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

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Malindo Air resumes domestic flights amid MCO

KUALA LUMPUR, April 24 -- After a brief shutdown due to the Movement Control Order, Malindo Air will resume its domestic services from Kuala Lumpur International Airport (KLIA) and Sultan Abdul Aziz Shah Airport, Subang, from April 27 with a single daily flight to each of the domestic destinations that it operates to.

See: https://www.bernama.com/en/business/news.php?id=1835542

 

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Virgin Atlantic says still talking with UK government on coronavirus funds

(Reuters) - Virgin Atlantic is still talking with the British government about a bailout package to cope with the devastating effects of the coronavirus outbreak on travel as well as focusing on private sector funding, a company spokeswoman told Reuters.

The comments came after the Sunday Telegraph reported here that founder Richard Branson was seeking a buyer for the airline and had set a May-end deadline for a sale, and that talks with the government for a 500 million pound ($618.35 million) bailout package had been "effectively shelved."

The spokeswoman said it was incorrect to say that the company has set a deadline to seek a buyer.

“Because of significant costs to our business caused by unprecedented market conditions which the COVID-19 crisis has brought with it, we are exploring all available options to obtain additional external funding,” she said.

She said talks with the British government were “ongoing and constructive.”

Virgin Atlantic is based in Britain and is 51% owned by Branson’s Virgin group and 49% owned by U.S. airline Delta (DAL.N).

More: https://www.reuters.com/article/us-health-coronavirus-virgin-atlantic/virgin-atlantic-says-still-talking-with-uk-government-on-coronavirus-funds-idUSKCN22801J

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45 minutes ago, flee said:

MOL loves publicity stunts. Lets wait and see what happens...

There was also small news that he is planning to bring EU into court for subsidising and rescuing airlines affected by covid lol.

 

https://www.irishtimes.com/business/transport-and-tourism/ryanair-may-legally-challenge-eu-state-bailouts-for-national-carriers-1.4237144

Edited by jahur

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14 hours ago, jahur said:

There was also small news that he is planning to bring EU into court for subsidising and rescuing airlines affected by covid lol.

https://www.irishtimes.com/business/transport-and-tourism/ryanair-may-legally-challenge-eu-state-bailouts-for-national-carriers-1.4237144

Well, MOL will be shooting himself in the foot if he is seeking cheap publicity at this point of time. EU most certainly doesn't need Ryanair now as there are massive excess capacity in the EU. Certainly Ryanair needs EU not the other way round. 

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Airbus CEO Warns Workers It’s Bleeding Cash and Cuts Are Needed

Airbus SE chief Guillaume Faury warned employees that the planemaker is “bleeding cash” and needs to quickly cut costs to adapt to a radically shrinking aerospace industry.

With airline customers fighting to survive and unable to accept new aircraft, Airbus is juggling its delivery schedules while reassessing its long-term outlook for the aerospace industry, Faury told staff in a letter sent Friday and seen by Bloomberg News. A plan to slash production by one-third announced earlier this month may not reflect the worst-case scenario, he said.

“We’re bleeding cash at an unprecedented speed, which may threaten the very existence of our company,” Faury wrote. “We must now act urgently to reduce our cash-out, restore our financial balance and, ultimately, to regain control of our destiny.”

See: https://www.bloomberg.com/news/articles/2020-04-26/airbus-ceo-warns-workers-it-s-bleeding-cash-and-cuts-are-needed

 

UPDATE 1-Airbus survival at stake without immediate action -CEO memo

See: https://www.reuters.com/article/health-coronavirus-airbus/update-1-airbus-survival-at-stake-without-immediate-action-ceo-memo-idUSL5N2CE0MT

Edited by flee

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New Alitalia launches in June. 100% gov owned now.

https://onemileatatime.com/alitalia-relaunch/?fbclid=IwAR0o_ptm3RiEWYCRJ0Nq5Ws48ljKl0BLzd8oAs1oi9KFi_hvvMocmGUhFb4

 

From gov owned and back to privatization and now back to gov owned again. Last made profit in 1998.

 

Heard something similar is happening to Thai and Garuda as well. 

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49 minutes ago, jahur said:

Heard something similar is happening to Thai and Garuda as well. 

You fired off the neurons - what is possibility of something similar happening to Air Asia  and Air Asia X (Malaysia at least) ? 😀

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SIA Group reserves liquidity for aircraft purchases

SIA Group has set aside S$3.3 billion ($2.3 billion) of the S$8.8 billion it plans to raise, from issuing equity and mandatory convertible bonds, for aircraft purchases and aircraft related payments.

“The rationale for these [aircraft] purchases remains valid even under the present scenario given that it would enable SIA to proceed with its adoption of new-generation aircraft, both as replacement for existing fleet and for growth, as these new generation aircraft will not only provide an enhanced travel experience to our customers but also, provide better operating efficiency and lower emissions,” the group said in response to questions from the Securities Investors’ Association (Singapore) (SIAS), as disclosed to the Singapore Exchange.

Cirium fleets data shows that the group expects to receive 18 aircraft for the rest of 2020, and another seven in the first quarter of 2021. These comprise seven Airbus A320neo family aircraft and five A350s, nine Boeing 787s, along with four 737 Max 8 jets, which have yet to be re-certified following a global grounding in March 2019.

SIA says: “We believe that the proceeds of S$8.8 billion from the rights issue will allow us to meet our liquidity and operational requirements, including operating cash flow needs, capital expenditure requirements and fixed obligations, for a good part of financial year 2020/2021.”

Full report: https://www.flightglobal.com/strategy/sia-group-reserves-liquidity-for-aircraft-purchases/138086.article

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Coronavirus pandemic inspires demand for UV airplane cleaner

Dimer UCV Innovations created a UV-C-emitting cleaning machine called GermFalcon for the airline industry in 2014 - but it’s only with the coronavirus that demand has really taken off.

“We didn’t want it to take a pandemic to create the demand in this industry. That’s the situation we’re in and we’re building our units as quickly as we can,” said Elliot Kreitenberg, president and cofounder of Dimer UCV Innovations.

He did not give details on sales of the unit, but said use of the machine had been offered to the industry for free during the pandemic.

More: https://www.reuters.com/article/us-health-coronavirus-germfalcon/coronavirus-pandemic-inspires-demand-for-uv-airplane-cleaner-idUSKCN2263AC

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Coronavirus: British Airways to cut up to 12,000 jobs

British Airways is set to cut up to 12,000 jobs as it deals with a collapse in business because of the coronavirus pandemic.

The airline's parent company, IAG, said it needed to impose a "restructuring and redundancy programme" until demand for air travel returns to 2019 levels.

BA, which employs about 42,000 people, had already warned that job losses were likely.

IAG also owns Spanish airline Iberia and Ireland's Aer Lingus.

In a statement, IAG said: "The proposals remain subject to consultation, but it is likely that they will affect most of British Airways' employees and may result in the redundancy of up to 12,000 of them."

The company said it will take several years for air travel to return to pre-virus levels, a warning that has been echoed by airlines across the world.

More: https://www.bbc.com/news/business-52462660

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AirAsia domestic flights start today, select regional ones to resume mid-May

KUALA LUMPUR, April 29 ― AirAsia will resume operating in stages, starting with domestic flights today and subsequently for several Asean countries by May 16.

AirAsia Group executive chairman Datuk Kamarudin Meranun said the low-cost carrier will begin flying again to Thailand on May 2, Indonesia on May 7, followed by the Philippines on May 16, subject to approval from the authorities.

“Strict health controls and social distancing protocols are in place, in compliance with the regulations. The resumption of services will increase gradually to include international destinations around the region, once the situation improves and governments lift borders and travel restrictions,” he said in a statement.

See: 

https://www.malaymail.com/news/malaysia/2020/04/29/airasia-domestic-flights-start-today-select-regional-ones-to-resume-mid-may/1861343

AirAsia Returning to Service Stronger

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Eight Thai carriers seek $771m loan from Thai govt: reports

Eight Thai carriers have sought a soft loan of around Bt25 billion ($771 million) from the Thai government, according to a 24 April Reuters report that cites a Thai AirAsia executive.

Tassapon Bijleveld, the executive chairman of Thai AirAsia and its parent company Asia Aviation, added that the carriers seeking the loan are Bangkok Airways, Nok Air, NokScoot, Thai AirAsia, Thai AirAsia X, Thai Lion Air, Thai VietJet Air, and Thai Smile.

The loan will carry an interest rate of 2%, which will have to be paid back over five years from 2021 onwards.

The report adds that while the airlines sought an initial Bt6.25 billion to be disbursed this month, further discussions with the Thai government were required.

See: https://www.flightglobal.com/strategy/eight-thai-carriers-seek-771m-loan-from-thai-govt-reports/138128.article

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Lufthansa may prefer creditor protection to government ownership, hinting at filing for bankruptcy

Reported by dpa International, Germany's flagship carrier, Lufthansa, is exploring the possibility of declaring insolvency, instead of having the state intervene, as it seeks a way of dealing with the economic fallout from the coronavirus pandemic.

Lufthansa, Europe's largest airline, announced last week that the airline is losing one million Euros per hour. They already have plans to restructure and downsize some of their fleet.

https://www.businesstraveller.com/business-travel/2020/04/29/lufthansa-may-prefer-creditor-protection-to-government-ownership/

https://samchui.com/2020/04/28/lufthansa-may-refuse-state-aid-file-for-bankruptcy/#.XqoeTqgzZpk

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Mexico's Interjet suspended from IATA body over payment arrears

MEXICO CITY (Reuters) - Struggling Mexican airline Interjet suffered a heavy blow on Wednesday when it was suspended from the clearing house membership of the International Air Transport Association (IATA) for failing to keep up with payments.

The Airlines Clearing House (ACH) said in a letter dated Wednesday the membership of ABC Aerolineas S.A. de C.V., which operates under the name Interjet, was suspended with “immediate effect” due to the “non-payment of a clearance balance”.

For more: https://www.reuters.com/article/us-mexico-interjet/mexicos-interjet-suspended-from-iata-body-over-payment-arrears-idUSKBN22B3BC

Our knowledge with current situation is once IATA suspended certain airline membership, it is almost the end of that particular airline. Lessors have been frantically de-registering and flying out their aircraft for past few weeks. 

Pre-COVID19 outbreak fleet breakdown:

  • A320ceo-  42    
  • A320neo- 7  (30 on order)     
  • A321ceo- 6    
  • A321neo-  8   
  • SSJ100- 2 (Total of 22, only 2 operational)
  • Total- 67 operational aircraft

From peak of 89 aircraft, now they are down to only 35 aircraft and more will be repossessed as the latest development on IATA suspension takes hold. Last count by planetspotters.net, they are down to 12 A320ceo, 1 A321neo, 22 SSJ-100.

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Boeing will cut more than 15% of jobs in commercial jet division, CEO Calhoun says

In the latest blow to the local economy, Boeing said it will cut “more than 15%” of jobs at its commercial jet business, principally in its Seattle-area operations, as the aerospace company adjusts to an aviation marketplace decimated by COVID-19.

“We will be a smaller company for a while,” CEO Dave Calhoun told analysts after the company announced a first-quarter loss of $641 million and a 26% drop in revenues. “The sharp reduction in demand for our airplanes we see out over the next several years won’t support the size of the workforce we have today.”

The company will also significantly slow production of the jets it builds in Renton and Everett.

The job cuts, which Calhoun warned might rise further “if there’s another spike somewhere down the road,” are part of a 10% cut in Boeing’s total workforce as the company struggles with the impact of pandemic as well as ongoing troubles with several aircraft programs, including the 737 MAX, which was grounded after two fatal crashes.

Boeing declined to say exactly how many jobs in its Puget Sound operations would be lost. But even a 15% reduction would mean a loss of nearly 10,000 jobs for Boeing Commercial Airplanes, which employs some 65,000 workers, most of them in Washington state.

There are about 36,000 employees at Everett and thousands more in Renton, as part of Boeing’s statewide workforce of more than 70,000 in commercial, defense and services operations. During a later call with reporters, Calhoun said the “higher percentage” of the cuts would fall on “white-collar,” or nonmanufacturing, workers.

More: https://www.seattletimes.com/business/boeing-aerospace/boeing-loses-641-million-in-first-quarter-announces-job-and-production-cuts/

 

 

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Since late March, most of the airline group’s 282 aircraft have been in hibernation at airports around Asia. But what happens to the aircraft during this time?

“Our fleet of aircraft may be in hibernation, but there is still much to be done to maintain these technologically advanced pieces of machinery. Our engineers have to make sure that all aircraft will be kept in excellent condition when we are ready to take to the skies again,” says Banyat Hansakul, Head of Engineering for AirAsia Group.  

AirAsia has since activated the Long Term Parking Procedures as part of the Aircraft Maintenance Manual (AMM) prescribed by the aircraft manufacturer Airbus. The stringent manual outlined procedures and recurring maintenance actions to preserve the safety and airworthiness of the aircraft during a prolonged parking period. 

More: https://newsroom.airasia.com/stories/fly-safe-with-airasia-2-aircraft-maintenance

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Malaysia Airlines says working with Khazanah for financial support, taken cost cuts

KUALA LUMPUR (April 30): Malaysia Airlines is working closely with sole shareholder Khazanah Nasional for financial support while also taking steps to defend its cash position to sustain business during the coronavirus crisis, it said on Thursday.

It did not give details of the financial support provided.

The Covid-19 pandemic that has killed more than 226,000 people globally and resulted in lockdowns in many countries, has battered the aviation industry as air travel has ground to a near halt.

"We have taken hard measures to aggressively defend our cash position including capacity and resource management, deferring non-critical spend, and implementing cost cutting initiatives across the business," Malaysia Aviation Group, the holding company for the national carrier, told Reuters via email.

More: https://www.theedgemarkets.com/article/malaysia-airlines-working-khazanah-financial-support-parent-co-says

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BA may not reopen at Gatwick once pandemic passes

British Airways has told staff that its Gatwick airport operation may not reopen after the coronavirus pandemic passes.

The admission came in a memo, written by the head of BA's Gatwick hub and seen by BBC News.

BA's Gatwick operation, which is currently suspended, is roughly a fifth as big as its Heathrow hub.

In a separate letter to pilots, BA said it cannot rule out suspending the rest of its Heathrow operation.

In the memo to Gatwick's staff, the company says: "As you know, we suspended our Gatwick flying schedule at the start of April and there is no certainty as to when or if these services can or will return."

In the letter to pilots, BA notes that some of its rivals abroad are facing tough competition. It adds that a quarter of BA's 4,300 pilots are set to lose their jobs.

"We need to ensure that our remaining operation is efficient, flexible and cost-competitive to enable us to survive in an increasingly lean and unpredictable industry," says the letter from senior management.

More: https://www.bbc.com/news/business-52489013

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Lufthansa collapse: Airline may be about to file for bankruptcy
One of the biggest airlines in the world, Lufthansa, is reportedly preparing to file for bankruptcy after talks snag over a bailout.

One of the world’s largest airlines, Lufthansa, could be on the brink of collapse as the airline desperately tries to negotiate a $13 billion rescue package with the German government.

The airline entered “intensive negotiations” late last week in a bid to sustainably secure the group’s solvency, as it reported a €1.2 billion ($A2 billion) operating loss in the first quarter.

But if the airline fails to secure a bailout, Lufthansa will be potentially consider a court protection (known as a Schutzschirm protection) as a last resort which would essentially shield the airline from creditors for three months while restructuring finances and management.

For the airline to receive the protection, it will need to be approved by a court and an application submitted before the company is no longer able to pay bills.

More: https://www.news.com.au/travel/travel-updates/health-safety/lufthansa-collapse-airline-may-be-about-to-file-for-bankruptcy/news-story/9a53d9c67d4a3d1215bd8fa73a4febb3

 

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Boeing raises $25 billion in blowout debt sale, eschews government aid

(Reuters) - Boeing Co (BA.N) raised $25 billion in a bond offering on Thursday, a blowout result for the planemaker, which it said helped the company avoid taking government aid during the coronavirus-induced travel downturn.

See: https://www.reuters.com/article/us-boeing-debt/boeing-raises-25-billion-in-blowout-debt-sale-eschews-government-aid-idUSKBN22C3SJ

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