US airlines hammered by the catastrophic loss of passengers during the pandemic are confronting a once-unthinkable scenario: that this crisis will obliterate much of the corporate flying they’ve relied on for decades to prop up profits. “It is likely that business travel will never return to pre-Covid levels,” said Adam Pilarski, senior VP at Avitas, an aviation consultant. “It is one of those unfortunate cases where the industry will be permanently impaired and what we lost now is gone, never to come back.” At stake is the most lucrative part of the airline industry, driven by businesses that accepted -- however grudgingly -- the need to plop down a few thousand dollars for a last-minute ticket across the US or over an ocean. While millions of customers fly rarely, road warriors are constantly in the air to close a deal, depose a witness or impress a client. Business travel makes up 60% to 70% of industry sales, according to estimates by the trade group Airlines for America. That’s under threat in the wake of an unprecedented collapse in passengers that started four months ago. Half the respondents in a survey of Fortune 500 CEOs said trips at their companies would never return to what they were before Covid-19, according to Fortune magazine.<br/>
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Air travel demand is easing as coronavirus cases spike in the southern US, according to data released Monday, souring airlines’ hopes of a summer rebound that would help generate cash to weather the pandemic. In the week ended July 19, 4.65m people passed through checkpoints at US airports, according to the TSA, down more than 4% from a week earlier and the first weekly percentage drop since April. Air travel is up sharply from more than five-decade lows hit in April, but airlines are facing softening demand amid new cases, quarantine orders for arriving travellers in New York and elsewhere, and delays in reopening some states to stop the highly contagious virus from spreading. The peak summer season is always crucial to airline revenue but it is even more important this year with a grim outlook for corporate travel this fall because of the pandemic. Delta last week said it would halve the number of additional flights planned for next month to 500 a day and CEO Ed Bastian warned that some business travel might never return after the pandemic. “Demand has stalled as the virus has grown, particularly down here in the South, across the Sun Belt, coupled with the quarantine measures that are going in place in many of the Northern states,” Bastian said last Tuesday. “Those two factors are causing consumers to pause.”<br/>
A US House of Representatives Committee on Monday asked the Federal Aviation Administration to disclose details of an employee survey on the agency's safety culture after two fatal crashes of Boeing 737 MAX airplanes raised questions about the agency's actions. FAA Administrator Steve Dickson was asked in a letter to share the outcome of the December 2019 survey that asked employees how they felt about a long-standing agency program called Organization Designation Authorization (ODA) that delegates some new airplane certification tasks to Boeing employees. Peter DeFazio, who chairs the House Transportation and Infrastructure Committee, and Rick Larsen, who chairs a subcommittee on aviation, wrote that it was essential that FAA officials had "the authority, resources, willingness and support from FAA's senior management to thoroughly and aggressively manage the ODA program." An FAA spokesman said the agency would respond to the lawmakers. The letter, made public Monday, noted that the Transportation Committee investigation has already determined that issues surrounding the ODA "played key contributing roles in the regrettable 737 MAX crashes of Lion Air flight 610 and Ethiopian Airlines flight 302." Reviewing the survey data "will help our committee properly fulfill our congressional role overseeing the FAA and its efforts to help improve the safety culture at the agency," the lawmakers added. The letter also referenced a Transportation Department Office of Inspector General report that noted the FAA sent two letters of investigation to Boeing in June 2019 and March 2020 "related to potential undue pressure of unit members."<br/>
As UK airports begin their busiest week since March, airlines are demanding a one-year “holiday” from Air Passenger Duty (APD) – the tax that adds at least GBP13 to adult air fares. More people are now flying from the UK than at any time since lockdown began in March. EasyJet says it expects to fly two-thirds more travellers this week compared with last. Far fewer passengers are being carried year-on-year, though, with easyJet planning to operate only 30 per cent of last year’s schedule in July, August and September 2020. Three of easyJet’s top destinations are in Spain: Palma, Alicante and Malaga. Amsterdam is the other high-performing location in terms of passengers. This week is Ryanair‘s busiest from the UK since mid-March, with passenger numbers in the hundreds of thousands. In the corresponding week last year, the figure was one million-plus. Ryanair says besides Spanish destinations, two Polish cities, Krakow and Warsaw, are among its best performing. The top destinations from Manchester and Stansted airports, both of them served by Ryanair and Jet2, match easyJet’s: the trio of Palma, Alicante and Malaga. In fourth and fifth places are Tenerife in Spain’s Canary Islands and Faro in Portugal – even though the Foreign Office currently warns against travel to the Portuguese mainland, and holidaymakers returning to the UK must quarantine for two weeks.<br/>
Scottish holidaymakers can jet off to Spain without quarantining on their return after SNP ministers finally announced that restrictions will be lifted this week. Humza Yousaf, the Justice Secretary, unveiled the about-turn following a "thorough review" of Covid-19 "prevalence rates" on mainland Spain and the Spanish islands. The change means Spain will be added to 57 other countries from which incoming travellers will not have to isolate when they arrive in Scotland. Nicola Sturgeon blamed higher infection rates in Spain when she controversially excluded it from her list of "air bridge" destinations earlier this month. Tourism and aviation chiefs warned the exclusion of one of Scotland's most popular holiday destinations would result in “mass redundancies”, and could see airlines moving their operations elsewhere. Gordon Dewar, CE of Edinburgh Airport, last night welcomed the SNP dropping the previous "unworkable blanket quarantine policy" but warned: "We still have to unfortunately accept that the normally busy summer season is effectively gone and that will directly impact on jobs in the sector." Scotland's travel agents also welcomed the move but said "the short term price of the delay in adding Spain to the list has been the cancellation of a plethora of flights between Scottish airports and Spain."<br/>
Express COVID-19 testing will be available for some passengers at Russia’s busiest airport from Monday as part of a pilot project aimed at allowing air travel and tourism to resume safely. The Russian Direct Investment Fund (RDIF) and Moscow’s Sheremetyevo Airport said the diagnostic tests, which give results in one hour, would be available for all passengers on domestic flights at Terminal B on Monday, as part of a wider plan to create coronavirus-free airport hubs. The portable testing system, which fits in two small suitcases, is already used at production sites by some Russian companies and was deployed at Russia’s World War Two Victory Day military parade, held on June 24, the RDIF said. “If you’re at an airport and you need to be tested for three hours, this is not a workable solution,” RDIF head Kirill Dmitriev told Reuters in an interview last week, adding the project aims to provide test results “within an hour”. “We are doing a pilot in an airport in Japan and in Moscow, Sheremetyevo, and in an airport in the United Arab Emirates.” Russia has not yet confirmed the date that international flights will return, with restrictions in place for many people travelling in and out of the country. But the RDIF said express coronavirus testing would be available from July 27 for domestic and international flights at Sheremetyevo’s Terminal D.<br/>
Southeast Asian low-cost carriers, a key growth engine for planemakers and leasing companies for a decade before the pandemic, are faltering financially as demand plunges, raising questions over whether they can replace and double their fleets. Auditors for Malaysia's AirAsia Group and Vietnam's VietJet Aviation are concerned about cashflows and funding, while Indonesia's Lion Air has put the brakes on a planned flotation. Even before the pandemic, bankers and leasing bosses were worried about whether aircraft ordered during a decade-long buying frenzy by Southeast Asian carriers would end up being delivered. The carriers, which have offshoots in multiple countries, have 938 planes on order and lease most of their existing fleets of 476 planes, according to Aviation Week data. Budget airlines with large domestic operations are well-placed for a post-pandemic recovery, despite having less financial support than state-owned rivals. Their lower cost structure helps reduce the rate at which they burn cash and gives them the flexibility to benefit first from any recovery, analysts say. But with borders shut and economic growth stunted, a return to the low-cost international travel needed for them to afford all of the planes they have on order looks increasingly doubtful - a worrying sign for the companies that make and lease aircraft. "One area that I'm concerned about generally is just those low-cost carriers who ordered too many aircraft," Robert Martin, CE of Singapore-based lessor BOC Aviation said. "I think there will still be work to be done on those during the third quarter," he said, referring to negotiations over current lease contracts.<br/>