US airlines charged into debt markets after the pandemic began in an effort to weather an unprecedented collapse in demand. Investors have snapped up deal after deal, their money secured by jets, routes and take-off and landing slots all worth billions on paper. But with a recovery in air travel years away, how much could aviation assets fetch in a sale today? Lenders acknowledge little appetite for repossessing aeroplanes that, because capacity outstrips demand for air travel, can only be sold or leased at a discount, or worse, will cost money as they sit in storage. Meanwhile, slots, gates and routes — SGR in industry parlance — retain value as long as an airline continues to operate, or if another airline wants to buy them. The pandemic increases the likelihood of airline bankruptcies while reducing the number of ready buyers, as survivors struggle to preserve cash. “Aircraft, and slots, gates and routes, no longer have the same value they did at the end of January this year,” said Ernie Arvai, president of AirInsight Group. “Aircraft, as with many other assets, are subject to the laws of supply and demand.” Or as Nick Pastushan, CE of aviation finance company Warbird Capital, put it: “You might have a very wide spread between what’s on paper and what a third-party investor would be willing to write a cheque for.”<br/>
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More travellers took to the skies over the July 4 weekend, but airlines are still facing paltry demand compared with last summer because of the coronavirus pandemic. An average of 661,811 people a day passed through Transportation Security Administration checkpoints in the first five days of July, a more than 90% jump from the same period last month and more than five times the number logged during the first five days of April, TSA data released Monday showed. TSA’s holiday weekend traffic is down more than 72% from the same period of 2019, underscoring airlines’ struggle to attract travellers amid the pandemic this summer, usually the peak travel period. American Airlines, for example, carried about 211,000 passengers on July 2, its busiest day since March, but the airline carried more than 600,000 travellers a day during the holiday weekend last year. Airlines have taken a number of steps to encourage bookings, such as waiving change fees if customers choose to forgo trips this summer as coronavirus cases rise and travel next year instead.<br/>
For years, flight schools, airlines and experts promised young recruits a job that was lucrative and secure because thousands of pilots in their late 50s and early 60s would retire in the coming years and demand for travel would continue growing. The profession is still stacked with older aviators, but airlines are expected to make deep cuts in the coming months, and the pilots most at risk are those who are just starting out. While air travel has recovered somewhat, it is still only about a fourth of what it was last year, according to airport security data. Most experts say the recovery will be slow and uneven because of a patchwork of travel bans and the unpredictable nature of the pandemic. The recent surge in coronavirus infections has already forced some governors to delay reopening their state economies and to shut down bars and other businesses. If cases continue to increase, as some public health experts fear, air travel could become a lot less appealing. To prepare for that uncertain future, the nation’s largest airlines are stockpiling billions of dollars in cash. If ticket sales do not recover soon, American Airlines, Delta, Southwest and United have said they could resort to job cuts as soon as Oct. 1, the first day when airlines are free to eliminate jobs and reduce hours under a stimulus law that Congress approved in March. Airlines could lay off, furlough or reduce the hours of tens of thousands of pilots, cuts that would disproportionately fall on those who have less union seniority and training. Major airlines have already stopped hiring pilots after posting hundreds of openings in Q1, according to Future & Active Pilot Advisors, a consulting firm.<br/>
As COVID-19 cases surged in many parts of the world, the island nation of the Seychelles was looking good: 70-plus straight days without a single infection. Then the planes arrived. Two chartered Air Seychelles flights carrying more than 200 passengers also brought the coronavirus. A few tested positive. Then, between June 24 and 30, the country’s confirmed cases shot from 11 to 81. Now the Indian Ocean nation has delayed reopening for commercial flights for its lucrative tourism industry until Aug. 1, if all goes well. African nations face a difficult choice as infections are rapidly rising: Welcome the international flights that originally brought COVID-19 to the ill-prepared continent, or further hurt their economies and restrict a lifeline for badly needed humanitarian aid. “This is a very important moment,” the WHO’s Africa chief, Matshidiso Moeti, told reporters on Thursday, a day after Egypt reopened its airports for the first time in more than three months. Other countries are preparing to follow. That’s even as Africa had more than 463,000 confirmed virus cases as of Sunday and South Africa, its most developed economy, already struggles to care for COVID-19 patients. But Africa's economies are sick, too, its officials say. The continent faces its first recession in a quarter-century and has lost nearly $55b in the travel and tourism sectors in the past three months, the African Union says. <br/>
China's aviation regulator said on Monday it has suspended a US-Bangla Airlines route between Dhaka and Guangzhou for one week due to some passengers on a recent flight having tested positive for COVID-19. The Civil Aviation Authority of China said that five passengers on a flight to Guangzhou, the capital of southeastern Guangdong province, tested positive for the coronavirus on June 28.<br/>
Vietnam plans to freeze approval for new entries to the airline industry until 2022, a move that threatens to solidify the virtual duopoly already in place. The chilled business climate caused by the novel coronavirus makes supporting existing airlines the top priority, Transport Minister Nguyen Van The said. Currently five commercial airlines operate within Vietnam, but two top players dominate the market. With Australia's Qantas Airways offloading its 30% stake in Jetstar Pacific, a joint venture with Vietnam Airlines, the state's move to block additional competition has raised concerns about higher ticket prices. Vietnam Airlines and VietJet Air command a combined 75% market share. Jetstar Pacific holds another 10% or more of the market. Foreign competitors face high barriers to entry. Among other restrictions, foreign ownership of a domestic airline is capped at 34%. "It's difficult to gain approval from authorities in the first place," said an insider at an airline. Malaysia's AirAsia Group tried four times to enter Vietnam's market with no success. Unlike other major Southeast Asian economies that have welcomed foreign LLCs, Vietnam does not have foreign-owned budget airlines operating in the market.<br/>
Vietnam’s most critically ill Covid-19 patient, a British pilot who later developed other severe health complications, was declared free of Covid-19 on Monday. Although doctors said he's fit for discharge and no longer needs to stay in quarantine, he's still being kept at Cho Ray Hospital in Ho Chi Minh City for physical therapy. Stephen Cameron, 43, is set to return to his country by a special repatriation flight on Sunday, the Health Ministry said. He had spent over 100 days in hospital, but made a miraculous recovery after being comatose for more than two months and constantly on ventilators, gradually regaining consciousness before sitting up and eating on his own. "Patient 91" had been diagnosed with the infection on March 18 and was cured of the novel coronavirus after two months at the HCMC Hospital for Tropical Diseases. <br/>
Operators of Rolls-Royce-powered Boeing 787s are set to be instructed to conduct inspections of certain Trent 1000 low-pressure turbine discs, over a possible cracking risk. Assessment of certain discs in service has revealed that rubbing contact with interstage static seals can lead to cracks in the front seal fins – which, in turn, could lead to cracks in the disc. As an interim measure, the EASA is preparing to mandate an inspection of seal fins on the third- and fourth-stage discs – with specific part numbers – in the low-pressure turbine. The one-time ultra-high sensitivity fluorescent penetrant inspections should take place at the next engine refurbishment shop visit, according to a proposed EASA directive. If any cracking is indicated on the seal fins, the disc parts must be replaced. EASA warns that the condition could lead to propagation of cracking, possible low-pressure turbine disc failure, and expulsion of high-energy debris.<br/>