China's aviation industry sank further into the red, losing 34.25b yuan in Q2, only slightly narrower than in Q1, underlining the colossal financial impact from the coronavirus pandemic. In the first quarter the industry, which includes airlines, airports and other aviation companies, lost 38.1b yuan, according to data released by the CAAC on Friday. China's aviation industry has been recovering faster than most countries emerging from the COVID lockdowns, underpinned by a steady recovery in the domestic travel market after the epidemic was largely brought under control. But passenger numbers showed the sector is still way below pre-COVID-19 levels, according to the latest official data. June passenger numbers fell 42.4% from a year earlier to 30.74m, the CAAC said, although that was better than a 52.6% decline in May. In the first half this year, total passenger numbers dropped by 45.8% from a year ago.<br/>
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Mexico's government Thursday ruled out a financial rescue of the country's airlines, which have been hammered by a sharp drop in global demand for travel and restrictions imposed due to the coronavirus pandemic. Aeroméxico announced in late June the start of a restructuring process under Chapter 11 bankruptcy proceedings in the US, while rival Interjet has also been struggling under the burden of coronavirus-imposed restrictions. Javier Jimenez, Mexico's Minister for Communications and Transportation, told reporters the government was in contact with the industry and exploring options to help them but said there would be no offers of a financial rescue. "There will be no rescue, but there will be support," said Jimenez, reiterating the stance of the administration of President Andres Manuel Lopez Obrador. The leftist leader has repeatedly ruled out private sector rescues, saying past bailouts only helped the rich and saddled Mexico with unsustainable debt. "From the outset, it was said the country is not in a position to do it, nor minded to do it, because the bailouts are still being paid for by Mexicans, peso by peso," he added.<br/>
Morocco will start gradually reopening its air and maritime borders next week after one of the world’s strictest border lockdowns, which trapped tourists inside the country and left thousands of Moroccans stranded abroad and unable to come home. Only Moroccan citizens and expatriates living in Morocco will be allowed to travel in the first stage of the reopening starting July 14, according to a government statement Thursday. National airlines will schedule as many flights as necessary to return Moroccans living abroad as well as foreigners living in Morocco. Passengers are required to present both a PCR virus test taken within fewer than 48 hours of the flight, as well as an antibody test, before boarding planes heading for Morocco. Moroccan citizens and foreign residents will be able to leave Morocco by air and sea. Morocco abruptly suspended all international passenger flights and passenger ships to and from its territory on March 15. Tourists scrambled to get out — and Moroccans abroad struggled to come home.<br/>
US aviation regulators are investigating Boeing after five engineers in a controversial aeroplane certification programme complained of pressure from the company. The US FAA formally asked Boeing in November 2018 to address reports from engineers in the Organization Designation Authorization programme that they had experienced “interference or conflicting duties” between their roles as Boeing employees and designated representatives of the federal agency. The revelation again puts a spotlight on Boeing’s internal culture and the ODA programme, under which the US regulator has outsourced portions of its safety review regime to the companies that it oversees. Both have come in for fierce criticism since two deadly crashes of Boeing’s 737 Max aircraft, which is currently grounded. The FAA also issued separate letters of investigation to Boeing in June 2019 and March, informing the Chicago plane maker it potentially violated regulations governing the ODA programme. The agency did not accept Boeing’s response to the first letter and is waiting for an answer to the second. Boeing said that it takes “allegations of undue pressure very seriously” and is working to resolve them with the FAA.<br/>
The aviation-industry crisis triggered by the coronavirus pandemic is exacerbating a yearslong move by airlines away from big jets. Rolls-Royce Holdings, a bellwether for the market for so-called wide-body aircraft, said it raised a further GBP2b to help shore up its liquidity as demand for its engines wanes among airline customers. The UK supplier specializes in making and servicing engines for the industry’s biggest aircraft. It said Thursday that its revenue will be lower than forecast until at least 2027 as it cuts back production and has fewer engines flying as a result, cutting back revenue related to engine servicing and maintenance. Shares fell as much as 9.5% in London. Airbus, meanwhile, said late Wednesday it had booked 21 orders for wide-bodies, but received cancellations for 22 in the first six months of the year. Airlines have more recently started to add back some capacity. But the type of demand that is returning—typically for shorter intracontinental or domestic routes—threatens to exacerbate a yearslong shift by airlines into smaller, nimbler jets. Airbus said that it received 344 new orders for narrowbodies, or single-aisle jets, with 45 cancellations in the first six months of the year. Airbus and Boeing have been pivoting in recent years to adjust to airline customers’ new reluctance to buy their biggest jets. Instead, carriers have flocked to smaller, single-aisle planes that are more fuel efficient, more flexible on range and can be filled up with passengers more easily.<br/>
In most industries, service revenues are the kind of resilient income stream companies want in a crisis. Aviation is the exception—and Rolls-Royce the public face of it. On Thursday, the engine maker’s London-listed shares plunged about 10% after it estimated that cash outflows will total GBP4b in 2020, compared with analyst expectations of GBP1.2b. A one-off change to invoicing practices is one big reason. The more serious one is that engine flying hours are likely to fall 55% this year. About 90% of Rolls-Royce’s flagship Trent engines are under service agreements whereby airlines make steady maintenance payments based on how much they are used. Unlike plane makers Boeing and Airbus, which will make money from each plane that they manage to keep in their order backlogs, engines are often sold at a loss. Manufacturers make up the difference over time in the form of aftermarket repair and maintenance revenues. History shows that, during downturns, this income is far more volatile than aircraft sales and airfare revenues, because carriers park a big chunk of their fleets and forgo shop visits. Rolls-Royce said Thursday that engine receipts will fall short for the next seven years. Yet the outlook wasn’t as bad as it could have been. The company said free cash flows should amount to “at least” GBP750m by 2022, not far off its much-touted pre-pandemic target of GBP1b for 2020.<br/>
Over 50 years after Concorde first took to the skies, a brand new supersonic jet is preparing for lift off. Denver based start-up Boom Supersonic has announced it will roll out XB-1, a 1:3 scale prototype of its upcoming supersonic commercial jet Overture, on October 7, with test flights beginning in 2021. The move will help to pave the way for the first commercial supersonic flights since the legendary delta-wing passenger airliner made its last flight in 2003. "XB-1 is the first step in bringing supersonic travel back to the world," said Blake Scholl, founder and CEO of Boom Supersonic. "Flights at twice the speed mean we can travel twice as far -- bringing more people, places, and cultures into our lives." According to Boom, the purpose of XB-1 is to to demonstrate and prove the "key technologies" for Overture, such as advanced carbon fiber composite construction and computer-optimized high-efficiency aerodynamics. The company has also released images of the experimental aircraft, described as "history's fastest privately developed aircraft," in the hangar, including the completion of its wing installation. The results of the XB-1 test program, which claims to be 100% carbon neutral, will allow the company to fine tune the design for supersonic airliner Overture.<br/>