Japan Airlines is expected to report another big loss for the July-September quarter as international traffic remains in a pandemic-induced slump. The carrier's operating loss apparently came to about 85b yen ($812m), compared with a 60.2b yen profit a year earlier. Revenue sank 70% to around 110b yen, with passenger traffic on international flights down 97%. A government program to promote domestic travel boosted traffic in Japan, nearly tripling from the April-June quarter. Combined with cost cutting, JAL narrowed its operating loss on a quarterly basis. Analysts had projected a 71.5b yen loss on average. Despite the pickup in domestic traffic, fares appear to have taken a hit as the coronavirus resurgence in August dampened demand during the peak summer travel season. JAL is redoubling cost-cutting efforts to stem the losses, laying out plans in August to further reduce fixed costs associated with aircraft and labor. JAL's overall financial health does not appear to be in doubt, with the company's capital ratio standing at 46% at the end of June. <br/>
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American Airlines is planning customer tours of the Boeing 737 Max and calls with its pilots in the coming weeks to boost the public’s confidence in the plane after two fatal crashes. The jets were grounded worldwide more than a year and a half ago after the two crashes — Lion Air Flight 610 in October 2018 and Ethiopian Airlines Flight 302 in March 2019. All 346 people on board the flights were killed. Following repeated setbacks, the FAA is at the tail-end of its recertification process for the jets though it has not signed off on the planes officially. “The FAA continues to follow a thorough process, not a prescribed timeline, for returning the aircraft to service,” it said. Boeing has made several changes to the planes’ software including making a flight-control system that pilots struggled against in both crashes less aggressive. “We are seeing that finish line approach us and I think it’s a real finish line,” David Seymour, American Airlines’ chief operating officer, told employees in a town hall meeting last week. The airline is planning to start flights with employees after Thanksgiving, estimating the FAA will lift the flight ban in mid-November, Seymour said. An American Airlines spokesman said the company’s plans are tentative, based on the FAA’s decision.<br/>
Airbus has delivered three A350-1000s to Qatar Airways, its first handover of long-haul aircraft to the Middle Eastern carrier for eight months. Qatar received its last long-haul jet from the airframer, an A350-1000, on 27 February – giving it 15 of the larger A350 variant. It had already completed deliveries of its 34 directly-ordered A350-900s in September last year. All three of the latest A350-1000s – registered A7-ANO, -ANQ and -ANR – departed in sequence from Toulouse for Doha on 22 October. “Qatar Airways is one of the few global airlines to have never stopped flying throughout this crisis,” says CE Akbar Al Baker. He adds that it is “one of the only airlines to continue taking delivery of new aircraft”, although it has kept its A380 fleet grounded. Qatar has 42 A350-1000s on order. The latest three deliveries mean it will have 18 in the fleet – taking its overall A350 complement, of both variants, to 52 jets.<br/>
Cathay Pacific will have to vie with rivals for rights to serve the flight routes operated until now by subsidiary Cathay Dragon after abruptly shutting the unit this week as part of a major restructuring. Cathay Dragon, originally a startup rival known as Dragonair, was grounded on Wednesday after 35 years of connecting Hong Kong to regional cities, mostly in mainland China. The move came as Cathay announced it would cut 8,500 jobs to cope with the grounding of most of its passenger flights amid the COVID-19 pandemic and would focus on serving premium customers with Cathay Pacific-branded flights, with budget unit Hong Kong Express serving other fliers. Stock analysts following Cathay applauded the move as a boost for efficiency. "We think that simplifying the brand structure for the business should help to reduce overlaps and streamline the business," wrote Ben Hartwright of Goldman Sachs in a client note. However, calling Cathay Dragon's traffic rights "important public resources that belong to the HKSAR government," a spokesman for Hong Kong's transport and housing bureau told Nikkei Asia that Dragon's rights "shall be returned to the government for reallocation and cannot be automatically transferred to other airlines." Other local airlines will be able to submit applications for the 40-some routes previously operated by Cathay Dragon and the bureau "will reallocate the traffic rights in accordance with the established mechanism," the spokesperson said.<br/>
After seeking legal advice, Cathay’s pilots union has asked its 2,200 Hong Kong-based members not to sign salary-slashing new employment contracts handed out in the wake of massive job cuts, with the airline’s pilots based outside the city also facing an uncertain future. The Hong Kong Aircrew Officers Association (HKAOA) in a letter to members on Thursday night vowed to defend its pilots’ existing contracts, as the city’s flag carrier seeks to rein in what it sees as inflated pay and generous conditions as part of a dramatic cost-cutting effort aimed at weathering the coronavirus pandemic. “In terms of the broader legal strategy, our lawyers are considering any and all angles, including any injunctive relief for actions taken by the company. All options are on the table at this stage,” union chairman Tad Hazelton said in the message to members. On Wednesday, Cathay announced it would be getting rid of 8,500 positions, with 5,900 existing jobs cut – most of them in Hong Kong – and thousands of other unfilled roles eliminated. Cathay Pacific’s regional carrier, Cathay Dragon, was also shut down with immediate effect as the airline sought to move its remaining Hong Kong-based pilots and cabin crew onto cheaper contracts. “The HKAOA has obtained legal advice on your contractual rights and protections pursuant to your COS (Conditions of Service),” a previous memo to unionised pilots said.<br/>“We suggest you refrain from making a commitment” until more substantive legal guidance was received, it added.<br/>
A Finnair passenger who wrecked a plane toilet during a fit of air rage has been ordered to pay E43,000 in damages and was given a one-year suspended prison sentence. The Finnish man was also instructed to pay the airline’s legal costs in the judgement handed down by Helsinki District Court. The incident took place on a flight from Helsinki to Vietnam in 2017, and started after the passenger attempted to use a Finnair gift card to pay for in-flight purchases, the court heard. A flight attendant said he became angry after this payment method was denied, reports Yle Uutiset. The man then went to one of the aircraft toilets; loud banging noises could be heard while he was in the cubicle. A member of cabin crew went to check the toilet after he had vacated it. “I have never in my career seen so many broken parts in a toilet, and it smelled of vomit and urine,” the flight attendant told the court. A towel rack had been ripped from the mirror, while it appeared attempts had been made to break the cabinet under the sink, with one door broken off and the wall behind it having sustained damage in the process. While the passenger admitted to causing the damage, he denied it was intentional. “I wobbled due to turbulence, and I grabbed the mirror cabinet,” he told the court. He added that he had been drinking alcohol and taking sedatives. His assertion was contradicted by four witnesses, who all stated there had been no extreme turbulence during the service.<br/>
Qantas is eyeing new international destinations and a larger share of Australia’s domestic market as it emerges from the Covid-19 crisis, company executives said Friday. The airline is keeping an eye on the potential for travel bubbles with parts of Asia, chairman Richard Goyder said at the flag carrier’s annual general meeting. “By early next year, we may find that [South] Korea, Taiwan and various islands in the Pacific are top Qantas destinations while we wait for our core international markets like the US and UK to reopen,” he states. CE Alan Joyce said the unexpected closure of state borders in July to cope with a fresh wave of Covid-19 cases had delayed Qantas and Jetstar’s domestic recovery plans. Domestic capacity is running at under 30% of what it was pre-Covid-19, whereas the group had expected it to be back to about 60% by now. “This delay resulted in a A$100m negative impact on earnings for the first quarter of FY21, and will have an impact on Q2 as well,” he told shareholders. Still, he expects the upturn in demand to be swift once Australian states reopen their borders and says Qantas has the liquidity to manage the situation. “Because our cash flow from continuing operations is positive before one-offs like redundancies, we could continue at this level of flying for a very long time – if we had to,” he adds. Joyce predicts that the group will be at up to 50% of domestic capacity by Christmas if Queensland opened its borders to New South Wales. He adds that due to changes in strategy at main rival Virgin Australia, Qantas Group’s share of the domestic market could rise from 60% to 70% over time.<br/>