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Lufthansa said it had issued a E1.6b bond Thursday, money that will be used to repay part of a bailout given last year by state lender KfW to help it cope with the COVID-19 crisis. “We are very grateful for the support we receive in our home markets. Today’s successful bond placement allows us to repay the entire KfW loan,” Lufthansa CFO Remco Steenbergen said. “Despite the repayment, however, it is likely that we will draw additional elements of the stabilization package which are currently unused. The extent of the utilization will depend on the further course of the pandemic,” he added. The airline was set to sell E750m of four-year debt at a yield of 3% and E850m of seven-year debt at 3.875% on Thursday, a lead manager on the deal said. At the height of worries around the COVID-19 crisis’s impact on the airlines sector a year ago, Lufthansa’s September 2024 bonds were yielding as much as 6.52%, so this represents a good rate for the airline, another source close to the deal said. But he added that for bond investors, these yields looked attractive with the European Central Bank’s bond purchasing programme compressing yields across the board. “These are pretty alluring levels for bond investors starved of any kind of yield and prepared to invest in a fundamentally strong credit hit by the crisis; a typical ‘fallen angel’ play,” he said, a phrase used to describe companies that have recently lost their investment grade status.<br/>

Lufthansa’s bid to tap a revival in tourism once coronavirus lockdowns ease has put the German giant on a collision course with its former leisure arm, Condor. Lufthansa is using surplus long-haul jets to target sunspots such as Mauritius, the Dominican Republic and Namibia that are expected to recover before the airline’s bedrock corporate markets. As a result, it has ended a half century-old deal to feed passengers toward Condor, starving the smaller carrier of business on flights to many of the same destinations. The switch presents an existential threat for Condor, which has no answer but to demand German regulators intervene. A plan to merge with LOT Polish Airlines was undone by the coronavirus crisis and Condor was already on life support when Lufthansa put a target on its back. The bigger airline is desperate to scrape up passengers where it can, and makes no apologies -- daring the government to go back on its pledge not to interfere. “Life is going to be tough for Condor,” said Daniel Roeska, an analyst at Sanford C. Bernstein in London. “Lufthansa needs to generate cash, which right now is more likely to come from tourism than from business travel. Why should Lufthansa subsidize Condor with cheap feeder tickets?” Story has more.<br/>

Singapore Airlines on Thursday reported a net loss of S$142m ($106m) for the October-December quarter, marking the fourth consecutive quarterly loss for the company as the coronavirus pandemic hit the global air travel industry. The result compares to a S$315m net profit in the same quarter a year ago. But the loss for the three months through December was much smaller compared with the July-September quarter's SG$2.34b -- the company's worst ever -- as relatively steady cargo demand and restructuring measures helped offset the impact of a sharp drop in passenger services. The total revenue for the October-December quarter was S$1.06b, down 76% from a year earlier, due to a 98% drop in the number of passengers. Cargo volume, on the other hand, dropped 36%. "In response to the continued strong demand for pharmaceutical and e-commerce shipments, and an uptick in general cargo demand, [Singapore Airlines] added capacity by stepping up the frequency of passenger aircraft operating cargo-only flights and through the resumption of more passenger services," it said. "The utilization of the freighter fleet was also maximized to deliver more cargo capacity." With no domestic routes to fall back on, the city-state's flagship carrier is one of the most severely hit airlines in Asia. Currently, 64 aircraft are used for passenger services and 31 for cargo, while 123 aircraft, including ones already impaired, have been grounded, the company said.<br/>

Canadian PM Justin Trudeau on Thursday insisted Ottawa would ensure airlines survived the COVID-19 pandemic even as industry advocates said that without a promised aid package many routes would die, crippling the economy. Air travel is critical for Canada, the second largest country by area and one which stretches across six time zones. For many communities, flights are the only reliable option. The government and major airlines such as Air Canada and WestJet have been in talks for months about an aid package but insiders say the negotiations are going slowly. “Canada needs and will have a vibrant competitive airline industry after this is all done. That is one of our fundamental understandings,” Trudeau said. “We’re having great discussions with them (the airlines), we’re continuing to, but we’re just needing to make sure that the package is right for Canadians, right for the industry and right for the future.” Air Canada has slashed bases and routes, particularly in the Atlantic region, prompting fears about the impact if the services do not return.<br/>

Air Canada will pause all operations of its Rouge aircraft indefinitely and lay off 80 employees starting Feb. 8, the latest round of cuts at Canada's struggling airlines. The airline's announcement comes as Canadian carriers suspend all flights to Mexico and the Caribbean at the request of the federal government, a measure that is expected last until at least April 30. "We are again pausing our Rouge operations effective Feb. 8 as these flights are primarily operated by Rouge," Air Canada said. Rouge flights were suspended earlier in the pandemic, but were restarted in November ahead of the winter travel season. In January, Air Canada announced layoffs of around 1,700 employees, when the company saw a drop in bookings because of a new requirement that travellers entering Canada show proof of a negative COVID-19 test. Air Canada said Rouge "remains a part of Air Canada's overall business strategy." Air Canada is still running flights to other parts of the world, including Europe and Asia, where they have contracts to operate cargo service.<br/>

Air NZ boss Greg Foran maintains the airline wouldn't be operating if it had refunded everyone who had flights cancelled but says he welcomes a review of law covering refunds. The airline is under renewed pressure over hundreds of millions of dollars of customers' money it is holding, with Consumer NZ saying it needs to review its hardline policy on refunds. While other airlines have refunded all ticket types if passengers want their money back, Air New Zealand is sticking to its policy of refusing to repay non-refundable tickets except in special circumstances, even though prospects of flying overseas soon remain dim. This could mean the airline has use of the money for years. Foran says the airline wasn't trying to be difficult and was in the process of building more flexibility into dates from credits, which in most cases it offers in lieu of refunds. "As I've been saying during the year, course I'd love to refund everyone, but if I refunded everyone then what were we going to do in terms of keeping the airline operating? It's not Air New Zealand trying to be difficult, it's not Air New Zealand hiding behind anything."<br/>