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A focus on tackling the mounting debt burden is likely to result in airlines adopting a more cautious approach to building back their networks post-pandemic, believes new IATA DG Willie Walsh. Industry debt levels have risen sharply as airlines took action to bridge the revenue gap caused by the sharp fall in air travel during the pandemic. At the end of 2020, IATA estimated that airline industry debt levels had increased by more than $220b, to $651b – a figure that will have increased as carriers continue to burn cash while air travel markets remain largely closed. Walsh said increased debt levels will have an impact on the structure of the industry. “It will certainly cause airlines to be more cautious in terms of how they rebuild their networks, because without question there will be parts of the global network that wont’ be sustainable financially,” he says. “So people won’t be prepared to take the risk in the short-term, because there will be a focus on rebuilding and correcting the balance sheets of airlines that have been significantly stressed. The debt burden airlines have taken on – and continue to take on – is massive. Walsh adds: “It will take time to correct that and it has impacted on every airline, nobody has escaped this because pretty much nobody is flying where they thought they would be. So I think the industry will be a little more cautious as we rebuild.”<br/>

The head of global airline industry body IATA has hit out at the high cost of COVID-19 testing, accusing providers of profiteering from travel, and calling for the industry to challenge whether PCR tests are necessary. European airlines are counting on a travel rebound this summer after months of COVID-19 restrictions left them struggling with minimal revenues and huge new debts taken on to survive the pandemic. But any demand for PCR tests that can cost more than the short flights themselves threatens the recovery. "We're clearly seeing evidence of profiteering by people who have jumped on the testing bandwagon," Willie Walsh, IATA's new director general, said at a virtual industry conference on Tuesday. He said that governments had mandated PCR tests and were then charging value added tax on the cost of the testing, a scenario which he said needed to be challenged. "The cost of testing should be significantly lower than it is. I think we've got to challenge whether PCR testing is necessary," he said.<br/>

Canada and the US Tuesday extended a land-border closure for non-essential travelers, and air passengers arriving in Canada will continue to be tested for COVID-19 ahead of a hotel quarantine period, authorities said. The land-border restrictions, imposed in March 2020, have been extended to May 21. Now in place for 13 months, they are being renewed month by month. Mexico said late on Monday it was maintaining some of its border curbs too. The US Department of Homeland Security said it was "engaged in discussions with Canada and Mexico about easing restrictions as health conditions improve". The restrictions have hit many border communities and businesses hard. Many US lawmakers have urged loosening the restrictions or setting a road map to resuming normalized travel. But Canada lags the United States on vaccinations against the coronavirus, and much of the country is now fighting a virulent third wave of the pandemic with school and business closures. Canada's mandatory three-day hotel quarantine following testing at airports, which was introduced as a temporary measure to discourage spring break travel, was also extended to May 21, health authorities said.<br/>

Intrepid US travelers who flew during the coronavirus pandemic got a real bargain in 2020, much to the chagrin of struggling airlines. Average domestic airfares fell 18.6% to $292 compared to 2019, according to new data from the Bureau of Transportation Statistics. This does not include spending on ancillary fees, like those for checked bags or extra-legroom seats. By themselves, airfares were at the lowest level adjusted for inflation since the bureau began collecting data in 1995. Airlines were hit hard by the Covid-19 crisis in 2020. At one point during the year, passenger numbers fell to levels unseen since the 1950s. Traffic has climbed, albeit with setbacks, since last April, with TSA screening numbers holding well above 1m people a day since March 11. But that drop in demand pushed airfares down, and the industry spilled red ink. The industry posted a collective $35b net loss during the year. Things have begun to turn. A strong uptick in net bookings in March helped some airlines put daily cash burn behind them — though that is not to be equated with turning profits — as they head into the traditionally busy summer travel season. <br/>

PM Boris Johnson’s government will set a goal to cut UK carbon pollution by 78% by 2035, deepening an already ambitious target as he seeks to spur global momentum in the fight against climate change and boost relations with US President Joe Biden. The government will adopt the target -- a cut relative to 1990 levels -- in line with the recommendations of the Committee on Climate Change, the Department for Business, Energy and Industrial Strategy said Tuesday in an emailed statement. For the first time, aviation and shipping emissions will be included, it said. The new target, set to become law by June, will also affect international flights and maritime. IATA Director General Willie Walsh said the industry would be able to achieve the new goal. “The industry is coming together. As we’ve gone through the worst financial crisis in our history, airline CEOs continue to be focused on the environment,” he said in an interview at the World Aviation Festival. “There are no arguments here.”<br/>

Ministers have urged Heathrow airport to dedicate a terminal to processing passengers arriving from “red list” countries, amid fears that the number of people coming from India could swell and create a more dangerous environment for Covid variants to spread. The Home Office has suggested Terminal 4 be used to separate those who have travelled from places where entry is banned for all apart from UK citizens and residents, and avoid them mixing with people coming from safer countries. Additional Border Force staff would also be provided to help deal with incoming passengers. India’s addition to the red list from 4am on Friday due to significantly rising case numbers and a new variant has prompted fears in Whitehall about queues in the arrival halls at UK airports, as people wait to have their passport and other documents including passenger locator forms and proof of negative test results checked manually. E-gates are still shut, significantly slowing the rate at which Border Force staff can process passengers. A government source said while lots of effort was going into reopening them, plans to bundle the extra paperwork required because of the pandemic into a digital document may not be ready for 17 May – the earliest that international travel could resume again.<br/>

Civilian flights between Tripoli and Cairo will re-start on Wednesday after a suspension of more than six years and the Egyptian embassy will re-open soon, Libyan PM Abdulhamid Dbeibeh said. “We bring you the good news that we have agreed with the Egyptian side that starting tomorrow Libyan planes will touch down in Cairo International Airport,” Dbeibeh said in a press conference in Tripoli on Tuesday with Egyptian Prime Minister Mostafa Madbouly. Egypt closed its Tripoli embassy and halted flights in 2014 as the conflict that saw rival governments set up in Tripoli and in the east of Libya intensified.<br/>

Indonesia’s aviation sector is expected to make a full recovery by 2026, contingent on vaccines and the successful containment of the pandemic. Domestic and international flight volumes are predicted to return to pre-pandemic levels in 2024 and in 2026, respectively, according to a white paper by Padjadjaran University and commissioned by the Indonesia National Air Carriers Association. At a 15 April virtual presentation of the white paper, UNPAD researchers outlined three recovery scenarios ranging from optimistic to moderate to pessimistic. Under the moderate outlook, they expect domestic air travel recovery to start in early 2022 and international air traffic to improve by the end of 2023. They predict domestic passenger volumes will reach nearly 78.7m in December 2024, almost surpassing the 79m passengers in 2019. “Vaccination is a game changer for the recovery of the aviation sector in Indonesia, so there is a need for policies and regulations to accelerate the vaccination programme so that the herd immunity can be reached and activities supporting the aviation sector are created,” they say.<br/>

Boeing’s 737 Max got a boost from the jet-leasing sector after Dubai Aerospace Enterprise announced a deal for 15 aircraft, adding to evidence that demand is reviving after the model’s near two-year grounding. The order for the Max 8 variant is worth about $1.8b at list prices and represents the first direct acquisition of the plane by the Middle East’s biggest lessor, whose previous deals have involved purchases from airlines. DAE’s order suggests that the Max may have turned a corner with leasing firms. The narrow-body model has seen a revival of interest from carriers after its return to service following two fatal crashes, including a 100-plane deal from Southwest. But it has also suffered a painful run of order cancellations from lessors affecting aircraft not yet placed with end users. DAE is “confident in the success” of the Max as domestic and regional air travel begins to recover from the coronavirus crisis, CEO Firoz Tarapore said Tuesday. Leasing companies including AerCap Holdings, Avolon and SMBC Leasing Co. canceled or delayed Max deliveries in 2020 as the pandemic prompted crippling travel bans. Air Lease Corp. said last month that the trend was beginning to turn, with carriers asking to reactivate orders amid a pickup in demand.<br/>

The US Transportation Department’s Office of Inspector General said on Tuesday it will audit the FAA November decision to unground the Boeing 737 MAX and other agency decisions. The 737 MAX was grounded in March 2019 after two crashes in Indonesia and Ethiopia within five months killed 346 people. The FAA approved its return to service after significant safety enhancements developed during the plane’s 20-month grounding. The new audit will examine the FAA’s actions following the two accidents, including the the agency’s risk assessments, the grounding of the aircraft and the subsequent recertification, the inspector general’s office said. Boeing declined to comment. <br/>

Boeing is sticking with CEO Dave Calhoun to guide the company through a long and uncertain recovery, while parting ways with a potential contender for his job. The company’s board raised Calhoun’s retirement age to 70, citing the 64-year-old’s “substantial progress” in ending the 737 Max grounding and bringing the planemaker back from the Covid-19 pandemic. In another surprise, Boeing said Tuesday that CFO Greg Smith will exit July 9 after guiding the company’s operations through years of turmoil. The shake-up tightens Calhoun’s grip and eliminates potential distractions over succession as he carries out a multiyear rebuilding effort. The departing CFO had been overseeing the company’s day-to-day turnaround efforts and was a familiar face on Wall Street. Last year, Smith spearheaded a $25 billion bond financing -- the biggest in Boeing’s history -- to keep the company afloat amid the unprecedented travel collapse caused by the pandemic. The decision “gives an outline of the leadership path for Boeing in the 2020s, though there is still much to learn about strategy and personnel,” Seth Seifman, an analyst with JPMorgan Chase & Co., said in a note to clients. Speaking at Boeing’s annual meeting Tuesday, the CEO vowed to return the planemaker to its engineering roots. He also outlined initiatives to shake up the company’s culture and streamline its business as it restructures after burning through $20b in cash last year.<br/>

With few flights and even fewer passengers, the coronavirus pandemic unleashed a wave of challenges for airlines. Some have gone out of business and others are barely surviving as global passenger volume hovers at around 50% of 2019 levels. Without passengers to fill them, airlines have been retiring their older aircraft faster than normal. The more than 1,400 planes airplanes parked in 2020 that might not return to service is more than twice as many aircraft as would customarily be retired in a single year, according to a 10-year aviation forecast by the business consulting firm, Oliver Wyman. The result will a more modern fleet, the report states. In a glass-is-half-full observation, David Marty, head of digital solutions marketing at Airbus, noted that planes remaining in airlines’ fleets are younger, more fuel-efficient aircraft, with lower carbon dioxide emissions. New engine technology and lighter structures and components let the Boeing 787 and the Airbus A350 burn 20 to 25 percent less fuel than the planes they replace, according to the manufacturers. Story has more.<br/>

Airfreight rates are expected to remain at an elevated level in the long term while freighters are expected to gain market share, according to a new whitepaper from Transport Intelligence. The whitepaper predicts that there is a high likelyhood of structural change in the airfreight market as a result of the Covid-19 pandemic. The report cites recent predictions from Boeing that the air fleet will grow by 3.2% annually over the coming 20 years, while cargo demand is expected to increase by around 4% each year over that same time frame. “The logic of these numbers is that available belly freight capacity will fall. This suggests that the low freight rates seen in the ten years previous to 2020 have come to an end,” Ti states in the paper. This will also result in increased use of freighters in order to meet demand. Ti also predicts consolidation. “There is likely to consolidation in the airline market, reducing both competition and capacity."<br/>