American Airlines could seek a larger loan from the US Treasury Department, its CFO said on Wednesday, noting that some peers may not use their portion of $25b in loans set aside for airlines under the CARES Act. Southwest has already announced that they are not taking the government loan, CFO Derek Kerr said, noting that the company is also in talks with Boeing to potentially defer the delivery of 18 737 MAX jets.<br/>
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Cathay Pacific is studying plans to park even more aircraft abroad in long-term storage, the Post has learned, with a recovery in air travel taking longer than anticipated. The group, which also covers Cathay Dragon, could send as many as half of its 180 passenger aircraft to desert locations eventually, one source familiar with the matter said, but another said it could be slightly less. A revised number of planes to be sidelined has yet to be finalised, but it will be larger than the third of the passenger fleet planned earlier, as the fallout from the global slump in air travel brought on by the coronavirus pandemic sharpens. “I think given what we know right now about Cathay’s fleet, they’re essentially uniquely unsuited for the current markets,” said Luya You, transport analyst at brokerage Bocom International. “We know that widebodies make even less economical sense to fly right now when load factors remain abysmal. Therefore, it’s much more cost effective to ground than to fly.” The vast majority of the Cathay group’s 235 planes are large widebody aircraft, which are not ideal for weak travel demand, and it does not have domestic flights to fall back on. Domestic and short-haul flights are expected to recover quickest, according to industry predictions, as evidenced by the nearly full recovery in domestic mainland Chinese air travel, while it could be 2024 before long-haul travel returns to pre-pandemic levels. With passenger numbers still low, airlines struggled to generate revenue in July, and Brian Pearce, chief economist at the IATA, said he expected that trend to continue. While capacity still outstripped demand, Pearce said carriers would probably continue to burn cash, leaving “airline finances in a relatively fragile situation”.<br/>