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

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Row over undelivered jets as Airbus threatens to sue airlines

PARIS (Reuters) - A stand-off over undelivered passenger jets is intensifying after Airbus (AIR.PA) signalled it would sue airlines refusing to honour contracts in the face of the coronavirus crisis.

The warning by Chief Executive Guillaume Faury in a news interview came as Airbus announced May deliveries well below normal, despite a partial recovery to 24 jets.

Planemakers and lessors have received multiple requests from airlines to delay deliveries due to the slump in air travel.

Faury told Politico that some airlines, which he did not identify, had refused to take calls at the height of the crisis, but that he hoped for a compromise.

“It will remain, I hope, the exception because we always try to find a different route than going to court,” Faury said.

“But if and when airlines - and it’s happening - have no other choice than fully defaulting and not proposing something better than nothing, or are not willing to do it, then (lawsuits) will happen.”

Industry sources said such public warnings are rare in the tight-knit aviation market and could backfire.

But they noted the disruption is so great that Airbus is adopting a more aggressive stance, bracing itself for a repeat of turmoil such as the 2001 collapse of Swissair and Sabena.

It has sent out dozens of default notices to airlines in a step that can lead to lawsuits but undermine relations, the sources said. Some airlines have responded angrily in private.

More: https://www.reuters.com/article/us-airbus-airlines/row-over-undelivered-jets-as-airbus-threatens-to-sue-airlines-idUSKBN23C25D

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The story of the coronavirus impact on airlines in numbers

After years of record traffic growth and unprecedented profitability, the airline industry is facing the sharpest and most sustained fall in demand as the coronavirus pandemic has brought international travel to a virtual standstill.  


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How Malaysian airline employees cope with MCO and Covid-19 pandemic

KUALA LUMPUR, June 10 — Malaysia has entered the recovery movement control order (RMCO) phase and many businesses are getting ready to reopen their doors for business.

The aviation industry, one of the hardest hit due to the closure of borders in almost all countries all over the world, left many aviation industry workforce struggling to make ends meet as many were forced to take unpaid leave, or even face retrenchment.


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Qantas to axe 6,000 jobs due to pandemic

Qantas will axe 6,000 workers in a bid to stay afloat through the coronavirus pandemic, the airline says.

The cuts equate to about a fifth of the airline's workforce prior to the Covid-19 crisis. In March, it furloughed more than 80% of its staff.

Australia's national carrier said the collapse in global air travel had devastated revenues.

Last week, the Australian government said its border would most likely remain closed into next year.

It prompted Qantas to cancel all international flights until late October, except for those to New Zealand.

On Thursday, chief executive Alan Joyce said the airline expected smaller revenues in the next three years, forcing it to become a smaller operation to survive.


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Passenger Traffic in 2020 Estimated to Reduce Between 48.7 Per Cent and 50.3 Per Cent Year-on-Year from Record High in 2019

KUALA LUMPUR, 26 JUNE 2020 – The Malaysian Aviation Commission (MAVCOM) published today the seventh edition of its Industry Report, Waypoint. The report provides an overview of the performance of the Malaysian aviation sector in 2019 and the outlook for 2020.

In the March 2020 edition of Waypoint, MAVCOM forecasted that passenger traffic this year would contract by between 36.2 per cent and 38.1 per cent year-on-year (YoY) as a result of the COVID-19 pandemic. Following recent developments, the Commission has revised its forecast to a decrease of between 48.7 per cent YoY to 50.3 per cent YoY, which translates to between 54.3 million and 56.0 million passengers this year.

19.6 million passengers were recorded in the first five months of 2020, which reflects a drop of 55.2 per cent YoY in passenger traffic. The decline in passenger traffic was largely attributable to the travel restrictions imposed as part of measures taken by countries worldwide to contain the spread of COVID-19. This includes the implementation of the nationwide Movement Control Order (MCO) in Malaysia effective 18 March 2020.

These restrictions, contributed to the cancellation of flights by both Malaysian and foreign carriers, with many passengers either unable and some choosing not to travel by air. The Commission estimates a cancellation of 35.2 per cent in domestic seats and 42.9 per cent in international seats scheduled for 2020, equivalent to a total of 44.8 million seats. As at early June 2020, 38.8 million seats had already been cancelled by local and foreign carriers, higher than MAVCOM’s previous estimate of 31.0 million seat cancellations in 2020.

Carriers are expected to continue adjusting their seat capacity in response to the many factors surrounding travel demand and restrictions. As at early June 2020, Malaysian carriers have cancelled a total of 29.6 million seats in 2020 compared to 28.3 million seats at end-May 2020. Likewise, foreign carriers operating to and from Malaysia are also reducing their seat capacity – a total of 9.2 million seats have been cancelled in 2020 as at early June compared to 8.5 million at end-May.

Consequently, the revenue-at-risk for 2020 by Malaysian and foreign carriers is estimated to be RM11.3 billion and RM4.6 billion, respectively (previous estimates: RM6.8 billion and RM5.0 billion), which collectively represents 51.1 per cent of estimated total airfare revenue in 2019. As for aerodrome operators, MAVCOM estimates that revenue derived from Passenger Service Charges (PSC) that are at risk is approximately RM0.5 billion (previous estimate: RM0.4 billion). This amount represents 33.4 per cent of total PSC revenue in 2019.

YBhg. Datuk Seri Saripuddin, Executive Chairman of MAVCOM said, “The impact of COVID-19 on the aviation industry has been extremely severe, and with no comparable precedent, the rate of recovery for the industry will be difficult to predict. The current relaxation of movement restrictions within Malaysia, however, should facilitate faster recovery for the domestic market. Immigration controls and quarantine measures in Malaysia and elsewhere, alongside passenger willingness to travel by air during this period, will also influence how quickly the overall industry will return to pre-COVID-19 levels. The safe re-introduction of international travel and the adoption of the International Civil Aviation Organization (ICAO)-recommended safety measures vis-à-vis managing COVID-19 for air travel could go some way towards reinvigorating the industry.


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NokScoot one step closer to liquidation

BANGKOK: Low-cost carrier Scoot announced on Friday (Jun 26) that the board of directors of NokScoot has passed a resolution to liquidate the troubled airline. 

NokScoot is a joint venture between Scoot and Thailand-based airline Nok Air. 

NokScoot's shareholders will deliberate the same resolution at a NokScoot general meeting in two weeks, Scoot said in a media release.

Scoot, which owns 49 per cent of NokScoot, said the airline had been unable to record a full-year profit since it was established in 2014.


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Report: Malindo Air offers staff one-year voluntary unpaid leave

KUALA LUMPUR, June 29 — Malindo Airways Sdn Bhd is reportedly offering its employees a voluntary long-term unpaid leave of one year, following which their employment status with the company will be made known.

According to an internal memo sighted by The Malaysian Insight, the scheme scheduled to start on August 1 is said to allow employees of the low-cost carrier to go on “voluntary unpaid leave without any justification”.


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Norwegian Air cancels 97 Boeing MAX and Dreamliners, claims compensation

OSLO (Reuters) - Norwegian Air (NWC.OL) has cancelled orders for 97 Boeing (BA.N) aircraft and will claim compensation from the U.S. plane maker for the grounding of the 737 MAX and for 787 engine troubles that hit its bottom line, the Oslo-based carrier said on Monday.

The airline cancelled 92 of the 737 MAX jets, five 787 Dreamliners and so-called GoldCare service agreements related to both aircraft, just as Boeing on Monday began a crucial set of flight tests of the 737 MAX in an effort to gain regulatory approval for it to return to the skies.

“Norwegian has in addition filed a legal claim seeking the return of pre-delivery payments related to the aircraft and compensation for the company’s losses related to the grounding of the 737 MAX and engine issues on the 787,” the airline said.

More: https://www.reuters.com/article/us-norwegianair-boeing/norwegian-air-cancels-97-boeing-max-and-dreamliners-claims-compensation-idUSKBN2402X2

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Coronavirus: Plane-maker Airbus to cut 15,000 jobs

Aerospace giant Airbus says it plans to cut 15,000 jobs as it deals with the effects of the coronavirus crisis.

It will cut 1,700 jobs in the UK, along with thousands more in Germany, Spain and elsewhere.

The move is subject to talks with unions which have opposed compulsory redundancies.

The Unite union said the Airbus announcement was "another act of industrial vandalism" against the UK aerospace sector.

Some 134,000 people work for Airbus worldwide, with around a tenth of them in the UK.

The firm said the UK cuts would fall only on the commercial aircraft division at its two sites at Broughton in Flintshire and Filton, Bristol.

More: https://www.bbc.com/news/business-53242272

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