American Airlines is seeing a slowdown in demand because of surging coronavirus cases, signaling a weaker outlook heading into the year-end holidays. After a strong start for Q4, a deceleration in net bookings growth began before Thanksgiving and has persisted into this month, American said in a regulatory filing Friday. As a result, the company expects its daily cash consumption to be at the high end of an earlier forecast of $25m to $30m. The company’s caution follows a similar warning Thursday by Delta, which said it may burn more cash than expected in Q4 because of the slowdown. While passenger totals jumped over the Thanksgiving holiday, they were still only about 40% of last year’s levels. American said it expects to end the year with more than $14b in liquidity.<br/>
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Qantas is looking to permanently reduce the number of cabin crew on the lucrative Sydney to Melbourne route as it unleashes a massive cost-cutting drive to help it recover from the COVID-19 pandemic. After the health crisis forced it to ground most of its fleet for the best part of 2020, the airline is trying to cut $1b from its annual cost base to help repair the damage inflicted on its balance sheet. Qantas is carrying out an exhaustive search for ways to save cash in all parts of its operations. It has already announced plans to lay off 8500 workers, or close to a third of its workforce since the start of the pandemic including by outsourcing all ground handling work. In further cost cutting, Qantas is also the process of removing one of the two portable emergency beacons from each of its Boeing 737s and Airbus A330s, which will deliver a minor saving from maintenance and streamlined pre-flight checks. Australian safety regulation only requires airlines to carry one portable Emergency Locator Transmitter in addition to the one that is installed on each aircraft, which crew are trained to take from the aircraft in an emergency evacuation. On Friday night Qantas operated its first flight from Sydney to Melbourne using four cabin crew instead of five, the company confirmed, and will use a reduced crew permanently if it is satisfied service remains acceptable on its busiest and most profitable route. "Given the challenges we face, and that the whole industry faces, we’re naturally looking at smarter ways to manage costs," a Qantas spokesman said. "But we’ll never compromise on safety and we’ll always be a premium airline offering a high level of service. In areas where we’re upgrading technology, we’ll hopefully be able to offer a smoother, faster experience."<br/>
Qantas CE Alan Joyce has brushed aside Rex’s threat to his business’ market share, arguing the regional airline will be hamstrung by its “limited network” and higher ticket prices. Joyce said, “We’re very confident in our relative position and what that means for our market share, which should be above 70 per cent going forward.” His comments come days after Rex started selling tickets for its new capital city routes between Sydney and Melbourne on 1 March, with plans to expand flights to Brisbane by Easter. It marks the first major new competitor for the so-called Golden Triangle in two decades. Joyce was speaking to the media after Qantas gave a quarterly update to the ASX, revealing it hopes to break even at an underlying level in the first half of this financial year, and be “net free cash flow positive”, excluding redundancies, in the second half. Qantas currently estimates it holds around 70% of the market, about 10 per cent more than it did pre-COVID.<br/>
Virgin has matched Qantas’ offer to allow Velocity members to switch to the flag carrier’s own frequent flyer scheme. The recently reborn airline’s proposals are even more generous, with Qantas Gold members being able to swap schemes by simply booking one flight, rather than accumulating 100 points or five return economy trips between Sydney and Melbourne. The news comes days after Qantas claimed thousands of top-tier members from rival airlines had taken up its initial offer and revealed 25 corporate accounts that have moved across in the last year. Virgin said that Qantas Gold status passengers wanting to switch to its own Velocity scheme simply need to fill out an expression of interest. They will immediately be granted a three-month trial membership – including lounge access, priority boarding and preferential seating – and will only have to book one “eligible flight” and earn 80 credits to continue Gold membership for a year. Story has details.<br/>