains a key part of the network as a FIFO base and taps the large resource industry business.

Abandoning Perth would be walking away from the corporate market and while the new Virgin Australia may be re-positioned in the market, it is certain to have premium classes and lounges.

Rating agency S&P also believes that Virgin Australia will fly out of administration saying “we expect that a debt restructuring should facilitate a recapitalization of the company, which should enable Virgin to emerge from the restructuring and continue as Australia’s second-largest domestic airline.”

There are now more than 10 suitors circling Virgin Australia’s administrators Deloitte looking at the opportunity of picking up a debt reduced airline.

Mr Frydenberg said that he believes that the suitors are “very serious.”

“I do believe there is a lot of significant interest from commercial parties.”

And there is a lot of interest from high profile administrator KordaMentha which made its start with the collapse of Ansett.

The company performed a quite extraordinary job of paying 96 cents in the dollar for employee entitlements over 10 years.

KordaMentha sold off aircraft, terminals and more than 10 million spare parts.

In the biggest administration in Australian history employees received the bulk of their money in the first three years and then a dividend every year for the remaining years.

A creditors meeting early next week for Virgin Australia will provide an opportunity for KordaMentha to put its name forward to look after the administration.

KordaMentha was contacted for comment.

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