general

World air traffic suffered a massive drop of more than half in March compared with the same period last year thanks to coronavirus-related travel restrictions, the airline industry's trade body said Wednesday. The 52.9% drop when measured by total revenue per passenger kilometres "was the largest decline in recent history, reflecting the impact of government actions to slow the spread of COVID-19", said the IATA. Many of the roughly 290 airlines who are members of the Association have been hard hit by the slump in air travel demand. "March was a disastrous month for aviation," said Alexandre de Juniac, IATA's director general and CEO. "Airlines progressively felt the growing impact of the COVID-19 related border closings and restrictions on mobility, including in domestic markets. Demand was at the same level it was in 2006 but we have the fleets and employees for double that. Worse, we know that the situation deteriorated even more in April and most signs point to a slow recovery." He warned: "The industry is in free fall and we have not hit bottom," de Juniac warned, while urging governments and the industry to work together to prepare for the moment when travel restrictions can be eased. It is imperative that governments work with industry now to prepare for that day."<br/>

Twelve EU governments urged the EU's executive body on Wednesday to suspend rules forcing cash-drained airlines to offer full refunds for cancelled flights instead of vouchers for future travel because of the COVID-19 pandemic. Airlines across Europe, including Lufthansa and Air France-KLM, have sought state rescues as coronavirus lockdowns have forced them to ground their fleets for more than a month, with no end in sight. Transport ministers of Belgium, Bulgaria, Cyprus, the Czech Republic, France, Greece, Ireland, Latvia, Malta, the Netherlands, Poland and Portugal have asked the European Commission for a temporary amendment to the rules. In a joint statement issued before a meeting of EU transport ministers, they said the bloc's executive body should propose the amendment as a matter of urgency. Consumers should be made to accept vouchers instead of refunds with certain conditions. However, at the meeting, some EU governments opposed changes to the current rules so as not to frustrate the legitimate expectations of passengers. No decision was taken.<br/>

The big three state-run Chinese airlines reported a slump in earnings in the first quarter as the coronavirus upended travel demand, but there are signs the worst of the crisis is over for them. China Southern and China Eastern lost 5.3b yuan ($750m) and 3.9b yuan, respectively, in the three months ended March 31. Air China posted a loss of 4.8b yuan for the period. Chinese airlines are operating at about half the seat capacity they had before the virus began to impact travel in late January. While the country’s aviation market is off its lows thanks to a pickup in domestic flights as people returned to work, the recovery has a long way to go as there’s little demand for leisure trips and international traffic has screeched to a halt. As the virus upset the pecking order of Chinese airlines, Shanghai-listed budget carrier Spring Airlines at one point emerged as the nation’s biggest carrier by international capacity after the “Big Three” scaled back their operations. Chinese carriers are adding capacity ahead of the national holidays that start Friday and run through May 5. <br/>

Treasury Secretary Steven Mnuchin said he isn’t considering providing additional money to help airlines reeling from the impact of Covid-19. US airlines reached deals to access a share of $50 billion in federal payroll assistance to bridge funding gaps as the industry waits for customers to start flying again. Companies accepting the aid can’t furlough or reduce wages for workers until Sept. 30. “At the moment there are no thoughts for changing those restrictions or additional money,” Mnuchin said Wednesday. “This money was critical to keep the airlines together, which was important for national security.” Airline analyst Helane Becker of Cowen & Co. said as many as 105,000 jobs could be lost in the industry unless there’s a quick improvement in demand. “We’ve struck the right balance of both payroll support and offering them lending facilities which will also create additional liquidity,” Mnuchin said. Airlines can also turn to the Federal Reserve for support, he said.<br/>

Airlines being subsidized to serve the most remote US airports can receive partial payments even if they cut flights during the new coronavirus epidemic under a plan announced Wednesday by the government. The DoT also said it doesn’t intend to enforce required levels of service if plummeting demand from Covid-19 causes airlines to halt flights. The Essential Air Service is a sometimes controversial program that pays airlines to fly to about 160 remote cities that otherwise wouldn’t have air service. While it has been attacked as wasteful, Congress has continued to fund it. With the virus reducing air travel nationwide about 95%, the DOT said in its proposal that it would make adjustments to how it runs the program through June 30. Major carriers fly routes subsidized under the program using smaller regional airlines under contract. If airlines operating at airports in the continental US, Hawaii and Puerto Rico complete at least one round trip flight a day, six days a week, the agency plans to pay it 50% for additional flights that weren’t made. In Alaska, which has the most airports with subsidized flights, the DOT intends to continue paying carriers so long as they complete at least half of their normal weekly schedule.<br/>

The US FAA has reduced air traffic control services at 100 airports amid significantly less air traffic at secondary and tertiary US airports. Most of the airports affected cater to general and business aviation, but a few larger international airports, such as Mineta San Jose International airport and Tallahassee International airport are also affected, according to the FAA. The changes entail reduced operating hours rather than complete closures of tower facilities. “To ensure the continued resiliency of the air traffic control system amid the COVID-19 pandemic, the FAA is planning to temporarily adjust the operating hours of approximately 100 control towers nationwide,” the regulatory body writes in a note on 22 April. The changes will be implemented over the course of a week, beginning on 27 April.<br/>

Boeing said it will slash staff and production after posting a massive Q1 loss. Demand for air travel has evaporated during the coronavirus outbreak, and the aerospace company continues to reel from the 737 Max grounding. The company announced it would cut 10% of its jobs, about 16,000 positions, through a combination of buyouts, natural attrition and involuntary layoffs. The cuts will be deepest in Boeing's commercial airplane unit -- which will lose about 15% of jobs. And Boeing said it would drastically scale back production of two widebody passenger jets, the 787 Dreamliner and the 777. "The demand for commercial airline travel has fallen off a cliff," said Boeing CEO Dave Calhoun. "The pandemic is also delivering a body blow to our business." Calhoun said it is too soon to say how many involuntary layoffs will be needed, but that it is likely that there will be some. He said that the company has offered 70,000 of its employees a voluntary layoff package.<br/>"That's a big number of offers," he said. "We are hoping we get a reasonably big number [of voluntary departures]." The job cuts are expected to take place by the end of this year.<br/>

Airbus signalled it was preparing a second cut to production in June, with thousands of job losses expected to follow, as the European aircraft maker plunged into net loss in the first quarter and warned that the industry would have to learn to “coexist” with the coronavirus. CE Guillaume Faury said Airbus was aiming to define “a new world by June” when longer-term demand from airlines would be clearer. Initial assessments suggested a return to normal could take three to five years.  Airbus would take steps to “resize” the business for both the short and medium term, Faury said. The company employs 81,000 people in its passenger jet business compared with 64,000 at rival Boeing’s commercial division, and out of a total of 130,000. Earlier this week Faury warned staff that the company's survival could be at stake amid a global collapse in air travel. “Our industry now faces probably the gravest crisis in its history,” Faury said, as the group revealed an E8b cash outflow in the first three months, while lower aircraft deliveries contributed to consolidated net losses of E481m, against a E40m profit a year ago. "We are very aggressively adapting to the short term [situation] and assessing what is the most likely new scenario for aviation for the next years.”<br/>