Federal stimulus money for airlines is keeping them afloat through the coronavirus pandemic, but it’s not proving to be enough to sustain the industry at its pre-pandemic size. Carriers say they will have to shrink, with fewer planes flying, fewer flights and fewer employees come Oct. 1, after restrictions related to their stimulus money expire. Airlines will likely need to park 20% of their planes and cut their pilot workforces in equal measure, Cowen analyst Helane Becker estimated in a recent research note. The coming job losses are a sign of how the government’s broad efforts earlier this year to support industries and preserve jobs as the economy shut down have been overwhelmed in some instances by the financial devastation the Covid-19 pandemic has generated. The $25b that airlines received as part of the broader economic stimulus package in March was intended as a bridge to carry airlines through as demand collapsed and keep employees on the payroll through the end of September. The money has also given carriers some time to stabilize, keep workforces trained and ready, and raise billions of dollars from capital markets. If not for the government aid, “I’m not sure we’d be flying at all,” one airline executive said. The problem now: demand hasn’t snapped back. Even as travel has picked up a bit lately, it remains a fraction of the record-high levels reached before the pandemic, and now airline executives believe the rebound will take years, not months. Airline officials and lobbyists say there haven’t been formal discussions about additional aid, though some unions are hoping that the funds to cover worker salaries could be extended. <br/>
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US officials on Friday pulled back on their plan to severely restrict Chinese airlines from offering commercial passenger service to the US, saying they would now allow those carriers to operate the same number of flights that China is allowing US carriers to operate between the two countries. The move comes after China announced changes to rules that had previously barred US carriers from restarting air service between the United States and China. On Thursday, China announced changes to rules that would allow international carriers, including US airlines, to operate one weekly flight each between the two countries. The number of flights could be increased if carriers met certain conditions related to the health status of passengers. The shift clears the way for Delta and United airlines to restart service between the two countries. Beijing revised its policy after US officials announced Wednesday that they would ban Chinese airlines from offering service between the US and China beginning June 16 due to limitations on American carriers. While not an outright ban, the move by US officials would have ended flights operated by Chinese airlines. <br/>
US President Donald Trump Friday said Warren Buffett, often regarded as the world’s greatest investor, made a mistake by recently exiting a multi-billion dollar investment in the airline industry. Trump made his assessment at the White House, shortly after the US Labor Department reported an unexpected surge in May jobs, and five weeks after Buffett said his Berkshire Hathaway Inc sold its airline stakes. “Warren Buffett sold airlines a little while ago,” Trump said. “He’s been right his whole life, but sometimes even somebody like Warren Buffett — I have a lot of respect for him — they make mistakes. They should have kept the airline stocks because the airline stocks went through the roof today.” Buffett did not immediately respond to a request for comment.<br/>
Britain’s three biggest airlines have started legal proceedings against the government in a bid to overturn quarantine rules due to take effect in the UK from Monday. BA’s owner, IAG, along with Ryanair and EasyJet, have sent a pre-action protocol letter setting out why they believes the moves, which will force air passengers arriving from abroad to self-isolate for 14 days, are illogical and unfair. Airlines and travel firms have protested in vain against the new Home Office-led regulations, which they have said come months late to stop the transmission of coronavirus and will kill off any nascent recovery in their industries. The airlines’ letter argues that the quarantine measures are more severe than those applied where the risks are greater, and impose greater restrictions on arrivals than on people infected with Covid-19. The airlines also object that enforcement of the regulations as published appears to apply only to England, and people arriving in Scotland, Wales or Northern Ireland would not face the same penalties. The devolved administrations have yet to set out how they will police the rules. The letter, the first step in an application for judicial review, was sent on Friday. A Ryanair spokesperson, commenting on behalf of the three airlines, said: “These measures are disproportionate and unfair on British citizens as well as international visitors arriving in the UK. We urge the government to remove this ineffective visitor quarantine which will have a devastating effect on UK’s tourism industry and will destroy even more thousands of jobs in this unprecedented crisis.”<br/>
The UK’s new travel quarantine will put 25,000 people out of work at Heathrow Airport, according to its CE. John Holland-Kaye said he was considering job cuts as a result of the scheme requiring passengers to self-isolate for 14 days on arrival from Monday. “76,000 people are employed at Heathrow,” the Heathrow boss said. “That represents one-in-four households in the local community, so if we start cutting jobs on mass that has a devastating impact on local communities, including the Prime Minister’s own constituency, which is only a few miles from the airport. What we’ve heard already from the airlines is that they are cutting around a third of all employees, so that would be 25,000 people out of work." Asked if he would also have to consider the future of a third of his workforce, Holland-Kaye replied: “That’s exactly the right kind of number. And I don’t want to see that happen. But we’ll have to make that decision, within the next couple of weeks.” Holland-Kaye said airport passenger numbers for most of April, May and June were between 5,000 to 7,000 each day – compared to average of nearly 220,000 each day at Heathrow in 2018.<br/>
For the first time in over four months, Chinese carriers carried more than one million passengers on 5 June, marking a gradual recovery for the industry after being hard hit by the coronavirus outbreak. The Civil Aviation Administration of China (CAAC) states that Chinese carriers flew about 1.04m passengers that day, about 38% lower than the same day a year ago. The carriers flew more than 11,000 flights that day, a new single-day high for the industry since February. For the first five days of June, the CAAC notes the average number of passengers carried domestically was about 935,000, with the average number of flights per day hitting around 10,600 flights. Average passenger load factor hovered around 70%. While these were lower figures compared to the same period last year, they were better than May’s averages. For that month, CAAC data indicates its carriers ferried an average of 786,000 passengers a day, and mounted close to 9,500 flights daily. In April, the average number of passengers flown a day was around 523,000, and average daily flights 6,950. <br/>
Japanese air carriers are trying to get the word out that it is safe to fly on commercial jets, with many people still concerned over being confined in narrow and closed spaces amid the coronavirus pandemic. Domestic flights started to resume gradually in Japan after the government completely lifted its state of emergency over the virus crisis in late May. Carriers are now hoping to ease anxieties among potential passengers and get them back on board. The Scheduled Airlines Association of Japan, an airline industry organization, produced a video about safety measures being taken by carriers to prevent the spread of the virus on board planes. The video informs people that the air in the cabin is completely renewed every three minutes or so and that disinfection is being carried out regularly. In the video, the association suggests that passengers use online check-ins, automated check-ins and baggage drop machines to reduce interpersonal contact, in addition to using hand sanitizers and taking other steps to reduce infection risks. In addition, All Nippon Airways and Japan Airlines now require passengers to wear masks when on board. Their cabin crew are also offering in-flight services on a reduced scale.<br/>
The Australian government said Sunday it will continue to underwrite domestic flights through September, extending its aid for airlines such as Qantas and Virgin Australia hurt by the COVID-19 pandemic. Deputy PM and Transport Minister Michael McCormack said the initial backing, due to expire on Monday, will be extended to cover shortfalls in operating flights on top domestic routes, even as airlines start to rebuild crushed capacity. Australia has barred its citizens from almost all outbound travel in order to stop the spread of the new coronavirus. “The Australian government is doing everything possible to ensure the aviation industry is sustained throughout the pandemic so that it can rebound on the other side,” McCormack said. <br/>
Airbus is considering a voluntary redundancy scheme for as many as 500 UK workers as the planemaker seeks to cut costs in response to the coronavirus pandemic. The European manufacturer’s job cuts in the UK are expected to fall mainly on the vast factory in Broughton, north Wales, which produces wings for commercial planes such as the A320 and A350. When compulsory redundancies are included, it is likely that UK job losses will be multiple times higher. One option under consideration was to offer voluntary redundancy to 500 workers, focusing on those nearer to retirement, a person with knowledge of discussions said. However, another source cautioned that no final decision had been made and it was only one of a number of options as the manufacturer prepared for years of lower demand. Airbus said in April it would cut the number of planes it built by a third. Airlines around the world have cancelled or delayed orders for new aircraft as their fleets remained grounded. The production cuts have led to the expectation of thousands of job cuts across Airbus’s global operations.<br/>
Demand for business jets has dried up during the Covid-19 pandemic. A precipitous drop in orders prompted aircraft maker Bombardier to announce it is cutting 2,500 jobs, mostly in Canada, its home base. Business jet deliveries are expected to fall 30% this quarter, Bombardier said Friday. "Bombardier must adjust its operations and workforce to ensure that it emerges from the current crisis on solid footing," the company said. It will take a charge of C$40m to cover the costs of the layoffs. <br/>