general

The US airline industry just closed the books on the worst year in its history, losing a combined $32b excluding special items. Yet it still ended 2020 awash in an ocean of cash. The nation's four largest airlines -- American, Delta, United and Southwest -- among them had $31.5b in cash on their balance sheets at the end of 2020. That's up from $13b a year earlier, before the pandemic hit. "Liquidity" has become a favorite buzzword of airline executives discussing their financial condition. Including the cash and yet untapped credit lines, the airlines have access to nearly $65b. "The liquidity is at record levels," said Philip Baggaley, chief credit analyst for the airline industry at Standard & Poor's. "That's good, and it's one of the few strong points they have at this point." The airlines received substantial financial help from the federal government, but most of that money was required to be spent keeping staff on payrolls temporarily. The lion's share of the borrowing and cash, then, comes from from banks and Wall Street. Like a struggling family flooded with credit card offers, the airlines have a lot of people eager to give them cash. The airlines have sold bonds, borrowed money, mortgaged their planes, frequent flyer programs and other assets, and even sold additional shares of stock, a highly unusual move for an industry in this position. The borrowing has added about $40b in long-term debt to the balance sheets of the nation's airlines. Story has more.<br/>

A senior US House lawmaker told reporters that a COVID-19 relief package would include a new round of payroll assistance for US airline workers. Representative Peter DeFazio, who chairs the House Transportation and Infrastructure Committee, said the new round of airline government assistance would extend restrictions on executive compensation and stock buybacks. US airlines have been awarded $40b in payroll support since March and airline unions last week asked Congress for another $15b to keep thousands of workers on the payroll past March 31, when the current round expires. Reuters reported Thursday that Democratic leaders in Congress are likely to back $14b to extend airline payroll support for six months, keeping nearly 30,000 airline workers on the job. Flight attendant union leader Sara Nelson said Thursday that $14b was being discussed for airlines and $1b for contractors. “Congress has to come up with more funds to support these workers,” Nelson said.<br/>

Violators of the federal transportation face mask requirement face a $250 fine that increases for subsequent violations, the TSA said Friday. The fine can rise up to $1,500 for repeated violations. "Based on substantial aggravating or mitigating factors, TSA may seek a sanction amount that falls outside these ranges," the agency said. The penalties may be in addition to those imposed by operators. US airlines have taken the initiative to ban passengers who do not follow the rules. Delta said in a company memo on February 1 that it has banned about 950 people for violating its mask rule. The FAA has said it will crack down on any passengers who disrupt flights or assault crew members over instructions to wear a mask.<br/>

The UK’s plan to tighten its borders against Covid-19 by ordering people to declare why they are leaving the country faces fresh uncertainty after airline staff warned they could not enforce the rules. Priti Patel, home secretary, announced the policy a week ago as part of a wider package of measures including hotel quarantine for those entering the country from “red list” countries with virulent strains of the virus. She pledged an increase in the police presence at airports and introduced a new requirement for people to declare their reason for travelling, which should be examined by airline staff at check-in. But staff at Heathrow said Friday that they had not been told to check why people were travelling when they check-in. Ticketing agents said they were not in a position to judge whether a trip was essential and the passenger should be allowed to travel, or if they should be denied boarding. Aviation executives have also privately expressed concern that airport and airline workers are being asked to effectively act as border agents. The GMB union, which represents staff in the aviation sector said it was “deeply concerned” for its members. “There is currently no oversight from government to make sure travel is only being done for essential reasons,” the union said. At the same time airport staff also warned that they were struggling to check the veracity of pre-flight Covid-19 test results, which are now mandatory.<br/>

Heathrow airport may be allowed to raise airline fees on a limited basis after Britain’s aviation regulator dismissed the hub’s pitch for a more substantial hike during the coronavirus pandemic. The Civil Aviation Authority said Friday it plans to reject Heathrow’s proposal, which the airport reckons would lift fares by GBP1.20 per passenger, as disproportionate and not in the best interests of consumers. Instead, the CAA said its preferred options are to fold the issue into work on a new, longer-term regulatory settlement that starts early next year, or to make “a more limited and targeted intervention” now. Passenger numbers at what’s normally Europe’s busiest airport have collapsed as curbs aimed at stemming the spread of Covid-19 effectively wipe out demand on long-haul routes. Heathrow isn’t allowed to lift prices directly, and is instead seeking a GBP1.7b boost to its regulatory asset base, the sum not recovered in airport charges that’s used in setting price controls. Heathrow said the CAA “has accepted that doing nothing is not an option,” but that it had requested a reasonable adjustment and that unlike other airports and airlines it is not seeking a taxpayer bailout.<br/>

Lunar New Year is usually a bonanza for Chinese airlines criss-crossing the country fully loaded with passengers. Not this year though, after the government took the rare step of encouraging people to stay at home as it tries to stamp out the coronavirus. Chunyun, as the Lunar New Year travel season in China is known, is regarded as the world’s biggest annual human migration and can account for as much as a quarter of airlines’ annual profits. The holiday this year falls on Feb. 11-17, but the travel period in China started in late January and runs to March. On Jan. 28, passenger traffic was 71% lower than the first official travel day in 2020, according to the Civil Aviation Authority of China. Ticket bookings for trains, normally packed, are almost 60% lower than usual, the railway authority said. About 10% of flights have been canceled over the coming fortnight, according to a BNEF report dated Feb. 3, which said China Southern appears most affected with almost one-third of flights scrapped.<br/>

Its lenders are pushing for bankruptcy. Its chairman and co-founder has been quietly stripped of power. Nearly $10b of its money has been embezzled. HNA Group, the vast Chinese conglomerate that threw tens of billions of dollars at trophy businesses around the world, is nearing the biggest corporate collapse in recent Chinese history. Its dismantling is an extraordinary turn of events for the company that began as a regional airline in China’s southern province of Hainan and grew to own large stakes in Hilton Hotels, Deutsche Bank, Virgin Australia and others. At its height, HNA employed 400,000 people around the world. For China’s leadership, HNA is now a cautionary tale. Its story offers a glimpse of how Beijing treats its most powerful entrepreneurs. China has been taking a firmer grip on the economy, and regulators have recently circled in on another empire — that of China’s most famous billionaire, Jack Ma. HNA was once the face of modern corporate China, a leader in the first wave of private Chinese companies with political backing to make large global acquisitions. Its propensity to load up on borrowed money to buy stakes in global household names was expensive and risky, seemingly daring regulators in Beijing and around the world to bring it to heel. As HNA’s creditors wait for a Chinese court to approve their request for bankruptcy and restructuring, questions are being raised about the scale of the conglomerate’s problems. It has $200b of debts it cannot pay off, and those who are owed money will have to sift through dozens, possibly hundreds, of its subsidiaries, said Michelle Luo, a bankruptcy lawyer at Hui Ye law firm.<br/>

Hong Kong is pressing ahead with a stringent 14-day quarantine requirement for aircrew members, but airlines have a two-week grace period before the new measure is enforced.<br/>The new rules take effect on February 20, although the government said flight crew stopping in Anchorage, a major cargo transit point for Cathay Pacific, would be exempt. In a statement on Friday night, officials also said sea crew must have a negative coronavirus test before travelling to the city, and would be required to quarantine for 21 days in certain circumstances. “The government understands the impact on airlines’ and shipping companies’ operations, and that on aircrew and sea crew members to be brought about by the new arrangements,” the statement said. “Having said that, we would appeal to the industry’s understanding of the need to tighten the relevant exemption conditions, and call for the industry to join our concerted efforts to fight the virus.” Airlines are expected to get a formal briefing on Monday, when the grace period begins.<br/>

Border restrictions introduced by France to curb the spread of coronavirus variants have halved air passenger numbers in the past week, the transport minister said Sunday, defending the government’s avoidance of a new lockdown. The French government has so far resisted calls from health experts to impose a third nationwide lockdown, aiming to rein in high contamination rates through an evening curfew, curbs on leisure activities and the tougher rules on foreign travel. Since last Sunday, France has banned non-essential travel to and from destinations outside the EU, as well as to French overseas territories.“This is bringing results, with passenger numbers halved compared with the previous week,” Jean-Baptiste Djebbari, a junior minister in the French government, told news channel LCI. The border measures would remain in force at least until the end of February, he said. While pressure on France’s hospitals has eased slightly, the level of new daily infections has remained relatively steady above 20,000 since last month, and doctors fear that could increase with the circulation of more transmissible variants of the coronavirus.<br/>

Scotland’s Edinburgh Airport has recorded its lowest passenger traffic since 1995 in the last 12 months. In 2020, the airport handled nearly 3.5m passengers as compared to a record of 15m in 2019. Edinburgh Airport CEGordon Dewar said: “The fall in our passenger numbers is only one reflection of the long-term damage being inflicted by Covid-19 on Scotland’s economy and its social fabric, but it is a worrying one and there is no clear path to recovery.” The Scottish Government has prolonged non-domestic rates relief for the aviation sector and is working with airports on recovery, reported the BBC. Statistics published by the airport reveals a drop of 99% in passenger traffic between April and June compared to the same period in 2019. As travel restrictions continued, passenger numbers plummeted to 76%.<br/>

Australian PM Scott Morrison has announced the country’s international arrival caps will return to its high December 2020 levels after a temporary reduction in January. He also maintained that the hotel quarantine process will continue for the foreseeable future and will remain regardless of vaccination. The levels were cut at the start of 2021 following a second COVID cluster in Sydney and following worries that more transmissible international variants of the virus could leak into the community. From 15 February, NSW will return to its weekly cap of 3,010 and Queensland to 1,000. Story lists all new limits.<br/>

Tata Boeing Aerospace (TBAL) will set up a new assembly line near Hyderabad to produced vertical stabilizer structures for the 737 Max. TBAL, a joint venture between India’s Tata Advanced Systems (TASL) and Boeing, already produces aero structures for the AH-64 attack helicopter. Boeing notes that the vertical stabiliser is a complex structure, and that the new assembly line will use robotics and automation. “The expansion of our aerostructure manufacturing capabilities with the new production line to deliver complex vertical fins for the 737s is another landmark in our collaboration with Boeing,” says TASL CE Sukaran Singh.<br/>