general

The airline industry pushed back its hopes of a rebound in traffic levels to pre-pandemic levels amid disappointing passenger numbers since lockdowns lifted. A full recovery is unlikely before 2024, a year later than it recently predicted, the IATA said on a call Tuesday. Traffic is not growing as fast as airlines are adding capacity, the industry’s main trade group added. “The demand and the revenues are not rising as quickly as expected so airlines are still burning cash,” IATA chief economist Brian Pearce said. “The situation is deterioriating relative to what we had expected.” Carriers had been pinning their hopes on catching the tail-end of the profitable summer season but disruptions continue amid viral flare-ups in countries like France and Spain. The restart of travel could be the most difficult time for airlines as they begin to incur higher costs when there are insufficient passenger numbers to generate profit. The majority of airlines likely won’t return to positive cash flow until 2021, Pearce said. Business travel is not yet recovering in line with a rebound in industry confidence, said Pearce, suggesting that behaviors have changed. There will likely be less corporate travel to company offices in the future, he said, with consequences for business models which often depend on high-paying executive fliers to cover the shortfall on economy tickets. Although the level of traffic showed an improvement in June from prior months, it was still 86.5% down from a year earlier.<br/>

Asian airlines carried only 724,000 international passengers in June, a 98% slump from a year earlier, as restrictions on movement suppressed air travel, the Association of Asia Pacific Airlines said. Average passenger load factor was just 36.3%, AAPA said in a statement Tuesday. The group’s director general, Subhas Menon, said the prospect of a recovery in the second half of the year is increasingly uncertain as governments grapple with a resurgence of infections and reimpose lockdowns. “The industry is in a perilous condition,” he said. “Airlines in the Asia Pacific region are rapidly depleting cash reserves and incurring massive losses.” Asia Pacific airlines carried 61m passengers in the first half of the year, down 68% from a year earlier as travel demand evaporated in the second quarter, Menon said.<br/>

China Southern on Tuesday rolled out an 'all you can fly' pass, becoming the latest in a fleet of cash-strapped carriers to join a promotional craze that analysts say has helped revive a coronavirus-ravaged air travel market. At least eight of China's dozens of airlines have introduced similar deals since June, often priced around $500 for in some cases unlimited flights. Industry watchers say the packages have been a shot in the arm, with costs offset by otherwise empty seats being filled in a country where daily flights last month recovered to 80% of pre-coronavirus levels. The global aviation industry is keenly eyeing China as a pilot for air travel recovery trends, as the country reopened its economy months earlier than other places after managing to bring the pandemic mostly under control - at least for now. But Luya You, transportation analyst at BOCOM International, said these promotional packages - ranging from unrestricted flights to an array of terms and conditions - can only stimulate demand when coronavirus risks are already sufficiently reduced. "While these packages may work in domestic markets, we do not expect similar rollouts for outbound routes anytime soon," she said.<br/>

The association representing FedEx aircrew has called on the US company to suspend flights to Hong Kong, saying the city’s stricter measures against a third wave of Covid-19 infections exposes them to “unacceptable risks”. The Air Line Pilots Association (ALPA) made the move after three FedEx pilots, who tested positive for Covid-19, were “forced” into hospital for treatment. Close contacts were also put in government quarantine camps “under extremely difficult conditions”, it said. Forced hospital admissions and isolation for close contacts are standard procedure for Hong Kong’s health authorities when handling positive virus patients and close contacts. “In Hong Kong, recent government mandates regarding Covid-19 testing have created unacceptable conditions for pilots, including our Hong Kong-based pilots and their families,” Dave Chase, chairman of the FedEx ALPA Master Executive Council, said. “Not only do these situations pose unacceptable risks to our pilots’ safety and well-being, but they also create added stress and distraction for flight operations.” He said pilots had to share a bathroom with “as many as five patients” at public hospitals, and the quarantine facilities have “very sparse provisions”. Between July 8 and July 28, 17 aircrew tested positive for the virus, and of those, eight were pilots.<br/>

Air freight traffic declines showed some signs of improving in June but business remains “exceptionally challenging”, according to the latest IATA market wrap-up. The airline association’s latest data shows that air cargo demand in cargo tonne kilometre (CTK) terms declined by 17.6% year on year in June, which is a “modest” improvement on the 20.1% drop recorded in May. Over the first half of the year, demand was 14.5% down on a year ago. In contrast, load factors continued to improve during June and were up 11.5 percentage points on a year-ago at 57.3% as a result of capacity dropping by 34.1%. Much of the decline in capacity was down to the grounding of passenger services, which led to a 70% decline in bellyhold capacity, partially offset by a 32% increase in freighter capacity. IATA DG Alexandre de Juniac said that there were still challenges ahead for the industry. “Cargo is, by far, healthier than the passenger markets but doing business remains exceptionally challenging,” he said. “While economic activity is restarting after major lockdown disruptions there has not been a major boost in demand. The rush to get personal protective equipment (PPE) to market has subsided as supply chains regularised, enabling shippers to use cheaper sea and rail options. And the capacity crunch continues because passenger operations are recovering very slowly.”<br/>

The French government will reconsider plans to build a fourth terminal at Paris Charles de Gaulle airport because of the the coronavirus crisis, Transport Minister Jean-Baptiste Djebbari said. State-owned airports operator ADP plans to build a fourth terminal at CGG-Roissy with capacity of 35 to 40m passengers per year, but green activists and local towns are fighting it and the fall in traffic due to COVID-19 has raised doubts about its viability. “The project to receive 40 million more passengers by 2030 is probably no longer justified as it was planned,” Djebbari said. He said French airports would still need investment for upgrades and would have to make sure that new types of planes, such as hydrogen-powered planes, can land. “The problem of T4 will be reviewed in depth, that is the reality,” Djebbari said, adding that he has disscussed the issue several times with ADP chief Augustin de Romanet. Djebbari said the virus crisis had cut traffic at French airports to about 40% of pre-crisis levels, with slightly more traffic on domestic lines and a bit less on long-distance lines. “Traffic is restarting very gradually. We will see in September whether business clients return, that will give an indication for the end of the year and next year,” he said.<br/>

Raytheon Technologies Corp. has slashed roughly 8,000 jobs in its commercial aviation businesses as the maker of jet engines and airliner systems contends with the travel collapse caused by the coronavirus pandemic. The virus’s impact on plane trips “has proven to be a lot worse” than what the company originally projected just a few months ago and traffic probably won’t return to 2019 levels until 2023, Raytheon Chief Executive Officer Greg Hayes said Tuesday on a call with analysts. Some of the lost jobs will return once jetliner demand picks up, he said. The cuts underscore the pain in commercial aviation as the prospects worsen for a speedy rebound in flying. Raytheon disclosed furloughs in May as part of a bid to preserve $4b in cash and pare costs by $2b, but didn’t reveal how many jobs would be affected. General Electric Co.’s aviation unit, which competes with Raytheon to supply engines for single-aisle planes, has said it would eliminate 13,000 jobs -- or about a quarter of its workforce. “Looking ahead, we expect the pressures in commercial aerospace to persist” as aircraft production and repair work for installed jet engines remain low, Hayes said.<br/>