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Alaska sees substantial flight reductions for several months

Alaska

Alaska Airlines is reducing its April and May flight schedule by 70 percent and is planning for substantial reductions for at least the next several months.

Alaska said US carriers were seeing demand reductions of more than 80 percent as lockdowns and fears about the coronavirus sweep across the country.

It said flight schedules for June and beyond would be based on demand “but it is our expectation that reductions will be substantial for at least the next several months”.

READ: Air New Zealand unveils reduced schedule for dark days ahead.

“Alaska’s goal, since the onset of this outbreak, has been to keep our employees and guests safe and healthy, and to ensure that our airline is here to support and serve them in the future,” said Alaska chief executive Brad Tilden.

“But we also know that given the lack of demand for air travel and profound impact on the financial management of our business, hard work and aggressive control of costs and cash are required, even with additional support.”

Shares in Alaska and other US carriers jumped Wednesday on the news an agreement had been reached on Capitol Hill to pass a $US2 trillion stimulus package that contains $50 billion support for airlines.

However, the airline said it was taking action to improve liquidity and reduce spending by suspending its cash dividend and share buy-back program, drawing down $US400m on its line of credit and securing an additional secured loan for $US425m.

Tilden and Alaska president Ben Minicucci are foregoing their pay and other managers are taking cuts of between 20 percent and 50 percent.

Employees are being asked to take a voluntary leave of absence but are being offered health and travel benefits if they do.

Pay increases have been suspended, hours are being cut and contractors and temporary workers are being released.

“These actions are unprecedented, but these are truly unprecedented times,” said Tilden. “Alaska has been here for 88 years to serve our customers and communities and to provide good jobs for our people.

“It is imperative that we act swiftly and courageously to ensure that we’re here to continue our mission in the future.”

 

Bureaucratic cargo bottlenecks could cost lives, warns IATA.

air cargo
Photo: Alexandr Markin/Wikimedia Commons.

Air cargo bottlenecks caused by bureaucratic processes are risking lives by delaying shipments vital in the war against COVID-19.

The International Air Transport Association is urging governments to take urgent measures to ensure that freight lines remain open, efficient and flexible.

The call comes as almost half the global airline passenger fleet is grounded.

Passenger aircraft normally transport almost half of total air freight shipments, leaving airlines scrambling to fill the void.

READ: Qatar Airways defies capacity trend to fly travelers home

“Air cargo is a vital partner in the global fight against COVID-19,’’ said IATA director-general Alexandre de Juniac.

“But we are still seeing examples of cargo flights filled with life-saving medical supplies and equipment grounded due to cumbersome and bureaucratic processes to secure slots and operating permits.

“These delays are endangering lives. All governments need to step up to keep global supply chains open.”

IATA wants governments to remove key obstacles by introducing fast track procedures for overflights and landing permits for freight operations, particularly into key Asian hubs.

It wants crew members operating cargo flights but who do not interact with the public to be exempted from 14-day quarantine requirements and support for temporary traffic rights for cargo flights.

It is also calling for curfews to be removed for cargo flights as well as economic impediments such as overflight charges, parking fees and slot restrictions.

The need to keep cargo operations moving efficiently has been supported by the World Health Organisation, which noted frontline health workers needed to be continuously supplied with necessary medical equipment and protective material.

A number of airlines are using cargo-only passenger aircraft domestically and internationally to bolster airfreight capacity.

They include the big three US airlines as well as carriers such as Air Canada, Aeromexico, Austrian, British Airways, Cathay Pacific, Emirates, Iberia, Korean, LATAM Lufthansa, Qantas, Scoot and Swiss.

It is our collective duty to keep these supply lines open by continuing air cargo operations,’’ said WHO chief of operations support and logistics Paul Molinaro.

“The scale-down of air passenger flow is seriously hurting our scheduled freight operations.

“We call on airline companies and governments to join the global effort to ensure dedicated freight capacity continues to operate on previously high volume passenger routes that are now closed down.”

 

Qatar Airways defies capacity trend to fly travelers home

Qatar
Photo: Qatar

Qatar Airways says it added 10,000 seats to its network Tuesday as it continued to fly home passengers wanting to get back to their families during the COVID-19 crisis.

This included extra flights to Paris, Perth and Dublin from Doha as well as charter services to Europe and the US from Asia.

In Australia, Qatar will add 48,000 seats from March 29 to operate a daily service to Brisbane, double daily flights to Perth and Melbourne as well as a triple-daily service to Sydney.

It also upgraded services to Frankfurt, London Heathrow and Perth by putting the Airbus A380 on those routes.

READ: Air New Zealand unveils reduced schedule for dark days ahead

Qatar Airways continues to operate to more than 70 destinations around the world as it offers a lifeline to travelers stranded by the tsunami of global airline capacity cuts.

The airline says it is following strict staff bio-security screening procedures for staff operating the flights and is working with global and national authorities to implement the latest guidance on COVID-19 measures.

It has introduced upgraded aircraft cleaning procedures and has a young fleet with advanced air filter screening systems.

The International Air Transport Association says that aircraft air conditioning systems are equipped with high-energy particulate air (HEPA) filters that can screen more than 99.9 percent of airborne threats, including microbes and viruses.

The airline’s home state of Qatar has barred entry to foreign nationals but is still allowing passengers to transit through its hub at Hamad International Airport.

“Figures for the last seven days show load factors of over 80 percent for flights to the UK, France and Germany, with a fall to 36 percent for outbound services from those countries, illustrating the demand for homeward travel,’’ an airline spokesperson said.

“Qatar Airways has flown more than 100,000 passengers home in the last seven days while 72 percent of passengers carried on 24 March were nationals flying to their country of origin.

“Working with embassies around the world, the airline has operated one-off services from destinations such as Phnom Penh, Denpasar, Manila and Kuala Lumpur to Europe.

“More than 5,000 passengers were flown home by these services over the last week, a number that is expected to more than triple over the next week.”

States that have introduced travel bans are allowing their own citizens to return, although with strict quarantine requirements. People who are not citizens or permanent residents are barred from entering an increasing number of countries.

Air New Zealand unveils reduced schedule for dark days ahead

Air New Zealand
Photo: Steve Creedy

Air New Zealand has unveiled a limited international schedule for April and May that includes Los Angeles, Hong Kong, Shanghai and three ports in Australia.

The schedule involves a handful of weekly flights and comes after the airline slashed its international capacity by 95 percent because of restrictions and a slump in demand prompted by COVID-19.

It aims to enable essential travel and keep air freight moving to key cargo destination in Asia and North America,

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

The airline will be flying seven trans-Tasman return flights a week from Auckland with two each to Brisbane and Melbourne and three to Sydney.

Three pacific islands — Rarotonga, Fiji and Niue — will each get a return flight a week while Norfolk Island will get a weekly flight from each of Sydney and Brisbane.

Air New Zealand said Samoa and Tonga were not permitting international flights, but it would put in one service per week from Auckland to each island until the restrictions end.

The Auckland-Los Angeles route will merit three return services weekly while Hong Kong will get two and Shanghai will be served on alternate days.

The Hong Kong services are being retimed to a night operation ex-Auckland and Hong Kong to maximize connection opportunities for cargo.

The Kiwi carrier last week completed a deal for a $NZ900m government standby loan facility to help it tackle the devastating impact of coronavirus and canceled its dividend.

“These are unprecedented times that we are all having to navigate,’’  chief executive Greg Foran said.

“And it is clear that if we don’t take all the appropriate measures to lower costs and to drive revenue, our airline won’t be in the best position to accelerate forward once we are through the worst of the impact of COVID-19.”

 

Aviation workers lose out in government aid package, say unions

workers unions

Australian aviation unions say workers are not reaping any benefit from the federal government’s aviation assistance package and have warned the nation may lose vital skills.

A joint letter from the Australian and International Pilots Association, the Australian Licenced Aircraft Engineers Association and the Australian Federation of Air Pilots has called for direct support for aviation workers.

About 28,000 workers are being stood down by Qantas and Virgin Australia and the unions say the government’s package — which provided relief in areas such as fuel excise and air navigation charges — is of limited use when planes are not flying.

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

“Other countries have already announced support that directly covers aviation industry employees,” the unions said in the letter to Deputy Prime Minister Michael McCormack.

“What we are asking is that when further aviation support packages are considered, ongoing wage relief be a key element.

“Australia cannot afford to lose qualified aviation professionals who will play a vital role in relaunching the industry when the COVID-19 downturn ends.”

The unions called on the government to ensure that aviation support packages cover all businesses and workers in the industry.

They also want the federal government to require any airlines accessing subsidies to maintain pilot and engineer license currency until normal operations resume and a guarantee the money will not be used for share buy-backs or dividend payments

“With tight government restrictions on movement directly impacting aviation, the industry needs more government support to ensure it survives this downturn,’’ they said.

Separately, the Transport Workers’ Union has called on the government to pay 80 percent of workers’ wages.

The TWU echoed criticism from the other unions that workers were required to use their leave while stood down.

A more radical suggestion from the union was that the government take a partial stake in Qantas.

Qantas boosts liquidity with $A1.05 billion loan

airlines Australia government
Photo: David Gray /Getty Images for Qantas

The Qantas Group has borrowed $A1.05 billion against seven of its wholly-owned Boeing 787-9s in a bid to ensure it has enough liquidity to get it through the coronavirus outbreak.

The loan — with a tenure of up to 10 years, an interest rate of 2.75 percent and no financial covenants —  increases the group’s available cash balance to $A2.95 billion.

The news was welcomed by the Australian Stock Exchange and boosted the Qantas share price by more than 20 percent to $A3.125 at noon Wednesday Sydney time.

The company also has an additional $A1 billion undrawn facility still available and $A3.5 billion in unencumbered assets that would allow it to boost its cash balance if needed.

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

The airline group said its net debt of $A5.1 billion remained at the low end of its target range and there were no major debt maturities until June, 2021.

“Over the past few years, we’ve significantly strengthened our balance sheet and we’re now able to draw on that strength under what are exceptional circumstances,’’ chief executive Alan Joyce said.

“Everything we’re doing at the moment is focused on guaranteeing the long-term future of the national carrier, including making sure our people have jobs to return to when we have work for them again.”

Airlines globally have been smashed by coronavirus travel restrictions and an associated slump in demand.

The International Air transport Association has described it as an airline “apocalypse now” and has urged governments to support carriers to ensure they survive the crisis.

The Qantas Group has also moved to reduce its spending by standing down two-thirds of its employees, suspending Qantas and Jetstar international flights as well as significantly cutting domestic operations.

The move will see much of the Flying Kangaroo’s fleet aircraft grounded and more cuts are expected in response to strict travel bans imposed by the state and federal governments.

The Qantas suspensions also mean that neither major Australian carrier will be flying scheduled international services, although the Flying Kangaroo is talking with the federal government about ad hoc flights to maintain key strategic links.

Many international carriers have also now suspended flights to Australia and the federal government has banned nearly all outbound travel.

 

 

COVID crisis prompts Thai Airways to cancel most flights

Thai airways
Photo: Thai Airways International.

Thai Airways International is suspending most of its passenger operations with a throng of Asian routes ending March 25 and flights to Australia following on March 27.

The Thai carrier is following other airlines whose operations have also been badly affected by travel restrictions and national lockdowns stemming from the coronavirus pandemic.

The airline will still operate cargo flights on some routes as well as charter flights for stranded passengers or at the request of government agencies.

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

Destinations to be suspended March 25 are: Hong Kong, Taipei, Tokyo (Narita and Haneda), Osaka, Nagoya, Seoul, Phnom Penh, Vientiane, Ho Chi Minh, Hanoi, Yangon, Singapore, Jakarta, Denpasar, Kunming, Xiamen, Chengdu, Beijing, Shanghai, Guangzhou, Karachi, Kathmandu, Lahore, Dhaka, Islamabad, and Colombo.

Starting on 25 March 2020: Hong Kong, Taipei, Tokyo (Narita and Haneda), Osaka, Nagoya, Seoul, Phnom Penh, Vientiane, Ho Chi Minh, Hanoi, Yangon, Singapore, Jakarta, Denpasar, Kunming, Xiamen, Chengdu, Beijing, Shanghai, Guangzhou, Karachi, Kathmandu, Lahore, Dhaka, Islamabad, and Colombo.

The airline’s domestic flights to Chiang Mai, Phuket, and Krabi will be transferred and operated by subsidiary HAI Smile.

The Brisbane, Sydney, Melbourne and Perth suspensions follow March 27 and on April 1, Thai will cancel most of its European services.  These include services to London, Frankfurt, Paris, Brussels, Copenhagen, Oslo, Moscow and Stockholm.

The suspensions are in addition to previous capacity cuts to destinations in Europe, India, Japan, the Middle East and New Zealand.

The airline is offering passengers the ability to convert unused tickets to a one-year voucher without fees and surcharges but the offer is subject to date restrictions

Royal Orchid Plus members holding award tickets for travel between March 25 and May 31  can re-credit miles to their account or change the travel date without a fee or charge.

The date for expired miles has also been extended until September 30, 2020.

 

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

Virgin

Virgin Australia will reduce its group domestic capacity by 90 percent, ground 125 aircraft and stand down 8,000 workers in a dramatic response to COVID-19 travel restrictions aimed at getting it through the crisis.

About 80 percent of the airline’s 10,000 workers will be stood down until at least the end of May.

Some will be able to access accrued leave entitlements but the airline acknowledged that many would face leave without pay and is working with suppliers to find them alternative employment.

There will also be redundancies as the airline continues to restructure to lower its cost base.

“We’re still working through those numbers with our people and the unions but at this point in time, on the back of these announcements today, that’s roughly 1000 people,’’ Virgin chief executive Paul Scurrah told AirlineRatings.

The airline will suspend all flying by low-cost offshoot Tigerair immediately and cut most of its domestic operations by March 27 through to at least mid-June.

This in addition to its decision to suspend all international flying from March 30 to June 14 and close all Virgin-operated lounges across its network.

READ: IATA warns of or airline ‘apocalypse now’ as forecast revenue hit doubles.

The remaining 10 percent of domestic capacity, some 13 aircraft, will be retained for the transportation of essential services, critical freight and logistics.

Services will be suspended to 19 destinations, but Virgin will continue to operate “near-daily” services to 17 others.

See a list here.

Areas that will not return after the suspension include Virgin’s New Zealand cabin crew and pilot base as well as its Melbourne Tigerair pilot base.

“We’re making very hard and very tough decisions right now and those decisions are all about making sure we can manage our way through this crisis,’’ Scurrah said.

“Everything we’re doing right now is focusing on the preservation of cash and making sure we’re as liquid as possible to weather this storm.”

Asked whether he would follow the lead of Qantas and raise money by securitizing aircraft, he said: “We have further levers we can pull, which we won’t announce today.

“Today is really about slowing down the rate of costs and preserving cash as long as we can to weather this unprecedented event.”

The dramatic suspension comes as Australian states have closed their borders and government warnings not to travel have intensified. The Australian government has now also banned nearly all outbound foreign travel.

READ: Australia bans outgoing travel as some ignore warning.

The aviation industry, including Virgin, will still need government support and Scurrah is optimistic that will come after comments last week by senior government ministers about the need to ensure a healthy, competitive aviation sector.

He noted a competitive aviation industry was essential to a strong, rapid recovery after the crisis and both major airlines would be needed.

“I think you saw their intent to support the airline industry with the package announced last week and which was a good start,’’ he said. “We’re confident they’re going to be standing by the industry.”

With the planes Qantas is also taking out of service, Australia now faces the biggest grounding of aircraft in its history.

For Virgin, this means repositioning and grounding more than 125 aircraft. The planes will be spread across airports and government facilities as they wait for the day they can return to service.

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

“With a few exceptions, pretty much everyone in this industry is working together, working collegiately as a team, to get through this,’’ he said. “And airports are no different.

“We’ve had some really proactive and positive support from them.”

Scurrah also applauded Virgin staff for working tirelessly to help passengers ahead of various state travel restrictions.

He vowed to return Tigerair and Virgin Australia to the skies “as soon as it is viable to do so” but warned the group may look different when it emerged from the crisis.

Questioned about this, he confirmed the airline would still be a full-service operator, fly widebody international routes and have a robust low-cost offering when leisure demand returned.

“I think the Virgin Australia people have come to love and know will be back stronger and better than ever,’’ he said. “What we will be doing though is making sure we become as efficient as we possibly can and make sure we’re in a position to fly as many routes as we can. “

Like everyone else, the Virgin chief was uncertain about when that would be.

“We’ve made some assumptions in the decisions we’ve made today about this being a prolonged crisis,’’ he said.

“So those decisions have formed the basis of our action to move forward and make sure we manage our way through this crisis.”

IATA warns of airline ‘apocalypse now’ as forecast revenue hit doubles

IATA
IATA Boss Alexandre de Juniac. Photo: IATA

The International Air Transport Association (IATA)  has warned airlines need $US200 billion in liquidity support as they face “apocalypse now” with forecast global passenger revenues plummetting as much as $US252 billion.

IATA’s latest estimate of the revenue hit airlines could suffer is more than double its previous estimate of $US113 billion, made on March 5 before the introduction of sweeping travel restrictions, and is 44 percent down on 2019 figures.

It is based on a scenario in which severe travel restrictions last for up to three months but are followed by a gradual economic recovery later in the year.

READ: Australia bans outgoing travel as some ignore warning.

But the airline umbrella group warned any recovery would be weakened by the impact of a global recession on jobs and confidence.

Hardest hit by the revenue slump in dollar terms will be airlines in the Asia-Pacific (down $US88 billion)  and Europe (down $US 76 billion), which also leads the fall in percentage terms.

IATA is also expecting full-year passenger demand to be 38 percent below 2019 with a 65 percent fall in capacity in the second quarter ended June 30.

“The airline industry faces its gravest crisis,” IATA director-general  Alexandre de Juniac said.

“Within a matter of a few weeks, our previous worst-case scenario is looking better than our latest estimates.

“But without immediate government relief measures, there will not be an industry left standing.

“Airlines need $200 billion in liquidity support simply to make it through. Some governments have already stepped forward, but many more need to follow suit.”

The airline group is calling for governments to provide direct financial support, loans or loan guarantees and tax relief to airlines.

The IATA chief said airlines were fighting for survival in every corner of the world as passenger demand evaporated.

He said governments needed to understand that without urgent relief many would not be around to lead the post-COVID-19 recovery, putting some 2.7 million airline jobs at risk

“For airlines, it’s apocalypse now,” he said

“And there is a small and shrinking window for governments to provide a lifeline of financial support to prevent a liquidity crisis from shuttering the industry.”

IATA cited examples of government support, including Australia’s $A715m ($US430m) aid package and Air New Zealand $NZ900m loan facility as well as relief measures in Brazil, China, Hong Kong, Qatar, Singapore and Scandinavia.

The European Union and the US are also expected to introduce significant measures to support the airline industry as part of broader economic packages.

“This shows that states around the globe, recognize the critical role that aviation plays in the modern world. But many others have still to act to preserve the important role of this sector,” de Juniac said.

“Airlines are an economic and employment engine. This is demonstrated even as passenger operations shrink, as airlines continue to deliver cargo that is keeping the economy going and getting relief supplies where they are needed most.

“The ability for airlines to be a catalyst for economic activity will be vital in repairing the economic and social damage that COVID-19 is now causing.”

However, the UK has baulked at an airline bailout, telling airlines it is only prepared to enter negotiations with individual companies as a last resort.

IATA’s forecast impact on passenger revenue by region:

Region of Airline Registration% Change in RPKs

(2020 vs. 2019)

Est. Impact on Pass. Revenue

2020 vs. 2019

(US$ billions)

 

Africa-32%-4
Asia-Pacific-37%-88
Europe-46%-76
Latin America-41%-15
Middle East-39%-19
North America-27%-50
Industry-38%-252

 

 

Australia bans outgoing travel as some ignore warning

travel canceled
Photo: Sydney Airport.

Australia is upgrading its outbound  “do not travel”  warning to a ban that prevents most Australians from heading overseas.

The federal government will use biosecurity powers to prevent a small number of people who continue to ignore the travel warning from heading overseas from Wednesday.

Exceptions will include aid workers, those who need to travel on compassionate grounds or for people whose travel is essential for work.

READ: COVID-19 wipes out 35 percent of global airline capacity, with more to come.

Prime Minister Scott Morrison told a press conference on Tuesday night that the number of people leaving Australia was now “very, very low” but there were still a number of people defying the do not travel advice and looking to head overseas for leisure travel.

Morrison said the government had been making the point for some time that no-one should be getting on a plane and going overseas for some time.

“They can’t do it because when they come home, that’s when they put Australians at risk,” he said. ” I had hoped that would have been fully complied with and I’ve got to say, Australians have been pretty good about it. But we need to put that arrangement in place.”

Asked when the ban would come into effect, Morrison said a directive was being worked on overnight and would come into force Wednesday.

Australia already has in place bans on incoming foreigners but Australians are flocking back to the country while commercial travel is still available and many of the nation’s more than 2100 confirmed cases have been acquired overseas.

Officials say the majority of the overseas cases had a recent history of travel to Europe or the Americas and cruise ships have proved a problem.

The travel ban was part of a number of new measures introduced as Australian tightens coronavirus restrictions and expands limits on gatherings to include weddings, funerals and other events.

Pubs, restaurants, cinemas and other venues are already off-limits and Australians are being urged to stay home and respect social distancing requirements as authorities try to curb the spread of the disease.

Australia is among a number of countries tightening travel restrictions and Hong Kong on Wednesday will join other global airline hubs such as Singapore and Dubai in banning transit passengers.

Cathay Pacific, which had already announced it was slashing capacity to just 4 percent, has a comprehensive list of entry restrictions on its website although these are subject to change.

One country that is was still allowing air services on Tuesday was Qatar.

Qatar Airways said it was still operating flights to more than 70 cities worldwide. It said it was constantly reviewing its flights to see where there was more demand or requests for services and where possible would add flights or put on bigger aircraft.

“We appreciate this is a difficult time and that many people around the world are trying to find a way to get home,” it said

“At Qatar Airways we continue to operate more than 150 flights per day so that as many people as possible can get home safely to their loved ones.”

 

 

 

 

 

 

 

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