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Lufthansa is to receive a rescue package worth a total of E9b from the German government, which will own at least a fifth of the carrier almost a quarter of a century after it was fully privatised. The aid, which is subject to approval by the EU and shareholders, will include E3b in loans via KfW, the country’s state-owned development bank, and will preclude the airline from paying dividends and constrain executive pay. The country’s Economic Stabilisation Fund will pay E300m to buy new shares in the group at the nominal price of E2.56 a piece, bringing its stake to 20% and diluting existing investors. The German government has committed not to exercise its voting rights in day-to-day matters, and plans to sell its stake by the end of 2023. However, Berlin will nominate two people to sit on Lufthansa’s supervisory board. The fund will also invest a further E5.7bn in the airline, in the form of equity capital which carries an initial coupon of 4 per cent that rises to 9.5% by 2027. The investment can be paid down by Lufthansa in whole or in part on a quarterly basis and gives the German government no further control of the company. A portion of that investment can be exchanged for a further 5% of Lufthansa, in the case of the airline missing interest payments, or for 5% plus one share, in order to block any attempts at a hostile takeover. The deal announced on Monday — by far the largest bailout in Germany since the outbreak — must still be ratified by shareholders at an extraordinary general meeting, and be given the green light by the EC. Despite demands from environmental activists and some political parties, it does not impose new carbon emission targets on Lufthansa. Peter Altmaier, Germany’s economics minister, said: “We have deliberately refrained from imposing conditions beyond the broader sustainability requirement, because our aim is not to have the state determine the company’s day-to-day business strategy.”<br/>

Rising tensions between the United States and China are spilling over into the airline industry. Washington has accused Beijing of blocking American carriers from resuming flights to China, prompting US authorities to more heavily scrutinize Chinese airlines. The tit-for-tat began last week after the US Department of Transportation claimed that regulators in Beijing were "making it impossible" for US carriers to fly between the two countries.<br/>United and Delta want to restart US-China routes in early June and have submitted applications to the Civil Aviation Administration of China (CAAC) to do so, according to the US DoT. Like other carriers, United and Delta suspended flights to China in February as demand cratered because of the coronavirus. The problem facing the US carriers is that the CAAC, in an effort to stop imported cases of Covid-19, ordered all airlines to use their flight schedules for the March 16-22 week as a benchmark to determine how many flights they could operate to China until further notice. By that date, US airlines had "completely ceased flying passenger service to China," according to the DoT. The CAAC has not responded to United and Delta's requests to resume operations, according the US agency. Meanwhile, several Chinese airlines have continued to fly US-China routes throughout the pandemic. But the Chinese aviation regulator has limited each of them to operating just one weekly flight to the US.<br/>

Brussels Airlines will restart commercial flights next month with a significantly downsized summer schedule following a 12-week interruption due to the coronavirus. The company said Monday it will restart flying operations on June 15, and plans to reach 59 destinations in 33 countries in Europe, Africa and the US by August. Hard-hit by the crisis, the Lufthansa subsidiary announced earlier this month it is planning to cut a quarter of its workforce as part of a cost-cutting plan. The company, which employs 4,000 people, has like many airlines suspended flights as a result of the pandemic. It said it is losing E1m a day because of revenue losses, aircraft leasing and maintenance costs, and has asked the government for support. Brussels Airlines’ revised summer plans will consist of 30% of the initially planned summer schedule in Europe and 40% of the long-haul summer program. The company plans to reach 240 weekly flights by August, and to further expand its network beginning in September.<br/>

Air Canada’s bid for tour operator Transat AT Inc faces an extended probe from EU regulators who said the deal may hamper competition by combining the two biggest airlines linking Europe and Canada. The EC set a Sept. 30 deadline to rule on the deal, citing concerns that the “transaction could significantly reduce competition on 33” routes, according to an emailed statement on Monday. One potential rival to the combined company, WestJet, is unlikely to be able to compete strongly on the routes that regulators see as problematic, the EU said. Transat agreed in August to be acquired for C$18 a share in cash. Shares have since slumped well below that level, suggesting investors are questioning whether the C$720m deal will happen in light of the coronavirus crisis, which has hammered the prospects for travel companies. Margrethe Vestager, the EU’s antitrust chief, said the pandemic shouldn’t prevent careful scrutiny of deals. “This is a challenging time, especially in markets severely impacted by the coronavirus outbreak, but a return to normal and healthy market conditions must be based on markets that remain competitive,” she said. <br/>

Air Canada starting 1 June plans to fly three modified Airbus A319s with only 58 business-class seats between Toronto, Montreal and Ottowa, aiming to maintain air travel while minimizing the risk of coronavirus infection. The flights sold through its charter subsidiary Air Canada Jetz will fly one morning and one evening round-trip between the three locations without any middle seats to minimize infections, the carrier announced on 22 May. The aircraft were modified from a typical 120-seat configuration for business-class charter travel prior to the coronavirus pandemic that led to a sharp decline in air travel since March. Prior to the pandemic these Air Canada Jetz aircraft flew hockey teams to games across North America. Now that professional sports are suspended along with other public gatherings, Air Canada aims to use its unique assets to offer a safer form of air travel. “Airlines like Air Canada are trying whatever they can to motivate traffic back into the planes in this transitional period,” Air Canada CFO Michael Rousseau said last week.<br/>

Air Canada CEO Calin Rovinescu was on track to receive around $12.9m in total compensation last year, but the value fell by more than half as the airline's shares stalled due to the COVID-19 pandemic. As of May 4, when the company's share price closed at $17.63 on the Toronto Stock Exchange, the total compensation of its president and chief executive officer was estimated at $5.8m. Remuneration of top executives and board members were included in a proxy circular sent to Air Canada shareholders prior to its virtual meeting scheduled for June 25. Rovinescu, 64, was entitled last year to a base salary of $1.4m. The value of his share-based awards fell to $1.89m from $3.55m, and $3.5m in options were worthless due to a big drop in the share price. His bonus was also cut by more than half, to $1.6m from $3.5m while his pension value was $875,000. The CEO gave up his base salary until June 30. His total compensation was $11.6m 2018.<br/>

Air NZ has confirmed it expects to report an underlying loss for the 2020 financial year while estimating hedging losses and aircraft impairments of up to $560m. The airline, which said Tuesday it has yet to draw on the Government's $900m loan, says while the recent move to Alert Level 2 allowed it to get its domestic engine turning again, it is clear that it will take some time for demand to return to pre-Covid levels. "We are preparing for a scenario in which the airline is still 30 per cent smaller than pre-Covid levels in two years' time" says CFO Jeff McDowall. For the second half of the 2020 financial year, Air NZ's network capacity is expected to be approximately 50% lower than the prior comparative period, driven by a reduction of approximately 90% in Q4. In light of this and the fact there was very little revenue coming in during Alert Levels 3 and 4, the airline is now expecting to report an underlying loss for the 2020 financial year. It currently has $640m of short-term liquidity, versus $1b prior to the outbreak. That doesn't include any of the $900m Government loan facility. "We have not yet needed to draw down on the government loan facility, as we continue to utilise all available levers to reduce our cash burn and right-size the business to reflect the expectation that, for some time, our airline will be smaller than it was pre Covid-19," says McDowall.<br/>

One of Japan’s major airlines plans to make the wearing of face masks compulsory as the industry shifts toward operating in a new coronavirus pandemic normal. From June, ANA will require all passengers to wear face masks inside airports and aboard aircraft. Anyone who refuses will be barred from boarding, meaning ANA is going a step further than an aviation industry body guideline that advises a “request” be made that passengers mask up. Cabin crew will wear face masks and ground staff will wear face shields as well, it said. Major airlines, including ANA, have also installed plastic curtains at check-in counters. JAL and Skymark Airlines said they will refrain from allocating passengers into adjacent seats to allow some measure of social distancing to be maintained. JAL said the measure is temporary and is aimed at easing people’s concern about coming into close contact with fellow passengers. JAL will halt sales of adjacent seats until the end of June, while ANA does not take such a measure, as such sales practice may lead to raising airfares. Japanese airlines have yet to announce whether they will implement more stringent anti-virus steps for their international routes that involve longer flight times and therefore an increased risk of infection.<br/>

India's Supreme Court Monday has allowed Air India to operate non-scheduled foreign flights with middle-seat bookings for the next 10 days. The top court was hearing an urgent plea against Bombay High Court's order to keep middle seats vacant on international flights in compliance with social distancing norms. "Directorate-General of Civil Aviation (DGCA) and Air India are free to alter any norms it may consider appropriate during the pendency of the matter," a bench headed by Chief Justice of India Sharad Arvind Bobde said. The apex court, hearing the petition filed by the government and Air India, said that the state-run carrier shall be allowed to operate non-scheduled flights with centre seat booking for 10 days. The top court said that it will ask the Bombay High Court to decide on the matter again. Solicitor-General Tushar Mehta, appearing for the Indian government, said that the circular was only intended for domestic flight operations, adding that everyone who comes from abroad (with all three seats occupied) will be compulsorily quarantined as per the guidelines. The bench asked whether there is no difference between international and domestic flights, to which Mehta responded by saying there is no difference. Mehta said that it is the decision of experts not to keep seats vacant and added that there aren't that many aircraft to evacuate people from abroad.<br/>