JetBlue Raises $115 Million By Securing 25 Airbus A321s

JetBlue announced that on August 27th, it raised over $115 million by securing 25 Airbus A321s. The airline used pass-through certificates to raise the money with interest payable semiannually on May 15th and November 15th. Final payments will be due in 2027.

Securing aircraft for funding

The total amount JetBlue raised was $115,584,000, secured by 25 Airbus A321s. The pass-through certificates are notes that JetBlue issues to creditors. In exchange, the notes are secured by certain assets, in this case, aircraft.

The 25 Airbus A321s that JetBlue has secured are:

  1. N976JT “Mint to Soar” (with Mint)
  2. N978JB “Menta Azul” (with Mint)
  3. N979JT “Eeny Minty Miney Mo” (with Mint)
  4. N981JT “The Royal TreatMint” (with Mint)
  5. N980JT “Taking a Menta Health Day) (with Mint)
  6. N982JB “One Mint, Two Mint, Blue Mint, You Mint” (with Mint)
  7. N984JB “Suave Menta” (with Mint)
  8. N983JT “M*I*N*T” (with Mint)
  9. N986JB “Mike India November Tango” (with Mint)
  10. N985JT “Minterial Girl” (with Mint)
  11. N988JT “Menta-Licious” (with Mint)
  12. N987JT “Sky’s the LiMint” (with Mint)
  13. N990JL “Seize the MoMint” (with Mint)
  14. N989JT “Freshly Minted” (with Mint)
  15. N991JT “Catch Mint If You Can” (with Mint)
  16. N993JE “Fly Like You Mint It” (with Mint)
  17. N992JB “The EleMint of Surprise” (with Mint)
  18. N994JL “P.S. I Love Blue”
  19. N995JL “New Number, Blue Dis?”
  20. N996JL “Don’t Hate Me Because I’m Bluetiful”
  21. N997JL “Blues That Girl?”
  22. N998JE “Blue If By Air”
  23. N999JQ “Midnight Blue”
  24. N973JT “Unforgettably Blue”
  25. N977JE “The LiMint Does Not Exist” (with Mint)

All of these jets are from three to two years old, with the oldest delivered new to JetBlue in February 2017 and the last being delivered new to the airline in December 2018. The airline raised between $4.3 to $4.9 million from each aircraft.

No change for passengers

Passengers will not notice the difference. The 18 jets with the airline’s lie-flat Mint product will continue to offer that hard product and the airline’s standard onboard services. The remaining seven aircraft lack Mint and are in an all-economy configuration. JetBlue will continue to own the aircraft. The only issues that could arise are if JetBlue defaults on its payment, which is unlikely.

A common practice

It is quite common for airlines to raise financing by securing aircraft. Amidst the ongoing crisis, airlines have been finding ways to raise cash and bolster their liquidity position. Almost all major airlines took funding from the federal government for payroll support, and others took on separate loans. Many airlines have also turned to the private market for funding. For example, Alaska Airlines raised over $1.1 billion earlier this year by securing 61 aircraft. American Airlines raised funding by securing slots, gates, and routes.

Back in June, JetBlue pledged slots at airports in New York and Washington D.C. to raise some additional cash. In the second quarter, JetBlue lost nearly half a million dollars. The goal for the airline now is to focus on building up its liquidity position and emerging from the crisis so it can enact a robust post-crisis network recovery plan.

source https://simpleflying.com/jetblue-airbus-a321s-financing/

Azores Airlines Halts North American Flights

Azores Airlines is suspending its flights to Boston and Toronto. Blaming low passenger loads caused by COVID-19, the Portuguese airline based at João Paulo II Airport in the Azores will stop flying to its two North American destinations from September 1. After temporarily grounding its international flying, Azores Airlines only resumed flying to North America in July.

“In July, the average occupancy rate on this (Boston) route was 21%, and, in August, to date, it has fallen even further to 17%,” said an Azores Airlines spokesperson in a statement published by the Portuguese American Journal.

“It would be a show of irresponsible management if SATA ignored this unfortunate reality. Thus, the Azores Airlines is forced to suspend this connection temporarily.”

Azores Airlines was previously known as SATA Internacional and now operates as a subsidiary of SATA Air Açores.

Azores Airlines blames COVID-19 for suspending flights

The airline was sending one of its Airbus A321neos to Boston and Toronto once a week from Terceira. The Azores Airlines spokesperson says these flights do reasonably well in normal times. However, demand had collapsed following the outbreak of COVID-19.

This announcement from the airline follows news that US$157 million in government funding is heading SATA’s way. The European Commission okayed funding last week via the Portuguese Government. The funds are to help the airline restructure after losses caused by the COVID-19 crisis.

“It is with satisfaction that the SATA Group Board has received news that following a process of notification to the European Union, state support to SATA via the Region (Azores) was today approved,” said SATA in a statement on Monday.

The European Commission is at pains to point out the funding is not a bailout or state aid. Instead, because Azores Airlines is a state-owned airline, they’d prefer to style it as private investment from the existing owners.

The funds are to cover critical short to medium-term operational expenses. While happy with the funding, the US$157 million shot in the arm falls short of the US$193 million SATA first asked for.

Fears of bankruptcy drive funding decision

Fears Azores Airlines is verging on bankruptcy brought the European Commission’s decision-makers onboard. Given the Azores’ isolation and dependency on air links, bankruptcy would cause acute difficulties for the Portuguese territory and its residents.

“A SATA bankruptcy would lead to serious social problems and economic difficulties for the region and significantly negative side effects on important segments of the economy,” said the European Commission when it announced funding for the airline.

There are some provisos. Azores Airlines cannot use the money for anything other than day to day operational costs. Cutting those operational costs is now a priority at Azores Airlines. That’s doubtless also behind the decision to temporarily abandon its North American markets.

The funding bailout puts the spotlight on the Azores Airlines. The airline had faced a series of financial years for years, long before the COVID-19 fueled travel downturn. As with many other airlines, COVID-19 brought these problems to the foreground.

SATA, along with the Azores regional government and the European Commission, will spend the next six months working on a business plan to plot Azores Airlines’ future. Whether destinations in North America play a role in that future remains up in the air.

source https://simpleflying.com/azores-airlines-halts-north-american-flights/

Delta Set To Furlough Around 2,000 Employees

Delta Air Lines is furloughing nearly 2,000 pilots in October. Saying the airline has too many pilots, Delta is standing down 1,941 pilots. It is also warning of further involuntary furloughs to follow. The airline is blaming COVID-19 and the sustained downturn in travel demand that followed.

Delta is overstaffed and in a difficult situation

Delta’s head of flight operations, John Laughter, sent a memo to pilots yesterday to break the bad news. That memo, seen by Simple Flying, said;

“We are simply overstaffed, and we are faced with an incredibly difficult decision,” Mr Laughter wrote.

Mr Laughter says there were 11,200 pilots on Delta’s payroll after calls for voluntary early departures. But the airline says they need only about 9,500 pilots across the short to medium term.

“We are six months into this pandemic, and only 25% of our revenues have been recovered. Unfortunately, we see few catalysts over the next six months to meaningful change this trajectory.”

In a statement, Delta’s pilots’ union, the Air Line Pilots Association (ALPA) called the decision disappointing.

Delta made a call for voluntary redundancies

In mid-July, Delta Air Lines told its pilots they would avoid involuntary furloughs if they agreed to reduced guaranteed minimum pay. At the time, Delta wanted to reduce minimum pilot pay by 15% in exchange for no pilot furloughs for at least one year.

The Atlanta-based airline was actively working on cutting expenditure and was asking for 17,000 employees to step up and accept voluntary redundancies, including calling for approximately 1,700 pilots to go. The deadline for applying for voluntary redundancy was Sunday, July 19. At the time, Mr Laughter said forward travel demand was down by 80%.In a memo sent to all employees in July, Delta’s CEO, Ed Bastian said

“We’re committed to exhausting every option possible and harnessing our creativity before we consider involuntary separations.

“We’re continuing to work with our pilots’ elected representatives to avoid pilot furloughs.”

But ALPA says Delta has done the opposite. They say that instead of creative solutions, the airline is using the threat of furloughs to force more pilots to accept redundancy packages.

Despite more pilots than anticipated accepting redundancy, it’s clear that it’s not going to be enough. CNBC is reporting that approximately 1,800 pilots took packages to leave Delta. That’s more than the 1,700 Delta asked for in mid-July.

“ALPA has drafted numerous, mutually beneficial proposals that would provide the airline
with voluntary cost-savings measures.” ALPA said in a statement provided to Simple Flying.

“Delta’s most junior pilots are facing unnecessary career uncertainty when ALPA has offered countless voluntary options to management to prevent furloughs from occurring.”

As conditions deteriorate, Delta wields makes its move

But yesterday’s memo from John Laughter said;

“Early retirements alone wouldn’t solve the pilot overstaffing situation caused by the COVID-
19 pandemic.

“COVID-19 cut faster and deeper than any other event in the history of our industry.

“Letters to pilots hired on or after July 17, 2017, will be sent out later this week.”

As airlines move closer to the cut off date of CARES Act funding, other United States carriers are expected to make similarly tough decisions. Delta’s memo also highlights that COVID-19 is having a more significant impact on the airline industry than initially forecast. There has been no quick rebound of travel demand, rather stop-start incremental increases, and it looks like continuing in this way for the foreseeable future. It’s a grim outlook for airlines and their employees.

Delta Air Lines acknowledges the impact involuntary furloughs will have on the pilots and their families. While predicting a “multi-year recovery,” the airline hopes to bring the pilots back to the cockpit as soon as possible.

source https://simpleflying.com/delta-2000-employees-furloughed/

May Turned Out To Have The Lowest Number Of Flights In US History

May turned out to be a pretty bad month for airlines. The US Department of Transportation (DOT) released statistics for airline operations in May. The most shocking monthly statistic indicated that US airlines operated an all-time monthly low since the DOT has been tracking data for monthly flights. May beat out April, which beat out the previous low back in 1994.

A record low number of flights

In bare scheduling numbers, the ten marketing network carriers in the US reported 192,412 scheduled domestic flights. This was down from April 2020, which had 331,238 scheduled flights. In May 2019, the ten airlines scheduled 694,331 domestic flights.

Of those 192,412 flights, 12,261 (or 6.4% of those flights) were canceled. This lead to an all-time monthly low of 180,151 flights in May 2020. This was even lower than April, which saw 194,390 flights operate. The previous low before both of these months was February 1994, with 370,027 flights. That 1994 report only included operating carriers and not codeshare partners, which are now included.

Spirit Airlines led the way in terms of lowest cancellations

Spirit Airlines canceled no flights in May. Below is the ranking of airlines from best to worst in terms of May operations canceled:

  1. Spirit Airlines (0.0% canceled)
  2. Frontier Airlines (0.2% canceled)
  3. Hawaiian Airlines [including regional operations] (0.3% canceled)
  4. American Airlines [including American Eagle operations] (1.1% canceled)
  5. United Airlines [including United Express] (4.1% canceled)
  6. Delta Air Lines [including Delta Connection] (5.1% canceled)
  7. Alaska Airlines [including regional operations] (5.8% canceled)
  8. Southwest Airlines (5.9% canceled)
  9. JetBlue Airways (7.7% canceled)
  10. Allegiant Air (53.6% canceled)

The overall monthly canceled flight rate was 6.4%. This was much lower than April, which had a canceled flight rate of over 41%. By May, airlines had an idea for how low demand was and consolidated operations, received service exemptions, and parked most of their planes, leading to more stable operations. Allegiant, which has a point-to-point model operating on a leisure model, was a little less reliable in terms of operations. Despite that, Allegiant had a pretty decent May.

Refunds were the number one cause of complaints

In May 2020, there were 21,914 complaints filed with the DOT. The lion’s share of those complaints was for refunds. Here is a breakdown by category:

  1. Refunds (20,915 complaints)
  2. Fares (344 complaints)
  3. Reservations/ticketing/boarding (341 complaints)
  4. Customer Service (107 complaints)
  5. Flight cancellations (71 complaints)
  6. Baggage (56 complaints)
  7. Frequent flyer program (24 complaints)
  8. Disability (18 complaints)
  9. Other (17 complaints)
  10. Flight delay (12 complaints)
  11. Misconnection (7 complaints)
  12. Oversales (2 complaints)

In terms of airlines with the most complaints about refunds, here’s how they ranked:

  1. United Airlines (3,215)
  2. American Airlines (1,024)
  3. Delta Air Lines (945)
  4. Frontier Airlines (887)
  5. Hawaiian Airlines (398)
  6. Southwest Airlines (307)
  7. JetBlue Airways (296)
  8. Alaska Airlines (271)
  9. Spirit Airlines (193)
  10. Allegiant Air (82)
  11. Sun Country Airlines (64)
  12. Endeavor Air [regional carrier] (31)
  13. SkyWest Airlines [regional carrier] (30)
  14. Silver Airways [regional carrier] (22)
  15. Republic Airways [regional carrier] (18)
  16. Horizon Airlines [regional carrier] (14)
  17. Other airlines (12)
  18. Eastern (3)

Foreign airlines also saw a significant number of complaints about refunds. Below are the top ten:

  1. Air Canada (1,705)
  2. TAP (901)
  3. Lufthansa (557)
  4. Aeromexico (401)
  5. Volaris (386)
  6. Norwegian (365)
  7. WestJet (346)
  8. Avianca (311)
  9. British Airways (287)
  10. KLM (256)

Amid the ongoing crisis, airlines have tried to skirt around refunds as much as possible. United has made several changes to its policies, and Air Canada took a relatively active stance against providing some refunds. It is unsurprising to see so many people file for refund requests. Earlier this year, US airlines had to be reminded by the DOT that refunds were not optional in many airline-related cancellations. And, in May, five US senators joined together on a bill to expand air travel refunds.

source https://simpleflying.com/may-lowest-record-us/

Qantas Posts Huge $2bn Loss As Airbus A380s Grounded For 3 Years

Qantas has announced an annual loss of nearly US$2 billion this morning. Despite having a strong first half to the 2019/20 financial year, there was a US$2.88 billion decline in revenue in the second half of the financial year. Notwithstanding Qantas’ first loss in years, the Australian airline is remaining upbeat about the future and its ability to survive.

Not a standard set of financial results

Despite grounding its international fleet in April, Qantas’ international operations made a profit of US$40 million in the financial year that ran to June 30. Australian domestic operations by the Qantas Group resulted in earnings before interest and tax of US$205 million. Qantas Loyalty had earnings before interest and tax of US$245 million. Offsetting this was US$2 billion in one-off mostly non-cash charges, including asset write-downs, redundancy charges, and upfront restructuring costs.

Hard decisions inevitable as borders stay closed

Saying more hard decisions were inevitable, the Qantas boss confirmed the A380s, currently parked in California, would remain grounded for at least the next three years.

Alan Joyce does not expect to see Australia’s international borders open up until the middle of 2021. Further, the airline boss says he doesn’t think Australia will allow travel to and from the United States until a COVID-19 vaccine is available.

Retiring the remaining 747 fleet and putting much of the remaining international fleet into storage reflects this view. Mr Joyce says Qantas doesn’t plan to fly any international routes over the next 12 months. Given that international flying typically generates US$5.75 billion in annual revenue for the airline, that’s a big financial shortfall on the immediate horizon. Further, the airline anticipates fixed expenses of nearly US$600 million just to keep its international planes on the ground until then.

“We will manage flexibly and manage for all scenarios in the coming period. That will hold us in good steed,” said chief financial officer, Vanessa Hudson today.

source https://simpleflying.com/qantas-loss-a380s-grounded/

Even After Being Fired Some Air India Pilots Kept Flying

In shocking news, some Air India pilots continued to fly a day after they were fired, on Thursday, not realizing the airline had let them go. The news comes after the airline vowed not to fire any employees, opting for a broad leave without pay program instead. As of now, the carrier has let go of 57 pilots, many of whom have appealed to the courts.

Fired pilots still flying

In a shocking move, Air India sacked 57 pilots after publicly stating that no jobs would be lost during the pandemic. However, this was not the most shocking news. The India Commercial Pilots Association (ICPA) told India Today that one pilot was made to fly a day after being let go, flying from Delhi to Bangalore on August 14.

Some reports also state that other pilots also flew on Friday, not knowing they had relieved of duty the previous day. This raises a myriad of concerns, including the mental state of the pilots and the validity of insurances since the pilot was no longer an Air India employee.

The removal of pilots has also resulted in delays to Vande Bharat flights, with one flight from Saudi Arabia delayed due to the pilot being removed from service. It seems Air India did not wait to remove these pilots, as many were due to fly in the next few days, throwing long-planned schedules in disarray.

Complicated policies

The root cause of this conflict is Air India’s complex policies. The first policy is the airline’s new leave without pay plan (LWP). Under this policy, Air India can ask employees to take anywhere between six months to two years off without pay. This leave can go on for up to five years, a timeline more akin to a layoff.

The new LWP policy drew heavy criticism, at which time Air India clarified that no employees would be laid off. This came as a relief to some, at least giving employees an assurance that they will have a job in the long-term. However, the promise is in question after this week’s sudden events.

The second policy is Air India’s standard resignation policy. According to the ICPA, at least 48 of the pilots who were laid off had previously resigned in July 2019 over non-payment of salaries. However, under the company’s policies, pilots can withdraw their resignation within six months, which the pilots did do. The airline subsequently accepted this withdrawal, and the pilots stayed on.

However, this week, Air India revoked its withdrawal acceptance and let all the pilots go, citing financial constraints. The move came as a shock to many after the firm previously promised not to let any crew go and praised them for their frontline service.

Air India response

In a statement on Twitter, Air India said it said it accepted the pilot’s resignations due to financial constraints. The airline also said the matter is currently under litigation since many pilots have asked the courts to step in. It is unclear if the carrier has the ability to retroactively accept a resignation that has been withdrawn.

source https://simpleflying.com/air-india-pilots-fired-flying/

Riots Prompt United Airlines To Empty Chicago Operations Center

United Airlines has temporarily moved its operations center away from downtown Willis Tower to a suburban location. The move comes after some unrest in downtown Chicago, which could have broader security and network concerns.

United temporarily moves away from Willis Tower

United Airlines is based in Chicago, Illinois. Its main operations center and headquarters are located in Willis Tower, the former Sears Tower. However, recently, United moved its operations center temporarily away from Willis Tower to a location in the suburbs amid increased unrest in Chicago.

The situation in Chicago

Much of the United States, and in some other places around the world, the death of George Floyd from an officer pressing his knee against Mr. Floyd’s neck for over eight minutes causing Mr. Floyd’s death, lead to a wide array of protests over police brutality, especially at the hands of minorities. Most of those protests have remained peaceful, including in Chicago.

However, after a police shooting in Chicago of a suspect on Sunday, things took a turn for the worse. The New York Times reports that a mass gathering of people on Chicago’s well-known shopping district, known as the Magnificent Mile, looted stores, broke windows, and held confrontations with the police.

Willis Tower is not too far from the Magnificent Mile– under two miles away. As one of Chicago’s most famous landmarks, there are concerns that the security of Willis Tower could be compromised like the Magnificent Mile was. This led to United’s temporary move to the suburbs. United will be back, however, as it has a long lease on the space.

source https://simpleflying.com/riots-prompt-united-airlines-to-empty-chicago-operations-center/

Starlux Airlines Offering Sightseeing Flight To Nowhere

For those in Taiwan missing the international travel experience, relatively new airline start-up StarLux Airlines is launching a ‘flight to nowhere’ for the purposes of sightseeing. The offer was announced this past week, marketed as a “pretending to go abroad” tour, taking passengers over the Taiwan-controlled Pratas Islands in the northern part of the South China Sea.

In mid-March, we asked ourselves and our readers if StarLux was the world’s unluckiest airline? The Taiwanese carrier launched at the beginning of this year. Two month’s into its operations, and the airline was forced to suspend its services due to the global health crisis.

While operations have resumed, the carrier is offering an additional service for those not quite ready for international travel just yet.

A trip to the Pratas Islands

The one-time experience took form as flight JX-8888. On top of being a specialized tourist experience, the flight was extra special in that it was flown by StarLux Airlines Chairman Chang Kuo-Wei, according to reporting by Focus Taiwan.

Data from FlightRadar24.com indicates that the flight took place on August 7th using the airline’s brand new Airbus A321neo. Registered as B-58201, the aircraft is less than a year old, having been delivered to StarLux last October.

Taking off just after 11:00 local time from Taiwan Taoyuan International Airport, the flight was about three and a half hours in duration.

Focus Taiwan notes that the flight headed south along the coast of eastern Taiwan at a lower-than-usual altitude. This was to give (window-seat) passengers an exclusive close-up look at Taiwan’s landscape from above.

Focus Taiwan reports that a total of 188 tickets for Friday’s flight were scooped up in the span of just 30 seconds. Thus, with this popular demand, StarLux spokesman Nieh Kuo-Wei says the airline is planning a second air travel tour package for mid-August, which will be completely different from this first experience.

source https://simpleflying.com/starlux-airlines-sightseeing-flight/

Virgin Australia Outlines Recovery Plan Operating Only Boeing 737s

Virgin Australia is emerging from the ashes of its April collapse. After a sale and restructuring process, the airline has just announced its future plans. Many of the changes were predictable, but there are some surprises. However, it’s all intended to create a stronger, more profitable, and competitive airline.

Virgin Australia outlines its future

In a statement released Wednesday morning, Sydney time, Virgin Australia said;

“Virgin Australia aims to be the best value carrier in the market, not a low-cost carrier. It will offer exceptional experiences at great value, regardless of the purpose of travel.

“Virgin Australia will continue to offer choice and convenience through an extensive network of domestic and short-haul international destinations, including frequent capital city connections and services to leisure and regional markets as part of the company’s future network plans.

“Our initial focus will be on investing in the core Virgin Australia domestic and short-haul international operation alongside our 10 million member strong Velocity frequent flyer program, continuing to offer an extensive network of destinations, a domestic lounge network, and value for money for customers.”

Tigerair axed, fleet pared back to Boeing 737s

As expected, Virgin Australia will revert to an all Boeing 737 fleet. The airline will remove the ATRs, 777s, A330s, and A320s from their fleet. In total, that reduces the fleet by 28 aircraft. All but four Boeing 777s are leased. That leaves 79 Boeing 737-800s still on the books. Many believe the number of 737s will also get trimmed at a future point. Virgin Australia confirmed today that the 737s would operate with a two-class cabin offering.

Regarding the order for 48 737 MAXs, Virgin Australia told Simple Flying discussions with Boeing were continuing and no update is available.

The future of Virgin Australia Regional Airlines (VARA) remains under a cloud. Virgin Australia says they are reviewing their options and examining different operating models. The future of Tigerair Australia is less uncertain. Virgin Australia has confirmed Tigerair would get axed, saying there was not enough demand in the market to support two brands. However, they plan to keep the air operator’s certificate should circumstances change in the future.

Virgin Australia wants to keep flying long-haul

Virgin Australia says international long-haul operations will remain an important part of the business. But given the current environment, the airline doesn’t plan to resume international flights anytime soon. But they did expressly reference interest in maintaining flights to Los Angeles and Tokyo. However, with Virgin Australia offloading their long-haul A330 and Boeing 777 aircraft, a new question arises – what aircraft will they use to operate any long-haul flights?

source https://simpleflying.com/virgin-australia-recovery-plan/