British Airways has agreed to defer GBP450m of pension deficit contributions and will pay no dividends to its parent IAG for the next three years in a recovery plan aimed at boosting its liquidity. The company will defer monthly contributions of GBP37.5m from October 2020 to September this year as part of an agreement with pension trustees. BA will provide property assets as security, which will remain in place until the airline has repaid the deferred contributions to the New Airways Pension Scheme, or Naps. The GBP450m of accumulated contributions plus interest will now be repaid monthly in a revised scheme to March 2023, adding to the end of the existing recovery plan. BA will be barred from paying dividends to IAG before the end of 2023 after it secured a government guarantee that is designed to help its recovery from the impact of coronavirus and Britain’s exit from the EU. From 2024, any dividends paid will be matched by contributions to Naps of 50% of the value of the payouts. Story has full details.<br/>
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Malaysia Airlines’s parent company was given the nod to implement a wide-ranging restructuring by the majority of its lessors and a UK court Monday, giving a lifeline to the national flag carrier that has floundered amid a plunge in air traffic during the coronavirus pandemic. Malaysia Aviation Group, which is owned entirely by the country’s sovereign wealth fund Khazanah Nasional, can now proceed with its plan to reduce the airline’s liabilities of over 15b ringgit ($3.7b), the company said. The carrier in October begun an urgent restructuring exercise that involved renegotiations with leasing companies and creditors, as airlines globally contend with lockdowns and travel restrictions to combat a resurgence of Covid-19 in many countries. Malaysia Airlines has cut salaries for management and pilots, offered unpaid leave to employees, and has sought payment deferrals since March last year. The financial restructuring exercise, which is expected to be completed in early March, will see the airline “successfully achieve” agreements with a range of its engine, financial and maintenance leasing companies and lenders, as well as Malaysian state entities, it said.<br/>
Finnair may be one of the few airlines in the world that could see its home market expand when the pandemic recedes. The carrier’s Nordic competition is receding, leaving it in a good place to swoop in and grab market share when travel resumes. Its main competition in the region, Norwegian Air, is drastically scaling back its operations. As part of the restructuring plan it hammered out with its home government, Norwegian will go from a 140-aircraft fleet to about 50 aircraft, all narrowbodies. It’s giving up its intercontinental ambitions and will operate a shorthaul network. Norwegian will focus its operations from its bases in Oslo and Copenhagen and will scale back its Helsinki base. “We know they have been closing it,” Finnair CEO Topi Manner said. This will leave a hole in the market that Finnair thinks it can fill. Rival SAS, based in Copenhagen, also is retrenching and has dramatically scaled back its operations. “We think there are 3 million passengers up for grabs in the Finnish market,” Manner said. All this is in the future, though. Finnair flew only 8% of its 2019 traffic in Q4 last year. Its international network has ground to a halt. Domestic routes in Finland, particularly to Lapland, are showing some signs of life, he said.<br/>
Regional Express has announced the airline will cut five routes while hitting out at Qantas, accusing the national carrier of “predatory behaviour”. The Rex deputy chairman, John Sharp, Monday announced a revamp of the airline’s regional network strategy. Flights on “marginal routes” between Sydney and Bathurst, Cooma, Lismore and Grafton, and the route between Adelaide and Kangaroo Island will be cut at the end of March. The company said this will allow it to “stand its ground” on routes where it now faces direct competition from Qantas such as between Adelaide and Mount Gambier, Melbourne and Albury, Melbourne and Wagga Wagga, and Sydney and Merimbula. “Rex announces it will embark on a major revamp of its regional route network in response to aggressive predatory moves by Qantas into thin regional routes serviced by Rex,” the company said Monday. Sharp said “the expected drag on Rex’s financial position from the losses” on the routes where it was facing competition from Qantas would “mean that Rex will be unable to continue subsidising marginal routes that we have serviced for the past 20 years”. He pinned the decision squarely on recent moves by Qantas to beef up the services it offers to regional areas, saying it represented anti-competitive behaviour targeting Rex. “Qantas has clearly embarked on a deliberate strategy of moving into Rex’s routes that can only support one regional carrier in an attempt to intimidate and damage Rex in its traditional regional market, hoping that Rex would be a less formidable competitor in the domestic market,” he said.<br/>