general

Airlines made a net loss of $71.71 per passenger during 2020, according to global data released by IATA on 3 August, as the Covid-19 pandemic reversed a period of relatively strong financial performance. In its latest World Air Transport Statistics report, the airline body contrasts last year’s fortunes with an average net profit of nearly $8 per passenger in the five years leading up to 2020, in what it acknowledges is a “high-volume, low-margin” business at the best of times. “This highlights the financial challenges in the years ahead for airlines, when scaling operations up and repaying costly debt,” says IATA, which currently expects the industry to record a net loss of $47.4b in 2021. The loss per passenger in 2020 corresponds to an overall industry net loss of $126.4 billion for the year. During 2020, IATA’s forecast for the overall loss was adjusted upwards several times as the year progressed and prospects for a meaningful recovery diminished. In June 2020, for example, it projected a net loss of $84b for the full year, while in November it forecast a loss of $118b. Going into 2020, it had projected an industry net profit of $29.3b, which would have been an improvement on the $25.9b profit recorded in 2019. Split by region, Asia-Pacific registered the smallest loss per passenger in 2020, at $39.54, as domestic markets proved resilient to the crisis, closely followed by carriers in Africa with a loss of $41.33 per traveller. Figures were significantly worse for other regions, at $66.35 in North America and $66.67 in Europe. The Middle East net loss was $73.19 per passenger, while carriers in Latin America faced the highest loss at $89.45.<br/>

The Biden administration is developing plans to require all foreign travelers to the United States to be vaccinated against the coronavirus, with limited exceptions, according to an administration official with knowledge of the developing policy. The plan will be part of a new system to be put in place after the current restrictions on travel into the country are lifted, but officials have yet to determine when that might be done. President Biden has been under pressure for months to ease restrictions on people wishing to travel to the United States, particularly as other countries, including Britain and Canada, relax their measures. But White House officials have said in recent days that there is no plan to lift current restrictions anytime soon, in light of the spread of the highly contagious Delta variant. “Given where we are today with the Delta variant, we will maintain existing travel restrictions at this point,” Jen Psaki, the White House press secretary, told reporters last week. White House officials reiterated that stance on Wednesday evening, saying there was no timetable yet for requiring foreign travelers to be inoculated.<br/>

Almost 9,000 Canadian border staff will begin “work-to-rule” strike action starting on Friday, the union announced on Wednesday, days before Canada begins allowing fully vaccinated US visitors in the country for the first time in 16 months. Talks between two unions representing Canadian border guards and staff - the Public Service Alliance of Canada (PSAC) and the Customs and Immigration Union (CIU) - and the federal government reached an impasse in December 2020, and the unions served the federal government on July 27 with a strike notice. Both sides came back to the table after the strike notice, but the unions said on Wednesday they had been unable to reach an agreement, and their members would begin working to rule as of Friday. The action means staff will “perform their duties to the letter of the law,” a statement from the unions said. This will include not answering questions from travelers about border regulations or collecting duties and taxes. “We truly hoped we wouldn’t be forced to take strike action, but we’ve exhausted every other avenue to reach a fair contract with the government,” said Chris Aylward, PSAC’s national president. Union demands include higher pay and the ability to carry their guns in areas like airports, among others. Businesses across Canada fear a negative impact, especially given the timing, just when they were expecting the first influx of tourists since the pandemic began. Canada will allow fully vaccinated US visitors into the country starting on Monday.<br/>

Aer Lingus has formally signed start-up carrier Emerald Airlines as its new regional franchise partner, following the collapse of Stobart Air. Emerald Airlines will operate services on behalf of the Irish IAG carrier from Ireland to the UK, Isle of Man and Jersey under a 10-year partnership from the beginning of 2023. The carrier – which will host the Aer Lingus Regional brand – will use ATR turboprops for the flights. UK-based Stobart Air had been operating the franchise but had already been facing the termination of the partnership after Aer Lingus selected Emerald as its preferred new operator. Stobart Air subsequently ceased operations in mid-June after a proposed acquisition of the carrier failed to materialise. This collapse could result in the Emerald partnership being brought forward from the initially-intended starting point. “Although the [Emerald] contract is not due to commence for 18 months, Aer Lingus continues to work closely with Emerald Airlines to evaluate options with respect to an earlier contract start date,” says Aer Lingus, adding that some 400 new personnel will be required.<br/>

Fully vaccinated visitors arriving in England from France will no longer have to isolate for 10 days, a loosening of restrictions that puts them in the same category as travelers from most other European countries. The UK also eased rules for arrivals from India, Bahrain, and travel hubs the United Arab Emirates and Qatar. Those countries will move from the UK’s highest-risk “red” list to its medium-risk “amber” list, meaning arrivals will no longer need to quarantine in a government-approved hotel. Six other European nations, including Germany, were added to the lowest-risk “green” list, meaning all visitors can avoid quarantine whether or not they are fully vaccinated. All changes will come into effect from 4 a.m. on Sunday, Aug. 8. Spain and all its islands -- key summer holiday destinations for British tourists -- will remain on the amber list, but travelers are advised to get take a lab-processed PCR test before departing to the UK. The British government was under growing pressure from French ministers, as well as airlines and tourism bodies, to overturn its decision last month to put France in a newly created “amber-plus” category. France was the second most-visited country by Britons before the pandemic, with low-cost carriers including EasyJet offering dozens of flights per week. The surprise amber-plus restriction in July came just as school holidays began in the UK.<br/>

Frustrated UK cockpit representatives are urging the government to redress the licence-recognition imbalance with the EU, as Ryanair’s Maltese carrier Lauda Europe’s recruitment for a London Stansted base lays down a requirement for European-licensed pilots. With the UK no longer a member of the European Union Aviation Safety Agency, after the ‘Brexit’ withdrawal agreement came into force on 1 January, UK licences are no longer valid for use on EU-registered aircraft – like the Maltese-registered jets of Lauda Europe. Lauda Europe is recruiting Airbus A320 captains and first officers for the Stansted base but its advertisement requires them to hold an EASA flight crew licence. UK licence-holders wanting to fly EU-registered aircraft need to apply for validation from the relevant EU aviation authority. The issue has been exacerbated by the pandemic-driven collapse in air transport demand, which has intensified competition for cockpit positions. UK pilot union BALPA’s acting general secretary Capt Martin Chalk tells FlightGlobal that UK-licensed pilots “are at a disadvantage” as a result of an “incomplete” withdrawal agreement. “This is a consequence of that short-sighted decision,” he says.<br/>

Ryanair has enjoyed its strongest month of traffic since the pandemic hit, carrying 9.3m passengers at a load factor of 80% in July. It represents a 4m jump on the 5.3m passengers Ryanair carried in June and surpassed the 7m the airline handled in August last year when travel restrictions were temporarily eased after the first Covid wave in Europe. It also marks the first time Ryanair’s load factor has reached 80% since the crisis began. The improved traffic performance comes amid a further easing of travel restrictions across Europe in July as the vaccination rollout continues. Despite the improvement, Ryanair passenger levels in July are still only at roughly two-thirds of pre-crisis levels. Ryanair flew 14.8m passengers at a load factor of 97% in July 2019.<br/>

Passengers on an El Al flight from New York to Tel Aviv will be tested for the coronavirus on the plane itself or before boarding on Thursday to speed up procedures upon arrival in Israel, where infections are on the rise. The Israeli airline announced the plan a day after Israel said travellers from the United States, like those from many other countries, would have to self-isolate for at least a week after landing at Tel Aviv’s Ben-Gurion airport. Israel hopes the new restriction will slow the spread of COVID-19 and discourage Israelis - foreign tourism to Israel is still largely banned - from flying abroad and risking higher exposure to the Delta variant that is fueling a surge of infections worldwide. The PCR tests for the El Al passengers will be conducted in coordination with Israel’s Health Ministry and the Femi and Xpres Check companies that have testing labs at New York’s John F. Kennedy airport and at Ben-Gurion, the airline said. Representatives of the companies, rather than the carrier’s crew, will administer the tests on the flight. El Al noted the tests, a pilot programme, were not a substitute for those required for passengers from the United States and other countries up to 72 hours before a flight.<br/>

Association of Asia Pacific Airlines (AAPA) director general Subhas Menon stresses that coronavirus vaccines and more harmony on travel rules and restrictions are key to getting the region flying again. Menon observes that the world is breaking into two distinct blocs. In the first are countries and regions – such as the USA and Europe – that have seen relatively successful vaccination campaigns. This allows travel – mainly domestic, for now – to pick up. The Asia-Pacific, where vaccination campaigns have lagged, is in the second bloc. “In Asia-Pacific, where vaccination rates [are low] in most places, aside from some exceptions like Singapore and Mongolia, you’re talking about 16% and below,” he says. He notes that travel restrictions in the region are actually tighter than they were in 2020. “So, a recovery in the Asia-Pacific is not on the horizon yet.” Last week, AAPA reported that the region’s airlines carried 1.4m passengers on scheduled international services in June, just 4.4% of the 32m carried in pre-pandemic 2019. Even so, Menon feels that the region’s airlines, for the most part, are in better shape than 12 months ago. Losses have narrowed, costs have come down, some have restructured, and some have secured funds either from the capital markets or governments.<br/>

Chinese e-commerce giant JD.com, owned by billionaire Richard Liu Qiangdong, is on track to become the country’s first e-commerce player with its own air cargo fleet. The East China bureau of the Civil Aviation Administration of China (CAAC), the authority in charge of civil flights, has given preliminary approval for the establishment of Jiangsu Jingdong, according to an announcement by the authority on Tuesday. The air cargo unit will be a joint venture between the e-commerce giant and Nantong Airport Group, with the e-commerce giant contributing 75% of the starting capital. Nantong is located in eastern China’s Jiangsu province, also the home province of JD.com founder Liu, who was born and raised in Suqian, a city in the northern part of the province. The joint venture will become the first cargo airline in China funded by an e-commerce platform and the country’s third private cargo airline after SF Express and YTO Express. JD Logistics, JD.com’s logistics arm which raised US$3.2b in May when it went public in Hong Kong, has yet to announce a detailed investment plan for the fleet. <br/>

As soft loans for airlines go through the approval process under the Thai Credit Guarantee Corporation (TCG), the Airlines Association of Thailand (AAT) is urging the government to help clear the loan conditions as soon as possible. The emergency situation, which has frozen domestic air travel from July to August, has created a tremendous impact on over 20,000 airline employees. While news reports have suggested that some airlines started to receive financial aid recently, the AAT wishes to clarify that they still haven't received soft loans as requested, Puttipong Prasarttong-Osoth, president of the AAT, said in a statement. He said airlines have adjusted their business plans and are working closely with related agencies including the Export-Import Bank of Thailand (Exim Bank) which offers support in relation to debt repayment and loans to maintain operations. However, the soft loan proposal which was submitted to the government is key to help saving jobs amid the prolonged and unpredictable pandemic. "The AAT insists that there is no further approval on soft loans from the government up to now," Puttipong said. Soft loans for seven airlines already received approval from the Social Security Office under the supervision of the Labour Ministry, however, the process has been stuck with the TCG as some loan conditions need to be changed to suit the airlines. The association would like the government to step in and help clear the obstacles related to soft loan conditions.<br/>

A Boeing 737 Max jet is on its way to China to conduct a flight test for regulators, people familiar with the matter said, a step toward lifting the plane’s more than two-year grounding in the country following two fatal crashes. The 737-7 took off from Seattle’s Boeing Field at around 8 a.m. local time, bound for John Rodgers Field outside Honolulu, according to FlightRadar24, a flight-tracking site. Boeing declined to comment on the flight or activity in China. “Boeing continues to work with global regulators as they complete their validation processes in order to better understand enhancements to the airplane,” the company said. Boeing’s shares recovered from a morning slump after Bloomberg News reported on the flight, rising as much as 1.4%. The stock was little changed at 11:39 a.m. in New York. Boeing had climbed 7% this year through Tuesday, about half the gain of the Dow Jones Industrial Average. The Hawaii flight is the first leg of a trip across the Pacific, said the people, who asked not to be named because the matter is private. With the Max also barred from Russian airspace, the narrow-body plane will travel near the equator to China rather than take the shorter northern crossing that is typically flown by commercial aircraft. While the Max’s validation flight in China would be a milestone, the country’s regulators still could take months to wrap up their work before allowing the plane to resume commercial service. Boeing sent a delegation of around 35 pilots and engineers to the nation last month to meet with regulators and prepare for simulator and flight testing. US FAA technical officials have just completed a quarantine in China -- required due to the Covid-19 pandemic -- and are expected to participate in the test program, said another person familiar with the matter.<br/>

Frankfurt Airport owner Fraport Group has swung back to profit in H1 2021, benefitting from cost control and compensation from the government. This resulted in a group net profit of $18.25m in the first six months of this year, compared with a loss of $274.22m in the prior year. However, Fraport stated that its business performance continued to be affected by Covid-19 headwinds from January 2021 to June 2021. Fraport’s group revenue of $960.96m in H1 2021 was 10.9% lower than the year-ago figure. The group still benefitted from the German and State of Hesse governments’ compensation to maintain operational readiness at FRA during the first Covid-19 lockdown last year. In addition, the Greek Parliament granted compensation to Fraport for operational losses incurred by its 14 Greek airports last year as a result of the pandemic.<br/>