Airlines are poised for a wave of consolidation amid a tough business environment exacerbated by the coronavirus pandemic, the head of one of Asia's biggest aicraft leasing companies said. Peter Barrett, CEO of SMBC Aviation Capital, said there are early signs of recovery in air travel demand in Asia and predicted low-cost carriers will lead the industry's recovery. "The strong will get stronger. The ones that do well will take market share. They are going to grow again in a couple of years," Barrett said in an interview. "Once flying returns, airlines are going to have to discount to get people back on aircraft. They are going to have to sell cheaper tickets to encourage and stimulate demand." Low-cost carriers have more ability to drive down costs than traditional airlines, he argued. There are early signs of recovery in air travel demand in Asia and parts of Europe, Barrett said. Data from aviation analytics company Cirium also shows that the pace of year-on-year decline narrowed to 35% in late May from 80% in February for China, and to 65% in late May from 75% in April for Asia-Pacific. "We are seeing some very small green shoots, I would say, in markets like Korea, Malaysia and Thailand and other markets in Europe," Barrett said. "What we are going to see over the next number of months is a slow, steady return of air travel. But it is going to take time."<br/>
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The nation’s largest airlines are preparing for a limited rebound next month as more Americans book vacations in places like Florida and the mountains and national parks in the West. That resurgence would offer some hope to the travel industry, which racked up billions of dollars in losses as tourists and businesspeople cancelled trips in the last three months because of the coronavirus epidemic. Some in the industry said the recovery was now already underway. After cratering in April, the number of travellers and airline and airport employees filtering through the TSA’s airport checkpoints has steadily climbed in recent weeks. The low point arrived on April 14, when the agency screened fewer than 90,000 people, just 4% of those screened the same date last year. On Sunday, the agency screened more than 440,000 people, about 17% of last year’s number and the best day since March. Investors appear to have noticed those numbers, and airline stock prices have surged. Airlines say they are preparing to capitalize on the renewed interest in travel. “We’re seeing a slow but steady rise in domestic demand,” Vasu Raja, American’s senior vice president of network strategy, said in a statement. “After a careful review of data, we’ve built a July schedule to match.” American plans to operate about 55% as many domestic flights as it did last July. That would be up from just 20% in May. United is planning for a similar, if somewhat smaller, rebound. <br/>
The US DOT will extend its financial support to airlines that cancel “Essential Air Service” (EAS) flights due to lack of demand stemming from the coronavirus pandemic. The agency had already authorised paying 50% of subsidies for flights cancelled due to lack of demand as long as carriers serve the destinations with at least one round trip daily, six days weekly. In Alaska, carriers must complete at least 50% of weekly schedules to receive payments. The DOT now says it will extend its payments, announced in April, until the end of September, and it leaves open the option of extending these further depending on if and how passenger demand rebounds as lockdowns and shelter-in-place orders lifted. The payments were originally set to expire at the end of June. “The department recognises that the documented effects of the Covid-19 public health emergency on air travel demand are ongoing,” it wrote in its 5 June decision.<br/>
When the coronavirus was spreading at breakneck speed this spring, Britain’s government flatly refused to quarantine travellers, even those arriving from virus hot spots like Spain or Iran. On Monday, as most Western European countries and the US were easing restrictions, the government introduced a plan requiring everyone entering the country to self-isolate for 14 days. PM Boris Johnson’s belated change of heart over quarantines has enraged airlines, frustrated travellers and upset lawmakers fearful of the economic damage. Experts doubt that the quarantine measures can be enforced, and question why a nation with one of Europe’s worst infection rates should try now to deter international travel. Under the new quarantine rules, people entering Britain by plane, train or ferry must fill out a form giving an address where they will self-isolate for two weeks, with fines of up to GBP1,000 for breaches. “Scientists say the quarantine has come too late, the police say it’s unenforceable, the tourism and aviation industry say it will ruin them,” said Conor McGinn, who speaks for the opposition Labour Party on home affairs issues. <br/>
Bosses of the travel and hospitality industry have been privately assured by the Government that “air bridges” will be introduced for foreign summer holidays from June 29 to replace blanket quarantine. The Quash Quarantine group of more than 500 of the biggest names in the industry said that as a result they would suspend their threatened legal action to overturn quarantine. “There’s a desire by the group to take action and we are not ruling it out in the future but we have had these assurances from senior Government sources that travel corridors will be in place from June 29,” said Paul Charles, a spokesman for the group whose businesses turn over GBP10b a year. “We are waiting for urgent Government direction on that happening.” It is thought confirmation could come as early as this week after the Cabinet meets on Tuesday. It is likely to be allied to a lifting of the Foreign Office ban on non-essential travel to “low risk” countries. Portugal, Spain, France, Italy, Greece and Australia are thought to be frontrunners for “travel corridors” which would allow holidaymakers and business people to go to and from the countries without having to self-isolate for 14 days.<br/>
Birds and other animals could present a greater threat to aircraft in India as the coronavirus limits human activity including wildlife management at airports, the country’s aviation regulator warned Monday. Many airports are near wetlands that attract large migratory birds, which pose a collision threat to aircraft. Meanwhile, a sharp reduction in aviation activity has given birds and other wildlife a greater opportunity to thrive, India’s Directorate General of Civil Aviation said in a notice to airport operators. “Many regular activities such as grass cutting, bird activity monitoring patrols, and dispersal measures may be limited given the current situation of reduced manpower and lower aircraft movements,” the DGCA said. To minimize the risk of collisions, airport operators should continue to monitor wildlife and not ease control measures, it said. “Particular attention should be given to increase of bird/wildlife activities as a result of reduced air traffic.”<br/>
As the coronavirus pandemic stifles air travel, major airports around the world are rethinking plans to spend billions of dollars on new terminals, runways and hotels that could sit empty if demand doesn’t return. San Francisco International Airport is postponing by at least six months a $1b terminal renovation formerly slated to start in June. In Florida, Orlando’s airport authority scaled back an expansion to 15 gates from 19. In London, executives at Heathrow Airport say building a third runway isn’t a priority at the moment, and in New Zealand, Auckland Airport is suspending plans for a new terminal and second runway. Belt-tightening is winning approval from some airlines, which fear such projects could translate into higher fees. “We don’t need a marble floor,” said Holger Blankenstein, executive VP of Volaris, a low-cost carrier in Mexico. Keeping airport fees in check, he said, makes it easier for airlines to offer lower fares. Still, many airports say that it would be expensive to stop a project already under way and that air travel could rebound by the time some expansions are complete. In Australia, work is continuing on a second airport for Sydney, scheduled to open in 2026. Hong Kong International Airport is moving ahead with a new runway. And in Germany, Frankfurt Airport is proceeding with a new terminal. “We are convinced that we will again see long-term growth in air traffic,” Stefan Schulte, executive board chairman of Fraport AG , the publicly traded company that runs the Frankfurt airport, told investors at its recent shareholder meeting. “A new terminal is not built on an outlook of just two or three years, but rather for the decades to come.”<br/>
Barely three months ago, Serge Dumas had one problem: how to keep up with record demand for the metal fasteners and bolts his small aerospace supply firm manufactures just north of Toulouse. Now, the head of Gillis Aerospace is wondering how to keep his 45 employees busy as Europe’s aerospace capital reels from plummeting jetliner demand caused by the coronavirus crisis. “In February, we were in the midst of euphoria and operating a just-in-time schedule,” Dumas said, referring to the drum beat of a fully-stretched aerospace supply chain. "In a few days, we went from accelerating flat-out to slamming on the brakes. We were flabbergasted.” Now his company, which recently partnered with Germany’s Boellhoff Group, has suspended an E800,000 investment in a new building and machinery. Gillis Aerospace, with annual revenues of E5m, is one of thousands of small to medium-sized firms hurt by the crisis as the French government and private lenders finalise a E1b fund to help the sector. Across the surrounding Occitanie region, a total of 40,000 aerospace jobs are seen at risk, up to half of which could involve Airbus, based in regional capital Toulouse. Once basking in wealth from air transport, France’s fourth largest city is alarmed by whispers that it could suffer a fate similar to Detroit, ravaged by recession in the auto industry. Four think-tanks and associations sounded the alarm in May, warning the area could succumb to “Detroit Syndrome”. “Right now, aerospace sub-contracting represents 86,000 jobs in Occitanie and Airbus buys 5-billion-euros of parts locally,” said Alain Di Crescenzo, president of Occitanie’s Industrial Chamber of Commerce. Planemakers employ another 30,000. “When Airbus coughs, everyone gets sick.” <br/>