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Airline executives have hinted in recent years that frequent flyer programmes, particularly in the US, are profitable. It took a global pandemic to reveal just how profitable. A quartet of US carriers — American Airlines, United, Spirit and most recently Delta — have put up their customer loyalty schemes as collateral for large quantities of new debt needed to see them through the crisis. Others may soon do the same. Documents sent to creditors contain a trove of information on the size, margins and valuations of the programmes, from American’s AAdvantage to United’s MileagePlus and Delta’s SkyMiles, with hundreds of millions of members between them. “The profitability and the size of these loyalty programmes, it’s the only reason American Airlines isn’t in bankruptcy right now,” said Stifel analyst Joseph DeNardi. “It’s the only reason United isn’t bankrupt, or on the verge.” Airline frequent flyer programmes began in the 1980s as a marketing tool to inspire brand loyalty among travellers, and have evolved into a lucrative source of cash. Airlines sell miles to banks, who then use them as credit card rewards, attracting the affluent consumers they want as cardholders. In essence, airlines have two businesses: the first flies people between destinations, and the second peddles those people to banks for a fee. Valuations recently put on the loyalty schemes have exceeded the market capitalisations for the airlines themselves — implying that investors value the business of flying passengers at less than zero. Story has more details.<br/>

Boeing hid design flaws in its 737 Max jet from both pilots and regulators as it raced to have the aeroplane certified as fit to fly, according to a damning congressional report into why two of the aircraft crashed within months of each other last year, killing 346 people. The report by the US House of Representatives transport committee found the US aircraft maker cut corners and pressured regulators to overlook aspects of its new design in its attempts to catch up with European rival Airbus. It also accused US regulators of being too concerned with pleasing the company to exercise proper oversight. The report said: “[The two crashes] were the horrific culmination of a series of faulty technical assumptions by Boeing’s engineers, a lack of transparency on the part of Boeing’s management, and grossly insufficient oversight by the [FAA] — the pernicious result of regulatory capture on the part of the FAA with respect to its responsibilities to perform robust oversight of Boeing and to ensure the safety of the flying public. The facts laid out in this report document a disturbing pattern of technical miscalculations and troubling management misjudgments made by Boeing. It also illuminates numerous oversight lapses and accountability gaps by the FAA that played a significant role in the 737 Max crashes.” Wednesday’s report marks the culmination of 17 months of investigation, involving five public hearings, 24 interviews and 600,000 pages of documents. The 238-page report details how Boeing attempted to minimise both the regulatory testing and pilot training required to fly the new Max, which was being rushed out in an attempt to compete with the Airbus A320neo. Story has more.<br/>

Hawaii Gov. David Ige said Wednesday that starting Oct. 15, travelers arriving from out of state may bypass a 14-day quarantine requirement if they test negative for COVID-19. Travelers will have to take the test within 72 hours before their flight arrives in the islands. Ige said drug store operator CVS and healthcare provider Kaiser Permanente will conduct the tests as part of an agreement with the state. Earlier this year Ige planned to start a pre-travel testing program on Aug. 1 only to have to postpone it as COVID-19 cases spiked on the U.S. mainland and in Hawaii. A shortage of testing supplies also forced delays. Another start date for Sept. 1 was also canceled. Airlines are expected to help inform travelers of the requirement. Hawaii leaders are hopeful that pre-travel testing will encourage people to return to Hawaii in a way that keeps residents safe. Tourism traffic to the state has plunged more than 90% since the pandemic began, forcing hundreds of hotels to close and pushing many people out of work. “I want to emphasize that this pre-travel testing will allow us to add a greater element of safety for travel into our state,” Ige said.<br/>

Which? is calling for the aviation regulator to urgently be given powers to fine airlines, after nearly six months of “blatant disregard” for the law on refunds for cancelled flights during the pandemic. The consumer group says airlines operating in the UK have not faced a single fine for breaking consumer law on refunds, delays or cancellations since 2003. The Civil Aviation Authority (CAA) was granted powers to enforce consumer rights laws on airlines in 2003, but cannot directly fine airlines. And the regulator has only used its powers once to apply to the courts for an enforcement order which forces an airline to comply with the law. This was against Ryanair in 2018, for refusing to compensate passengers for delays caused by planned industrial action by its staff during the peak of the summer holidays. The case is yet to be heard and the airline continues to refuse to compensate consumers. The findings come after Which? exposed the UK’s 10 biggest airlines for repeatedly breaking the law on refunds for coronavirus cancellations earlier this year.<br/>

Tanzania on Wednesday announced it was lifting a ban on several Kenyan airlines after Nairobi announced it would no longer impose a coronavirus quarantine on travellers from the country. In the latest spat in a long-running diplomatic row between the East African neighbours, Tanzania last month banned the airlines after Kenya put passengers travelling from the country on a list of those who would have to undergo mandatory quarantine. While Kenya imposed strict movement restrictions and other measures to curb the virus, Tanzania has come under fire for failing to take it seriously enough, and claiming that God was protecting it from the illness. However, Kenya on Tuesday backed down, exempting Tanzania from the quarantine. "In view of that and on a reciprocal basis, the United Republic of Tanzania now lifted the suspension for all Kenyan operators namely Kenya Airways, Fly 540 Limited, Safarilink Aviation and AirKenya Express Limited," the Tanzania Civil Aviation Authority said.<br/>

Airlines in India are seeking at least $1.5b as an interest-free credit line from the government, Civil Aviation Minister Hardeep Singh Puri said, as lockdowns and restrictions linked to the coronavirus pandemic hit demand for air travel. The carriers in what was until recently the world’s fastest growing aviation market are also seeking to defer loan repayments by six months, without these borrowings getting classified as “non-performing,” Puri said in a written reply in parliament. Local airlines have asked the government to include jet fuel in the South Asian nation’s goods and services tax, and abolish excise duty on aviation turbine fuel, the minister said. Indian Prime Minister Narendra Modi has yet to announce any meaningful monetary package for the aviation industry, as the government struggles with the worst economic slowdown among major nations. Indian carriers need as much as $2.5b to keep flying, according to estimates from CAPA Centre for Aviation, and one or more of the nation’s airlines are expected to fail in the absence of additional funding from the government or their owners. India was one of the most difficult places for the aviation industry even before the pandemic, with fares as little as 2 cents and some of the world’s highest fuel taxes. However, the government is engaged with aircraft lessors and financiers to ensure there is no premature withdrawal of planes, Puri said. Local traffic has slumped almost 80% to just 12m passengers in the five months to July 31, eroding airline revenues, he said. Close to 3m jobs in aviation and related industries as well as more than $11b in revenue could be lost in India this year because of the pandemic according to the IATA. <br/>

Thai aviation faces a real threat in Q4 when operating costs surge again after the government's aid measures end, while some carriers may not get the soft loans the prime minister has promised. After a meeting between seven airlines and PM Prayut Chan-o-cha on Aug 28, there remains no conclusion on how and when state-backed banks will allocate 24 billion baht in soft loans to airlines to mitigate the impact of the outbreak crisis. Tassapon Bijleveld, executive chairman of Asia Aviation (AAV), the largest shareholder of Thai AirAsia (TAA), said the carrier expects to get more details on loan conditions by next week, as Gen Prayut's working team is following developments frequently. He refused to comment on reports that TAA and Bangkok Airways are the only two of the seven airlines that will receive soft loans. But he said his own belief is that the other carriers will get some support, though not as much as they have requested. "We will face a real threat in the fourth quarter if Thailand cannot reopen to foreign tourists," Tassapon said. "Even though the government has approved a special tourist visa scheme, the action plan afterward is more important because tourism operators don't have a clue how to start." Nuntaporn Komonsittivate, head of commercial operations at Thai Lion Air, said the airline still has to run on self-survival mode by maintaining domestic revenue and streamlining operating costs. To prevent losses, each flight should run at a 70% load factor, but the figures for weekday flights are mostly below 50%.<br/>

Australian Deputy PM Michael McCormack has shifted responsibility for repatriating more than 26,000 stranded Australians back on to the states, demanding that leaders jointly increase their arrival caps by 2,000 a week. The minister, whose infrastructure and transport portfolio gives him responsibility for the arrival caps, has written to the states asking them to increase the cap of 4,000 arrivals a week to 6,000. He said the South Australian premier, Steven Marshall, and NSW premier, Gladys Berejiklian, were “keen” to take more arrivals. McCormack said he had written to the premiers and chief ministers “telling them they need to” increase their limits. McCormack asked NSW, Queensland and WA to take 500 additional arrivals a week, and South Australia to take an extra 360. He encouraged the use of Gold Coast and Cairns as potential ports in addition to Brisbane in Queensland. Berejiklian said NSW would take an extra 500 arrivals a week, up to 2,950, but only on the condition that Queensland and Western Australia doubled their caps. She said she had been given an assurance by Scott Morrison on Tuesday that other states “would also take that load, and on that basis I was very pleased to do our bit”. Marshall said South Australia would increase its cap from 500 to 800 a week, but that only 600 of those would be for international arrivals, with the rest set aside for interstate quarantine. The Western Australia premier, Mark McGowan, blasted McCormack for publicly announcing the demand, saying it was “very directly outside the spirit of the national cabinet”. The Commonwealth should not “palm it all off” and instead work with the states to increase the number of arrivals, McGowan said. McCormack said the requests were based on best medical advice, hotel quarantine capacity, discussions from the last national cabinet meeting and “common sense”. McCormack said there were up to 30,000 Australians overseas who had registered their wish to return home. Citizenship law experts have also raised concerns the arrival caps are unconstitutional. The caps are in place until 24 October.<br/>

Raytheon Technologies Corp. plans to eliminate more than 15,000 jobs this year at its corporate offices, jet engine-maker Pratt & Whitney and aviation and military equipment manufacturer Collins Aerospace amid the downturn in the airline industry, CEO Greg Hayes said Wednesday. The job cuts at the Waltham, Massachusetts-based company are nearly double the total it initially announced in July. Hayes said the cuts amount to administrative cost reductions of about 20% at Pratt & Whitney, based in East Hartford, Connecticut, and about 12% at Collins Aerospace, based in Charlotte, North Carolina. Pratt & Whitney has seen shop visits decline 60% since the second quarter, and Collins Aerospace saw a 65% drop in commercial spare parts orders, Hayes said, noting global commercial air traffic is down about 45% amid the coronavirus pandemic, down from an 80% drop in March.<br/>

The Middle East and North Africa Business Aviation Association (MEBAA) show has been postponed to 2021 due to concerns related to the COVID-19 outbreak, the event’s organizer said. The show will now be held from February 22 to February 24 next year at DWC, Airshow Site. It was initially planned for December 8 to December 10. “We have been closely monitoring the COVID-19 spread over the past few weeks as well as developments on travel restrictions from governments around the world,” said Ali Alnaqbi, Founding and Executive Chairman of MEBAA “After very careful consideration of the situation and taking into account invaluable feedback from our exhibitors and stakeholders we believe the decision to postpone the event is in the best interests of the health and safety of our exhibitors, visitors, contractors and staff,” he added.<br/>

In a direct hit against the Transport Ministry‘s move to oust him, Koo Bon-hwan, CEO of the state-run Incheon International Airport, on Wednesday refused to step down for “ungrounded” reasons. “During a meeting with a senior official at the Ministry of Land, Infrastructure and Transport earlier this month, I was asked to resign on my own. I was told a dismissal would be recommended if I don‘t leave immediately,” he said. His comments come following reports that the Transport Ministry is moving to remove him from his position, having recommended his dismissal to the Ministry of Economy and Finance after launching an investigation into several accusations against the CEO, which are yet to be confirmed. The rare move by the ministry has been stoking multiple speculations, including how it may be seeking a way out of its permanent job transition debacle by having Koo take the fall. “I expressed my intention that I can’t leave the post immediately without being given a good reason to do so,” he added. He also said his offer to quit sometime next year had been rejected. Koo is accused of misusing a corporate credit card as well as dismissing a staff member for formally questioning a human resources decision. Koo argues these accusations don’t amount to grounds for dismissal.<br/>