THE AIR TRANSPORT INDUSTRY WORLDWIDE IS ON LIFE SUPPORT DUE TO CoVID 19
Coronavirus (COVID-19) pandemic continues to impact the global aviation arena with its debilitating economic effects. The effects, among others, include flight suspensions, airports closure, grounding of aircraft/redundancies and huge loss of revenue to airlines, ground handling firms, JET-A1 suppliers and other service providers. With over 25 million jobs under threat globally, airlines and Original Equipment Manufacturers (OEM) are evolving a raft of measures, including pay/job cuts, to navigate around the unprecedented crisis, KELVIN OSA-OKUNBOR reports.
The International Air Transport Association (IATA) says the industry is in the throes of an unprecedented crisis. It’s Director-General/CEO, Alexandre de Juniac, says airlines are facing the most critical period in the history of commercial aviation.
According to experts, the aviation sector is worse hit by COVID-19 as the movement of passengers and commercial cargo has been halted because of travel restrictions imposed by many countries across the continents.
The effect is that Airlines, Airport authorities, ground handling companies, Aviation fuel suppliers, Airline caters/Suppliers and others in the value chain have been hard hit.
PROBLEMS FACED BY AIRLINES DUE TO COVID 19
Virgin Australia (Australia): Virgin
Cash-strapped airline Virgin Australia
“Our decision today is about securing the future of the Virgin Australia Group and emerging on the other side of the COVID-19 crisis,” CEO Paul Scurrah said in the statement. “Australia needs a second airline and we are determined to keep flying.”
The airline was more than a$5 billion ($3.2 billion) in debt and had appealed for an Aus$1.4 billion loan to stay afloat, but the government refused to bail out the majority foreign-owned company.The airline said four insolvency experts from accounting firm Deloitte had been appointed as administrators. Virgin had already stood down 8,000 of its 10,000 staff, suspended all international routes and scrapped all bar one of its domestic routes after Australia shut its borders to limit the spread of COVID-19 and imposed tough restrictions on movement.
flybe (UK): Flybe Airlines Could Be Bankrupt by May Because Of the COVID-19
UK regional airline Flybe entered administration a practice similar to declaring bankruptcy on Thursday, March 5. Although Flybe was already on the brink of collapse despite a major investment by a Virgin Atlantic-led consortium the previous summer the coronavirus crisis pushed it over the edge. Flybe operated about 40% of domestic flights in the UK.
LUFTHANSA: Lufthansa to ground 150 Aircraft
Lufthansa will ground 150 aircraft out of its total fleet of around 770 due to the coronavirus, the German airline said on March 4, confirming what company sources had told Reuters earlier. “We are dynamically adjusting our plans to reflect extraordinary circumstances,” a Lufthansa spokesman said, adding that 25 of the 150 grounded aircraft are long-haul jets.
Last week Lufthansa said it had grounded 23 long-haul aircraft.European airline bosses warned on Tuesday that the worst is still to come for the airline industry in terms of economic damage from the coronavirus outbreak, but they predicted that travel demand could stabilize in the coming weeks.
Lufthansa Group airlines, which include Swiss, Brussels and Austrian airlines, had already said on Friday that it would reduce the number of short- and medium-haul flights by up to 25% in the coming weeks depending on how coronavirus spreads.
Lufthansa said on Monday that it was extending the suspension of flights to China until April 24, to Tehran until April 30 and reducing services to northern Italy due to the coronavirus outbreak. According to the International Civil Aviation Organization, the Kovid-19 outbreak will reduce global airline revenue by about 4bn- $ 5bn.Lufthansa Group also owns Network Airlines, Eurowings and the Aviation Services segment.With global operations, the group generated revenue of € 35.84bn in fiscal year 2018. This is due to its earnings report later this month.
In January, Lufthansa selected Google Cloud to develop a platform that would help create stable flight plans and improve operations. Meanwhile, the death toll due to Kovid-19 has risen to over 3,200. The number of confirmed cases increased to 95,000.
INDIGO: IndiGo to Suspend Meals, Fill Only 50% Seats in Airport Buses after Lockdown
Once the nationwide lockdown to curb the spread of Covid-19 is over and flights are allowed to fly again, InterGlobe Aviation Ltd.’s IndiGo airlines will deep clean its aircraft more frequently, stop in-flight meal service for a brief period and will fill a maximum 50 percent seats in airport buses, Chief Executive Officer Ronojoy Dutta said on Friday. "...Our singular focus is on cash flow. We are examining all our fixed costs and looking for ways to minimize them," he said in an email to employees which was accessed by PTI. Dutta said IndiGo’s plan after the lockdown will be going forward to first start the services and gradually ramp up the capacity. “We have always been very safety conscious and now we must be health-conscious as well. With this in mind, we are looking at changingmany of our operating procedures. The new set of procedures has not been finalized yet.”
AIR MAURITIUS: Air Mauritius Placed Into Administration
The current crisis in the aviation industry seems to have suddenly caught up with several airlines. As of today, Mauritian airline Air Mauritius has been placed into administration. The airline’s board came to a decision following “a complete erosion of the company’s revenue base.” Air Mauritius has become the second airline to enter administration proceedings in as many days voluntarily. Yesterday Australian carrier Virgin Australia also entered voluntary administration caused by the current crisis. It looks as though other airlines could also suffer similar fates before the crisis is over.
According to the letter issued by the Air Mauritius board of directors, the African airline has been placed into voluntary administration. This action has been taken to safeguard the airline, given the current situation. According to the letter, Mr. A. Sattar Hajee Abdoula, FCA, and Mr. Arvindsingh K. Gokhool, FCCA of Grant Thornton have been appointed as the airline’s administrators.The administration proceedings have come as a direct result of the current situation being faced by the aviation industry as a whole. In its letter, the airline stated that its entire revenue base had been eroded. The erosion has been caused by a decrease in demand tied to many different travel bans enacted by separate national governments. The airline believes that demand will not begin to return until the end of 2020.
AIR FRANCE
Air France has to cut 1,500 jobs, mostly ground staff, by the end of 2022, union sources told AFP on Thursday, though the company refused to confirm pending negotiations with labor representatives.
Unions said the airline would have to avoid forced layoffs and the cuts would come through natural attractions, mainly from aid departments in human resources, logistics and other functions.Air France, for its part, said that "discussions are still ongoing" with the unions.
The company's website says that in 2018 it had about 45,000 employees - 29,000 ground staff, 11,800 flight attendants, and 3,800 pilots.
Earlier on Thursday, Air France said cost-cutting measures, including a partially hiring freeze, were being taken to address the impact of the coronovirus outbreak on the travel sector.Air India's financial director Steven Zaat said in a letter that the impact on airline passenger traffic from the COVID-19 virus increased strongly from last week, not only to China and Asia, but also to destinations across our entire network. . By AFP.
Air France, its partner airline KLM and others have suspended the most, if not all flights to China, a coronovirus outbreak that has killed more than 2,700 people and infected more than 80,000.oLast week, the International Air Transport Association said that it estimates that airlines operating in the Asia-Pacific region jointly lose $ 27.8 billion in revenue this year due to the coronovirus crisis.
BRUSSELS AIRLINES:
Brussels Airlines is the national airline of Belgium, connecting the capital of Europe to more than 80 destinations, where 17 in sub-Saharan Africa, the continent Brussels Airlines considers its second home. In addition, Brussels Airlines offers 65 destinations in Europe, 3 in North America, and Tel Aviv. The company has more than 4,000 employees and 48 aircraft operating 250 flights per day, carrying more than 10 million passengers per year from Brussels Airport.Brussels Airlines combines competitive fares with the highest service quality thanks to its no-conforming position. With the yearly changing Belgian Star Chefs, its wide offer of Belgian food and drink and six Belgian symbols, Brussels Airlines is an ambassador of its country, bringing Belgium to the world and Belgium to the best in the world.Brussels Airlines provides cargo capacity on all its flights commercially by Lufthansa Cargo. The airline also handles the daily maintenance of its aircraft fleet.
Due to the rapidly decreasing demand for air travel within Europe, Brussels Airlines has decided to reduce flight frequencies on multiple routes to limit the negative economic impact on its business. The Belgian airline notices an overall negative booking trend on almost all European markets but Northern Italy is the most affected.
As a result, Brussels Airlines will reduce the frequency of its flights by 30% for the coming two weeks in Northern Italy. It concerns flying to Milan Linnet and Milan Malpensa, Rome, Venice and Bologna between 2 and 14 March.Passengers whose flight is canceled are contacted and rebooked on other available flights or can choose to receive a full return if they no longer wish to travel.After adopting its flight schedule to demand declines, the Belgian airline is focusing on economic measures such as temporary technical unemployment, and has decided to increase its hiring fees entirely.
LGW, THE REGIONAL GERMAN AIRLINE:
LGW, consisting of 15 aircraft and 354 personnel, had worked exclusively on behalf of the Lufthansa subsidiary Eurozings with its own crew of late.However, that lease agreement was terminated during the crisis.LGW had found it impossible to get new orders, but the airline would continue to see them under its own administration, with the intention of keeping the option open to employees when air traffic was re-selected.
LGW employees were sent to short-time work prior to insolvency, without additional payment. According to the unions, payments will continue despite insolvency. A spokesman for the pilots' union Vreinig cockpit said they are now in talks with management.
LGW is the second German airline to be declared bankrupt due to a coronovirus epidemic. In early April, Thomas Cook Aviation, consisting of six propeller planes, faced the same fate.
WIZZ AIR:
Wizz Air expects normal operations to continue until July 2020, with sufficient liquidity to avoid crisis
József Váradi, CEO of Wizz Air, expects services to resume in May-2020, and to continue normal operations to Jul-2020 (MTI / The Budapest Business Journal / Portfolio.hu / Yahoo Finance, 15/14-March-2020 ) Can be restored by.
The carrier reportedly reduced its schedule by 20%, grounded 10 aircraft and could suffer a net loss of EUR40 million for the two months ended March-2020. Mr Varadi said the carrier has EUR1.5 billion in free cash and is in stable financial condition. Mr. Varadi believes that the carrier has sufficient liquidity to avoid a coronovirus crisis.
QATAR AIRWAYS:
Qatar Airways sacked around 200 Filipino workers as a result of an outbreak of coronovirus. Qatar David de Decang from the Labor Attache of the Philippines said that the majority of workers were assigned to the airline's technical department, such as engineers and maintenance staff (ABS-CBN News, 17-Mar-2020).
AIRBUS: Airbus announced (17-Mar-2020)
This would give ample time to implement stringent health and safety conditions in terms of hygiene, cleanliness and self-disturbance, while improving the efficiency of operation in new working conditions. The decision follows the implementation of new measures to prevent the COVID-19 epidemic in France and Spain.
IRISH AIRLINES: The Irish airline said on Friday that Ryanair planned to cut 3,000 jobs and talk to Boeing about delays in delivery of the plane as it is not expected to fully recover European air traffic from the coronovirus crisis. Two weeks ago, Europe's largest budget airline said it could make bumper profits in 2021 and had no plans to postpone Jet's orders, But in an undetermined update, Ryanair pushed the start of the return to normal time from June to July, saying it would fly only 50% of the planned capacity in the three months to the end of September, usually its busiest season. The airline said it was now reviewing development plans and aircraft orders and was negotiating with Boeing and aircraft leases to cut delivery numbers over the next 24 months.
FINNAIR OYJ: Finnair Oyj said several
The delay, a tweet revealed, has become an epidemic for airlines on the scale of the challenge as routes cut, companies halt business trips, governments limit entry and people increasingly decide to settle home.
For Finnair, the virus has been particularly disruptive since building Helsinki into a hub for travel to East Asia to use the least flight time from anywhere in Europe. Amid measures in the region, the carrier has canceled services to China and Seoul and cut frequencies for Hong Kong and Osaka, Japan.
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