Allegiant Air Leads April 2020 Cancellations At 84.7%

Nevada-based Allegiant Air has won the prize for the most cancelations in April. US Department of Transportation statistics released last week shows the airline canceled 84.7% of its flights that month. Allegiant Air also had the lowest on-time arrival rates of 10.4%

Cancelation rates more than double previous records

Across all major US carriers, 41.3% of scheduled domestic flights were canceled in April. That is the highest monthly cancelation rate on record and more than double the previous record. In September 2001, following 9/11, 20.2% of flights were canceled. In April 2019, just 2.4% of flights were canceled.

As COVID-19 began to bite in March, US carriers began slashing flights and reducing capacity. By mid-April, scheduled flights across the United Staters were down by about 58% compared to the same time in 2019. Loads were running at 5% to 15%.

At Allegiant, passenger loads were running at 19.3% in April. That month, there were just 1,089 scheduled departures, only 15.3% of what was originally timetabled. Allegiant Air April cancelation rate easily beat the second-placed prize winner. Southwest Airlines canceled 51.6% of its flights in April. In third place was Frontier Airlines. They canceled 47.7% of their flights.

Hawaiian Airlines had the lowest cancelation rate

The airlines with the lowest cancelation rates in April were Hawaiian Airlines, Spirit Airlines, and Alaska Airlines. Hawaiian Airlines canceled just 17.6% of its flights. Spirit Airlines canceled 19.8% of its flights, and Alaska Airlines canceled 20.3% of their flights.

The US Department of Transportation attributes the spike in cancelations to COVID-19 and the subsequent downturn in travel demand.

In April 2019, major US carriers operated 668,259 flights. Before COVID-19 struck, the airlines were increasing capacity. In March 2020, before the first round of cancelations, major US carriers had 701,278 flights scheduled. In contrast, in April this year, just 331,238 flights were scheduled across the US domestic networks.

But nearly half of those scheduled 331,238 flights in April were canceled. Just 194,390 flights were operated in April. Allegiant Air operated just over 0.56% of those April flights. The previous low was in February 1994 when 370,027 domestic flights operated.

In addition to the high cancelation rates in April, the US Department of Transport notes that on-time arrival rates in April were the lowest since records began in 1987. Across the major US carriers, the April on-time arrival rate was just 55.7%.


Delta Air Lines To Warn Over 2,500 Pilots Of Potential Furloughs

Delta Air Lines is preparing to send notices to more than 2,500 pilots about possible furloughs. Alongside this, the airline reached an agreement with its pilots’ union about early retirement options as the carrier seeks to reduce its size amid decreased travel demand and major losses.

Preparing for furloughs

CNBC reports that Delta is gearing up to send notices to 2,558 pilots about potential furloughs. At the same time, Delta has also reached an agreement with its pilots’ union about early retirement options. The early retirement option is a voluntary way that, alongside unpaid leaves, will help Delta reduce its staff amid a need for reductions.

Delta confirmed the notices to Simple Flying and discussed early retirements“Delta and ALPA continue to discuss meaningful options to reduce or prevent pilot furloughs. In an effort to best prepare our pilots should furloughs be needed, Delta will send required notices to approximately 2,500 pilots to let them know of a possible furlough. Delta and the Air Line Pilots Association have reached an agreement on a pilot-specific early retirement program. As we work to manage through the impact of the pandemic and align staffing with expected flying demand, this voluntary early-out plan, together with other similar programs for all Delta employees, is a meaningful next step.”

Delta was expecting and trying to reduce furloughs

Early this month, Delta was working with its unions to avoid furloughs for over 2,300 pilots. While the number has grown slightly since then, the airline is still trying the best it can to avoid furloughs. The airline’s policy has always been to focus on reducing the involuntary part of job cuts or furloughs. This has led airlines to give some incredibly attractive early retirement packages.

Why furloughs?

In a webcast viewed by Simple Flying, American’s chief, Doug Parker, noted that furloughs are part of the “old airline playbook.” For pilots, especially, furloughs are attractive for airlines. Letting go of pilots is difficult since they require a lot of training and are a big investment for carriers. The airline does not have to let go of pilots formally, but, in essence, can retain enough pilots for when it does have all that capacity again. In the meantime, it keeps an airline’s payroll slim and is part of a cost-cutting move.

Right now, Delta’s pilots are protected from furloughs and layoffs until October 1st– when federal payroll support runs out. After that, two things are working against pilots. Not only is there no government support, but winter is approaching.Advertisement:

The winter is one of the worst for airlines with low travel demand and plenty of leisure destinations that are no longer attractive– especially out in Europe and the northern United States. Already, Delta has indicated it will be much smaller come the fall. The MD-series has already been retired; the airline is planning for the last 777 flights in the fall. This alone reduces Delta’s fleet count by over 60 planes compared to pre-crisis levels

Even among the planes that Delta will fly in the future, until summer 2021, the airline won’t need all of that capacity. Some will undoubtedly remain parked and, with new aircraft deliveries deferred and four A350 acquisitions canceled, some of Delta’s pilots may not have the option to fly other planes or else retrain for a few months.

Ultimately, there is still time for the situation to play out differently. While demand has started to return, it is nowhere near the levels airlines will need to turn profits. Plus, the airline may have to cut more flights as the crisis continues to unfold. Until we are past the current crisis, it will be a tough road for executives and employees as carriers cut daily cash burns and try to chart a successful path forward.


Pandemic Crisis Prompts WestJet To Lay Off 3,333 Workers

Canadian airline WestJet is laying off 3,333 workers in the immediate future. It is an eye-catching number but there is nothing eye-catching about losing your job. As for WestJet, they prefer to speak of it in anodyne corporate-speak, calling the layoffs “organizational changes.

“Today’s announcement regarding these strategic but unavoidable changes will allow us to provide security to our remaining 10,000 WestJetters, and to carry on the work of transforming our business,” said WestJet President and CEO Ed Sims in a video message yesterday.

3,333 employees to go in “organizational changes” at WestJet

In a media statement, WestJet acknowledged the impact of COVID-19 on the business. Capacity is down by 90% on year on year basis. Earlier this year, the airline was flying high, with approximately 14,000 employees.

Now, WestJet has just 4,500 employees on its books. A further 5,500 are furloughed with most likely to come back. But there remains a surplus pool of employees.

“WestJet has remained self-sufficient throughout this extended crisis, cutting our costs by more than 60 percent,” said Mr Sims.

“The damage we’ve incurred from a weakened demand environment is being compounded by multiple factors. The reality in which we find ourselves requires difficult and often painful decisions to ensure our continued viability in the future.”


Virgin Australia Bondholders To Throw Their Hat In The Bidding Ring

A Sydney-based advisory firm is proposing a debt for equity deal that could see it snatch control of Virgin Australia. Just hours before the deadline for final bids in the collapsed airline, bondholders have got together to present a deal to the airline’s administrator. It’s a proposal, the bondholders argue, that offers greater bang for the buck than what’s already on the table.

Bondholders looking to get a better deal

Following the airline’s collapse, Virgin Australia bondholders have been left holding around US$1.43 billion of unsecured debt. The professional advisory outfit, Faraday and Company, is now representing a number of those bondholders. They have been talking to Virgin Australia’s administrator, Deloitte, for the past fortnight. Faraday wants to swap debt for equity and pump more cash into the airline. If successful, they will have disrupted a carefully calibrated process to relaunch Virgin Australia.

The two shortlisted bidders, Bain Capital and Cyrus Capital Partners are due to submit their final, binding bids by the close of business on Monday. The well resourced Bain Capital is tipped to come out the winner. But Cyrus Capital Partners has been consistently under-estimated throughout the entire process.

Final bids due tonight, but some disquiet at bidder’s plans

The Australian Government is keeping a close eye on the administration process. Last week, there were reports that the government was unhappy with both Bain and Cyrus Capital’s plans to streamline Virgin Australia. The government fears a relaunched airline will concentrate on busy trunk routes at the expense of regional routes.

However, given that the Australian Government has repeatedly declined to invest in or lend to Virgin Australia, their concerns may fail to gain much traction at Deloitte.

Also unhappy are several unions representing some 10,000 Virgin Australia employees. They fear substantial job losses with either a Bain or Cyrus owned airline. The unions are said to be less than impressed with the details of both bids. Collectively, the Virgin Australia employees make up the bulk of the collapsed airline’s creditors.


WestJet 737 Forced To Divert As Passenger Removes Mask To Smoke

On Sunday, June 14th, a WestJet Boeing 737 flying from Vancouver to Toronto had to divert to James Richardson International Airport in Winnipeg. The diversion was due to an ‘unruly’ passenger, who allegedly lit a cigarette and failed to comply with crew instructions to wear a mask. The man faces a hefty fine and is charged with several offenses.

An unruly and non-compliant passenger

According to CTV News, Manitoba RCMP (Royal Canadian Mounted Police) were called around 14:30 (Central Daylight Time) and were directed to meet the aircraft at the Winnipeg airport:

“They were advised this male had lit up a cigarette on board and was also not listening to any of the directions from the flight crew which included to don his personal safety mask as well,” – Corporal Julie Courchaine, Manitoba RCMP via CTV News

The 60-year-old man from British Columbia was arrested and taken into custody. The individual faces several offenses, including failure to comply with flight crew instructions to wear a face mask.


What Is CARES Funding & What Happens When It Runs Out?

Formally known as the Coronavirus Aid, Relief, and Economic Security Act, the US CARES Act is a $500 million boost to the US economy. We have written a lot about the CARES Act at Simple Flying. The financial assistance package also covers many other industries in the United States. Only about 6% of the entire package is going to the airline industry.

But that still translates into a very handy $29 billion. Of that amount, $25 billion is going to passenger airlines, and $4 billion is going to cargo airlines. Not all the funds are a simple cash handout. The money is a combination of loans, loan guarantees, and grants. But the bulk of the money is in the form of grants. All up, US airlines are getting $17.5 billion in cash grants. A further $7.5 billion is available in the form of loans

There is also some relief from federal excise taxes, such as taxes on taxes on airline passenger tickets, cargo, and aviation fuel.

CARES Act funding a short term win for airlines

Naturally, the airlines were delighted with the financial windfall. American Airlines is picking up $4.1 billion in cash grants and is applying for a $1.7 billion loan. United Airlines expects to receive $3.5 billion in cash grants and a further $1.5 billion in loans. Delta Air Lines is getting $5.4 billion in cash and loans.

It’s not just the biggest carriers who picked up the cash and loans. CARES Act funding has filtered through to most airlines. Next tier down in airline size, JetBlue got $685 million in cash grants and a further $250 million in loans.


Interjet Is Now Only Operating Sukhoi Superjets

Over the last month and a half, Mexican low-cost carrier Interjet has operated solely with its Sukhoi Superjet100 fleet. Since the coronavirus crisis began, Interjet has returned 59 Airbus airplanes to leasing companies and has only had seven, all of them parked. What will happen with Interjet? Let’s investigate further. 

During May, Interjet operated flights to six destinations from Mexico City. It did these flights with only three Sukhoi Superjet. The carrier flew to Cancún, Guadalajara, Monterrey, Oaxaca, Puerto Vallarta, and Mérida. All these operations are under two and a half hours of flight time, which is important to keep in mind. 

Interjet has a fleet of 22 Sukhoi airplanes, but more than 50% of it hasn’t flown since 2018. It was widely known that Interjet was trying to get rid of its Russian-built fleet after years of disarrays. In January, the airline confirmed to Simple Flying that it was moving on to an Airbus-based fleet.

So, when the coronavirus crisis hit, Interjet had a problem. It started losing its Airbus fleet to leasing companies and closed its international operations. But, as we know, Mexico kept its skies open, so Interjet kept some routes open. To do it, Interjet brought its Sukhoi fleet back from the ground.


Etihad Airways Operates First Ever Flight To Costa Rica

This weekend, Etihad Airways is finishing up its first-ever flight from Abu Dhabi to San Jose, the capital of Costa Rica. The flight, a goodwill repatriation service, first landed in Santo Domingo, in the Dominican Republic before heading on to Costa Rica.

What was the journey about?

Etihad calls the operation a “goodwill flight,” transporting Costa Rican citizens home. Accompanying passengers is humanitarian aid from the Government of the United Arab Emirates, “to help Costa Rica in its fight against COVID-19,” the airline says.

While the arrival in Costa Rica was a first for the Middle Eastern carrier, the aircraft was also helping Dominican nationals get home from the UAE, with the flight landing first in Santo Domingo, capital of the Dominican Republic.


How Much Has US Travel Rebounded?

The United States has started to see its steady rebound in passenger travel. Week after week, the TSA is recording more people going through security, and thus, more people flying. Airlines have also been responding in kind with increases in capacity and flights. But, that begs the question, how much has US travel rebounded?

Week-on-week screening numbers show signs of an increase

Using week-upon-week numbers, the TSA has seen a steady increase in passengers since mid-April with numbers expected to go up. Every week, the TSA is recording increases in the number of people who cross through security checkpoints around the country. On June 4th, the last publicly available date of full screening count at the time of publication, the TSA screened 391,882 passengers. This is a good sign indicating that passenger numbers could cross 400,000 on Friday, June 5th.


Kuwait Airways Flies In Cuban Doctors From Havana

On the evening of Friday, June 5th, 300 doctors and nurses from the Republic of Cuba arrived in Kuwait to assist in the battle against COVID-19. This large team of Cuban healthcare professionals will be working in intensive care for the next six months to deal with coronavirus cases.

The arrival of the Cuban team

A Kuwait Times Instagram post (embedded below) shows the large team emerging from a Kuwait Airways Boeing 777 via stairs. Sporting white medical coats and wearing face masks, the Arab Times reports that the team was transferred from the airport via private buses to be tested for the virus.