Airline losses (due fuel prices/hedges, etc.)

[Min 6]

Qantas has blamed the relentless rise in fuel prices for the first major cut in its services since the SARS crisis hit the airline industry five years ago, after announcing plans to retire and ground some of its domestic aircraft from July.

 

Reflecting moves by several US airlines to ground some aircraft rather than fly on uneconomic routes, Qantas has announced its plans to exit several low-yielding routes, including the Sydney-Gold Coast route in order to cut costs.

 

The airline said the domestic cuts equate to the grounding of six jets. Qantas said it will follow through with extra cuts to its international network within a week.

 

The share market rewarded the cost-cutting move by pushing Qantas's shares 5%, or 16 cents, higher to close at $3.45.

 

Warning the airline's fuel bill could increase $2 billion next financial year, Qantas chief executive Geoff Dixon said in a statement this afternoon: "The fact is that fuel prices are something we have no control over, so we have to look harder at areas where we do have control."

 

Mr Dixon said the airline's fuel hedging policy, fuel surcharges, recruitment freeze and recent fare increases were not enough to ward off the "widening gap between the actual increase in the cost of fuel and the amount we offset".

 

Qantas at present only pays around US$72 a barrel for its oil needs, due to its fuel hedging policy where it locks in its fuel contracts at the start of every financial year. But from July 1, the fuel hedging will drop off and most of Qantas's fuel bill will be exposed to the current market price of around US$130 a barrel. It only has a small portion of its fuel bill for 2008-09 locked in at around US$90 a barrel.

 

Only last week, Qantas lifted its fares for the second time in less than a month but the move did not stop credit-rating agency Standard & Poor's from signalling on Wednesday a possible downgrade to the carrier's rating with a negative outlook.

 

S&P affirmed Qantas's BBB+ rating but said Qantas's cash flows were under pressure from high fuel prices.

 

Qantas now plans to "ground" two Boeing 767s, retire one ageing 737 and speed up the retirement of its fuel-guzzling fleet of four 747-300s.

 

But in a worrying sign, Qantas said its low-cost subisidiary Jetstar would cancel the delivery of one A321 and ground another of its relatively new A320s. This counters moves by other airlines to focus on the retirement of older and less fuel efficient jets. Jetstar said the grounded A320 would be used as a "spare".

 

Jetstar will also cut back on services, axing its Sydney-Whitsunday Coast service and cutting back or axing several other routes.

 

"We must take these hard decisions now, however, if we are to ensure the ongoing strength of Qantas, preserve the jobs of the vast majority of our current workforce and position ourselves for growth when the trading environment improves," said Mr Dixon.

 

Sydney Morning Herald

 

[Naim 6]

Page last updated at 14:40 GMT, Wednesday, 28 May 2008 15:40 UK

BBC

Fuel price grounds Qantas planes

A number of older Qantas planes will be retired as part of the cuts

 

The rising cost of fuel has caused Australian airline Qantas to ground a number of aircraft and cancel the purchase of a new plane.

 

Staff numbers will be reduced and a number of domestic routes will also be cancelled in the coming months.

 

The airline estimated its fuel bill would make up 35% of the company's total expenditure this year.

 

Qantas will announce changes to its international network within the next week, the company said.

 

"We must make these hard decisions now if we are to ensure the ongoing strength of Qantas,” said chief executive Geoff Dixon.

 

"It is inevitable that a reduction in staff numbers will be necessary in selected parts of our business," he said.

 

The changes announced so far are the equivalent of grounding six aircraft, the company said.

 

But despite cancelling the order for one Jetstar A321 plane, it reinforced a commitment to invest 35bn Australian dollars ($33.6bn; £17bn) in new aircraft.

 

http://news.bbc.co.uk/2/hi/business/7424050.stm

[Mohd Azizul Ramli 2]

Let's use this thread to track all airlines' move over the skyrocketing fuel price. The following news are supplied by Pieter C from various threads. I wonder what are airlines in our home turf going to do about this.

 

Korean Air To Cut Flights To Cope With Rising Oil

May 26, 2008

 

Korean Air said on Monday it plans to cut some passenger flights from June to mid-July to cope with surging jet fuel prices. Korean Air, the world's number 1 cargo carrier, said it also plans to adjust routes based on demand and earnings and may hedge its fuel costs.

 

"We will reduce slack routes and flights which are expected to slow down," a company official said asking not to be identified. Korean Air will cut flights on 12 routes, suspend five routes and change planes on four routes. The plans come as fuel prices hit a record high on Monday. Prices have jumped 57 percent so far this year.

 

Korean Air swung to a larger-than-expected quarterly net loss in the first quarter, hit by higher fuel costs. In the first three months of the year, the company used 1.3 percent more fuel from a year ago while fuel costs, its single-biggest cost item making up 30 percent of its operating expenses, jumped 49 percent.

 

(Reuters)

 

* * * * *

 

JetBlue To Defer Delivery Of 21 Airbus A320s

May 27, 2008

 

JetBlue Airways said on Tuesday it plans to defer delivery of 21 Airbus A320 aircraft that were originally scheduled for delivery between 2009 and 2011 until 2014 and 2015, citing current high fuel costs.

 

"In the face of escalating fuel costs, we believe it is essential to take a more financially conservative approach to managing our business," said Dave Barger, its chief executive.

 

Barger said the deferrals will help JetBlue further moderate its growth rate in 2009 and beyond, which will enhance liquidity and defer future debt obligations.

 

(Reuters)

[Pieter C. 5]

However, do not forget to check the Oneworld-, Skyteam- and Star Alliance as well as LCC topics for their respective airline-news either

[Min 6]

yes, i agree seems fuel prices going mad.. i think someone should stick this thread up for follow up update... on my side, i'll cover the news in Australia..

[Mohd Azizul Ramli 2]

Also from Pieter C, from the European LCC thread.

 

Air Berlin To Scrap Routes As Fuel Costs Hurt

May 29, 2008

 

German carrier Air Berlin has abandoned its full-year profit goal and says it will scrap unprofitable routes from its network as it tries to weather rising fuel costs. The airline still expects to achieve an operating profit for the full year based on current jet fuel prices but it has dropped its forecast for 2008 earnings before interest and tax (EBIT) of EUR73 million to EUR120 million euros (USD$114 million - USD$187 million).

 

"As a result of the current difficult market environment, in particular the high fuel prices, it is anticipated that operating income will be adversely affected during the further course of the year, making it difficult to obtain the envisaged EBIT corridor," Air Berlin said in a statement on Thursday. The airline said it now expected fuel costs this year to be some EUR80 million more than it had forecast in March.

 

Chief Executive Joachim Hunold declined to give a new target EBIT range and told a news conference that any new range could not be taken seriously, given market conditions. The head of EADS, the parent of European plane maker Airbus, told the ILA Berlin Air Show this week he was worried about the impact of the high oil price on airline finances. Oil prices have roughly doubled in the last year.

 

Airbus was bracing for more delays and even cancellations to plane orders after US carrier JetBlue Airways blamed the cost of fuel for deciding to defer delivery of 21 Airbus A320s for up to five years. Air Berlin's Hunold said the airline was reviewing all of its long-haul routes and would also seek to pass fuel costs on to passengers through higher ticket prices. But it was too early to talk about delaying orders for new planes, he said.

 

The carrier has hedged 88 percent of its fuel needs for this year and 24-35 percent for the first three quarters of next year, Hunold said, as it tries to control the impact. Europe's biggest low-cost airline, Ryanair, said earlier this month that rising oil prices were hurting profits and admitted "calling the oil market wrong". It was just 2.5 percent hedged for the next 12 months.

 

(Reuters)

[Pieter C. 5]

Topic now pinned for easier reference/updates...

 

Silverjet Stops Flights As It Runs Out Of Cash

 

May 30, 2008

Britain's Silverjet said it stopped flights on Friday after failing to get a USD$5 million loan from Abu Dhabi-based investors, becoming the third London to New York business class-only airline to run out of cash.

 

Silverjet, which along with Eos and MAXJet tried to steal away business class customers from larger carriers such as British Airways and Virgin Atlantic with cheaper tickets, more space and quicker check-ins, said its fleet of three aircraft will be grounded when the last flight returns.

 

Silverjet needs an emergency injection of cash or it will follow now-bankrupt Eos and MAXJet out of business. All three focused on the lucrative market of business people jetting between meetings in London and the US.

 

Silverjet is talking to investors about a rescue package but had "yet to conclude such discussions to its satisfaction".

 

Douglas McNeill, transport analyst at Blue Oar Securities, said: "The climate for attracting capital into the airline industry has never been worse.

 

"There was speculation Lufthansa showed an interest but if they were going to do something I think they'd have done it by now."

 

The airline, based at Luton Airport north of London, said Abu Dhabi-based fund Viceroy Holdings had failed to give it the first USD$5 million of an GBP8.4 million pounds (USD$16.6 million) loan facility it had reached initial agreement over.

 

"It is with deep regret that the board of Silverjet has decided that it must suspend operations with immediate effect," it said in a statement on Friday.

 

Shares in the airline were suspended last week after the company said it had not received the loan from Viceroy that was meant to guarantee its future in a tough economic climate.

 

In the last six months business-class-only carriers Eos and MAXJet went bust, citing increasing jet-fuel costs as the main reasons for going out of business.

 

(Reuters)

[Keith T 2]

It just struck me how everything has hit all of a sudden, or as the boss of AF-KL Jean-Cyril Spinetta put it in an article I read (sorry can't find it now) - it's all hit "violently and quickly." I mean, we all knew fuel costs were quite high for a while but things seemed rather rosy until a few months ago. And it's not just the usual suspects in North America in trouble either, you know things ARE bad when one of the world's most profitable airlines is in distress.

[Pieter C. 5]

Only the big ones with good fuel-hedging will survive...

 

If not a state-owned company, it's indeed extremely difficult to stay aloft nowadays...

 

How can a small airline, like Blue Islands (see GVA thread) or OLT (in Germany) stay 'airborne' ???

[Pieter C. 5]

IATA Says Global Airline Losses Possible In 2008

 

June 2, 2008

The International Air Transport Association (IATA) said on Monday a significant decline in global airline profitability, or even losses, look inevitable for 2008 as the industry struggles with sky-high fuel prices.

 

"The situation is desperate and potentially more destructive than our recent battles with all the horsemen of the apocalypse combined," IATA Director General Giovanni Bisignani said in a speech at an annual meeting held this year in Istanbul.

 

IATA said a combination of high fuel prices, a US economic downturn, and accelerated deliveries of aircraft ordered at the peak of the economic cycle but delivered during a slowdown meant the outlook for 2008 was "clouded by the perfect storm".

 

"Adding to the downward pressures on revenue growth from the US recession will be the acceleration in aircraft deliveries in 2008 and 2009," IATA said in its annual report.

 

Record oil prices, which hit an all-time high of USD$135.09 a barrel on May 22, are seriously threatening the outlook for industry. Oil prices have roughly doubled in the past year.

 

US airlines are already suffering the most because of the downturn in that country's economy. US carriers have already raised fares, added new fees and surcharges, cut jobs and reduced services, to cope with oil prices and the slowdown.

 

KLM Chief Executive Peter Hartman said demand will be hit by the oil price and economic slowdown, but so will supply be reduced as airlines go under.

 

"You will also see a lower supply because more and more airlines get in the red and in trouble, and of course everybody who has an increase in costs as far as he cannot manage it under productivity improvements, should increase the prices for the consumer," he said.

 

Also speaking on the sidelines of the conference, British Airways Chief Executive Willie Walsh said the company expected to trim its capacity later this year faced with high oil prices.

 

Bisignani forecast industry losses of USD$2.3 billion in 2008 if the average price of a barrel of Brent oil remained at USD$107 for the rest of the year.

 

He also said that if oil prices remained at USD$135 a barrel for the rest of the year airline industry losses would be USD$6.1 billion.

 

"If the consensus of experts is correct and oil averages USD$107 per barrel (Brent) the fuel bills will be USD$176 billion, USD$40 billion more than in 2007. This would push us back into the red with a loss of USD$2.3 billion in 2008," Bisignani said. He said last year's bottom line was USD$5.6 billion.

 

Bisignani said traffic growth in the industry would at best be 3.9 percent this year, down from growth of 5.9 percent in 2007.

 

The association said increased liberalization in the industry would also intensify competition and squeeze profitability.

 

Bisignani said 24 airlines had stopped operating or gone bankrupt in the last six months. He gave no further details.

 

IATA represents 240 airlines operating 94 percent of all international passenger and cargo flights.

 

(Reuters)

 

[Seth K 3]

Demand for air-traveling is elastic but not that elastic, won't effect much but the most suffer from the skyrocketing fuel price are low cost carriers, unable to keep the 99 cent tickets .

[Pieter C. 5]

European Airlines Struggle, Groundings Seen

 

June 3, 2008

European airlines are struggling to fill their planes and may ground unused aircraft next winter, the Association of European Airlines (AEA) said on Tuesday.

 

The warning follows one on Monday from the International Air Transport Association (IATA) that the global airline industry is set to report losses this year possibly as high as USD$6.1 billion.

 

The AEA, which represents 33 airlines, warned on the north Atlantic market -- a key source of revenues for big European carriers such as British Airways, Air France-KLM and Lufthansa.

 

"Clearly, economic conditions are taking their toll in the marketplace as the global slowdown and the credit crunch impact business confidence and travel volumes, while resurgent inflation is severely affecting discretionary income," it said.

 

Its members increased overall traffic by 1 percent in April versus last year, but north Atlantic routes were down 2.7 percent and traffic on European domestic routes declined 1.6 percent.

 

April load factors fell 2.7 percentage points to 74.8 percent, said the AEA, whose members carry 346 million passengers a year on 2,540 planes.

 

The group said a number of routes were making no profit, with little chance of redeploying the planes elsewhere, raising the possibility of groundings next winter.

 

"A number of airlines, in Europe and elsewhere, have already signaled that they could make substantial capacity cutbacks once the summer flying program is completed, pointing to the possibility that traffic growth may evaporate altogether," it said a statement.

 

IATA said in its annual report on Monday that a combination of high fuel prices, a US economic downturn and accelerated deliveries of aircraft ordered at the peak of the economic cycle but delivered during the slowdown meant the outlook for 2008 was "clouded by the perfect storm".

 

The AEA was not the first to signal malaise on transatlantic routes.

 

American Airlines said last month it would end service between New York's JFK Airport and London's Stansted Airport as part of a wider plan to cut capacity to better cope with high fuel prices.

 

Last week Silverjet became the third business class-only airline flying between London and New York to collapse.

 

(Reuters)

 

Chinese Carriers To Trim Long-Haul Flights

 

June 3, 2008

Two of China's major airlines plan to cut back flights on certain loss-making long-haul international routes to reduce costs as they confront high oil prices, an airline executive and state media said on Tuesday.

 

China Eastern Airlines will cut back flights on some loss-making international routes but will execute the plan gradually to avoid significant reductions on any individual routes, an executive with the carrier said.

 

"Demand on some long-haul international routes has been weak and it is difficult not to lose money," said the executive, who asked not to be identified. He gave no details.

 

China Eastern operates 467 air routes, including 98 international routes, with 6,275 regular flights weekly, according its 2007 financial report.

 

China Southern Airlines will cut services on more than 20 international routes, including flights to Los Angeles, Paris and Singapore, the official Shanghai Securities News said, citing a source close to the carrier.

 

The paper did not say whether the adjustments, starting next month, would be seasonal or permanent.

 

No comment was available from China Southern.

 

Chinese airlines have been losing money on several long-haul routes due to a lack of global networks and inadequate cost controls, compounded by surging oil prices, analysts said.

 

A senior executive with Air China, the country's flag carrier, said his company had no current plans to cut international services.

 

(Reuters)

 

[Pieter C. 5]

United To Shrink The Business, Cut Staff

 

June 4, 2008

United Airlines parent UAL will reduce its work force and domestic fleet, following similar cuts by rivals as the industry grapples with high fuel costs and a weakening economy, the company said on Wednesday.

 

The plan, which pushed UAL shares up 9 percent, calls for reducing domestic capacity by 14 percent in the fourth quarter.

 

That means the elimination of 100 planes from the fleet as well as 1,400 to 1,600 job cuts. Included in the plan are the previously announced layoffs of 500 salaried and management employees and the retirement of 30 Boeing 737s.

 

"With fuel at historically high levels, United and our competitors need to redefine ourselves in this marketplace," UAL Chief Executive Glenn Tilton said in a message to employees. "The answers are not easy, yet this environment demands that we and the industry act decisively and responsibly."

 

UAL lost USD$537 million in the first quarter and has been in merger talks with rivals to try to bolster its competitive position amid rising fuel costs.

 

However, the company recently ended discussions with US Airways, saying last week that it would not seek a merger now. Upon announcing the decision, Tilton promised to "size the business appropriately."

 

UAL said it expected to retire all of its 94 single-aisle Boeing 737s if it can reach a deal with lessors. It also will retire six Boeing 747 jumbos.

 

Over this year and next, UAL will reduce its mainline domestic capacity by 17 or 18 percent and shrink consolidated capacity -- which includes regional flying -- by 9 or 10 percent.

 

UAL's downsizing is consistent with recent steps taken by American Airlines, which said last month it would cut its domestic capacity by 11 or 12 percent in the fourth quarter and eliminate more than 1,000 jobs.

 

In March, Delta Air Lines, which plans to merge with Northwest Airlines, said it would cut 2,000 jobs through voluntary retirement and reduce domestic capacity by 10 percent this year.

 

Airline experts generally agree that the industry must cut its capacity by 20 percent and raise fares by 20 percent to stabilize.

 

The airline industry began recovering from a years-long downturn in 2006 as carriers cut capacity on competitive domestic routes and raised ticket prices accordingly.

 

A spike in the price of crude oil, which is directly linked to the price of jet fuel, eroded some of the financial progress airlines have made. And the prospects for weaker travel demand as the US economy slows threatens to undo the gains altogether.

 

Before AMR and UAL's actions, airlines had been cutting capacity for more than a year, but by smaller percentages. The big reductions by the two largest US carriers may prompt others to make similar moves.

 

"We could see the other majors increase the magnitude of their cuts," Corridore said.

 

(Reuters)

 

As Mergers Fade, US Airlines Seek Alliances

 

June 4, 2008

The prospect of sweeping airline consolidation this year may be gone, but big US carriers are still seeking comfort in the form of strategic alliances as painfully high fuel costs threaten their existence.

 

United Airlines and US Airways effectively put an end to speculation about major airline mergers when they announced simultaneously last week that they were not planning a deal.

 

Those two had widely been expected to announce their own union, as United had been with Continental Airlines in April. Without either of those deals on the table, only Delta Air Lines and Northwest Airlines, which disclosed their plans in April, are headed for a full-blown merger.

 

The industry's attention is now turning to other, simpler types of alliances that fall short of combining operations.

 

"Everybody is looking at things that they have not looked at before. And that's very encouraging," said Stuart Klaskin at KKC Aviation Consulting.

 

"We're going to see alliances being used in much more creative, differing manners than we've seen historically," Klaskin said.

 

Experts generally agree that in order for US airlines to survive amid current record high fuel prices, the industry must cut its capacity -- the number of seats for sale -- by about 20 percent and raise the average ticket price by about 20 percent.

 

Some investors had pinned their hopes for this result on industry consolidation. But Delta and Northwest's deal calls for almost no capacity cuts and no further reductions in the work force.

 

Mergers are usually an opportunity for companies to eliminate costs and increase their market share for greater leverage over suppliers and distributors. Airlines are now looking to shed costs on their own, and then look to alliances for the strategic benefits.

 

American Airlines and United Airlines have both announced large layoffs and capacity cuts in the past few weeks in orders to save money, and are both looking at new alliances.

 

United and Continental are said to be in alliance talks, and Continental also has had talks with American and British Airways, according to sources. Details of the talks are scant, and partnerships could take various forms.

 

"This is the big unknown. We don't have a clue what they're talking about," said Darryl Jenkins, a Virginia-based airline consultant. "The whole idea is to increase revenue with minor increases in cost," he said.

 

While experts remain in the dark about the likely form of potential alliances, they generally agree the most lucrative partnerships would pair two strong international route structures.

 

"The only thing that would make sense would be a full network code share which would be international," said airline consultant Robert Mann.

 

An airline code share allows two airlines to sell tickets on each other's flights, allowing a traveler to fly a leg of a trip on one airline and the next leg on another. The arrangement stimulates sales for each partner.

 

A United/Continental link-up of international routes would be formidable, Mann said. He added, however, that such an alliance would attract scrutiny from various governments that have not permitted flights with a Continental code on United's Pacific routes, Mann said.

 

Klaskin predicted alliances between US and foreign carriers like the joint transatlantic service offered by Northwest and its European partner KLM Royal Dutch Airlines, which is owned by Air France.

 

He said that without some creative deal-making, the airline industry is in for a downturn rivaling the one that tipped United into Chapter 11 in 2002 and Delta and Northwest into Chapter 11 in 2005.

 

"I don't think that we are going to get through another 18 months without at least one more large airline bankruptcy," Klaskin said.

 

(Reuters)

 

Wasn't KLM clever a few years back, when they signed an alliance with NW ???

 

 

[Pieter C. 5]

Wow, this topic is becoming quite 'popular'...

 

Continental Airlines Cuts Jobs, Retires Planes

 

June 5, 2008

Continental Airlines said on Thursday it would cut 3,000 jobs, or about 6.5 percent of its work force, and retire 67 older planes as it scales down in the face of high fuel prices.

 

Continental is the latest of the major US airlines to announce large cutbacks as they grapple with unprecedented fuel prices. On Tuesday, United Airlines announced plans to cut jobs and flights, following a similar move by American Airlines last month.

 

Continental said it would cut 3,000 of its 45,000 staff, and retire 67 single-aisle Boeing 737 planes by the end of 2009, on top of the six planes it has already pulled out of service this year.

 

The airline said it would replace some of those older jets with deliveries of new, more fuel-efficient 737s. Its mainline fleet of about 375 planes would shrink to about 344 by the end of next year, an overall cut of about 8 percent.

 

It said it would cut flights after the summer season, reducing domestic capacity by about 11 percent in the fourth quarter.

 

(Reuters)

 

Qantas To Change Schedules Due To High Oil

 

June 5, 2008

Australia's Qantas Airways said on Thursday it plans to make changes to some international flight schedules to manage the effects of higher oil prices.

 

Among the changes, Qantas said it would withdraw some services to Japan, while some routes in Southeast Asia would also be affected. The move follows last week's decision by Qantas to overhaul its domestic services.

 

A thrice-weekly service from Melbourne to Tokyo will be withdrawn from September, though Qantas will add a new five-times per week Gold Coast-to-Tokyo service to be operated by its budget carrier Jetstar.

 

Chief Executive Geoff Dixon said Qantas would lose more than AUD$100 million under its existing Japan schedule at current fuel prices.

 

Qantas also plans to cut its 747-400 Sydney-Los Angeles services to 15 from 17 per week and close its pilot base in Cairns, forcing some 40 Cairns-based pilots to return to Sydney and other bases, Dixon said in a statement.

 

Qantas said there would be a small number of job losses resulting from the changes.

 

Airline industry worldwide has been hurt by rising crude oil prices, which jumped to a record USD$135.09 last month. Late last month, Qantas and Air New Zealand both reduced seat capacity.

 

Qantas has also raised its fares twice since late April to partially offset the fuel burden.

 

(Reuters)

 

 

[Pieter C. 5]

Embraer Sees Airlines Cutting Seats To Face Oil Spike

 

June 6, 2008

Airlines must cut unprofitable routes and raise passenger ticket prices to survive an industry disaster threatened by high fuel prices, Brazilian aircraft manufacturer Embraer warned on Friday.

 

Many traditional carriers have already cut costs in the face of competition from low-cost airlines but only tough measures to boost revenues will allow many of them to ride out what could be a five-year downturn in air travel, it said.

 

"Airlines have made a great effort to cut costs but many are still not profitable. They have to do something about excess capacity or they will keep losing blood with falling revenues," Luiz Sergio Chiessi, Embraer's vice president of airline market intelligence, told a press briefing.

 

The stark warning contrasts with booming demand for business jets reported by the same company on Friday.

 

Some premium customers, who make up most of the profits of traditional carriers, are defecting to business jets, finding them safer and more efficient than braving congested airports.

 

Embraer, which started out making planes for the Brazilian air force, is a leading manufacturer of regional jets seating between 50 and 120 passengers and which feed into big airline networks. Since 2002 it has expanded into small executive jets.

 

Although many passengers reach their destinations fuming about overcrowded aircraft, many airlines only manage current high load factors by selling unsold seats at a steep discount.

 

That masks a deeper industry problem of overcapacity as the economy heads towards recession, Chiessi said.

 

Airlines are used to sharp swings in business cycles but this time fuel costs are biting harder than ever.

 

"Planes are full but with a very poor yield," Chiessi said, referring to the revenue per passenger and for the distance flown, the make-or-break benchmark for the airline industry.

 

With fuel prices eating up an escalating proportion of total costs and airlines unable to trim much more fat after years of cost-cutting, some carriers must boost yield by raising prices.

 

Market forces mean one way to achieve that is to offer fewer seats, a cull already well under way in the United States.

 

Continental Airlines said on Thursday it would cut 3,000 jobs, or about 6.5 percent of its work force, and retire 67 older planes as it grapples with unprecedented oil prices, which have doubled in the past year.

 

On Tuesday United Airlines announced plans to slash jobs and flights, following a similar move by American Airlines last month.

 

And Australia's Qantas Airways said last month it planned to cut some domestic routes in response to an estimated USD$1.9 billion upcoming rise in its 2008/09 fuel bill. It also raised prices on domestic and foreign routes.

 

(Reuters)

 

[Keith T 2]

http://www.theaustralian.news.com.au/story...1-23349,00.html

 

Air NZ services hit by fuel costs

 

June 07, 2008

 

AIR New Zealand has increased fares and scaled back routes due to the continued high cost of fuel and changes in demand.

 

The price of domestic airfares will rise by an average 4 per cent, as will international airfares sold in New Zealand, Australia and the Pacific Islands.

 

Domestic and short-haul international price rises are effective from June 16, with long-haul rises expected from June 20. Among the changes, capacity on the Tasman route will be cut during lower demand months.

 

Between August and November, services from Hamilton to Sydney will be cut from three to two a week, and between September and November services from Dunedin to Sydney will be scaled back from three to two a week.

 

Services on both Tasman routes will return to three a week from late November. Services between Wellington and Sydney during August will be cut from a total of 44 to 36.

 

Air NZ shares were unchanged yesterday at $1.16.

[Pieter C. 5]

US Airlines Resume Market Slide On Oil Price Spike

 

June 7, 2008

A record one-day spike in global crude oil prices on Friday pushed the anticipated fuel bill for US airlines up by more than USD$4 billion, driving down shares and heightening uncertainty about industry prospects.

 

"Things just got worse for us today," James May, the chief executive of the Air Transport Association said.

 

Airlines are particularly sensitive to price increases with carriers spending more on jet fuel than any other expense.

 

Domestic airlines are expected to pay more than USD$61 billion for fuel this year, USD$20 billion more than for 2007, the ATA estimates. The figure accounts for some of the pending capacity cuts, imposed by the biggest airlines to counter high fuel expense.

 

The ATA estimated that Friday's USD$10 jump in crude prices -- if it sticks -- added more than USD$4 billion to the industry's annual bill.

 

US crude settled up USD$10.75 at USD$138.54 a barrel on Friday. Prices could reach USD$150 by July 4, one of the busiest American travel holidays, investment bank Morgan Stanley said in a research note.

 

Analysts have warned that continued sustained increases in fuel costs could eventually push more US airlines into bankruptcy. A handful of small airlines have gone out of business this year. Frontier Airlines is operating under bankruptcy court protection.

 

"I know one thing, people can't afford to fly and so you're seeing a decline in revenue and increasing costs that will probably result in more bankruptcies in this industry," former Continental Airlines chief executive Gordon Bethune told CNBC.

 

Airlines have imposed multiple fare increases this year to try and offset oil price increases.

 

United Airlines and Continental this week became the latest domestic carriers to announce plans for grounding planes and eliminating thousands of jobs as part of industry capacity reductions to offset high oil and slackening demand due to a weakening economy.

 

Bill Warlick, a senior analyst at Fitch Ratings, said liquidity cushions at major carriers are sufficient for now but believes another round of capacity cuts could occur later in the year if fuel prices continue to climb this summer.

 

"Schedule planners are going to look hard at where they can cut further, if it's necessary," Warlick said.

 

Already depressed shares of the biggest airlines, which rallied modestly mid-week on their capacity reduction plans and prospects for higher fares, resumed their downward slide on Friday.

 

The Dow Jones industry average recorded its worst sell-off in 15 months. The Dow Jones Transport Average, led by airline declines, fell 4.4 percent. The AMEX Airline Index was off 6.9 percent.

 

United parent, UAL dropped 14 percent to USD$8.64; Delta Air Lines fell about 8 percent to USD$6.30; AMR, parent of American Airlines was off nearly 9 percent to USD$7.13; Northwest Airlines dropped nearly 9 percent to USD$7.34, and Continental was also off nearly 9 percent to USD$13.87. US Airways fell about 7 percent to USD$4.12.

 

Low cost carriers also took a hit. AirTran dropped more than 7 percent to USD$3.11 and JetBlue Airways fell more than 6 percent to USD$4.04. Industry leader, Southwest Airlines was off nearly 4 percent to USD$13.68. Southwest is currently less vulnerable to higher fuel prices because of strong hedges.

 

ATA's May blamed this year's unsustained surge in oil prices on market speculators and called on Congress to close trading loopholes.

 

(Reuters)

 

[Keith T 2]

http://www.news.com.au/travel/story/0,2605...0-27977,00.html

 

Tough times for the Queensland tourist industry.

 

VIRGIN Blue is set to whack the beleaguered tourism industry with a double whammy, flagging a new luggage tax for passengers and cutting flights to Queensland's Gold Coast.

 

Virgin Blue chief executive Brett Godfrey yesterday said skyrocketing fuel prices and greater security-screening processes had combined to severely increase check-in costs.

 

The budget carrier has also put Coolangatta services on the chopping block only days after the State Government delivered a $4 million rescue package when Qantas and Jetstar revealed flights between Cairns and Japan would be slashed.

 

"A bag costs us more to put through an aeroplane than a passenger," Mr Godfrey told Channel Nine.

 

"There's markets such as Coolangatta that has seen a 40-odd per cent increase (in) capacity this year, so even though that has been a profitable route for us in the past, maybe we have too much in there."

Related Sections

 

His comments came as Queensland Premier Anna Bligh stepped up her calls for national help as she labelled the issue one of "national significance" given the visitors Queensland attracts who travel elsewhere around Australia.

 

The State Government has been criticised over the past week after the Tourism Queensland budget was cut by $3 million before the rescue package emerged.

 

Federal Tourism Minister Martin Ferguson yesterday refused to comment on suggestions the Commonwealth was planning an assistance package for tourism operators.

 

But he said: "The problems facing the Queensland and Australian tourism sector are significant and require a serious, properly considered, strategic response rather than a knee-jerk reaction."

 

Ms Bligh insisted national help was needed given the "ripple effect" the state's tourism had across the nation.

 

"There has been discussions with the Federal Government (and) I expect we will hear something from Canberra in the not-too-distant future," Ms Bligh said.

 

"This is of national significance. This is not just an issue for Queensland."

 

Mr Ferguson said key stakeholders would meet with Tourism Australia and Queensland Tourism this week to work on a response.

 

Queensland Tourism Council chief executive Daniel Gschwind said tourism was a shared responsibility between states and the Commonwealth.

Edited June 9, 2008 by Keith T

[Pieter C. 5]

Smaller Airlines Unlikely To Survive High Oil Prices

 

June 9, 2008

A host of smaller European airlines are likely to go bankrupt in coming months if the oil price does not drop significantly below current levels of USD$130 a barrel.

 

Faced with the unprecedentedly high cost of fuel, airlines will have to hedge against the oil price and cut unprofitable flights and routes to help them stay in the air.

 

Pressure on airline profit margins will be exacerbated by a slowdown in demand from consumers, as well.

 

Short-haul weekend breaks or second holidays are expected to be high up the list of cost cuts as household bills are inflated by rising fuel, utility and food prices.

 

Overall, 24 airlines have gone bust around the world this year and just under half were based in Europe, according to the International Air Transport Association (IATA).

 

The transatlantic business class-only airline model has been wiped out.

 

Britain's Silverjet was forced to call in the administrators at the end of last month due to a lack of funds, following the demise of rivals MAXjet and Eos Airlines.

 

Now the regular and low-cost airline models are also under threat as profits plunge.

 

"Airlines are facing their hardest time since 2001, and it would be normal to expect some bankruptcies across the industry," said Andy Clarke, director of air transport policy at the European Regions Airline Association (ERA).

 

"Certain low-budget airlines won't be able to compete effectively as margins tighten and fuel costs spiral upwards," added Mark Fennessy, restructuring lawyer at law firm Orrick in London.

 

"In my view, the majors (Air France, Lufthansa and British Airways) and major low-budget airlines (Ryanair and easyJet) will survive although they may have to drop some unprofitable routes," he said.

 

Andrew Fitchie, airlines analyst at broker Collins Stewart agreed that changes would have to be made.

 

"In the short term, the only differentiating factor is whether [an airline] has fuel hedging or not... Those who survive must substantially cut back on capacity -- they can cut out the loss-making services and focus on what makes money," he said.

 

Michael O'Leary, chief executive of Ryanair, spelt out the severity of the problem at the airline's annual results presentation last week.

 

He said that if oil remained at USD$130 a barrel, the group's profits of nearly EUR500 million euros (USD$780.4 million) would be wiped out in the year to end March 2009.

 

In what O'Leary admits was a mistake, Ryanair has not hedged at all on the assumption that oil would eventually fall -- meaning it pays the highest possible price for fuel.

 

In contrast, British Airways has 70 percent of its fuel hedged at USD$82 a barrel for the first quarter of this year, dropping to 55 percent at USD$90 in the fourth quarter.

 

However, if oil remains high the British carrier will bear the brunt eventually as the terms of its hedging deteriorate.

 

"Hedging is not really a solution. It doesn't allow you to escape the impact -- it just defers it," said Douglas O'Neill, transport analyst at Blue Oar Securities.

 

He added that cutting capacity was a better strategy, and a sign of good management rather than weakness. "It's a sensible reaction to the fact that some routes are not making money anymore," he said.

 

O'Leary said he was prepared to cut capacity on routes where there are several flights a day, rather than cutting out a route completely.

 

British Airways signaled last week that it would cut capacity later this year, with details still to be finalized.

 

O'Leary was characteristically blunt about which airlines were in trouble, naming Slovakia's SkyEurope as a possible casualty by the end of the summer. Small British airlines such as Jet2, FlyGlobespan and Flybe were also on his list, prompting fierce denials from the parties involved.

 

Flybe said oil would have to reach USD$170 a barrel for its profits to be reduced to zero, while Jet2 was equally defiant.

 

"We are fully hedged for this summer, next winter and substantially for next summer," said Andrew Merrick, finance director of Jet2 parent Dart Group, although the firm did put out a profit warning on February due to a disappointing performance last winter.

 

Merrick said Jet2, which operates from airports in Northern England and Scotland, was happy with its volume of summer bookings, but Blue Oar's O'Neill said that the predicament of some airlines was being obscured by the high summer season.

 

He said that the onset of the quieter autumn and winter period could come alongside slowing demand from the consumer.

 

"At this time of year, airline cash flow is strong, but after the summer is over, you can't rule anything out," he said.

 

(Reuters)

 

[Kee Hooi Yen 0]

I wonder how the skyrocketing fuel prices will affect airlines from oil producing countries such as Emirates, Etihad, Saudi etc..

[Tamizi Hj Tamby 1]

Man,the fuel prices just went down slightly yesterday.But the price itself wasn't stabilized yet,and it high prices definately making the aviation industry running hard.

[KC Sim 2]

Min : Great idea putting up this thread. This is going to be a drawn-out trend and putting everything in one discussion here makes it easier for all to keep track. And in years to come, this is a good resource for those wishing to do research.

 

I hope that everyone helps to look out for news relating to what airlines do to cope with the rise in the price of oil . . . and then deposit the news here.

 

Thanks Min, for the initiative.

 

Here's what is happening at YG.

 

http://nationmultimedia.com/2008/06/07/bus...ss_30074952.php

 

Quote:

Oil price forces thai airways to retrench

By Suchat Sritama

The Nation

Published on June 7, 2008

 

10-year plan to be revised, with routes and aircraft procurement at risk

 

Skyrocketing oil prices have clipped Thai Airways International's wings, forcing the flag carrier to retrench on its 10-year business plan, including possibly paring routes and new aircraft procurement.

 

"The airline's revision will also include its revenue projection," THAI president Apinan Sumanseni said yesterday.

 

"THAI's revenue this year will fall short of the target of Bt210 billion," he said.

 

The new plan will be finalised by next month, but the airline has already decided to close its long haul Bangkok-New York route in July and cut frequencies to Los Angeles, London, New Zealand and Johannesburg due to higher jet fuel expenses, he said.

 

On July 1, the New York station will be closed down and flights to Los Angeles will be reduced from seven a week to five.

 

"The company has already lost Bt4 billion per year for the two long-distance routes to New York and London," he said.

 

The oil price is the key driver of the cost of operations.

 

The jet fuel price has jumped from US$270 per gallon last year to $400, which hits all airlines, he said.

 

The four A340-500s used to service the Bangkok-New York route will no longer be needed and sold off. The company bought the aircraft for $130 million (Bt4.3 billion) each.

 

The long-haul routes are struggling the most because they consume much more fuel.

 

The Bangkok-New York flight was launched in May 2005. The airline is running an average load factor of 80 per cent on the daily flights, but the return is still poor due to fewer premium seats.

 

Major rivals including Singapore Airlines still operate the route but have transformed all seating to business class, which gets higher rates.

 

THAI is studying reducing frequencies to London, Johannesburg and other destinations.

 

The airline will also revise its route from Bangkok to Oakland, New Zealand, by adding stopovers in Sydney or Melbourne. The plan is set to start in October.

 

However, traffic to India is picking up so it will increase flights to New Delhi, Mumbai and Kolkata.

 

 

 

 

KC Sim

Edited June 11, 2008 by KC Sim

[Pieter C. 5]

Lufthansa, Air France, Air Berlin Increase Fuel Charges

 

June 11, 2008

Germany's two biggest airlines, Lufthansa and Air Berlin, plan to raise the surcharges they impose on passengers to offset high fuel costs for the second time in a month as oil hovers above USD$130 a barrel.

 

Lufthansa will charge EUR24 euros (USD$37.19) each way on domestic and European routes from June 16, while Air Berlin will charge EUR25, both increases of EUR3, the carriers said on Wednesday.

 

The long-haul surcharge will rise by EUR10 each way to EUR92 at Lufthansa and EUR95 at Air Berlin.

 

Air Berlin added that surcharges to medium-haul tourism destinations would rise EUR3 to EUR35, with flights to Egypt, Madeira and the Canary Islands seeing surcharges up EUR5 to EUR45.

 

"In recent weeks, crude oil and kerosene prices have continued to rise... In response to this development, Lufthansa is adjusting its fuel surcharges on its flights," Lufthansa said.

 

Air France also said on Wednesday it will increase its fuel surcharge by EUR2 on domestic flights, EUR5 on medium-haul flights, EUR10 on long-haul flights and EUR20 on very long-haul flights from June 13.

 

"Half of this increase will be withdrawn as soon as the price per barrel remains steady under USD$120," Air France said in a statement. "The remaining increase will be withdrawn as soon as the price per barrel remains steady under USD$115."

 

Lufthansa last increased its fuel surcharges on May 14 and repeated on Wednesday it would monitor oil prices and make further adjustments depending on jet fuel price trends. Its smaller German competitor last raised them on May 16.

 

UK rival British Airways last week lifted its fuel surcharges to GBP16 pounds (USD$31.29) each way on short-haul routes, GBP78 on long-haul routes of less than nine hours and GBP109 each way on flights of over nine hours.

 

The price of oil hit a record USD$139.12 a barrel on Friday and was trading at over USD$133 on Wednesday. Airlines have said rising fuel costs will hit profits this year despite efforts to hedge against increases, with some carriers looking to trim capacity and cut services to stem losses.

 

The International Air Transport Association (IATA) said this month that the global airline industry was set to record a loss this year, possibly as high as USD$6.1 billion, as carriers struggle with sky-high fuel prices.

 

Commerzbank senior commodity analyst Eugen Weinberg said on Wednesday the oil price could peak at around USD$150-170 in the next three months.

 

Lufthansa said last week it expected its fuel bill to jump to EUR5.7 billion this year from EUR3.9 billion in 2007. In April, Lufthansa had estimated 2008 fuel costs of EUR5.26 billion and gave a range of scenarios from EUR4.88 billion with oil at USD$89 a barrel to as much as EUR5.71 billion at USD$134.

 

Air France-KLM last month warned it would have to expect a EUR1.1 billion rise in fuel costs, squeezing profits this year and forcing it to find EUR150 million in savings.

 

Air Berlin meanwhile abandoned its full-year profit forecast last month and said it was scrapping unprofitable routes. It said it was reviewing its entire long-haul network as it tries to weather the higher cost of fuel.

 

(Reuters)

 

Virgin America Sets Fuel Surcharges

 

June 11, 2008

Low-cost airline Virgin America on Wednesday announced fuel surcharges in all of its markets, effective immediately, in response to the unprecedented rise in oil prices.

 

The surcharges include USD$25 on long-haul routes such as San Francisco to New York, and USD$10 on short-haul flights such as San Francisco to Los Angeles.

 

Richard Branson's Virgin Group holds a minority stake in Virgin America.

 

(Reuters)

 

 

Virgin Atlantic Chief Sees More Airline Failures

 

June 12, 2008

More US airlines need to go out of business and the price of tickets must rise much further if the air travel industry is to survive record oil prices, the chief executive of Virgin Atlantic Airways said on Wednesday.

 

Rules prohibiting foreign ownership of airlines must also be swept aside if the US industry is to climb out of its slump, according to the chief of the British airline, which has been expanding since its creation by billionaire Richard Branson in 1984.

 

"Carriers are going to go out of business and need to go out of business," said Virgin's Steve Ridgway in an interview in New York. "We can't just keep up this merry-go-round of propping them up," referring to repeated bankruptcies among US carriers.

 

The failure of one or more big carriers in the United States would reduce competition and allow others to raise ticket prices, most analysts agree. But flexible US bankruptcy protection laws have so far allowed airlines to get over financial hardships while still operating, where in other countries they might have stopped flights altogether.

 

Nine small airlines have gone into bankruptcy or stopped operating in the last six months, crushed by the doubling of fuel prices in the last year, but so far very little capacity has actually been taken out of the market.

 

Four of the major US carriers have been through bankruptcy in the past five years, but all have survived and some have even added flights, which increased competition and resulted in lower ticket prices.

 

"Ultimately the industry is going to have to re-price," said Ridgway, meaning that ticket prices will have to rise. "That will have an effect on demand and that will ultimately have an effect on capacity balance."

 

In the last three months, Continental Airlines, American Airlines, United Airlines and Delta Air Lines have all announced double-digit cuts in domestic capacity for this winter -- meaning that the number of flights will be reduced -- as they grapple with high fuel prices.

 

British Airways, Virgin's main rival, has said that capacity cuts are "inevitable,", but Ridgway said the airline had not made any decisions yet.

 

"The acid test will come in the winter and the autumn," he said. "We aren't going to be immune to this."

 

No international flights are being cut by the US airlines, Ridgway said, stressing that international travel is still relatively strong, even as the US economy weakens.

 

"Some of the marginal US-Europe routes may well get pulled, but the London market will remain very dominant," he said.

 

Privately held Virgin, which operates about 30 flights a day from the UK to the United States, Caribbean, Middle East, Asia, Australia and South Africa, is only a fraction of the size of the world's major carriers, but it has carved a powerful niche in the lucrative transatlantic market and has a number of coveted slots at London's Heathrow Airport.

 

About 60 percent of Virgin's passengers live in Britain, which means the weak dollar has been good for its business, especially in its strong leisure market.

 

Last year Virgin set up a domestic US airline, Virgin America, but cannot own any more than 25 percent of it due to laws unique to the US airline industry. If the industry is going to develop, those rules must be cast aside, said Ridgway.

 

"It's crazy that the industry which made the global economy possible is still sitting there with all these shackles and all this inefficiency," he said. "Can you look at their system and say it's worked brilliantly?"

 

Boeing's delayed 787 Dreamliner is "frustrating" but not disastrous for Virgin, said Ridgway, as the airline is not in a hurry to replace its Airbus A340s.

 

The British carrier has ordered 15 of the larger 787-9 models, worth USD$2.8 billion overall at list prices, and has options and purchase rights on another 28.

 

First delivery of the carbon-composite, fuel-efficient plane is now slated about 15 months behind the original schedule after a series of production setbacks. Most airlines will be getting their planes 18 months to two years late, Ridgway said, as Boeing struggles to get up to its promised production rates.

 

"They set themselves a very ambitious hurdle, that's where they tripped up," said Ridgway, who is now expecting Virgin's first 787 toward the end of 2012, as opposed to the original target of April 2011, which he described as "quite a long time to wait".

 

Virgin, like other 787 customers, is in talks with Boeing over compensation, but nothing has been determined yet.

 

"When you build a sales patter around the fact you can build an aircraft every three days, that creates the book doesn't it?" said Ridgway. "If that doesn't work, that's a big problem for them. How do you get the supply chain up to that?"

 

(Reuters)

 

[Pieter C. 5]

Continental To Cut Flights As Oil Prices Rise

 

June 12, 2008

Continental Airlines said on Thursday it will stop flights from its hubs to more than 40 domestic and international destinations as of September 3 as it scales down in the face of high oil prices.

 

The bulk of the cuts will come at Continental's Houston and Newark, New Jersey, hubs. Among the services being discontinued include flights from Newark to Cologne, and from Houston to Washington.

 

The cuts were detailed as Continental released more information about the capacity reductions it announced last week in response to record fuel prices.

 

Last week, Continental said it would cut 3,000 jobs, or about 6.5 percent of its work force, and retire 67 older planes.

 

On Thursday, Continental said its cuts will result in an 11 percent decline in domestic mainline capacity, or available seat miles -- reflecting the number of seats for sale and length of flight -- in the fourth quarter, compared with the same period last year.

 

The changes will result in a 6.4 percent decline in consolidated -- mainline plus regional -- capacity in the fourth quarter.

 

As a result of the cuts, the airline will close its offices at 15 domestic and international locations.

 

Continental is the latest of the major US airlines to announce large cutbacks as they grapple with unprecedented oil prices, which have doubled in the past year.

 

United Airlines has announced plans to slash jobs and flights, following a similar move by American Airlines.

 

(Reuters)

 

Finnair To Cut 500 Jobs To Counter Fuel Costs

 

June 12, 2008

Finland's flag carrier Finnair plans to cut about 500 jobs to counter high fuel costs and a sharp fall in demand, it said on Thursday.

 

The company's fuel bill will rise by between EUR160 million euros (USD$246.9 million) and EUR180 million this year compared with last year, the airline said in a statement.

 

"Demand has decreased and this decrease has accelerated at such a rate in the past weeks that together with the price development of fuel, Finnair's (performance)... has significantly weakened," the airline said.

 

It added that to ensure the company's growth strategy, it needs additional cuts of at least EUR50 million per year.

 

The airline plans to cut about 500 jobs to reflect production cuts, it said.

 

"I am sure they will go through operations with a fine-toothed comb, and if this is about capacity cuts, some flight personnel has to go," eQ Bank analyst Dahlstrom said. "I don't think this is about changing their strategy based on Asian traffic."

 

Finnair has increased its flights between Europe and Asia in recent years.

 

Last month, Finnair said its profits would fall from last year's levels, and its May passenger load factor fell 7.3 percent year-on-year to 65 percent.

 

Finnair pilots are in the middle of wage talks with the airline, and late last month rejected a mediator's offer of pay increases of about 15 percent over the next three years.

 

(Reuters)

 

[Pieter C. 5]

Ottawa Holds Air Canada To Layoff Rule Obligations

 

July 25, 2008

Air Canada must live up to its employment code obligations to laid-off workers as it embarks on a plan to cut 2,000 jobs to deal with surging fuel prices, the Canadian government ruled on Friday.

 

But Air Canada, the country's biggest airline, said the ruling would not affect its plans to complete its cuts by November 1.

 

"I have instructed labor program officials to monitor the situation to ensure that any affected employees receive their entitlements under the Canada Labor Code," Labor Minister Jean-Pierre Blackburn said in a statement.

 

Air Canada had asked for a waiver from its labor code obligations after it announced the cuts in June. Union officials had argued there was no justification for Air Canada to be exempted.

 

Under the rules, employers cutting 50 or more jobs in a four-week period must notify the minister, union officials and non-union employees at least 16 weeks before the termination date.

 

They must also establish a joint planning committee to make all reasonable efforts to develop an adjustment program for the terminated staff, the ministry said.

 

Air Canada plans to lay off 7 percent of its work force by November as it reduces capacity amid record fuel costs and an economic slowdown.

 

"Our objective was to proceed with mitigation discussions as quickly as possible for the sake of the affected employees so that everyone knows what their options are," Air Canada spokeswoman Angela Mah said.

 

"The only question was whether those talks take place within the framework of the collective agreement or the Canada Labor Code."

 

Among the affected workers are 632 flight attendants, more than half of whom will lose their jobs due to the shutdown of cabin crew bases in Halifax, Nova Scotia, and Winnipeg, Manitoba, the carrier has said.

 

Flight attendants, represented by the Canadian Union of Public Employees, plan rallies across the country on Monday to protest the base closures.

 

(Reuters)