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Singapore and Star launch digital connection service

Singapore
The new digital connection service. Image: Singapore Airlines.

Singapore Airlines customers connecting to other Star Alliance flights will become the first to use a new digital service aimed at making transfers easier.

The Singaporean carrier has become the launch customer for the digital version of the Star Alliance Connection Service and will embed the service in its app.

The Star connection service was launched in 2017 to take the stress out of time-critical connections but until now has required dedicated support staff to help passengers transfer between their flights.

READ: AirAsiaX proposes restructure to avoid liquidation.

Information provided by the digital version includes the optimum route from the arrival to the departure gate, as well as the distance and time needed to get there.

In the case of critical connections, passengers receive a digital express connection card that allows expedited passage through certain checkpoints.

“We know that it can be challenging at times for customers to navigate through large, unfamiliar airports when connecting from one flight to another, especially when unexpected delays have an impact on the connecting time,” said  Star Alliance vice president customer experience Christian Draeger.

“The digital connection service is designed to provide these travelers with easy and intuitive guidance at their fingertips, making transferring a smooth, frictionless and, now, touchless experience.”

The service uses UK-based Living Map’s Airline Accelerator, a technology positioning product that underpins customized customer routing within the airport terminal.

This initial release focuses on London Heathrow Airport (LHR) Terminal 2 and Singapore Airlines passengers connecting to or from any other Star Alliance member airline in the terminal will have access to airport maps via the SingaporeAir mobile app.

Android users get to use the digital service first with iOS following.

Star also has plans to roll out the digital service to other airports where connections are common for future adoption by other member airlines.

“Launching the Connection Service on the SingaporeAir mobile app, in partnership with Star Alliance, is part of our efforts to use digital technologies to provide a more seamless end-to-end journey to our customers,’’ said  Singapore Airlines executive vice president commercial Lee Lik Hsin.

“As the world’s leading digital airline, we will continue to find innovative ways to enhance the experience for our customers and support their evolving needs.”

FAA releases Boeing 737 MAX draft training report

737 MAX Boeing
Photo: Boeing

The Boeing 737 MAX has taken another key step towards rehabilitation after the US Federal Aviation Administration issued a draft report on revised training procedures for the troubled plane.

The report from the Flight Standardisation Board will be open for comment until November 2 and adds new training requirements to deal with the Maneuvering Characteristics Augmentation System (MCAS) system involved in two fatal crashes.

The crashes in Indonesia and Ethiopia killed a total of 346 people and led to the MAX being grounded in March last year.

READ: Boeing cuts forecast aircraft demand by 11 percent over the next decade.

The draft report includes recommendations from the Joint Operations Evaluation Board involving civil aviation authorities from the US, Canada, Brazil and the EU.

It calls for pilots to undergo simulator training before they can resume flying the MAX that includes dealing with multiple alerts for unusual conditions.

Some commentators are predicting the MAX will be “ungrounded’ as early as November but the FAA cautioned there are still key milestones before the plane can fly again.

These include a review of Boeing’s final design documentation to evaluate compliance with all FAA regulations and the issuing of a Continuing the International Community (CANIC) and an Airworthiness Directive advising operators of corrective actions needed before the aircraft can re-enter service.

The FAA will also perform in-person and individual reviews of all new 737 MAX aircraft manufactured since the grounding as well as review and approve operator training.

The FAA noted other jurisdictions would make their own decisions on the MAX.

“These actions are applicable only to U.S. air carriers and U.S.-registered aircraft,’’ it said on its website.

“While our processes will inform other civil aviation authorities, they must take their own actions to return the Boeing 737 MAX to service for their air carriers.

“The FAA will ensure that our international counterparts have all necessary information to make a timely, safety-focused decision.”

Boeing said in a statement that it was working closely with the FAA and other global regulators to meet their expectations as it worked closely to return the MAX to service.

The new development came after FAA administrator Steve Dickson recently flew the plane and said he liked what he saw.

AirAsia X proposes restructure to avoid liquidation

AirAsia X liquidation
An AIrAsia X A330.

AirAsia X has proposed a group-wide debt and equity restructuring scheme aimed at avoiding liquidation as it warned it was unable to meet its financial obligations.

The long-haul, low-cost airline was hard hit by border closures and said in a stock exchange announcement that it was facing “severe liquidity constraints in meeting its debt and other financial commitments”.

This is despite cost-cutting moves that saw it ground all scheduled flights, cut salaries and retrench staff across the group.

READ: AirAsia bows out of Japan.

With liabilities now exceeding assets by almost 2 billion ringgit ($US480 million) and a deficit in shareholders’ equity, the statement warned an “imminent default” on debt and other financial commitments would see the airline liquidated.

“To avoid a liquidation and to allow the airline to fly again, the only option is for AAX to undertake a group-wide debt and corporate restructuring and update its business model to survive and thrive in the long term,’’ it said.

“The right-sizing of the Group’s level of operations and its financial obligations are pre-requisites for the raising of any fresh capital, comprising both equity and debt, that will be used to support the implementation of the Group’s revised business plan.”

The group appointed chartered accountant, investment banker Lim Kian Onn, who has been on the board since 2012, to lead the restructuring.

The plan includes a scheme to restructure a 63.5 billion ringgit ($US15.3 billion) debt owed to creditors, including passengers who made advance payments for flights.

It proposes converting advance payments and deposits for tickets into travel credits for “future travel or purchase of seat inventory”.

The airline also plans to rationalize its network by terminating or suspending unprofitable or immature routes and shifting its focus from market share to sustainability, profitability and yield.

The company said it had been involved in extensive discussions with major creditors over the past two months.

While there was varying degrees of support for the proposed restructuring scheme, it said there was strong support for the continuation of the airline business.

“AirAsia X and other airlines the world over are struggling to survive amidst the global crisis of COVID-19 pandemic,’’ chief executive Benyamin Ismail said.

“We remain committed to our guests, Allstars, business partners and shareholders to ensure we build a viable and sustainable airline for the long-haul, and for the survival of this airline, the proposed restructuring plan is our only option.

“It has been extremely difficult for the airline during this period as we had to ground all scheduled flights, implement salary cuts and retrenchment for the first time in the company’s history as a consequence of the pandemic.

“Similar exercises are likely to continue during the restructuring process, but our focus is to ensure a successful restructuring to keep as many jobs as possible.”

“We have a low cost base, we are in the right part of the market and many of our key markets are in green zones which are likely to reopen first.

“We have a robust recovery strategy in place, and with the continued support from our stakeholders, we will overcome all challenges and come out stronger.”

AirAsia X had established a strong foothold in markets such as China, Japan, Korea and Australia.

Ismail said the airline still had “ongoing dialogue with tourism and airport authorities,  governments and other industry stakeholders to pave the way for the prospect of travel bubbles in green zone countries”.

 

 

Social distancing made luxurious on new Airbus A220 bizjet

Airbus A220 bizjet
Social distancing made comfortable. Photo: Airbus

It’s a case of social distancing made luxurious with the launch of a new Airbus business jet based on the successful A220 family.

The ACJ Two Twenty is aimed at the heavy, long-range business jet category and has already attracted six orders.

Airbus says the “clean sheet” Two twenty offers three times more cabin space with a third less operating costs than its competitors by leveraging the efficiencies of the A220-100.

READ: Boeing cuts aircraft demand forecast by 11 percent over the next decade.

This includes a 50 percent reduced noise footprint compared to previous generation aircraft and up to 25 percent lower fuel burn.

Airbus A220 biz jet
No trouble sleeping here. Photo: Airbus

It has an increased range of up to 5,650nm (10,500kms), enabling it to fly more than 12 hours and directly connect city pairs such as London-Los Angeles, Moscow-Jakarta, Tokyo-Dubai and Beijing-Melbourne.

Airbus A220 bizjet
Space to work. Photo: Airbus

Inside, Airbus is claiming two-times better connectivity than its competitors with a wi-fi system across all cabins as well as innovations such as electro-chromatic windows and LED lighting.

READ: Crisis as airlines burn $US300,000 in cash per minute.

Existing partner Comlux has been chosen to outfit the first 15 cabins, which see six wide VIP living areas distributed across 785 square feet (73 square metres) of floor space. Comlux is also the launch customer for the plane, with two orders, while the other four aircraft were ordered by undisclosed parties.

The cabin will allow up to 18 passengers to “work, share, dine and relax “ in a variety of layout options.

Airbus A220 bizjet

“The aircraft combines intercontinental range, unmatched personal space and comfort for all passengers. This latest technology platform offers unbeatable economics and unrivaled reliability, “said ACJ president Benoit Defforge.

“Based on its compelling market appeal, we see promising demand for this aircraft in the growing business jet market.”

Crisis as airlines burn $US300,000 in cash per minute

airlines
Photo: O'Hare International Airport.

Global airlines are expected to burn through $US300,000 of cash a minute in the second half of 2020 despite the restart of operations.

The startling figure  — equivalent to $US77 billion for the second half or $US13 billion a month —  are contained in a warning by the International Air transport Association of a looming cash crisis and a renewed call for more government support.

IATA estimates that despite cutting costs by just over 50 percent during the second quarter, global airlines went through $US51 billion in cash as revenues fell almost 80 percent compared to the same period a year ago.

READ: Airline lobby group IATA cuts staff by 22 percent.

The cash drain continued during the summer months and is expected to extend into next year with a further $US60-70 billion cash burn.

IATA does not expect the industry to turn cash positive until 2022 and warned airlines face a grim northern winter season without additional relief measures, including financial aid that does not add more debt to the industry’s already-highly-indebted balance sheet.

It estimates governments worldwide have so far provided $US160 billion in support, including direct aid, wage subsidies, corporate tax relief, and specific industry tax relief including fuel taxes.

“We are grateful for this support, which is aimed at ensuring that the air transport industry remains viable and ready to reconnect the economies and support millions of jobs in travel and tourism,’’ said IATA director general Alexandre de Juniac.

“But the crisis is deeper and longer than any of us could have imagined. And the initial support programs are running out. Today we must ring the alarm bell again. If these support programs are not replaced or extended, the consequences for an already hobbled industry will be dire.

“Historically, cash generated during the peak summer season helps to support airlines through the leaner winter months.

“Unfortunately, this year’s disastrous spring and summer provided no cushion. In fact, airlines burned cash throughout the period. And with no timetable for governments to reopen borders without travel-killing quarantines, we cannot rely on a year-end holiday season bounce to provide a bit of extra cash to tide us over until the spring.’’

IATA noted airlines had undertaken extensive self-help measures to cut costs.

This included parking thousands of aircraft, cutting routes and any non-critical expense as well as furloughing and laying off hundreds of thousands of employees.

It also sees little appetite among consumers for cost increases, citing a recent survey in which about two-thirds of travelers had indicated that they would postpone travel until the overall economy or their personal financial situation stabilizes.

“Increasing the cost of travel at this sensitive time will delay a return to travel and keep jobs at risk,” said de Juniac.

The lobby group cited figures from the Air Transport Action Group showing the severe downturn this year, combined with a slow recovery, threatened 4.8 million jobs across the entire aviation sector.

Because each aviation job supports many more in the broader economy, the global impact was estimated at 46 million potential job losses and $US1.8 trillion dollars of lost economic activity.

Boeing cuts forecast aircraft demand by 11 percent over the next decade

Boeing forecast
Single-aisle aircraft such as the 737 MAX will continue to be the biggest market segment. Image: Boeing

Boeing has reduced its forecast for commercial aircraft demand over the next decade by 11 percent but remains bullish that growth will ultimately return to its long-term trend.

The US aerospace giant’s annual market outlook noted that commercial aviation and services markets would continue to face significant challenges due to the pandemic.

But it said the global defense and government services markets, also key contributors to the company’s revenue, would remain more stable.

READ: Boeing consolidates 787 production in South Carolina.

The 2020 Boeing Market Outlook (BMO) includes projected demand for 18,350 commercial aircraft in the next decade – 11 percent lower than the comparable 2019 forecast – valued at about $US2.9 trillion.

In the longer term, however, it predicted the commercial fleet would return to its growth trend, generating demand for more than 43,000 new aircraft in the 20-year forecast period.

The outlook noted airlines globally had begun to recover from a more than 90 percent fall in passenger traffic but warned that “a full recovery will take years”.

Nonetheless, it predicted an average 4 percent growth rate over the next 20 years with the global commercial aircraft fleet expected to rise to reach 48,400 by 2039, up from 25,900 today.

“During this period, Asia will continue to expand its share of the world’s fleet, accounting for nearly 40 percent of the fleet compared to about 30 percent today,’’ it said.

And while it may be of little solace to aviation workers currently in unemployment lines, the company’s 2020 Pilot and Technician Outlook forecast that the civil aviation industry will need nearly 2.4 million new aviation personnel between now and 2039.

Boeing said single-aisle airplanes such as its 737 MAX would continue to be the largest market segment, with operators projected to need 32,270 new aircraft in the next 20 years.

It expects single-aisle demand to recover sooner due to its key role in short-haul routes and domestic markets as well as passenger preference for point-to-point service.

In the widebody market, Boeing forecast demand for 7,480 new passenger airplanes by 2039 but said demand in this segment would be affected by a slower recovery in long-haul markets as well as “uncertainties from COVID-19’s impact on international travel”.

“Commercial aviation is facing historic challenges this year, significantly affecting near- and medium-term demand for airplanes and services,” said Darren Hulst, vice president of commercial marketing.

“Yet history has also proven air travel to be resilient time and again. The current disruption will inform airline fleet strategies long into the future, as airlines focus on building versatile fleets, networks and business model innovations that deliver the most capability and greatest efficiency at the lowest risk for sustainable growth.”

Air cargo demand, labeled “a relative bright spot in 2020”, was expected to grow 4 percent annually and generate further demand for 930 new widebody production freighters and 1500 converted freighters over the forecast period.

Overall, the BMO’s total forecast market value of $US8.5 trillion over the next decade, including demand for aerospace products and services, was down from the $US8.7 trillion predicted a year ago.

This included a $US2.6 trillion market opportunity for defense and space over the next decade reflecting the ongoing importance of military aircraft, autonomous systems, satellites, spacecraft and other products to national and international defense.

About 40 percent of this would be in the US, the forecast said..

“While near-term commercial services demand is lower, the BMO forecasts a $3 trillion market opportunity for commercial and government services through 2029, with digital solutions emerging as a critical enabler as customers focus on leaner operations to adjust to future market demand,’’ it said.

“Life cycle services and support will help customers scale their operations to meet efficiency and cost objectives aligned to market recovery trends.”

The coronavirus epidemic has forced both Airbus and Boeing to look at layoffs and restructuring to adapt to the new market conditions.

Most recently, Boeing announced it would consolidate its 787 production in South Carolina.

AirAsia bows out of Japan

AirAsia Japan
Photo:MeandKancil2020/Wikimedia Commons.

AirAsia has ceased operations in Japan after COVID-19 slashed travel on the low-cost joint venture.

The current incarnation of AirAsia Japan was incorporated in 2014 and had been operating domestic and international flights from its base at Chubu Centrair International Airport.

AirAsia said coronavirus travel restrictions and the associated uncertainties had severely curtailed demand and resulted in flight reductions, cancellations and aircraft groundings that “weighed heavily on the company’s ability to continue operating”.

The airline confirmed it was ceasing operations from October 5 and Japanese media reported it was the first airline in Japan to close its business due to the coronavirus outbreak.

READ: Airline lobby group IATA cuts staff by 22 percent.

“Despite our unrelenting efforts to sustain operations through successive and wide-ranging cost reduction initiatives, we have concluded that it would be an extremely challenging feat for us to continue operating without any visibility and certainty of a post-pandemic recovery path,’’ Air Asia Japan chief operating officer Jun Aida said.

“I would like to express our deepest gratitude and appreciation to our loyal guests and other stakeholders who have supported us all along. This painful decision to cease operations was decided neither in haste nor taken lightly. It was agreed upon after conducting a thorough business review.

“Further steps to this decision will be made in accordance with the applicable laws and regulations including the Japan Civil Aeronautics Act.

“We have canceled all flights. All affected guests will be contacted via email with further information within the next seven days.”

The decision affects flights operated by AirAsia Japan but not flights into and out of Japan by other members of the AirAsia Group.

The group said international services to Japan, from Malaysia, Thailand and the Philippines would resume in the future after travel restrictions were lifted and borders with Japan are reopened.

Virgin Australia’s new owner inks Queensland HQ deal

Virgin

The Queensland government has signed a $200m deal to keep Virgin Australia’s headquarters in Brisbane as reports surfaced of a rift between the airline’s new owners and founder Sir Richard Branson.

Australian media reports suggest US private equity firm Bain Capital is playing hardball with Branson over the stake in Virgin it is prepared to give him.

The British entrepreneur is said to be angling for a 10 percent stake while Bain is reportedly only willing to hand over 5 percent.

READ: Air New Zealand CFO joins executive exodus

The Queensland government is expected to end up with a 2 to 3 percent stake in the airline in return for a $20m slice of the total incentive package.

The government’s $200m investment includes working capital, financial incentives and subsidies in addition to the equity investment.

It was keen to get the deal signed ahead of a state election in which the opposition had threatened to take back the money.

Queensland Treasurer Cameron Dick said the state’s return on investment would be about 7 percent over the 10 years of the agreement.

Mr Dick said the move was designed to provide competition and support regional communities.

Virgin went into administration in April with debts totaling $A6.8 billion. Bain emerged in June as the winner of a bidding war for the airline and this was confirmed at a creditors’ meeting in September.

Bain’s bid for the airline was valued at $A3.5 billion and it is expected to delist Virgin Australia when it becomes outright owner this month. It is also renegotiating union and other agreements.

The restructured airline is relaunching with a reduced fleet of 56 Boeing 737s, about three-quarters of pre-COVID domestic 737 capacity, with plans to expand to 75 aircraft as demand recovers.

It has ditched bigger Boeing 777 and Airbus A330 aircraft used on transcontinental and international routes as well as its ATR regional turboprops.

Airline lobby group IATA cuts staff by 22 percent

IATA cuts staff
IATA boss Alexandre de Juniac.

The International Air Transport Association (IATA)  will cut its global headcount by 22 percent after being “deeply impacted” by the coronavirus pandemic crippling its membership.

The airline lobby group said the cuts amounted to about 400 positions globally about half of which had already been accounted for through unfilled positions and voluntary departures.

This would mean about 200 layoffs across IATA’s offices worldwide, it said.

READ: US airlines begin thousands of layoffs as support stalls.

IATA had already frozen recruitment, reduced spending and its senior management had taken voluntary pay cuts.

“The restructuring will ensure IATA is well-positioned to sustainably support its members as we work towards restarting the aviation industry,’’ the organization said.

“IATA operates in 53 jurisdictions each of which has unique regulations covering restructuring with which IATA will comply.”

The cuts come as the lobby group converted its 76th annual meeting in Amsterdam, arguably the biggest event on the aviation calendar, to a virtual event after initially postponing it from June.

The World Air Transport Summit that accompanies the meeting was canceled for 2020.

“The decision to cancel the in-person AGM has not been taken lightly and in no way is a reflection on the hospitality of the Netherlands, nor our host carrier, KLM,’’ IATA director general Alexandre de Juniac said.

“When we postponed this year’s AGM from June until November, it was with the expectation that government restrictions on travel would have been sufficiently eased to enable a physical meeting.

“That now seems unlikely and alternative plans for a virtual event are being activated.”

De Juniac said the meeting would be one of IATA’s most important AGMs.

“The industry is in the deepest crisis in its history,’’ he said.

“And it is more important than ever for the industry to have this meeting serve as a rallying call of resilience as we find solutions to safely open borders and re-establish global connectivity, ensure vital cargo lanes; and build a sustainable future from the destruction of the virus.’’

Air New Zealand CFO joins executive exodus

Air New Zealand
Photo: AIr New Zealand.

The run of long-serving Air New Zealand executives heading for the departure lounge continues with chief financial officer Jeff McDowall confirming he intends to leave towards the middle of 2021 after more than two decades at the carrier.

McDowall will stay to assist with a planned capital raising before following the likes of former chief commercial and customer officer Cam Wallace, former chief marketing and customer officer Mike Tod and former chief flight operations and people safety officer John Whittaker.

Several exits came after Air New Zealand chief executive Greg Foran culled his senior executive team in May, citing the impact of COVID-19.

READ: Aviation groups intensify push to replace European quarantine with testing.

Like airlines globally, Air New Zealand has been ravaged by the coronavrius pandemic and it announced in September that it had started to draw down on government-backed standby funding as it looked at its long-term structure and the capital raise.

The move came as it recorded a $NZ454 million net loss for 2019-20 compared to a $NZ276 million profit the previous year.

McDowall, who has been CFO since 2018 and held a series of senior commercial and finance roles at the airline, will stay until the capital raise is completed.

“Jeff is playing a critical role in supporting myself and the Board as we rebuild from the ravages of COVID-19, but after a career spanning more than two decades with the airline, he feels it will be time to open a new chapter of his career once the capital raise is complete,’’ Foran said in a statement.

“We will shortly commence a global search for a successor, and I would like to thank Jeff for giving us such a long line of sight of his career intentions.

“He has had an illustrious career at Air New Zealand, including as acting chief executive officer pending me starting earlier this year.

“Without Jeff’s leadership over the past two decades, especially as part of the Executive team in recent years, the airline would not have delivered its long run of commercial success or grown its international footprint around the world so successfully.”

Meanwhile, Leanne Geraghty has been appointed to the newly created position of chief customer and sales officer.

Originally from Australia, she was previously group general manager airports with responsibility for more than 1800 employees and operations across 50 airports internationally.

“Leanne is an outstanding leader with a tremendous depth of industry knowledge having worked in the aviation and tourism industries on both sides of the Tasman for more than 30 years and led teams around the world,’’ Foran said.

“Her detailed knowledge of the New Zealand, Australian and Pacific Island markets, in particular, sets us up well for the post-COVID-19 international tourism recovery when the time comes.”

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