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Airlines are preparing to cut thousands of workers and tap government loans as a surge of coronavirus cases and fresh government travel restrictions upend a nascent recovery in travel. After New York, New Jersey and Connecticut said last month that they would require people arriving from hot-spot states to quarantine for 14 days, United's reservations for travel within the coming month quickly began to slide, according to a presentation to United employees Monday. The drop-off has been most acute at United’s Newark, N.J., hub, where near-term net bookings were about 16% of a year earlier’s levels as of July 1, according to the presentation. Just weeks earlier, net bookings there had climbed to about a third of last year’s levels. The bookings metric, which is the difference between new reservations and cancellations, has also started to fall in other hubs, the airline told employees. That is a worrying sign for the struggling airline industry’s hopes for a recovery. Frontier Airlines also told employees this week that bookings had taken a hit, and that it is evaluating what schedule reductions it would need to make as a result.<br/>

Want to keep prices high? The textbook strategy is to keep a firm grip on supply, just like major oil producers regularly try to do. Much to travellers’ delight and investors’ dismay, however, airlines are likely to be even less successful at it. Restrictions on short-haul travel are being eased first, raising hopes of a faster recovery for low-cost operators: Their stock prices are down about 30% this year compared with a much larger 55% drop for legacy airlines. Cash is finally starting to flow in as households emerge from lockdowns eager to spend and travel. On Monday, eurozone retail-sales data showed a record rebound in May, mirroring similar readings in the US. Michael O’Leary, CE at Ryanair, said that the first July planes taking Britons to their summer spots in Spain and Italy were more than two-thirds full. But selling plane tickets isn’t enough. The big question for investors is whether, amid pressing health concerns, airlines can sell them at a price that makes them money. The data so far are preliminary, but there is little to suggest that this notoriously cutthroat industry will stop being cutthroat. In theory, low-cost carriers should have the flexibility to carefully bring back just the right number of seats to service those desperate for a sunny holiday and still keep airfares high. Unlike hub-and-spoke strategies, which need the network to be profitable as a whole, these airlines can decide not to restore those specific point-to-point routes that look unlikely to break even. In practice, however, periods of recovery can end up being even more competitive than boom times. Story has more.<br/>

Governments around the world are spending like never before to kick-start their economies in the wake of Covid-19 lockdowns, in many cases tying green initiatives to rescue packages, even as some industries say saving jobs should trump environmental concerns. Companies, including Air France-KLM and Austrian Airlines, are receiving government support aimed at mitigating the effects of the coronavirus pandemic and reducing carbon emissions. But their industries are resisting stimulus packages tied to climate policy, saying governments should prioritize reviving job growth and business activity. Governments are pushing for change in some of the worst-hit industries with a dual approach: Providing bailouts on condition that companies adhere to environmental terms and offering help to promote low-carbon solutions such as electric vehicles and renewable energy. In Europe, the green initiatives have triggered some pushback from businesses. The airline industry said proposals to attach environmental conditions to financial assistance were ill-timed. “Without a return to financial stability it will be impossible for airlines to bring new and more efficient aircraft into service, invest in sustainable aviation fuels or commit resources to improving the efficiency of their operations,” said the IATA. Climate activists and scientists hope the support for climate-friendly government spending will grow from the current commitments of 5% of the overall $12t in stimulus packages announced around the world. Green initiatives represent a smaller proportion of stimulus funds compared with the packages that followed the 2008-09 financial crisis.<br/>

Qantas and Jetstar will “significantly reduce” flights between Sydney and Melbourne, both ways, for the rest of July as the decision to close its border with Victoria has ripple-on effects across the aviation industry. International flights have also been disrupted by the federal government imposing a cap on international arrivals at Sydney airport. As of Saturday, only 450 passengers a day will be allowed to arrive, with a maximum of 50 passengers a flight. International flights have already been banned from landing in Melbourne. On Tuesday, Qantas said that it would slash the number of flights to and from Melbourne for the rest of the month. Qantas and Jetstar will “continue to operate limited flights for essential travel only”. The airline said the Sydney to Melbourne route was the most affected, but it still “expects to operate multiple flights per day”. Other routes, such as Melbourne to Byron Bay, will also be affected. The temporary border closure between NSW and Victoria will come into effect at 12.01am on Wednesday, with exemptions for work and for access to essential health services. However, a number of international airlines said the NSW-Victoria border closure would not yet affect routes. United and Air New Zealand, two of the airlines to still run regular international routes to Australia, said they had no plans to alter services.<br/>

Australia will likely slow down the return of its citizens from abroad, Prime Minister Scott Morrison said on Wednesday, as it grapples with a fresh outbreak of the coronavirus that has led it to isolate its second most populous state. The border between Victoria and New South Wales, the busiest in the country, was closed overnight and around 4.9m residents in the Victorian capital of Melbourne will return to partial lockdown at midnight following a spike in COVID-19 cases in the city. With the Victoria shutdown putting pressure on other states, Morrison said he would take a proposal on Friday to the national cabinet created to deal with the pandemic, seeking to slow down the return of Australian citizens and permanent residents by reducing the number of repatriation flights. The two groups have been the only arrivals allowed since Australia closed its international border in March. Neighbouring New Zealand has already taken that step, announcing on Tuesday that its national airline will not take new inbound bookings for three weeks to reduce the burden on overflowing quarantine facilities.<br/>

Indonesia's state-owned airport operator PT Angkasa Pura II plans to increase the number of available flight slots and normalize its operational hours in July, as it seeks to spur the recovery of the aviation industry that has been severely impacted by the ongoing health crisis. The airport operator has set a target to make 30% of flight slots available at its 19 airports across the country, from the previous 10 to 20 percent made available during the COVID-19 outbreak. For example, at the country’s main airport, Soekarno-Hatta International Airport in Tangerang, Banten, it aims to make 330 of the airport's 1,100 daily flight slots available. “Starting from July, we will focus on the recovery of aviation traffic to support economic activities in Indonesia,” said Awaluddin in an official statement on July 4. The plan is part of the company’s strategy to ignite the recovery of the aviation industry, which also includes reopening domestic routes and increasing flight frequency.<br/>

The Philippines is lifting the ban on non-essential travel and allow hair treatment in salons even as infections rose by a quarter in the past week. The task force on coronavirus has allowed Filipinos to resume non-essential travel to countries that will allow their entry, as long as they have round-trip tickets, visas and health insurances, presidential spokesman Harry Roque said Tuesday. Departing passengers will also be required to sign declaration forms acknowledging they are aware of risks of traveling, and to undergo quarantine upon their return. The Philippines has 46,333 confirmed coronavirus cases as of Monday, including 1,303 deaths. It has the second-highest number of infections in Southeast Asia after Indonesia, and has the fastest rise in cases since June 1 when the capital region reopened. The Philippines is set to reopen a terminal in its Manila airport on Wednesday, allowing eight airlines including Cathay Pacific and Emirates Airline to operate. <br/>

A consortium of six of the Philippines’ biggest conglomerates on Tuesday dropped a proposal to upgrade and operate the country’s main airport, as the impacts of the coronavirus hit the viability of the $2b project. Modernising the ageing and congested Manila airport was among the largest projects of President Rodrigo Duterte’s $180b “build, build, build” planned infrastructure overhaul, his signature economic policy. The consortium said it reviewed its plans in light of the impact of the coronavirus on global travel and proposed to the government changes to ensure the Ninoy Aquino International Airport (NAIA) project was viable. “Unfortunately, the government indicated that it is not willing to accept most of the consortium’s proposed options and the consortium can only move forward with the NAIA project under the options it has proposed,” the group said.<br/>

Travel bubbles are likely to be delayed after several countries eyed for the scheme have seen a resurgence of Covid-19 cases, according to the Civil Aviation Authority of Thailand (CAAT). CAAT DG Chula Sukmanop said even though talks about travel bubble arrangements are being thrashed out with a number of countries including China, Japan and South Korea, the scheme will be put on hold due to a spike in infections. He said Thailand will be closely monitoring the Covid-19 situation this month. The government has come up with a plan to launch travel bubbles with several countries with low coronavirus risk and initially the arrangements were to be adopted with the first group of international leisure travellers in August at the earliest. Chula said that local tourism is vital to rebuilding the country's aviation industry and noted that demand for domestic travel is picking up after airlines resume operations and business operators launch promotional campaigns to boost travel.<br/>

Solomon Airlines and the country's tourist authority are pushing for a travel bubble with other countries in Micronesia, Melanesia and Polynesia. The airline has grounded international flights until the end of August but the tourist group says the Covid-free status of a group of nations makes the time right to work on a travel bubble. Earlier this week, no cases of Covid-19 had been reported in Solomon Islands or Vanuatu, nor in the sovereign states of Kiribati, the Marshall Islands, the Federated States of Micronesia, Nauru, Palau, Samoa, Tonga and Tuvalu, the organisations said. Josefa Tuamoto, CE of Tourism Solomons said many countries in the wider region had adopted new screening protocols and are now better informed and equipped to diagnose and treat Covid-19 should an issue occur. "While Australia and New Zealand continue to explore options for a transtasman bubble, we believe there is merit in forming a travel bubble of intra-regional Pacific nation groupings," he said. In total the countries have a population of about 1.5 million but the bubble would cover a vast area of the Pacific. "An arrangement between Solomon Islands and Vanuatu for example, could help our countries in their preparedness before opening borders to larger leisure destinations," he said.<br/>

Boeing has reached settlement agreements in more than 90% of the wrongful death claims filed in federal court after the 2018 crash of a Lion Air 737 MAX in Indonesia that killed all 189 people on board, a court filing on Tuesday said. The fatal crash, followed within five months by another 737 MAX jetliner in Ethiopia, led to the worldwide grounding of the best-selling model and a corporate crisis that has included hundreds of lawsuits alleging the jet was unsafe and separate probes by the Justice Department and US lawmakers. Boeing has been racing to clear a number of remaining hurdles to win US FAA approval to fly the MAX again commercially, potentially later this year. In a filing in federal court in Chicago, Boeing said claims relating to 171 of the 189 people on board the crashed jet have been fully or partially settled. That includes 140 of the 150 claims filed in the US District Court for the Northern District of Illinois. A Boeing spokesman said the company remains committed to resolving the remaining cases.<br/>

Aircraft lessor Avolon Tuesday announced the cancellation of an additional 27 Boeing 737 MAX planes after cancelling 75 of the jets in April as it grapples with the fallout of the COVID-19 pandemic. It also cancelled one Airbus A330neo widebody jet, the fifth it has canceled since the start of the COVID-19 crisis, and deferred the delivery of three A320neo aircraft until 2022. The lessor said it has reduced its near-term commitments by over 140 aircraft since the start of the year. The 737 MAX has been grounded since March 2019 after two fatal crashes in five months. However, Boeing and the U.S. Federal Aviation Administration last week completed certification test flights, a key milestone toward the plane’s return to service. Avolon, which had been due to purchase nine of the 27 MAX jets via sale-and-leaseback deals with airlines, still has 37 MAX jets on order. Boeing said it had come to an agreement with Avolon to further restructure its order book as part of an ongoing effort to help airlines and leasing companies “balance supply and demand with market realities” in light of the COVID-19 pandemic.<br/>