IATA is urging governments to launch programmes that stimulate demand for air travel and help the aviation industry recover from the coronavirus crisis. IATA’s director of global airport infrastructure and fuel Hemat Mistry argued Tuesday that stimulus would enable fast recoveries from the crisis without the distortion to competition that can accompany support to individual airlines. Although airlines have been provided with around $173b in assistance since the onset of the Covid crisis, they are forecast to continue burning through $7b per month in the first half of 2021, making additional support necessary. IATA is keen to stress that this extra assistance should not contribute to airline’s debt, which has ballooned amid the crisis. “With potential to safely reopen borders and revive travel with testing, governments will need to add measures that stimulate demand,” states IATA CE Alexandre de Juniac. “Such targeted initiatives will help generate revenues, avoid adding debt to airlines, and immediately generate economic activity across the value chain.” Asked whether governments are interested in the principle of market stimulation, Mistry responds that “in general they’ve been positive about this initiative”. He adds: “When we try to explain this could lead to an earlier recovery of the industry, this is something that rings a bell.”<br/>
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Some carriers are seeking “outrageous” prices to fly dry ice and other medical equipment in the pre-holiday rush, but a capacity squeeze should ease in 2021 when the roll-out of COVID-19 vaccines is expected, the WHO’s logistics chief said on Tuesday. Distribution of vaccines to low- and middle-income countries will be tricky, due to grounded passenger air services in some places, and may rely on charters, said Paul Molinaro, WHO chief of operations support and logistics. Price inflation has been a growing feature in air freight, with “across the board increases especially since November,” Molinaro said. He cited a price quote just received for a dry ice shipment, needed to cool some lab re-agents, which is around 20 times the norm. “I just had a quote from a cargo (company) - a big one that shall remain nameless - Dallas (Texas) USA to Sierra Leone, Freetown - at sort of $105 a kilo, which is outrageous actually,” he said. The “normal price” would be $4-$6 per kilo, he said. Molinaro said a range of factors had driven prices, including a greater than usual pre-Christmas increase in e-commerce as lockdowns keep people at home. “So we have air freight rates coming out of China going up because of the introduction of the new iPhone, because of the introduction of Play Station 5 and because of the fact that products are in high demand anyway,” he said. By January, available capacity might increase, he added. Airline body IATA’s chief economist Brian Pearce said Tuesday that Christmas demand “exaggerates the problem” of soaring cargo rates, which should ease early next year in time for the ramp-up in vaccine shipments. “That’s the low season for the cargo business - that will free up a lot of capacity,” he said.<br/>
FedEx and United Parcel Service have enough air cargo capacity handle COVID-19 vaccine deliveries, FedEx Americas President Richard Smith said on Tuesday. FedEx and UPS are key partners to the US government's Operation Warp Speed vaccine project and will move millions of doses for Pfizer Inc and other pharmaceutical companies. Experts predict that the unprecedented size of the COVID-19 project will test the nation's cold-chain shipping capabilities. "There's plenty of capacity in our networks to handle this, and remember it's not all going to hit us on a Tuesday," Smith said during the Operation Warp Speed vaccine summit at the White House. "It's going to come over time, so we've got this. Relax," Smith said, also referring to UPS. Accenture's Seabury Consulting estimates the global roll-out of a vaccine will generate 65,000 tonnes of air freight, which is five times the air vaccine trade in 2019.<br/>
South Korea more than tripled the number of coronavirus vaccine containers aircraft can carry by easing limits on dry ice needed to keep them cold, the country’s deputy minister for aviation said Tuesday. South Korea said on Tuesday it signed deals to provide coronavirus vaccines for 44m people next year, including from AstraZeneca, Pfizer, and Moderna and Johnson & Johnson’s Janssen. Airlines and governments round the globe are working on ways to establish cold chain delivery systems for vaccines, like Pfizer’s, which requires storage at below minus 70 Celsius, and Moderna’s, which needs to be kept at -20C. A difficulty with vaccine transport is that airplanes can only carry a limited amount of dry ice - frozen carbon dioxide - as it turns into gas over time, displacing the breathable air in the cabin. The transport ministry raised the limit of dry ice a plane can carry from 3,300 to up to 11,000 kilogrammes, which will allow a Boeing 747 cargo plane to carry 52 containers of vaccines, up from 15, Kim Sang-do, deputy minister for civil aviation, said on the sidelines of a forum. To allow this, it will boost safety measures such as carbon dioxide emission inspection and installation of gas meters, the ministry said.<br/>
Americans are expected to continue with their travel plans for the Christmas holiday with more than 1m air passengers per day anticipated for several days during the holiday period, David Pekoske, administrator of the Transportation Security Administration, said during an aviation event Tuesday. Americans plan to travel despite CDC advice to stay at home and celebrate with the people they live with. Anthony Fauci, the US government’s top infectious-disease expert, said that the Christmas holiday season could pose greater risks than Thanksgiving when it comes to spreading the coronavirus, and urged Americans to double down on measures such as wearing masks, avoiding crowds and social distancing. Despite Pekoske’s forecast, passenger traffic has fallen steadily since Thanksgiving as the country faces a surge in new infections. In the past seven days through Monday, airlines carried only 33.5 percent of passengers compared to the equivalent week in 2019, or an average of about 725,000 a day. The passenger numbers are the lowest seven-day average since late September, according to TSA data.<br/>
US airlines carried 62% fewer passengers in October over the same month last year, the US DoT said Tuesday. The 62% decline from October 2019 was the smallest year-to-year decrease since March when the coronavirus pandemic slashed US travel demand. The largest airlines carried 29.9m passengers in October, down from 78.3m passengers in October 2019. US domestic demand was down 60% and international demand was off 77%. Airlines for America, an industry group, said this week it estimates that through late November passenger demand remains down 62%. A spike in COVID-19 cases and guidance from US health agencies urging Americans to avoid holiday travel has led to a recent softening in travel demand. International travel demand has also been harmed by US travel restrictions that bar most non-US visitors who have recently been in the EU, United Kingdom, China and Brazil from visiting the US. Airlines are hoping vaccine prospects will start lifting demand throughout 2021 but do not expect a full recovery for some time.<br/>
The price of insuring against a debt default by US airlines has fallen sharply as investors anticipate the industry will get a new round of bailout funding to help see it through to a coronavirus vaccine next year. Even as the country’s main carriers burn through cash at a rate of tens of millions of dollars a day, and the pandemic continues to rage across the US, prices for airline credit default swaps have fallen to levels not seen since March or, in some cases, February. Share prices for the big four carriers — American Airlines, Delta, United and Southwest — have also risen, outpacing the broader stock market since the first vaccine trial results were published a month ago. “The immediate existential threat has receded,” said Berenberg analyst Adrian Yanoshik. “And the very obvious second act of this is a lot of people feel like vaccines are coming, the world will open up and we’ll travel again next year.” The cost of credit default swaps, which pay out when a company defaults on its debts, is now a fraction of their peak in May, as airlines have tapped both government and private market funds to improve their liquidity positions. CDS prices act as a proxy for the market’s view of a company’s creditworthiness. They have tumbled again in recent weeks, by between 38 and 67% for the four big carriers. Story has more details.<br/>
European governments agreed to expand night-train services linking the continent’s major cities, creating another headache for airlines fighting to recover from an unprecedented slump in air travel. Ministers from France, Germany, Austria and Switzerland unveiled a plan Tuesday to boost rail traffic between cities including Paris, Berlin, Vienna and Milan to curb rising carbon emissions. The Trans-Europe Express 2.0 initiative will be established in late 2021 and allow travelers to journey across multiple national borders without changing trains, a direct challenge to aviation. The revival of Europe’s night-train network comes 25 years after the collapse of the original Trans-European Express that linked 130 cities across the continent. The boom in short-haul flying eroded its appeal, but campaigns by environmental activists such as Greta Thunberg are making people more aware of their carbon footprint. There is “growing demand for young people for other modes of transport other than aeroplanes,” said Marc Papinutti,” an official at France’s environment ministry. Expansion of night-train services comes at an awkward time for Europe’s airlines as they struggle to cope with the fallout from the coronavirus, which punctured a decades-long boom in air travel. However, rail’s impact may be limited by the difference in traveling times. A direct journey from Amsterdam to Rome would take over 13 hours under the TEE 2.0 plans, compared to just over 2 hours flying. That’s unlikely to attract time-short business travelers, although could appeal to climate-conscious holidaymakers. Furthermore, the fallout from the Covid-19 pandemic means countries leading the night-train charge are major stakeholders in national airlines, and are unlikely to undermine their recoveries. “European rail traffic is a game changer for a climate-friendly and economically successful future,” said Michael Peter, chief executive officer of Siemens AG’s mobility division, one of Europe’s largest train manufacturers. “Night trains will enjoy a renaissance.”<br/>
Airlines flying to the UK are demanding that key overseas hubs be granted exemption from British quarantine measures. At present anyone arriving in the UK via a hub airport that is in a “quarantine country” must self-isolate for two weeks. Spending a couple of hours in a key transit location such as Paris CDG, Frankfurt or Amsterdam airport makes the traveller liable to UK quarantine. The effect is to render much of the government’s so-called “travel corridors” list meaningless – because so many destinations cannot be reached by a non-quarantine airport. For example, British holidaymakers in the Dutch and French Caribbean must travel home through Amsterdam and Paris respectively. Just two countries in Africa – Namibia and Rwanda – are on the travel corridors list, but quarantine-free travel is impossible from either of them. Passengers from Namibia must change planes in another African country, while the Rwandair flight from Kigali to London Heathrow touches down in Brussels. While no new travellers join the plane, a pilot is required to leave the aircraft in the Belgian capital to conduct a “walk around” check – meaning every passenger on board must quarantine. Dozens of Pacific and Atlantic islands, as well as Uruguay, are similarly subject to what the IATA calls an effective travel ban.<br/>
Grant Shapps has been urged to buy swathes of airline tickets before giving them away in a “lucky draw” to boost the Covid-ridden aviation industry. In what could be dubbed “Grant’s Giveaway”, trade body IATA said the lottery was one of five “proven ways” that air travel can be stimulated through greater state intervention. Hong Kong authorities have pre-purchased 500,000 tickets to be handed out to local residents and overseas visitors when its borders reopen. Another idea, taken up in Thailand, is for governments to subsidise passenger travel for doctors and nurses. Alexandre de Juniac said: “Governments will need to add measures that stimulate demand. Such targeted initiatives will help generate revenues, avoid adding debt to airlines.” Other than investing around £1m to Flypop, an airline with no planes or operating licence, the UK Government has refused to provide airlines with industry-specific support. Rishi Sunak has said that taxpayers will only step in as a last resort once all private options have been exhausted. Other ways to stimulate the aviation industry included temporary waivers of government charges - such as the UK’s air passenger duty. Subsidies for running regional routes and incentives for operating services with few passengers on board was proposed. <br/>
Boeing on Tuesday said it logged more cancellations than orders for its 737 Max plane last month, just as carriers are preparing to return the jets to service following two deadly crashes. US and Brazilian officials last month cleared the planes to fly again after a 20-month grounding after crashes of nearly new Max jets in 2018 and 2019 that killed all 346 people on the two flights. Boeing said customers including Virgin Australia and lessor Air Lease canceled orders for 88 Max planes. Virgin Australia, however, changed its order to include 25 of the 737 Max 10, a larger model, which it expects will be delivered starting in mid-2023. <br/>
Nearly 21 months after it was grounded following two deadly crashes, the Boeing 737 MAX will return to the skies Wednesday with a flight by Brazilian carrier Gol, the airline confirmed. Gol, the first company to resume commercial flights with the now-overhauled jet, said it was fully confident in the safety upgrades and expanded pilot training program implemented by Boeing as part of aviation regulators' conditions to recertify the plane. "For the past 20 months, we have been carrying out the most intensive safety review in the history of commercial aviation," Gol's vice president for operations, Celso Ferrer, said. "Safety comes first and foremost." The 737 MAX will make its return on an early-morning domestic flight. A Gol spokesman told AFP that any passenger who did not feel comfortable flying on the 737 MAX would be allowed to reschedule at no cost. Gol, the biggest domestic airline in Brazil, said 140 of its pilots had undergone training on the jet in the United States. The company said it expected to have its full fleet of seven 737 MAX planes back in the air by the end of the year.<br/>
A flyers advocacy group has challenged the Federal Aviation Administration’s (FAA) decision to lift the March 2019 order grounding the Boeing 737 MAX airliner after two fatal crashes in five months that killed 346 people. Flyers Rights and a group of flyers said on Tuesdy they had appealed the FAA’s Nov. 18 decision allowing flights to resume to the U.S. Court of Appeals for the District of Columbia. Paul Hudson, president of FlyersRights.org and one of fourindividuals who challenged the decision, said the FAA and Boeing declared the MAX safe based on “secret data and secret testing that is clearly legally inadequate.” Hudson and some Democratic lawmakers have demanded the FAA disclose more underlying data in its review. The group is separately trying to force the FAA under the Freedom of Information Act to turn over documents related to 737 MAX technical fixes and testing. Boeing did not immediately comment. The FAA declined to comment.<br/>