United reported deepening losses in Q3 and a $1.1b charge to cover 22,000 job cuts during the coronavirus pandemic. The company said it suffered a net loss in Q3 of $1.8bn, about $200m more than in the second quarter and a reversal from the $1b it earned in the same period of last year. Operating revenues plunged 78% to $2.5b as it reduced flights from last year’s levels. Cash burn averaged $25m a day for the period — compared with $40m a day in Q2 — of which $4m was dedicated to servicing debt and paying severance to employees. United had $19.4b in liquidity at the end of Q3. The company also said Wednesday that it expected to pay $1.1b to reduce its workforce by 22,000 employees — 13,000 through furloughs, and 9,000 through voluntary departures. The costs comprise a mix of severance and settlement losses from the employees’ pension plan. United began furloughing 13,000 employees two weeks ago, as restrictions on US government aid meant to preserve jobs expired. The company recorded $294m of the workforce reduction charge in the second quarter, and $765m in Q3. It has also paid $14m in severance for managers this year. “We’re ready to turn the page on seven months that have been dedicated to developing and implementing extraordinary and often painful measures,” said Scott Kirby, United’s CE. “Even though the negative impact of Covid-19 will persist in the near term, we are now focused on positioning the airline for a strong recovery that will allow United to bring our furloughed employees back to work and emerge as the global leader in aviation.” United is trying to lure passengers back to the skies by dropping change fees and offering more flights to holiday destinations to court leisure travellers. The company’s cargo revenue climbed 50% in Q3 to $422m.<br/>
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The global aviation industry will take at least two years to recover from the coronavirus pandemic and mass travel to return, Singapore’s Transport Minister Ong Ye Kung said, stressing the importance of developing a widely available and effective vaccine to help countries open their borders. “When a vaccine is widely available around the world and people gain confidence to travel again and visit other countries, then we will have aviation back on its feet, almost fully,” Ong said. “How long that will that take, I can’t make a guess, I would say minimally a couple of years.” Singapore has to “find ways to try to revive” the aviation sector, the minister said, adding that the city-state’s testing capacity is now around 30,000 a day and may rise to 40,000 by November and probably further after then. A balance needs to be struck between travel and epidemic control, Ong said. Asked about Singapore Airlines, which posted a record quarterly loss in the three months through June and is reducing its workforce by about 20%, Ong said the carrier faces a “dire situation” because of the pandemic and the fact it has no domestic market to fall back on. Virus-related travel restrictions mean SIA, which raised S$11b largely through a rights issue earlier in the crisis, is flying a tiny fraction of its usual capacity. Traffic figures for August show the carrier’s passenger numbers were down 98.4% from a year earlier. Whether Singapore Airlines needs to raise more funds will largely depend on how successful any revival in travel is, Ong said. “The more we can revive, the more cash they can generate, the less their need for recapitalization.” <br/>
ANA Holdings is set to receive about 400b yen ($3.8b) in subordinated loans from five lenders, people with knowledge of the matter said, as the struggling Japanese airline reels from the steep dropoff in passenger traffic due to the pandemic. Sumitomo Mitsui Financial Group, Mizuho Financial Group, Mitsubishi UFJ Financial Group, Sumitomo Mitsui Trust Holdings and the government-backed Development Bank of Japan will participate in the financing, said the people. ANA as well as Japan Airlines are forecasting domestic passengers to drop by about 50% this month. ANA was considering raising 200b yen via a public share offering and cutting costs by selling aircraft and disposing of non-core businesses, the Nikkei newspaper reported last month. An ANA spokesperson declined to comment, saying that the carrier wasn’t the source of information. Kyodo News reported that Sumitomo Mitsui and the Development Bank of Japan will each lend 130b to ANA, while Mizuho Financial Group will provide 60b yen. Mitsubishi UFJ will offer 50b yen and Sumitomo Mitsui Trust Holdings will add 30b yen, the news agency reported.<br/>
ANA is seeking to cut monthly wages and other benefits by 5% starting January at the latest, as part of sweeping cost-cutting measures to cope with the coronavirus pandemic that has reduced demand for air travel, sources familiar with the plan said Tuesday. With about 15,000 employees, the major airline will also start offering early retirement at the end of next March by increasing severance pay from Oct. 14. The program will target flight attendants ages 30 and older as well as ground staff ages 40 and older, according to the sources. ANA is targeting an average 30% cut in annual pay for its employees with the cost-cutting package, which will also include scrapping winter bonuses and asking workers to shoulder 50% of pension premiums, up from the current 30%, according to the sources. Its employees have already seen their summer bonuses halved. ANA is aiming to reach an agreement with its labor union, which has been notified of the plans, at a time when the outlook for a recovery in air travel remains uncertain due to the pandemic. The company is expected to announce a set of measures to promote structural reform later in the month, with pulling passenger jets out of service earlier than scheduled being floated as an option.x <br/>