Impact of the coronavirus crisis on aviation

[sn26567]

[Homo Aeroportus]

Burundi,

Dozens (37 to 60 persons depending on the source) were denied boarding for being bi-nationals.
Even the intervention of the ambassador at the airport could not solve the problem.

Also, it is my understanding that the problems that this flight encountered on arrival, delaying its landing, is what led the SN repatriation flight from EBB to divert to KGL and pick up passengers stranded there while there were to be taken care of by the BAF flight.

H.A.

[TLspotting]

Air Tahiti Nui to operate rescue, medical, cargo flights from Papeete to Paris CDG via Pointe-à-Pitre every 10 days (flexible).

Air Senegal to operate DSS-BJL-STN rescue flight :

BA suspends all flights to and from Japan for 48 hours.

#LOTdoDomu operation, by LOT and the Polish government (together with PKP & Polonus), ended.
In 22 days, 388 flight operations through 83 airports, 60 countries for a total of 55,000 people.

Singapore Changi closes Terminal 2 for 18 months, to finish T2 expansion works in 2023 instead of 2024.

Middle East Airlines CEO says he can't help with flying back all residents without risking airline collapse.
“We are not able to financially support expats' returns because our priority now is the sustainability of this company.", he said.

Brussels Airlines continues to operate repatriation flights (Kigali - Cologne, Abidjan - Conakry - Brussels, Freetown - Monrovia - Brussels) also Air Belgium (Lima - Brussels and Algiers - Brussels, soon to South Africa and central Africa) and TUI fly (Paramaribo). 5,000 passengers are at home, including 4,500 Belgians.

All international flights from/to Thailand cancelled until 17 April.

BA stores 6 A380 at Châteauroux - Déols :
G-XLEA, XLEC, XLEF, XLEI today, XLEJ, XLEL tomorrow.

London Heathrow is to a single runway use, closing Terminal 3 & 4.

El Al CEO says that fall of the airline "is likely to happen" in the next days if the airline doesn't get state support.

As cathay belgium said : flygBRA, from Sweden, filed for bankruptcy protection, halting all flights until end May, but not clear if it is extended until September.

CRL is currently making a contract with LGG for CRL employees (not all) to help their colleagues of Liège.
Runway works at CRL slowed down, but significative impact if the works are completely stopped (which means that the extension should be postponed).

Air Belgium suspended bookings on Antilles route until 3 June, not included.

[TLspotting]

As cathay belgium said : flygBRA, from Sweden, filed for bankruptcy protection, halting all flights until end May, but not clear if it is extended until September.

Ravn Air Group from Alaska, including Ravn Air Alaska, Ravn Air Connect & PenAir files for Chapter 11 bankruptcy protection as well due to "slow aid from the US", hundreds of flights cancelled...

[sn26567]

Daily review:

Ethiopian Airlines has started to furlough workers, including crew members in response to the impact of the coronavirus crisis.

Air Deccan of India is ceasing its operations until further notice and all employees are being put on sabbatical without pay.

American Airlines reduced nearly all flights in and out of New York JFK, Newark and LaGuardia, due to health concerns. United Airlines announces the temporary suspension of nearly 90% of all flights in and out of Newark and LaGuardia, due to the same health concerns.

Chorus Aviation of Canada will have the delivery of its nine CRJ900s on orders delayed due to production shutdown as a result of the coronavirus. Chorus also had pending transactions involving the delivery of three ATR72-600s and three A220-300s in 2020. Chorus expects all these deliveries will be deferred.

Delta Air Lines says it’s burning more than US$60 million in cash every day, and it still hasn’t seen the bottom. In April 2020, its schedule will be at least 80% smaller than originally planned, with 115,000 flights cancelled. Delta is seeking worker-protection grants Revenue for 2Q to be down 90%.

easyJet founder Stelios Haji-Ioannou warns that the budget airline will ‘run out of money’ by August 2020 if a multi-billion pound order for 100 new Airbus jets is not cancelled. He is also seeking the removal of CFO Andrew Finlay.

El Al is “likely to close” if the government does not provide financial assistance within the coming days. The carrier had presented requests to the Finance Ministry worth a total of US$350 million, in addition to an organisational efficiency plan.

Emirates is seeking to raise billions of dollars from loans after the coronavirus forced the airline to ground its passenger fleet.

IAG plans to advance the retirement of some 67 aircraft, to delay delivery of orders and is considering not renewing leases expiring between 2020-21.

JetBlue is doing only US$1 million in bookings per day, while burning through $10 million per day. The April 2020 schedule has been cut 70%, and 100 aircraft have been parked.

Southwest Airlines will be offering cargo-only charter services on its B737s to help stem losses from the crisis.

Turkish Airlines announced that due to the continuing coronavirus, it will suspend all domestic service until 20 April 2020.

Vietnam Airlines will lose US$2.12 billion in revenue as most of its 106-strong fleet has been grounded due to the coronavirus. Up to 10,000 employees, or half the company’s staff, will have to stop working while others’ salaries have been cut.

Switzerland has not yet adopted its position on a possible state aid to SWISS. The government will make a decision in the next session.

[Passenger]

For flights only, EU Rule 261/2004 applies: outgoing and incoming flights for EU-carriers, outgoing flights only (out of the EU) for non-EU carriers. When an airline cancels a flight, 261/2004 Article 8 applies: when a flight is cancelled (no matter what the reason is), airlines must offer passengers the choice between:
a) a reimbursement within 7 days;
b) a rebooking at the earliest opportunity;
c) a rebooking at a later date ànd at the passengers’ convenience.

EU-261/2004 is a EU-Regulation which is, per definition, valid in full in all EU member states. No country is allowed to amend even one paragraph from 261/2004. Only the European Parliament is allowed to amend 261/2004 (and the European Commission is allowed to clarify 261/2004). The recent move from the Dutch government to allow ticket reimbursement via ticket vouchers, is illegal.

Thus: when a passenger asks for a refund, the airline must refund within 7 days. And that’s a huge problem now: some airlines don’t have enough cash to survive if all passengers ask for a refund, specially not when the ongoing crisis continues for a few more months. On 23th March 2020, Credit Suisse has filed the liquidity of the major airlines, and the CS report shows that (for the EU) only Ryanair (by far number one) and IAG have a solid base if they should refund all pre-sold tickets today. Next follow EasyJet and AF/KLM, with LH far behind. Weak on cash doesn’t mean weak balance sheet: an airline may have invested huge in it’s fleet, thus leaving little cash on the bank (and isn’t Ryanair saving cash for it’s 737 MAX payments?).

- - -

So I do believe Alexandre de Juniac (CEO IATA) when he says that not all airlines will be able to fulfill the legal obligation to refund. This leaves us with two options:
1. or we stick with 261/2004 as it is, which will result in bankruptcies.
2. or we support an official amendment to 261/2004, allowing vouchers.

I have allways regarded EU-261/2004 as a consumer protection legislation. But pragmatism now preveals for me: the worse that could happen to passengers, is an airline bankruptcy. That leaves passengers empty handed, as their ticket voucher then becomes worthless (vouchers are a minor claim in a bankruptcy).

On 18th March 2020, the European Commission has issued “guidelines” regarding 261/2004. The E.C. stated that airlines had to refund, but the main focus of that Guideline was on the cancellation itself: what if the airline cancels, what if the passenger cancels, when do airlines have to pay compensation, … When the Guideline was issued, the refund problem wasn’t an issue yet.

With the European Commission excelling in navel-gazing, the European Parliament should take over control. With a compromise: short term: allowing airlines to issue voucher instead of a refund. Long term: make an insolvency coverage for tickets compulsary.

[Yuqu12]

The insurance requirement would not fall under Reg. 261/2004 but under Reg. 785/2004 (on the Insurance Requirements for Air Carriers and Aircraft Operators).

[Homo Aeroportus]

Meanwhile, the Jet Fuel price is lower than 20 years ago.
60% lower than a year ago and 45% lower than a month ago.

From IATA Jet Fuel Monitor, situation as of last Friday 03APR :

H.A.

[TLspotting]

Reuters : Korean Air says 70% of employees must take leave for six months

Via RTL France : The France - China airbridge partially stopped. 2 AF cargo flights (16M of masks) were not allowed(?) to depart, due to recent developments in health controls in China. Negociations are going on between China & France to restart this kind of operations.

Teeside - Isle of Man route by Eastern postponed until 24 August.

easyJet has secured a £600 million loan from UK government.

[Passenger]

For those who thaught that TUI nv/sa (Belgium) and/or Brussels Airlines nv/sa could benefit from the German state aid to TUI AG (Germany) and/or to Lufthansa: KfW, the German authority that helps companies in distress with financial aid, clearly forbits that their aid is used for foreign divisions:

Die KfW beteiligt sich an Konsortialfinanzierungen für Investitionen und Betriebsmittel von mittelständischen und großen Unternehmen. Hierbei übernimmt die KfW bis zu 80% des Risikos, jedoch maximal 50% der Risiken der Gesamtverschuldung. Das erhöht Ihre Chance, eine individuell strukturierte und passgenaue Konsortialfinanzierung zu erhalten.

Das Förderprodukt kommt nicht in Frage für:
...
Auslandsvorhaben von deutschen Unternehmen oder deren Tochtergesellschaften mit Sitz im Ausland

Source:
https://www.kfw.de/inlandsfoerderung/Un ... ung-(855)/

[TLspotting]

Lufthansa Group makes significant changes :

6 Airbus A380, 9 A340, 21 A320 and 5 Boeing 747 to be retired.
Germanwings to close.
Further restructuring at Austrian & Brussels.

https://www.aviation24.be/airlines/luft ... rmanwings/

[nordikcam]

I just heard on France 5, broadcast "C dans l'air" that Alitalia and Brussels airlines had just been nationalized ... did I miss an episode about SN?

[sean1982]

Israel refuses to bail out El Al because they wont be able to pay back the loan

https://viewfromthewing.com/israels-fin ... for-el-al/

[SR20]

Skeyes, Belgian ANSP, asking for government's help !

https://www.tijd.be/ondernemen/luchtvaa ... 19407.html

https://www.lecho.be/dossiers/coronavir ... 19428.html

[Acid-drop]

Yeyyy free money for all
As if.

[sn26567]

Daily review:

Alaska Air Group updates its capacity reduction plans to reflect 80% cuts in both April and May 2020. Alaska Airlines and Horizon Air both applied for payroll support grants under the CARES Act.

Lessor Avation says some airline customers have entered into short-term financial relief agreements with Avation and discussions with other airlines are at an advanced stage. The lessor has placed a moratorium on Capital Expenditure and all aircraft purchases have been deferred.

GOL has suspended guidance for 2020 and 2021, until the activity of the sector returns to normal. The carrier will leave most of its fleet grounded until the end of May 2020.

IATA has released new analysis showing that some 25 million jobs are at risk of disappearing with plummeting demand for air travel amid the crisis, with almost half in Asia-Pacific.

Jambojet announces the cessation of all flights from 07-30 April 2020, in compliance with travel restrictions.

Lufthansa Technik to introduce short-time working. The agreement thus applies to around 12,000 employees and will initially run until 31 August 2020.

Lufthansa may drop Vienna as a hub airport as the carrier mitigates the impact of the pandemic.

Mesa Air Group has been asked by its airline partners to reduce overall block hours in April 2020 by approximately 55%. The Company also anticipates being asked to further reduce block hours for May. Mesa Air Group has submitted its application for worker-protection grant funds available under the CARES Act.

Norwegian to cut 800 employees based in Sweden as the pandemic continues to take its toll.

Republic Airways has submitted an application for emergency federal grant funding that would enable it to keep employees paid through 30 September 2020.

TAP Air Portugal is a priority for the government, with a package of measures to support the aviation industry set to be announced soon. TAP should see a deferred payment of contributions and taxes, and possibly direct funding.

[PttU]

Lufthansa Group makes significant changes :

6 Airbus A380, 9 A340, 21 A320 and 5 Boeing 747 to be retired.
Germanwings to close.
Further restructuring at Austrian & Brussels.

https://www.aviation24.be/airlines/luft ... rmanwings/

At Lufthansa, six Airbus A380s and seven A340-600s, as well as five Boeing 747-400s, will be permanently decommissioned.

Some thoughts I had: the Airbus A380 (and to a lesser extent the 747) have become rather unpopular planes because:
* 4 engines, higher fuel usage, meaning higher costs as fuel is a more important factor compared to the moment those planes were designed.
* too big: designed for a hub and spoke model where travelling from A to B means flying A to hubA, a big plane to hubB and a smaller plane again to final destination B.

I understand there is just too little demand for the next few months to fill an A380 or 747, but what thereafter? The A380 failed because the hub and spoke model was less used, and more direct flights were offered and were cheap and popular. But what if demand remains low in the post-corona era? Too low to fill an A321 or A330 or B757 or similar on a lot of direct routes? Could that mean an increased interest in the hub and spoke model and increased demand on routes between hubs? And thus an increased need for bigger planes? Maybe more trains for the first or last part of the journey given their green image.
It's hard to guess what fuel prices will be doing, but assuming they remain low: that would mean a lesser handicap for the 4-engine planes.
Furthermore: focusing on less destinations could be another effect of airlines needing to shrink down, inherently focusing more on hub-connections.

So... What do you think? Might the impact of the coronavirus also mean an impact on the way aviation business works? On the type of aircraft used?

[Conti764]

Lufthansa Group makes significant changes :

6 Airbus A380, 9 A340, 21 A320 and 5 Boeing 747 to be retired.
Germanwings to close.
Further restructuring at Austrian & Brussels.

https://www.aviation24.be/airlines/luft ... rmanwings/

At Lufthansa, six Airbus A380s and seven A340-600s, as well as five Boeing 747-400s, will be permanently decommissioned.

Some thoughts I had: the Airbus A380 (and to a lesser extent the 747) have become rather unpopular planes because:
* 4 engines, higher fuel usage, meaning higher costs as fuel is a more important factor compared to the moment those planes were designed.
* too big: designed for a hub and spoke model where travelling from A to B means flying A to hubA, a big plane to hubB and a smaller plane again to final destination B.

I understand there is just too little demand for the next few months to fill an A380 or 747, but what thereafter? The A380 failed because the hub and spoke model was less used, and more direct flights were offered and were cheap and popular. But what if demand remains low in the post-corona era? Too low to fill an A321 or A330 or B757 or similar on a lot of direct routes? Could that mean an increased interest in the hub and spoke model and increased demand on routes between hubs? And thus an increased need for bigger planes? Maybe more trains for the first or last part of the journey given their green image.
It's hard to guess what fuel prices will be doing, but assuming they remain low: that would mean a lesser handicap for the 4-engine planes.
Furthermore: focusing on less destinations could be another effect of airlines needing to shrink down, inherently focusing more on hub-connections.

So... What do you think? Might the impact of the coronavirus also mean an impact on the way aviation business works? On the type of aircraft used?

Staffing issues as well I suppose... A 747, let alone a 380 needs more crew then a 777 or a 787, 330 or 350...

And I think companies would rather have twins flying direct half empty then having a bunch of single aisles flying around half empty filling a (super)jumbo for 3/4.

[Passenger]

The green boys have spoken: "no state aid to Belgian aviation, unless they reduce their pollution and unless aviation will pay taxes on fuel and VAT on tickets".

NL:
https://www.bondbeterleefmilieu.be/arti ... n-eerlijke

FR:
https://www.iew.be/pas-de-soutien-au-se ... limatique/

[TLspotting]

OO-JDL on the way to PTP and OO-ABA to MPM, as related by sdbelgium.