The global airline industry is forecast to lose a record $84b this year with a return to profitability coming in 2022 at the earliest, even as carriers restore flights dropped during the pandemic. The latest outlook from the IATA sees a 55% drop in passenger traffic this year and a $16b deficit in 2021. The trade group also predicts the loss of 32m jobs tied to the air-travel business. North American airlines are forecast to lose a collective $23.1b this year, or $38.15 a passenger—which still makes them the best-performing region. SAirline stocks have climbed sharply over the past week as travel restrictions ease and carriers do more flying. Still, the sharp downturn is expected to have long-lasting effects on carriers as well as plane makers Boeing and Airbus. More than 14,000 planes are still parked world-wide because of the slump in travel and commerce since the coronavirus pandemic began. Passenger jets normally help meet cargo demand by carrying high-value items like consumer electronics, apparel and fresh fruit, and the slump has removed half the air-cargo capacity for such goods. The shortage of cargo space has almost doubled freight costs on busy trade routes, such as between China and the US, according to data provider WorldACD. Airlines have responded by returning cargo jets from desert storage and by reconfiguring passenger planes to carry freight in the main cabin.<br/>
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China’s air passenger traffic halved in May from a year earlier as the coronavirus pandemic hampered travel in the country although the pace of decline slowed from the previous month, showing the industry is on track for a gradual recovery. Air passengers numbered 25.83m in May, down 52.6% year-on-year, CAAC spokesman Xiong Jie told an online news conference on Wednesday. That compared with a 68.5% year-on-year decline in April, when passengers numbered 16.72m. In the first five days on June, the average daily numbers of passengers and flights rose to 57.4% and 66.11% of levels seen last year, respectively, with load factors nearing 70%, CAAC said on Saturday. The encouraging signs bode well for the global tourism industry, which is closely watching mainland travel patterns as countries follow China’s lead in reopening their economies. Some of the carriers preparing to resume flights to China have requested all passengers take a nucleic acid test for the coronavirus before boarding the plane, Xiong said. The CAAC has said it would suspend airlines from services if five or more passengers on a flight tested positive upon arrival.<br/>
Europe’s $36b of airline bailouts could herald a shift to lower-emission travel as countries impose environmental strings on aid. Those requirements may also mean customers have less choice and pay more. Austria is taking the most radical steps in agreeing to fund the local arm of Lufthansa. The government will impose a minimum E40 ticket price to discourage non-vital journeys while hiking fees on flights under 350 km to E30. And Austrian Airlines services to locations less than three hours from Vienna will be replaced by train journeys. “It’s good to end things that just don’t make sense, such as tickets that are too cheap,” Lufthansa CEO Carsten Spohr said Monday. “It doesn’t make sense ecologically or economically. In that respect I can imagine implementing these measures in other European locations.” France is also taking steps to reduce short-haul flights, requiring Air France to cut domestic services by 40% as part of a E7b package to help it survive the coronavirus crisis, and the Netherlands is expected to impose environmental conditions on funding for sister company KLM. French Finance Minister Bruno Le Maire has said the government wants to remake Air France into the greenest carrier in the world, partly by curbing domestic flights by 40% and pulling services between cities less than 2 1/2 hours apart by rail. His Dutch counterpart Wopke Hoekstra said in an April 24 letter to the House of Representatives that KLM would be need to take steps such as reducing CO2 emissions and night flights to win taxpayer funds.<br/>
The French government announced an enormous financial support program on Tuesday for its flagship aviation industry as global travel restrictions from the coronavirus pandemic slash passenger flights and orders for new planes, putting tens of thousands of jobs at risk. The E15b package (almost $17b), which includes some previously announced measures, includes aid for Air France, Airbus and major French parts suppliers through direct government investment, subsidies, loans and loan guarantees. It also includes a special fund jointly financed by the government, Airbus and other big manufacturers to support small suppliers. In exchange for the support, companies will be required to invest more in low-emission aircraft, powered by electricity, hydrogen and other means, as the government capitalizes on the opportunity to make the French aviation industry the “cleanest in the world.” “We are declaring a state of emergency to save our aeronautical industry to allow it to be more competitive,” Bruno Le Maire, the finance minister, said at a news briefing with France’s defense and environment ministers. He said the plan would allow France to set new global standards for low-carbon aircraft, with E1.5b earmarked over the next three years on research and development to develop a carbon-neutral aircraft by 2035.<br/>
The grounding of air travel during the coronavirus pandemic could prompt a jobs crisis in British aviation on the scale of the coal mining industry’s collapse during the 1980s, a report has warned. Putting ministers on notice for a surge in redundancies as airlines confront a future with fewer journeys made by plane even after the outbreak recedes, the New Economics Foundation (NEF) said at least 70,000 jobs in the wider aviation industry – including engineering, catering and duty free shopping – were at risk before the end of summer. Thousands of workers in the industry will have to retrain in other areas of the economy, it said. Compiled in collaboration with the TUC, aviation unions and the climate action charity Possible, the study warned this figure would match the job losses in the coal industry in 1980-81 in the early years of Margaret Thatcher’s newly elected Tory government, which left lasting scars for communities across the north, Midlands, Wales and Scotland. The warning on aviation jobs comes at a crucial time for firms that have furloughed workers in the UK. Covering the wage bill of almost 9m workers, the transition away from the furlough scheme is expected to trigger a wave of redundancies in the coming weeks, as the government gradually reduces the support available from August until the scheme closes at the end of October. Calling on the industry to negotiate redundancy limits with trade unions, it also said any airline industry bailouts should come with tough conditions forcing the suspension of shareholder dividends, excessive executive pay and tax avoidance, while also demanding firms invest more in green technology and decarbonisation. <br/>
Holidays abroad could be possible from July, according to travel industry bosses. Quash Quarantine, a group of more than 500 companies, says it has received private assurances from senior government sources that travel corridors will be in place from 29 June. The group, which has been campaigning to overturn the 14-day quarantine rule that came into force in the UK on 8 June, is pressing for the assurance to be made public. It is also calling for an amendment to the Foreign Office advice against all but essential travel. It follows Paul Charles, spokesman for Quash Quarantine, said, “We urge the government to signal to the travel industry publicly and urgently that this is the case ... We are still considering our options regarding legal action, including whether to join BA’s claim or launch our own action, but would prefer that 29 June is confirmed as soon as possible for the start of travel corridors. The industry needs urgent visibility on a timetable for travel to begin again.” In a letter sent to the home secretary on Monday, the Association of British Travel Agents (Abta) has asked the government to “urgently investigate travel corridors to establish transport links with countries identified as having appropriate levels of infection risk.”<br/>
An Israeli airliner with 22 passengers aboard became the first commercial flight to touch down in Cyprus after the east Mediterranean country reopened its airports following an 11-week ban aimed at curbing the spread of COVID-19. Israel is among a group of 19 countries with low coronavirus infection rates from which Cyprus is now permitting commercial flights. Arriving passengers must secure health certificates declaring them coronavirus-free three days before departure. The requirement is set to expire June 20 for people coming from 13 of those countries, including Greece, Finland, Norway and Germany. Tourism-dependent Cyprus is keen to resume commercial flights in hopes of salvaging the summer tourist season.<br/>
With the airline industry struggling amid the coronavirus pandemic, the situation is particularly worrisome for low-cost airlines, which rely on high seat occupancy and aircraft operating rates. As they resume more flights that have been grounded since February, some are using their aircraft for cargo transportation and others are trying to balance infection prevention with profitability until social distancing rules can be safely eased and air traffic demand returns to pre-pandemic levels. But some aviation industry experts say that low-cost carriers will likely need to start devising new business strategies instead of just weathering the storm by hoping that demand will eventually come back. Peach Aviation plans to resume services on all of its domestic routes by June 19 after having drastically reduced its schedule, while Jetstar Japan is also restoring flights in stages following extensive cancellations. The two carriers are both asking passengers to wear face masks and suspending all in-flight sales. Jetstar will not take reservations for middle seats, the same preventive measure taken by Japan Airlines, though its officials say the arrangement is "a temporary response" that will be impossible to sustain unless it gives up the low-cost business model and raises fares. Peach Aviation is not taking special measures for customer spacing, saying its aircraft have sophisticated ventilation systems, though industry officials say it will still be hard to make profits with the current level of air travel demand. Story has details.<br/>
Boeing logged orders for new freighter planes in May, but cancellations continued to outpace new business as the coronavirus roils the air travel industry. The company reported nine orders and twice as many cancellations, which included a switch of a delivery slot for a 747 freighter for UPS, the company said. The scrapped orders included 14 of its 737 Max planes, the beleaguered jet that has been grounded since March 2019 after two fatal crashes killed 346 people. Boeing’s backlog shrank to 4,744 planes, the lowest since 2013, including orders the company periodically removes from its tally due to financial trouble or other factors at some customers, a practice it didn’t have in place seven years ago.<br/>