general

The skies are clearing up a bit for airlines as states ease lockdown measures and travellers slowly return to airport check-in lines. After a pronounced slump in air travel in the spring, airlines are adding back flights as they hope to salvage some lost revenue during the key summer travel season. As of Monday, investors had driven shares for the major airlines back to their early March levels, before the coronavirus forced the US economy to a standstill. The airline industry has essentially been grounded for months after a plunge in passenger demand forced American Airlines, United Airlines and others to slash flight schedules. Even with the recent surge in airlines shares, the NYSE Arca Airline index remains well below its 2020 high from mid-February, when restrictions on international travel began to take hold. Analysts don’t expect passenger traffic to get back to 2019 levels anytime soon. Last week, American Airlines said that next month it will operate 55% of the US flights that it ran in July 2019. United will run a more modest 30% of its schedule compared with a year ago. But for investors, those small signs of recovery were enough to warrant jumping back into airlines stocks. Meanwhile, vacation destinations in Florida, the Gulf Coast and mountain states are seeing some of the strongest resurgence in demand. United plans to resume about 130 nonstop routes in July that it had suspended. “While it is unlikely that we are out of the woods on COVID-19, improving passenger flow numbers suggest some consumers’ desire to travel is outweighing COVID-19 concerns,” said Citi analyst Stephen Trent, in a note to investors.<br/>

Latin American countries should quicken steps for airlines to renew domestic flights no later than July before more companies are forced to declare bankruptcy or close, a high-ranking official of IATA said on Thursday. The trade group estimated losses for airlines in Latin America at $4b this year, with total losses for the industry expected to reach $84b globally. Latin America has imposed stricter travel restrictions than most regions to fight coronavirus. Colombia and Argentina have banned international flights through to Aug. 31, while other countries including Peru, Ecuador, El Salvador and Panama have also grounded all flights and repeatedly extended those bans as the disease has spread. Airline revenues from passenger transport in Latin America are expected to fall $18b this year. Some 93% of regular flights are grounded, while operations in some countries have been practically stationary for four months, said IATA’s regional vice president for the Americas, Peter Cerda. “They can’t hold out beyond July, we have to begin planning for domestic flights in Latin America to be in the air soon and then shortly restart international flights,” Cerda said. He highlighted the urgency of restarting flights in Argentina, Colombia, Peru and Panama, and also called on governments across the region to implement processes which will allow airlines to transport passengers safely. Cerda called on governments to financially support airlines which have already exhausted their two to three month liquidity limits.<br/>

The end of hand baggage on planes was signalled by the government Thursday as it "strongly" advised passengers and airlines to store baggage in the hold to combat the spread of coronavirus. New guidance from the Department for Transport (DfT) said travellers should check in all baggage before boarding flights because this would minimise its contact with passengers and speed up embarkation and leaving the plane. The advice for passengers and airlines is seen as a precursor to getting people back in the air safely, with plans being drawn up for "air bridges" to allow holidaymakers to bypass quarantine and fly to "low-risk" destinations, possibly by early July. The move, however, sparked fury from Michael O'Leary, CE of Ryanair, who is jointly taking legal action with IAG, BA's parent company, and Easyjet to overturn the Government's "ineffective" and "useless" 14-day quarantine. O'Leary said the hand baggage move was "nonsensical" and "rubbish" because each bag would be touched by at least eight staff, from baggage handlers to loaders, on each journey if it was transported in the hold. "This guidance was issued today by the Department of Idiots with no consultation with the industry or anyone, just like with quarantine," O'Leary said. "Quarantine is ineffective and useless, 'air bridges' are bonkers and now we're being told to carry no bags onto planes. Try telling that to the female passengers of Europe."<br/>

London Heathrow airport said it has begun cutting front-line jobs after a recovery in passenger numbers was delayed by Britain’s introduction this week of a quarantine rule for incoming travelers. Europe’s busiest airport will initially seek voluntary departures after agreeing a severance plan with unions, it said Thursday. The hub has already eliminated 500 management posts. The quarantine plan has sparked uproar among UK airlines and airports. Heathrow CEO John Holland-Kaye warned previously that the 14 days of self-isolation for arriving passengers would put one-third of the hub’s 7,000 posts at risk if Britain failed to say when the policy might be lifted. “Throughout this crisis, we have tried to protect front line jobs, but this is no longer sustainable,” he said in the release. “While we cannot rule out further job reductions, we will continue to explore options to minimize the number.” A Heathrow spokesman said the airport has 5,500 front-line workers but that the number of job losses hasn’t yet been determined while it consults with labor groups. Posts affected will include security officers, baggage-trolley operatives and engineering and maintenance staff. A third of the airport’s 1,500 management positions were cut previously.<br/>

Norway will no longer require airlines to leave middle seats on planes empty, a measure previously introduced to reduce the risk of contamination with the novel coronavirus, the country’s transport minister said on Thursday. The Nordic country, which advised its citizens in March not to travel abroad, is to open its borders for tourists coming from Denmark, and plans to update travel advice for other countries by June 15.<br/>

Chubu airport in central Japan will resume some international flights from next Tuesday after operations were suspended for more than two months due to the spread of the novel coronavirus, the operator said Thursday. Philippine Airlines plans to fly three round-trip flights between the airport and Manila in June and continue the service into July, although the schedule has yet to be decided, Central Japan International Airport said. The airline has not flown to or from Chubu airport in Tokoname, south of Nagoya, Aichi Prefecture since March 23. Finland's Finnair is also scheduled to restart flights to and from the airport in July, the airport's operator said. All international flights have been suspended at the airport since April 1 due to the virus outbreak.<br/>

Qatar has directed ministries and all other government and public entities to reduce costs for non-Qatari employees by 30% as of June 1, either via pay cuts or lay-offs, a finance ministry document seen by Reuters showed. The document also outlined other cuts affecting Qatari employees, including to benefits, which come as the world’s top liquefied natural gas exporter feels the bite of a global coronavirus downturn that has sapped energy demand. Expatriates make up the majority of many Gulf states’ populations, including in tiny Qatar, where the workforce of everything from its banks to airlines are filled out by foreign nationals.<br/>

Boeing has told its biggest supplier to freeze a recently restarted production of parts for the 737 MAX to prevent creating a glut of new jets for airlines adjusting to the slump in demand amid the coronavirus pandemic. Spirit AeroSystems, which makes the fuselage and other parts for the MAX, said late Wednesday it had been asked by Boeing to halt efforts on four MAX jets and avoid starting work on 16 more planes. The moves highlight a sharp industry divide over how many planes Boeing and Airbus should make. Executives are split over whether airlines will opt for new planes or hold onto older aircraft as they recover from depressed demand. Boeing said it is continuing to resume the 737 MAX production it began two weeks ago, but has temporarily asked its biggest supplier to halt further work, likely reducing the number of new planes it makes this year. The primary reason doesn’t appear to stem from any new complication in securing essential federal safety approvals to return the MAX fleet to the air. “To reflect the slower ramp and align our supply inventories, we’re working closely with our suppliers to adjust delivery schedules and rate profiles as appropriate,” a Boeing spokesman said Thursday.<br/>

Airbus is set to ditch its planned derivatives market for the airline industry to hedge against highly volatile ticket prices as the European aircraft manufacturer moves to conserve cash. The company is reviewing plans to launch its full-scale futures and options market, called Skytra, that had been due to launch before the end of the year, said two people involved in the discussions. It will instead focus on licensing specialist data and indices for the air travel industry, the people said, in a significant scaling back of the two-year project. The decision comes as Airbus seeks to cut investment in all but core businesses in response to a sharp drop in demand for new aircraft. The contracts were intended to track the daily changes in the price of air travel and help airlines hedge with the volatility of fares. Even before its launch, many executives in the derivatives industry had questioned Airbus’s decision to set up its own trading venue, a far step from its main business of making planes. Typically, companies looking to hedge their exposures to changes in interest rates and fuel prices use banks or exchanges such as CME Group and Intercontinental Exchange.<br/>