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Covid-19: Airlines seek emergency aid as coronavirus brings industry to near-halt

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Colombian airline Avianca files for bankruptcy in US court

Colombia's national airline, Avianca, has filed for bankruptcy protection in a US court.

The carrier is the second-largest in Latin America, but its passenger operations have been grounded since March because of coronavirus.

It said the pandemic had cut more than 80% of its income, and it was struggling with high fixed costs.

If it fails to come out of bankruptcy, Avianca will be the first major airline to go under amid the pandemic.

In a statement, the firm said it had filed for Chapter 11 bankruptcy protection in a court in New York. The process postpones a US company's obligations to its creditors, giving it time to reorganise its debts or sell parts of the business.

Chief executive Anko van der Werff said the move was needed to ensure the New York-listed airline emerge as a "better, more efficient airline that operates for many more years".

More: https://www.bbc.com/news/world-latin-america-52612335

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Changi airport to close Terminal 4 indefinitely from 16 May

Singapore’s Changi airport will temporarily close Terminal 4 (T4) from 16 May, “in view of the small number of flights still operating in the terminal”.

“The timing of [when T4 will resume operations] will depend on when air travel demand picks up and on the requirements of airlines seeking to relaunch flights at Changi airport,” operator Changi Airport Group (CAG) said in a statement today.

More: https://www.flightglobal.com/changi-airport-to-close-terminal-4-indefinitely-from-16-may/138327.article

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Auckland airport uses Covid-19 downtime for runway replacement

Auckland airport is bringing forward runway pavement replacement work while operations are at a minimum during the Covid-19 outbreak.

“We’ve experienced a significant reduction in flights and passenger numbers, with aircraft movements currently 90-95% lower than a normal busy day,” Andre Lovatt, general manager of airport development and delivery, said in a statement on 11 May.

“This project has been planned for some time,” he adds, “but it was clear that we had an opportunity to bring construction forward to the earliest available time while runway movements are at an all-time low.”

The operator says construction begins in two weeks and will last eight to 10 weeks. Using a displaced threshold method, the existing runway will be shortened by 1.1 km but aircraft continue to operate while work is carried out safely.

More: https://www.flightglobal.com/auckland-airport-uses-covid-19-downtime-for-runway-replacement/138326.article

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AirAsia studying possibility of increasing airfares

KUALA LUMPUR (May 13): Low-cost airline AirAsia Bhd is studying the possibility of increasing its airfares in the future, following the implementation of the Conditional Movement Control Order (CMCO).

Executive chairman Datuk Kamarudin Meranun said discussions are ongoing to decide if there is an urgent need for AirAsia to increase its airfares in the future.

“Even if there is an increase, it will not be significant.

More: https://www.theedgemarkets.com/article/airasia-studying-possibility-increasing-airfares

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10 hours ago, flee said:

AirAsia studying possibility of increasing airfares

KUALA LUMPUR (May 13): Low-cost airline AirAsia Bhd is studying the possibility of increasing its airfares in the future, following the implementation of the Conditional Movement Control Order (CMCO).

Executive chairman Datuk Kamarudin Meranun said discussions are ongoing to decide if there is an urgent need for AirAsia to increase its airfares in the future.

“Even if there is an increase, it will not be significant.

More: https://www.theedgemarkets.com/article/airasia-studying-possibility-increasing-airfares

 

isnt they already increase? 😂

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Delta’s 777 aircraft to retire by end of 2020, simplifying widebody fleet amid COVID-19

Delta plans to retire its 18 widebody Boeing 777s by the end of 2020 as a result of the COVID-19 pandemic. The retirement will accelerate the airline’s strategy to simplify and modernize its fleet, while continuing to operate newer, more cost-efficient aircraft.

“We’re making strategic, cost-effective changes to our fleet to respond to the impact of the COVID-19 pandemic while also ensuring Delta is well-positioned for the recovery on the backside of the crisis,” said Gil West, Delta’s Chief Operating Officer. “The 777 has been a reliable part of Delta’s success since it joined the fleet in 1999 and because of its unique operating characteristics, opened new non-stop, ultra-long-haul markets that only it could fly at that time.”

Last month, Delta announced plans to accelerate the retirement of the MD-88 and MD-90 fleets to June. Since the onset of the COVID-19 situation, Delta has reacted quickly by parking aircraft and considering early aircraft retirements to reduce operational complexity and cost. To date, the airline has parked more than 650 mainline and regional aircraft to adjust capacity to match reduced customer demand.

The Boeing 777-200 first entered the fleet in 1999 and grew to 18 aircraft, including 10 of the long-range 777-200LR variant, which arrived in 2008. At the time, aircraft was uniquely positioned to fly non-stop between Atlanta and Johannesburg, South Africa, Los Angeles to Sydney and other distant destinations.

Delta will continue flying its fleet of long-haul next generation Airbus A350-900s, which burn 21% less fuel per seat than the 777s they will replace.

Despite a reduction in international passenger travel, the 777 fleet has been the workhorse of Delta’s cargo, mail and U.S. citizen repatriation operations amid the pandemic. Since late April, the widebody jet has flown dozens of trips from Chicago and Los Angeles to Frankfurt to deliver mail to U.S. military troops abroad; operated between the U.S. and Asia to deliver thousands of pounds of critical, life-saving supplies to aid in the COVID-19 response; and carried thousands of U.S. citizens back to the U.S. from Sydney, Mumbai, Manila and other cities around the world.

More specific details of the timing of the 777’s exit from the fleet will be disclosed at a later date.

Source: https://news.delta.com/deltas-777-aircraft-retire-end-2020-simplifying-widebody-fleet-amid-covid-19

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Cargo Aircraft Roar To Life, Reaching Record Utilization As Coronavirus Creates Urgent Demand For Air Freight

Even today some flights still have to wait for a place to park at the airport. Yet the backlog is not at the passenger terminal but instead the cargo apron. Cargo aircraft are roaring to life, setting new records for utilization.

China Southern’s freighters are flying 15.5 hours a day, a rate enviable even for passenger aircraft. Freighters at Air China, China Airlines and Korean Air have also surpassed their annual record. Airlines with cargo aircraft have a rare source of revenue and cash flow as passenger flights dwindle and refunds outstrip new bookings. Air cargo sustained some Asian airlines during SARS, and may do so again during this coronavirus downturn.

There is a near halt on intercontinental passenger flights, where in the cabin airlines seek mood lighting and the latest lie-flat seats, but below are scuffed cargo compartments with containers featuring outdated airline logos from decades past.

It is in this unglamorous part of the plane that typically transports at least half of the world’s air cargo. Korean Air carries over 60% of its cargo in the bellies of passenger flights, while for Singapore Airlines it is 75%.

Stopping passenger flights during the coronavirus outbreak has removed this cargo capacity. China alone has lost the equivalent of 50 daily 747 flights.

More: https://www.forbes.com/sites/willhorton1/2020/03/31/cargo-aircraft-roar-to-life-reaching-record-utilization-as-coronavirus-creates-urgent-demand-for-air-freight/#25cebbb7bdd7

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On 5/2/2020 at 9:40 PM, flee said:

Here is the news story: Ismail Sabri: Domestic flights only half-load with social distancing in place

Do note that ministers are known to say inaccurate things and are often corrected at a later date.

Making some progress towards redemption 😀

https://www.thestar.com.my/news/nation/2020/05/14/full-capacity-allowed-for-flights-to-sabah-s039wak-as-state-govts-will-impose-quarantine-says-ismail-sabri#cxrecs_s

 

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Cathay Pacific loses money, flags 'very bleak' outlook

SYDNEY (Reuters) - Cathay Pacific Airways Ltd (0293.HK) said on Friday it made an unaudited loss of HK$4.5 billion ($580.53 million) at its full-service airlines during January-April and flagged a “very bleak” outlook as the coronavirus crisis grounded planes globally.

The Hong Kong-based airline said passenger numbers in April dropped by 99.6%, compared with last year as it flew a skeleton network due to a ban on transit traffic in the Asian financial hub and little outbound demand.

“At this stage, we still see no immediate signs of improvement,” Cathay Chief Customer and Commercial Officer Ronald Lam said in a statement.

“We are evaluating all aspects of our business to ensure that we remain strong and competitive when we emerge from this crisis.”

Cathay last month laid off 286 cabin crew based in the United States and furloughed 201 pilots based in Australia and Britain.

The HK$4.5 billion loss at full-service carriers Cathay Pacific and Cathay Dragon in the four months ended April 30 compared with a previously announced unaudited loss of HK$2 billion for the month of February.

More: https://www.reuters.com/article/us-health-coronavirus-cathay-pacific/cathay-pacific-losing-money-says-business-outlook-remains-very-bleak-idUSKBN22R0IE

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Why don’t Thais want to save Thai Airways from coronavirus tailspin?

  • Thailand’s national carrier is seeking a US$1.81 billion loan from the government, but the public is not so keen
  • Poor performances, financial mismanagement and alleged corruption have weakened trust in what was once the ‘pride of the nation’

See: https://www.scmp.com/week-asia/economics/article/3084516/why-dont-thais-want-save-thai-airways-coronavirus-tailspin

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Coronavirus puts paid to SIA’s last 777-200ERs

Singapore Airlines has confirmed that it will accelerate the retirement of its remaining Boeing 777-200ERs owing to the impact of the coronavirus pandemic.

The airline says that its last three examples were recently moved to Asia Pacific Aircraft Storage in Alice Springs, Australia. Original plans had called for the type to be retired from its fleet this year.

More: https://www.flightglobal.com/fleets/coronavirus-puts-paid-to-sias-last-777-200ers/138411.article

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Australia's Qantas set to ramp up domestic flights without social distancing

SYDNEY (Reuters) - Qantas Airways Ltd (QAN.AX) could restart 40-50% of its domestic capacity in July if states relax border controls, and expects to offer low and flexible fares without social distancing measures to stimulate travel demand, its chief executive said on Tuesday.

The airline will introduce measures on board from June 12 such as providing masks and cleaning wipes to ensure safe travel and give passengers peace of mind during the pandemic, but will not leave middle seats empty.

“Social distancing on an aircraft is impractical,” Qantas Chief Executive Alan Joyce told media. “It only gives you 60 centimetres (23.6 inches) between passengers.”

He said to meet Australia’s standard for social distancing of 1.5 metres on the ground, an Airbus SE (AIR.PA) A320 operated by low-cost arm Jetstar could fill just 22 seats, rather than the normal 180.

More: https://www.reuters.com/article/us-health-coronavirus-qantas-idUSKBN22V00R

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Coronavirus: Rolls-Royce to cut 9,000 jobs amid virus crisis

Rolls-Royce has said it will cut 9,000 jobs and warned it will take "several years" for the airline industry to recover from the coronavirus pandemic.

The Derby-based firm, which makes plane engines, said the reduction of nearly a fifth of its workforce would mainly affect its civil aerospace division.

"This is not a crisis of our making. But it is the crisis that we face and must deal with," boss Warren East said.

The bulk of the job cuts are expected to be in the UK at its site in Derby.

Rolls-Royce employs 52,000 people globally and Mr East told the BBC's Today programme that the company had not yet concluded on "exactly" where the job losses would be, due to having to consult with unions.

But he said: "It's fair to say that of our civil aerospace business approximately two-thirds of the total employees are in the UK at the moment and that's probably a good first proxy."

Roll-Royce's civil aerospace business has 30 sites in the UK, but the largest plant is in Derby.

Full report: https://www.bbc.com/news/business-52723107

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Phase-out of Air France entire Airbus A380 fleet
On 20 May 2020
In the context of the current COVID-19 crisis and its impact on anticipated activity levels, the Air France-KLM Group announces today the definitive end of Air France Airbus A380 operations.

Initially scheduled by the end of 2022, the phase-out of Airbus A380 fleet fits in the Air France-KLM Group fleet simplification strategy of making the fleet more competitive, by continuing its transformation with more modern, high-performance aircraft with a significantly reduced environmental footprint.

Five of the Airbus A380 aircraft in the current fleet are owned by Air France or on finance lease, while four are on operating lease. The global impact of the Airbus A380 phase-out write down is estimated at 500 million euros and will be booked in the second quarter of 2020 as a non-current cost/expenses.

Airbus A380 will be replaced by new generation aircraft, including Airbus A350 and Boeing 787, whose deliveries are ongoing.

Source: https://www.airfranceklm.com/en/phase-out-air-france-entire-airbus-a380-fleet?sf122769169=1

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Philippine Airlines confirms $1bn revenue loss due to Covid-19

Philippine Airlines (PAL) has seen revenue shrink by nearly $1 billion since it suspended operations because of the coronavirus pandemic, the flag carrier’s parent confirms.

Airline president Gilbert Santa Maria was quoted in local newspaper The Philippine Star last week saying that the carrier has seen revenue slide by over $300 million per month - totalling nearly $1 billion - since suspending operations in March.

PAL Holdings says that the airline had been “more or less” generating revenues of $300 million per month and Santa Maria’s estimate is “not without basis”.

See: https://www.flightglobal.com/airlines/philippine-airlines-confirms-1bn-revenue-loss-due-to-covid-19/138527.article

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Thai AirAsia considers merger

With its "fortune hanging in the balance", the chief of Thai AirAsia (TAA) says it may merge with another low-cost carrier (LCC) to clamp down on pricing wars once flights eventually resume in the country.

If Thailand does not resume tourism activities by July, TAA's chairman said next year the company would begin laying off employees, downsizing the company and its fleet to keep its business alive.

https://www.bangkokpost.com/business/1925524#cxrecs_s

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Thai Airways: pandemic delivers final blow to mismanaged carrier
Stripped of state protection, national icon faces drastic recovery overhaul

The slow collapse occurred in layers. Management was inconsistent as presidents and board members frequently came and went for political reasons. And employees were not blameless, taking advantage of executive mismanagement to feather their own nests.

It wasn't that the need for reform went unrecognized, just that efforts by past presidents, when they came, were inevitably cut short. Piyasvasti Amranand took the helm in October 2009 after serving as energy minister. Within Thai, he is still spoken of as the only true reformer, launching cost-cutting measures such as salary cuts for senior executives.

Despite helping the airline fill its deficit in 2009, directors suddenly voted him out in June 2012 in what was seen as a politically motivated ballot. His spouse was a senior member of the Democrat Party and the kingdom was under the premiership of Yingluck Shinawatra from then-rival-Pheu Thai Party controlled by her brother, the exiled former Prime Minister Thaksin Shinawatra.

Piyasvasti expressed exasperation at receiving no explanation for the apparent boardroom coup. "The performance of the company during my term has improved in every aspect," he said at the time.

Charamporn Jotikasthira, former president and chief executive officer of the Stock Exchange of Thailand, took the helm in 2014. But Charamporn's reforms faced a major revolt from the airline's union and made little progress. He ended up retiring in February 2017. Sumeth Damrongchaitham took over the position in September 2018, but resigned March this year in the middle of his tenure.

Unprofessional boards also did not help. After a military coup in 2014, a trend emerged when Air Chief Marshal Prajin Chatong, who later became a deputy prime minister in the junta, was appointed chairman. Five civilian members were purged and replaced with five Royal Thai Air Force officers.

The appointments marked an end to the management culture of only appointing technocrats to board management positions that Thaksin had introduced around 2001 and Yingluck abided by. Three air chief marshals are currently on the board and have no experience in running listed companies or restructuring loss-making airlines.

Unions are guardians of workers' rights, but employees at Thai are seen as overprotected. Salary increases are based on length of employment. "At times, senior captains were getting paid more than the president of the company," a former board member told Nikkei Asian Review.

At one time, the airline had 300 engineers reporting 8 hours overtime for all 365 days of the year, "which does not make sense," the former board member said. And, he added, when changes were introduced to reduce such compensation anomalies, staff were able to get around them through special allowances.

https://asia.nikkei.com/Business/Company-in-focus/Thai-Airways-pandemic-delivers-final-blow-to-mismanaged-carrier

 

Edited by KK Lee

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4 hours ago, flee said:

333 staff to go (172 pilots, 111 cabin crew and 50 engineers) in first round of redundancy.

Edited by JuliusWong

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KUALA LUMPUR -- Southeast Asia's biggest low-cost carrier AirAsia Group is set to reduce its workforce by up to 30% as founder Tony Fernandes considers selling a 10% stake in the airline to raise cash.

Desperately trying to stave off a cash flow crisis triggered by the coronavirus pandemic which has decimated the region's travel and tourism industry, AirAsia will also slash remaining staff salaries by up to 75% in an attempt the save the airline, the Nikkei Asian Review has learned.

The retrenchment will include cutting 60% of AirAsia's cabin crew and pilots for both AirAsia and its medium-haul affiliate AirAsia X. AirAsia Group operates through Malaysia, Thailand, Indonesia, Japan, India and the Philippines.

https://asia.nikkei.com/Business/Transportation/AirAsia-to-slash-workforce-by-30-considers-10-stake-sale

Bloodbath

Edited by KK Lee

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