general

Airline and airport groups have called on governments around the world to provide fresh aid packages for the beleaguered aviation industry. They said they also want current quarantine arrangements to be replaced with a new testing regime. Without these things, they said, the industry faces collapse. The IATA warned that airlines around the world faced a fall in revenues this year of $418b. At the same event, Airport Council International (ACI) World said airports would see their own income fall by $104b. IATA DG Alexandre de Juniac said that financial aid packages granted by many countries to their aviation businesses earlier this year had been put together on the assumption that a recovery would be well underway by now. That had not proven to be the case, and the sector was still suffering deep "financial trauma", he said. "Without a second tranche of financial aid, many airlines will not survive the winter", he said. Meanwhile ACI world director general Luis Felipe de Oliveira said that airports were also facing extreme financial pressure. "We could see airports going bankrupt in a very short period of time", he said. "ACI and IATA are aligned in calling for urgent government action to introduce widespread and coordinated testing of passengers to enable quarantine requirements to be removed. Without this action, it is not an exaggeration that the industry is facing collapse."<br/>

Airlines and airports said EU moves to help restart flights in the region through a more coordinated approach to coronavirus-related travel curbs are wholly inadequate. The measures, adopted Tuesday, fail to propose the replacement of quarantine requirements with coronavirus tests and won’t stop states refusing entry from other EU countries, the IATA said in a joint statement with Airports Council International and lobby group Airlines4Europe. The proposals backed by European Affairs Ministers seek to set a common threshold for entry restrictions, with unfettered travel allowed between areas with fewer than 25 new cases of Covid-19 per 100,000 people for the previous 14 days, and under 4% of tests showing positive results. None of the 27 EU states is below that threshold. Neither are the rules binding on governments. “We are pretty disappointed,” IATA DG Alexandre de Juniac said in a webcast briefing. “We were expecting the European Council at least to be open to replacing quarantines by testing.” IATA also backs the reopening of borders between countries with similar infection rates and longer delays between the announcement of new measures and their introduction. De Juniac reiterated calls for further financial support for airlines and said he expects that some carriers won’t survive the winter at current occupancy levels. <br/>

Americans are slowly starting to fly again, which signals a positive turnaround for owners of the more than $120b of municipal debt sold by the nation’s airports. Some 5.7m travelers passed through checkpoints in the week ended Oct. 10, the most since the coronavirus pandemic scuttled air travel and halted tourism, according to the Transportation Security Administration. On Sunday alone, the agency counted more than 980,000 travelers, the most since March 16. The activity is still significantly lower than before the pandemic reached the U.S. and major carriers are idling thousands of employees as a resurgence in the virus threatens to keep travel depressed this year. But it marks a welcome turn for airports that borrowed tens of billions of dollars in recent years to build new facilities before the coronavirus sent the economy hurtling into the worst recession in modern history. Airport bonds are typically backed by reserves and a combination of fees from passengers, airlines and rental cars or parking. Jason Appleson, a portfolio manager at Asset Management in Chicago, said muni-bond investors anticipate that air travel will eventually return to normal once coronavirus vaccines are developed and widely distributed. Such optimism has allowed airports to continue to borrow easily despite the financial hit dealt to the industry and the deadlock in Washington over further measures to stoke the economy. Chicago’s O’Hare International sold more than $1b worth of securities in late September and Hawaii’s airport system told $582m last week. Denver International Airport and Kansas City International Airport are slated to sell a combined $1.5b of bonds this week. “People still need to travel city to city, state to state -- I don’t think that will be going away,” Appleson said. “It may not happen in the next six months, but in a year, or two years, things should come back.”<br/>

Israel and the UAE will sign a commercial aviation deal imminently, an Israeli official said on Tuesday, as the countries cemented newly normalised relations ahead of reciprocal delegation visits expected next week. Direct air traffic between Tel Aviv and Abu Dhabi or Dubai would be a tourism and business boon for Israel and the Gulf power, while also easing Israelis’ travel to Asia. Saudi Arabia has agreed to expedite such flights by letting them pass over its territory. But Riyadh has indicated it is not ready to establish formal ties with Israel, as the UAE and Bahrain did at a Sept. 15 ceremony in Washington. Ofer Malka, DG of Israel’s Transportation Ministry, said the UAE aviation deal is “more or less ready, and we will sign it in the coming days”. Israel has also agreed to UAE commercial flights over its soil to westward destinations and back, Malka told Army Radio. El Al Israel Airlines would likely be used for the initial legs of the trip and Etihad Airways for the last, marking the first direct flight to Israel by a UAE airliner, said the source.<br/>

The airline industry's troubles continue to hammer Boeing. The aircraft maker once again reported weak deliveries and shrinking orders for September. Boeing delivered only 11 commercial jets last month, three of which were freighters and one a passenger aircraft for the military. That means so far in 2020, the company has delivered only 98 commercial planes to customers -- less than a third of what it delivered in the same nine-month period last year. The delivery figures are key for Boeing, because it receives most of the payment from customers at the time of delivery. "We continue to work closely with our customers around the globe, understanding their near term and longer term fleet needs, aligning supply and demand while navigating the significant impact this global pandemic continues to have on our industry," said Boeing Chief Financial Officer Greg Smith. Not surprisingly, once again there were no new jet orders in September. Additionally three orders were canceled for the 737 Max, the troubled aircraft that has been grounded since March 2019 following two fatal crashes that killed 346 people. Overall Boeing has had 229 jet orders canceled so far this year -- almost all them for the 737 Max. Boeing had hoped to have approval by the middle of this year for the plane to once again carry passengers, but that has become just the latest in a series of missed target dates for its return.<br/>Last month Boeing also reclassified 48 previous orders as no longer certain enough to count in its backlog of orders. More than 800 of its jet orders have been reclassified this year. That means a total of 1,050 orders have been lost or classified as uncertain this year.<br/>

The WTO Tuesday gave the EU permission to impose tariffs on $4b worth of American products annually in retaliation for illegal subsidies given to the US plane maker Boeing, a move that could result in levies on American airplanes, agricultural products and other goods. The decision, which stems from a 16-year fight before the global trade body, follows a parallel case that the US brought against Europe over subsidies to its largest plane maker, Airbus. Last year, the Trump administration imposed tariffs on European planes, wine, cheese and other products after the WTO gave the US permission to retaliate on up to $7.5b of European exports annually. It remains to be seen whether the new tariffs will ultimately persuade the US and Europe to come to a negotiated settlement that would lift the levies, or merely inflame relations and result in higher costs on businesses and consumers on both sides of the Atlantic. The EU has repeatedly appealed to the US to remove its tariffs, but American officials say Europe has not taken the necessary actions to stop its Airbus subsidies. The tariffs will not go into effect immediately. The EU needs to request authorisation from the WTO to impose the levies, which it can do at an Oct. 26 meeting at the earliest. The EC last year issued a preliminary list of American products that it could choose to tax, including aircraft, chemicals, citrus fruit, frozen fish and ketchup. The tariffs, when American companies are reeling from the coronavirus pandemic, would be especially painful for Boeing, which is already struggling from a pair of devastating crises. <br/>

Raytheon Technologies began shedding salaried workers at its Pratt & Whitney jet-engine unit as the company prepares for a long slump in sales and repair work. Most of the involuntary cuts will occur over the next few days and affect workers in the US, Canada and Poland, Pratt said in an internal memo Tuesday. Additional reductions are planned for the coming weeks and most of the terminations will be completed by the end of the year. The job losses are part of Raytheon CEO Greg Hayes’s plan to shed some 15,000 posts in the company’s commercial aerospace units, which include Pratt and avionics supplier Collins Aerospace. Pratt rival General Electric has also made deep cuts at its jet-engine operation amid an unprecedented downturn in air travel sparked by the coronavirus pandemic. The salaried reductions were necessary in light of declines in the commercial aviation due to the pandemic, Pratt said. The company declined to specify how many workers would be affected.<br/>