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Colombia’s Avianca filed for Chapter 11 bankruptcy in the US Sunday, saying coronavirus has presented it with the biggest challenge in its century-long history. In a filing to a bankruptcy court in New York, it said the measure was needed to ensure Avianca can “emerge as a better, more efficient airline that operates for many more years". “Avianca is facing the most challenging crisis in our 100-year history as we navigate the effects of the Covid-19 pandemic,” said CE Anko van der Werff. “Entering into this process is a necessary step to address our financial challenges.” Avianca is second in size only to Chile’s Latam in Latin America and is the second-oldest airline in the world behind Dutch carrier KLM. It began life in the Colombian city of Barranquilla in 1919, just 16 years after the Wright brothers’ historic first flight. It carried over 30m passengers last year to 76 destinations in 27 countries in the Americas and Europe. It generated revenue of $4.6b in 2019 and employed 21,000 people, most of whom have been furloughed due to coronavirus. Avianca said its consolidated revenue has fallen by over 80% since its flights were grounded in mid-March. Since the pandemic hit, van der Werff has been campaigning for government help, saying the airline needs a state loan — not a full bailout — but that has not been forthcoming. Avianca had faced a $65m debt repayment this weekend.<br/>

United Airlines abandoned a $2.25b sale of junk bonds because it wasn’t satisfied with the terms, said people familiar with the transaction. The airline ultimately reached a deal but decided to pull it to seek more favorable terms and potentially a different structure later, said one of the people. The offering fell flat with investors on concerns about the planes backing the debt. Enticed by the hot market for junk bonds, United had been planning to use the new debt to refinance a $2b one-year term loan that the company signed with a group of four banks on March 9. At a yield of 11% based on unofficial price discussions, the potential interest rate was significantly higher than that on the loan, which pays a rate of as much as 2.5 percentage points above the London interbank offered rate over the course of the year. United declined to comment. In a regulatory filing Friday, the company said it had “decided not to proceed with its previously announced proposed offering.” JPMorgan Chase & Co., which was leading the deal, declined to comment.<br/>

Lufthansa’s CE Carsten Spohr delivered a stark message to shareholders this week. “In less than 65 days, we have returned to the flight plan levels of 65 years ago.” Passenger numbers have plunged 99%, the German group has “practically no earnings”. In short, he told Lufthansa’s virtual annual meeting, it was “going to need help”. The plea from the former pilot who led Lufthansa to its best three years in history will almost certainly be answered — a E9b bailout from Berlin is likely to be agreed within days. But it may well come with conditions that threaten Spohr’s hold on Europe’s second-largest airline group, which was privatised 23 years ago: the German state is insisting on taking a 25% equity stake and seats on the supervisory board. It is a scenario that Spohr — who has also sought aid for the group’s airlines in Belgium, Switzerland and Austria — is trying very hard to avoid. Lufthansa, he said this week, may need government support, “but we do not need government management”. While many praised Spohr’s directness, former supervisory board member Nicoley Baublies said such comments backfired. “He patronised the government, and made it difficult to find a good solution,” the UFO cabin crew union official said. “It was unnecessary.” Yet Spohr’s record could still convince the government not to clip his wings. Even before the coronavirus crisis, he was widely considered to have excelled in one of the toughest jobs in corporate Germany.<br/>

Germany is working on a “concrete model” to aid Lufthansa, Economy Minister Peter Altmaier said Sunday, amid a political row over whether the state should take a strategic shareholding and play an active role in the stricken airline. Altmaier’s comments followed calls by the Social Democratic Party, junior partners in Chancellor Angela Merkel’s ruling coalition, to tie aid for Lufthansa to protecting jobs, cutting the dividend and giving the government a say on strategy. “For me it’s important that we don’t exert any influence on business decisions. That has never worked in the past,” Altmaier said. Lufthansa said Thursday it was negotiating a E9b bailout with Germany’s economic stabilisation fund after the coronavirus pandemic slashed travel by 99% and forced it to ground 700 aircraft. The package includes a non-voting capital component - known as a silent participation - a secured loan, and a capital increase that may leave the government owning up to 25% plus one share. While Altmaier and Merkel’s conservatives oppose a direct state investment, the opposition Greens have said that a silent participation would be unacceptable.<br/>

ANA Holdings said Friday that it will temporarily suspend its recruiting activities for fiscal 2021, which starts in April next year, due to the impact on its business environment from the spread of the new coronavirus. The parent of ANA said it now finds it difficult to compile a business plan. ANA Holdings will not cancel informal job offers it has already made to some 600 people, including vocational school students, for employment in fiscal 2021. The company has yet to decide when to resume its recruiting activities. For fiscal 2021, ANA Holdings is planning to employ a total of some 3,200 people at its 37 group companies, but it may change the plan. ANA Holdings booked a group net loss of Y58.7b in January-March after a plunge in passenger demand amid the coronavirus outbreak. It has declined to release its earnings projections for the current year through March, citing uncertainties over its business outlook.<br/>

ANA will cut summer bonuses for rank-and-file employees by 50% in 2020 to cope with plummeting air traffic, it was learned Friday. Japan's largest carrier recently presented the plan to the company's labor union. Other companies in the group also plan to the slash payments, a move that is expected to save the entire group 7b yen ($65m). As the coronavirus pandemic depresses demand for air travel, the carrier aims to reduce labour costs. The last time the airline slashed summer bonuses was in fiscal 2010, when passenger numbers decreased in the wake of the global financial crisis. ANA regards the summer bonus as part of overall compensation and had set it at twice of monthly pay. This year it will be set at only one month's pay. In addition to rank-and-file employees, non-union managers will also see bonuses halved. The carrier has not proposed cutting monthly pay itself, but the move on bonuses is expected to result in employees seeing annual compensation fall by about 5%. The end-of-year bonus may also be reduced.<br/>

ANA has eased its company dress code that mandated female cabin attendants and ground staff wear high heels, the company has said. The change, which comes amid a movement against requiring women to wear such shoes in the workplace, took effect May 1 and includes its group companies. It follows a similar move by JAL, which revised its regulations and allowed the wearing of shoes with no heels from April. ANA, however, said female staff must still wear pumps that are made of plain, black leather and do not cover the instep, as the style goes well with the uniform. Walking and ballet shoes remain banned. The airlines is now asking that heels have a height of around 5 centimeters or below and a width of 3 cm or more. It had previously required heels to have a height and width of between 3 cm and 5 cm. “We’ve thought about creating a healthy and better working environment,” the company said, adding, the new rules take into consideration how workers can walk stably and reduce strain on their toes and waist.<br/>

The THAI union has made clear its stance against privatisation and spinning off potentially profitable units as part of a rescue plan for the ailing national carrier. Union president Nares Peung-yaem Friday said the union was determined to oppose any attempt to end the airline as a state enterprise or to shift away any business units. He made the comment as the union submitted a letter to Prime Minister Prayut Chan-o-cha through Suporn Attawong, an assistant to the PM’s Office minister, at Government House Friday. The move took place on the same day that Gen Prayut held talks with ministers on details of a plan to rescue the financially crippled flag carrier. Deputy PM Anutin Charnveerakul, Transport Minister Saksiam Chidchob and his deputy, Tavorn Saenneam, took part in the talks. Details of the meeting have not been disclosed. The government had said earlier that it did not intend to bring in new private investors or do anything else that would reduce the state shareholding below 51%, the level required to keep its state-enterprise status. It is not clear whether senior political figures still hold this view. The airline’s circumstances have grown even more dire in light of the collapse of travel amid the Covid-19 pandemic. THAI now needs funding just to get it through the next few months as it carries out a rehabilitation plan. That funding, a bridge loan of 54b baht arranged by the Finance Ministry, could come with some very tough conditions. A ministry source said on Wednesday that one of the conditions could include a reduction in the carrier’s headcount by 30-40%. <br/>

Face masks will soon be mandatory for passengers travelling with Singapore Airlines, regional wing SilkAir and budget carrier Scoot, as part of new measures to tackle the COVID-19 pandemic. From 11.59pm on Sunday, all passengers on SIA and SilkAir flights must bring their own face mask on board and wear it throughout the flight, said SIA in an advisory on its website on Saturday. Passengers will also have to observe safe distancing measures when embarking and disembarking, as well as when queuing for the lavatory. This is in accordance with a directive by the Civil Aviation Authority of Singapore, said the airline. SIA said that its ground staff and cabin crew will assist to ensure that passengers observe safe-distancing measures at all times. It also announced other travel measures for certain flights. Customers travelling to Singapore will undergo a basic health assessment before boarding, including a verbal health declaration and temperature checks, said the airline. Meal services will be suspended for flights within Southeast Asia and services to China. Passengers will be given a snack bag with water and refreshments when boarding instead. All other flights will have meals provided. "These measures are in addition to the existing precautionary measures that SIA and SilkAir have in place to safeguard the wellbeing of our customers and crew," said SIA.<br/>