American Airlines shares jumped more than 16% on Friday after the carrier said an uptick in travel demand is helping trim its daily cash burn to $40m from a previous forecast of $50m. The carrier said that it aims to wipe out its cash burn by the end of the year. American reiterated a forecast that it still sees revenue in Q2 down 90% from a year ago, when it posted sales of close to $12b. The airline last week said it plans to add more flights, particularly for the domestic market as some demand returned. Through June 8, American has been flying an average of 129,000 passengers a day and its flights are 62% full, though capacity is down 70% from a year ago. In May, the carrier said it flew 85,000 travellers a day with a load factor of 47% and capacity off 75% from May 2019.<br/>
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American Airlines said Friday that it planned to pledge its loyalty program as collateral for a $4.75b government loan as it seeks to shore up capital to manage through the coronavirus pandemic. American, which is the first to provide details of the terms it is discussing with the government, expects Q2 revenue to be down about 90%. While demand for travel has started to rise as parts of the country have reopened, with over 500,000 people passing through security checkpoints Thursday — the highest since March — traffic is still down more than 80% from a year ago. On Friday, American said that its loyalty program is worth between $19.5b and $31.5b and that it would pledge a significant portion as collateral.<br/>
Cathay Pacific will slowly reinstate capacity in June and July, even as it expects capacity in the subsequent months to continue to be “substantially reduced”. This also marks the first time since the coronavirus outbreak emerged that the carrier will be adding capacity to its already-pared down network. For June, Cathay and sister carrier Cathay Dragon will operate 3.5% capacity, marginally higher than the 3% capacity operated in May. This will increase again in July, when both carriers will operate at approximately 9.4% capacity. Cathay group customer and commercial chief Ronald Lam stressed that the plans to reinstate capacity “remain contingent on the further relaxation of travel restrictions around the world and are subject to change”. Adds Lam: “We will continue to monitor demand and adapt our passenger schedule accordingly, though we expect we will be operating a substantially reduced schedule over the coming months.” <br/>
MPs have labelled BA “a national disgrace” for trying to slash its staff terms and conditions during the coronavirus crisis. In a scathing report, the Commons transport select committee accused BA of making “a calculated attempt to take advantage of the pandemic” through moves that could lead to up to 12,000 staff being laid off and the remaining 30,000 put on inferior contracts. Although the report said some redundancies at BA and other airlines might be inevitable, it condemned the flagcarrier, which has been granted a GBP300m Bank of England loan and received GBP35m a month to furlough thousands of employees. In conclusion, MPs said: “The behaviour of British Airways and its parent company towards its employees is a national disgrace. It falls well below the standards we would expect from any employer, especially in light of the scale of taxpayer subsidy, at this time of national crisis.” BA issued formal notice to unions at the end of April of its plans to lay off staff and reduce terms and conditions. The 45-day minimum period for consultation will pass on Monday, although immediate redundancies are not expected. The transport committee chair, Huw Merriman, said: “The impact of coronavirus may sadly mean that the loss of some jobs in the aviation sector is justified. The behaviour of British Airways and its parent company, IAG, is not.”<br/>