Alice Springs Is Running Out Of Space To Store Aircraft

The travel downturn is bad news for airlines, but for some other operators in the industry, it’s a business bonanza. One business doing well is the Asia-Pacific Aircraft Storage (APAS) at Alice Springs Airport in central Australia who are bursting at the seams. Their storage park is almost at capacity, and the owners have begun turning to other airports to take the overflow.

Exponential growth at Alice Springs

According to a report in Australia Aviation, the long term aircraft storage park is close to its maximum capacity of 100 planes. Until the travel downturn, it was rare to see more than 20 aircraft there at any one time. But with thousands of aircraft sitting idle worldwide, airlines began sending their planes down to Alice Springs earlier this year. By July, the park was looking after nearly 50 aircraft. Now, it’s closer to double that number.

Singapore Airlines Group famously sent some of its massive A380s to Alice Springs mid-year, making headlines worldwide.

Business is so good the Northern Territory Government has kicked in a few million dollars to fund infrastructure expansion at APAS. The storage park is becoming a significant local employer and pumping millions back into the local economy.

Among the airlines now using the park are Cathay Pacific, Cebu Pacific, Cathay Dragon, Fiji Airways, Virgin Australia, Singapore Airlines, Silk Air, and Scoot.

Robyn Ironside in The Australian is reporting that APAS is expected to reach capacity next week.

Alice Springs aircraft storage park expanding and sending planes elsewhere

APAS is madly scrambling to expand. Soon it will have the ability to handle up to 200 planes over a 350,000 square meter site. APAS is also starting to work with other airports to take surplus aircraft. They’ve done a deal with Toowoomba’s Wellcamp Airport to store aircraft there.

Wellcamp is close to Brisbane, a couple of hours flying time east from Alice Springs Airport. The deal is interesting for many reasons. Both APAS and Wellcamp are examples of smaller private businesses operating in an industry dominated by big business and government. Both are agile and responsive – they get things done.

The two airports have different climates, and climate is important when it comes to storing aircraft. Alice Springs has a dry desert climate, hot days with low humidity, and colder nights. But it’s in central Australia, and that part of the world has red bulldust in abundance.

Toowoomba is a 90-minute drive inland from the Queensland coast. It’s more humid, but there’s a lot less dust to get into planes. Toowoomba and Wellcamp sit high on an escarpment. The area typically sees cold crisp winters and warm summers.

Qantas passed on Alice Springs for California

The climatic differences mean APAS can offer its potential customers more choice. While Alice Springs is a popular choice for many airlines, not all choose it. Local airline Qantas famously picked California’s Mojave region over much closer Alice Springs to park its A380s and 787-9s.

Qantas says Alice Springs is too humid, so we guess they won’t like Wellcamp either as a storage option. But they also liked California because they’ve also got a big A380 maintenance and engineering base at Los Angeles International, an easy drive from the Mojave storage park.

That said, Wellcamp will appeal to some airlines. With the travel downturn continuing, APAS says they can see themselves looking after up to 300 aircraft. Meanwhile, they are busy building more hardstands at both airports.

source https://simpleflying.com/alice-springs-aircraft-storage-space/

Lessors And Lion Air Working To Modify Leasing Agreements

One of Indonesia’s biggest airline groups is attempting to radically restructure its aircraft lease agreements. The Lion Group, who own the Lion Air brand, is reported to have approached their lessors to request group-wide power-by-the-hour agreements for 24 months.

The Lion Group wants to go to power-by-the-hour leases

Jakarta-based Lion Group is Indonesia’s biggest airline group. They operate several well-known airline brands, including Lion Air, Thai Lion Air, Malindo Air, Wings Air, and Batik Air. Between them, the various airlines lease more than 220 aircraft.

According to a Cirrum report in FlightGlobal late last week, the Lion Group has contacted its many lessors asking them to revise lease agreements. The Lion Group wants to convert its existing leases to power-by-the-hour agreements. With the Lion Group’s revenues substantially down this year, the business is asking lessors to share the pain.

The alternative is to break leases and send planes back to their owners. Airlines know lessors have a tough time farming out returned planes to new airlines in the current environment. Many experts suggest this is making airlines bolder when it comes to asking for new leasing terms on existing aircraft.

“A typical power-by-the-hour agreement usually involves a minimum spend amount, as well as a charge per flight hour,” Cirrum’s Thomas Kaplan tells FlightGlobal.

“A maximum monthly charge may also be set, plus the minimum monthly charge can be less than half the normal full lease rate.”

A poor deal for aircraft lessors

This kind of deal might be music to the ears of the cash-strapped Lion Group, but the many lessors are unenthused. The Lion Group is not the first airline group to ask for a power-by-the-hour agreement this year. But it’s a big ask for a 24 month period.

These types of lease agreements are most common for seasonal operations. An airline would pay the normal lease while the aircraft is busy servicing seasonal demand on a certain route or to a certain destination. Then, during the off-season lull, the lease deal might revert to a power-by-the-hour agreement.

Now more airlines are asking for power-by-the-hour deals to cut costs. The problem for lessors is that these deals cut into their revenue. While some revenue is better than no revenue (as can happen with lease deferrals or plane returns are negotiated), aircraft lessors appear underwhelmed by the trend towards long term power-by-the-hour leases.

“Lion Air and other operators are intending to negotiate power-by-the-hour agreements with some lessors. Obviously, it will cause huge losses for lessors with this unfair situation,” one lessor is quoted saying in FlightGlobal.

Goshawk Aviation sues Lion Group over unpaid aircraft leases

One lessor has already commenced legal action against the Lion Group. Goshawk Aviation Ltd sued the Lion Group in a London Court in late July. They claimed the Lion Group had not met payments on seven Boeing 737 leases. The lease deal was worth US$12.82 million, and Goshawk says between US$2 million and $3.2 million was unpaid. Goshawk wants the full $12 million-plus paid in full.

The Lion Group says it wants to find a “fair solution” with Goshawk and all its aircraft lessors. While the multiple lessors with planes out across Lion’s various airlines are adopting different positions on Lion’s power-by-the-hour requests, one lessor summed the situation up from the lessor’s perspective.

“We’re unhappy with power-by-the-hour.”

source https://simpleflying.com/lion-air-lessor-agreements/

Delta To Retire All Its Boeing 717s And 767-300ERs

Delta Air Lines has set out plans to retire all of its Boeing 717s and 767-300ERs. The two types will exit the airlines’ fleet by December 2025. Alongside these aircraft, from its regional brand, Delta will be retiring all of its 50-seater Bombardier CRJ200s.

Retiring the aircraft

Delta Air Lines announced on September 25th that it would retire all Boeing 717-200s and all 767-300ERs by December 2025. Meanwhile, the CRJ200s will be retired by December 2023. Delta stated in an investor update that these plans are part of the airlines’ fleet simplification strategy.

The airline evaluated all of these aircraft, and, on September 23rd, the airlines’ team concluded the carrying value of these aircraft was no longer recoverable compared to their future cash flows from the jets. Essentially, Delta does not think they can turn a profit with these aircraft in the future.

The Boeing 717-200s

Delta Air Lines has 91 Boeing 717-200s in its fleet. At the end of the second quarter of 2020, the airline only earned 13 of these aircraft, meaning the rest were on lease. These planes have an average age of just under 19 years of age, making them a little old for short-haul workhorses.

The Boeing 717s have 110 seats onboard with 12 in recliner-style first class, 20 in extra-legroom economy, and 78 in economy. These are, notably, the only jets in Delta’s mainline fleet that do not have seatback screens onboard.

Of 91 aircraft, 88 of Delta’s 717-200s came from Southwest Airlines starting in 2013. Southwest had just merged with AirTran Airways but did not want to add complexity to its fleet, so it sought a new place for the 717s. Those planes found a home in Delta’s fleet.

The Boeing 767-300ERs

Delta retired seven Boeing 767-300ERs in the second quarter, bringing its overall number of 767s in its fleet to 49 of the 767-300ERs and 21 of the 767-400ERs. Delta owns outright all of these aircraft with an average age of just under 25 years.

The 767-300ERs come in two different configurations. One has 26 forward-facing lie-flat Delta One seats with 35 in extra-legroom economy, and 165 in standard economy. The other has 36 forward-facing lie-flat Delta One seats with 32 in extra-legroom economy, and 143 in standard economy. All of these aircraft have seatback entertainment.

These aircraft are one of Delta’s long-haul workhorses, flying transatlantic, transpacific, and some routes to South America, including between Atlanta and Bogota, where Simple Flying got to check out the aircraft.

Bombardier CRJ200s

Delta does not fly the CRJ200s itself. Rather, those planes fly with regional carriers like Endeavor and SkyWest, which, combined, have 97 of the type in its fleet.

These jets seat 50 passengers in a 2-2 configuration. These aircraft operate a mix of short-haul and medium-haul operations, though they are not much of a passenger favorite.

What will replace these aircraft?

Delta does not have perfect one-to-one replacements for all of these jets. The CRJ200s will likely be replaced by other regional jets– a massive boon for passengers since those aircraft offer a true three-product experience. Whether any routes are cut because of this, however, is unclear. In some cases, Delta may choose to operate fewer frequencies with a larger aircraft, or else consolidate flights on a particular route.

As for the 717s, Delta does have 64 Airbus A220 aircraft on order, which would not make them a perfect one-to-one replacement. Counting the existing 31 in the fleet, Delta does have a good one-to-one plus a little extra for replacement. However, if Delta does decide it needs more, amending this order for a few extra planes would not be hard, though it would come at a cost at a time when Delta does not necessarily want to incur such an expense.

Moving on to the 767-300ERs, this is a different story. There are 32 A330-900s left to come to Delta, but, even on a perfect one-to-one replacement, that leaves Delta 17 aircraft short. Without any other new aircraft orders, this means Delta will most probably need to cut some long-haul routes. Ones to Europe, especially, would be at risk since Delta has partners on which it can transfer passengers.

A less ideal option would be for Delta to convert some of its A321neo orders to A321XLR orders. These aircraft, which rivals United and American have on order, could cover some seasonal routes such as to Berlin, Prague, Lisbon, and others. Though a bit of a downgrade compared to the 767, it would still allow Delta to provide at least some international service.

What do you make of Delta’s aircraft retirements? Will you miss any of these aircraft? Let us know in the comments!

source https://simpleflying.com/delta-retirements-aircraft/

United Airlines Delays Pilot Furloughs Until November

Chicago based United Airlines has reached an agreement with the Air Line Pilots Association (ALPA) to avert an imminent involuntary furlough threat affecting nearly 3,000 pilots. United Airlines management has agreed to delay any pilot furloughs until October 31, giving the pilots and their union some breathing space.

“This agreement underscores our commitment to all 13,000 United pilots and represents the importance of creative solutions needed to mitigate massive layoffs for our pilots,” said United pilot union Chairman Captain Todd Insler in a statement provided by ALPA.

The proposed deal provides some breathing space for United’s pilots

There is a catch. There will be no pay for the pilots facing involuntary furlough for the remainder of September and throughout October. But there’s a deal on the table, and if both United Airlines and the pilots union can agree on terms, involuntary furloughs will be avoided for a further nine months.

ALPA represents around 13,000 United pilots. Two thousand eight hundred fifty of those pilots were facing an imminent involuntary furlough threat. United sent them a WARN notice in late August. ALPA has proposed a deal that includes the following;

  • Preventing pilot furloughs until June 2021;
  • Offering a second round of early separation options for all pilots age 50+ with ten years experience;
  • Adding restrictions on express carrier flying; and
  • Securing triggers for a pay raise and additional permanent contract modifications that improve
    work conditions for all United pilots.

“Through past bankruptcies, mergers, strikes, 9/11 and other adverse events affecting this airline, United pilots have always taken care of each other,” said Captain Insler.

“This is our union and our responsibility to take care of each other to ensure there is a temporary lifeline to keep all of our pilots at United flying.”

If deal accepted, pilot jobs safe for nine months

United’s pilots need to vote on the deal. However, both airline management and the union are optimistic it will get ratified. ALPA has recommended its members accept the deal.

“Our pilots are voting right now on a tentative agreement that, if approved, would avoid all pilot furloughs for at least nine months,” a United Airlines spokesperson told Reuters yesterday.

United Airlines is flying just 34% of its usual network-wide capacity this month. Next month, that figure should increase slightly to 40%. To date, payroll funding via the CARES Act has safeguarded jobs, but funding is due to expire shortly.

The airline industry has actively campaigned for an extension to CARES Act funding. So far, this has fallen on deaf ears. Without an extension of funding, mass lay-offs are anticipated across the airline industry. United Airlines has suggested it may need to lay off 36,000 employees.

“The pandemic has drawn us in deeper and lasted longer than almost any expert predicted, and in an environment where travel demand is so depressed, United cannot continue with staffing levels that significantly exceed the schedule we fly,” United Airlines said in a memo sent to employees.

That’s had unions scrambling to secure deals, and today’s example suggests compromises are getting made by all parties. A similar agreement was reached just days ago between Delta Air Lines and their pilots’ union. The interim deal with Delta expires on November 1, just a day after the proposed deal with United Airlines.

source https://simpleflying.com/united-pilot-furloughs-november/

Trans-Tasman Routes Off The Books For Air New Zealand Until March

Air New Zealand’s CEO, Greg Foran, has moved to hose down speculation of an imminent trans-Tasman travel bubble. The on-again-off-again travel corridor was on again over the weekend amid sharply declining COVID numbers in the Australian state of Victoria. But travelers with itchy feet on both sides of the Tasman Sea had hopes dashed on Monday morning. Mr Foran said in an interview that he doesn’t see a travel corridor between the two countries happening until March 2021 at the earliest.

“I certainly do not believe we will see anything across the Tasman this calendar year. It’s hard to believe it would be before March next year and could well be longer,” Mr Foran told Patrick Hatch of The Sydney Morning Herald.

Traffic on busy international corridor slashed

Flights across the Tasman are usually the busiest international sectors in and out of Australia and New Zealand. Nearly eight million people make the short flight each year. COVID-19 put the brakes on those flights, with only Air New Zealand operating a pared-back service. But with both countries seeming to be getting on top of COVID-19 by mid-2020, there was much talk of a travel corridor.

However, a second wave of COVID in Victoria centered on Melbourne, and a smaller outbreak around Auckland saw prospects of a travel corridor between Australia and New Zealand fade.

Melbourne has been enduring a harsh, city-wide lockdown that’s now having dramatic effects. There were just 11 new cases reported in Melbourne on Sunday, down from 700 plus highs in early August. Elsewhere in Australia and around New Zealand, low to no COVID cases are getting reported. That’s been enough to get people talking again about a travel corridor between Australia and New Zealand.

Trans Tasman travel bubble talk boosted last week

That included Australian Prime Minister Scott Morrison, who resurrected prospects of travel between certain regions late last week.

For example, the whole of the (New Zealand) South Island, that’s an area where there is no COVID,” Mr Morrison said at a press conference after a National Cabinet Meeting on Friday.

Mr Morrison confirmed that a travel corridor between Australia and New Zealand remained under active discussion. Comments like that raised expectations of a possible relaxation in border controls between the two countries sooner rather than later.

But the bosses of both Air New Zealand and Qantas, the two key carriers on the trans-Tasman routes, aren’t getting onboard the bandwagon.

source https://simpleflying.com/air-new-zealand-trans-tasman/

Alaska Airlines “Buy One Get One” Row Promotion Returns

Alaska Airlines is bringing back its “Get the Row with BOGO” promotion. From now through September 16th, passengers booking a flight and traveling by October 31st can get a whole row to themselves when they book a flight.

The promotion

The “Get the Row with BOGO” applies to new tickets purchased starting today through September 16th for travel by October 31st. Travelers can buy one ticket and get a second ticket on the same flight for just the taxes and fees, which does not amount to much.

Because Alaska Airlines is blocking middle seats through October 31st, passengers will be able to get an entire row to themselves.

Sangita Woerner, Alaska’s senior vice president of marketing and guest experience, commented in a statement to Simple Flying,

“Our hope is that with this offer, as well as our Next-Level Care and middle seat blocking through Oct. 31, our guests are given further peace of mind while traveling to our more than 115 destinations this fall. We have added layers of safety to keep our guests and employees safe when they are ready to fly, and hope to see many of them in the skies in the coming months.”

Terms and conditions and how to use

To use, head over to Alaska Airlines’ website, enter your departure and arrival cities, dates, and make sure you select two travelers to take advantage of the promotion. The discount code is GETYOURROW. Enter the code before you search for flights. Once you have chosen an itinerary, select the window and aisle seats to get your whole row. You may not have a nonstop flight, depending on your destination, but might have to transfer in the airline’s largest hub in Seattle.

Tickets must be purchased by 23:59 on September 16th Pacific Time. There are some further restrictions. Passengers can only use this when purchasing standard economy class fares (no basic economy fares). This is also not valid for first class fares. You also won’t have to deal with change fees if you have to alter your travel.

The discount is valid for all Alaska Airlines destinations, minus Prudhoe Bay (SCC). The deal is valid on various days depending on your destination:

  • Travel to Hawaii or Mexico on Sundays through Wednesday
  • Travel from Hawaii or Mexico is valid from Tuesdays through Fridays
  • For all other destinations, the promotion is valid for flights from Mondays through Thursdays and Saturdays

The return of the promotion

Back in early August, Alaska Airlines launched the buy one get one promotion. Aside from a few changes to the days where the promotion is valid, the terms remain the same.

This promotion is designed to spur people to fly with the airline. Even with a blocked middle seat, it still does not reach the six feet of distance recommended in the now ubiquitous social distancing. However, getting a whole row to yourself gives you a chance to separate from people across the aisle.

Peak leisure travel days are excluded from the promotion. Fridays and Sundays are the busiest days for passengers heading to or from a vacation. Unless you are flying from Hawaii or Mexico to the contiguous United States or Alaska on those days, you won’t get a chance to take advantage of the promotion.

However, if you have some flexibility and can leave a day or two early or come back a day or two later in the week, then you’ll be able to get the whole row to yourself.

source https://simpleflying.com/alaska-bogo-row-return/

Viva Air Colombia’s First A320neo Spotted

Painted nose to tail in bright yellow, Viva Air Colombia’s first A320neo paraded out onto the tarmac in Toulouse, France, last week. The new color is a big departure from Viva Air Colombia’s mostly white aircraft. No matter how busy the airport, this brand new A320 will be easy to spot in the crowd.

The plane, to be registered as HK-5352, was photographed on September 11. She was rolling down the taxiway at Toulouse about to undertake her first flight.

The first of many A320neos for Viva Air Colombia

This aircraft is the first of many A320neos the Colombian low-cost carrier expects to take over the new few years. In 2017, the airline signed an agreement to buy 50 single-aisle Airbus aircraft, including 35 A320neos. The airline said they were purchasing the planes to modernize their fleet and grow their network.

“Airbus is pleased to play a major role in supporting Viva Air in its exciting journey to develop the low-cost model throughout Latin America,” said Airbus Customers Chief Operating Officer, John Leahy, at the time.

Viva Air Colombia remains optimistic about the future

Since beginning operations in 2012, Medellin-based Viva Air Colombia has gradually built its fleet up to 22 A320-200 planes. Now Colombia’s third-biggest airline, that slow and considered growth has held the airline in good stead this year. While half of Viva Air Colombia’s fleet is parked, the airline hasn’t tinkered with its Airbus order and remains optimistic about growth opportunities in Central and South America.

“We do believe that there are going to be more opportunities in the market and business opportunities as well because the market is going to be reconfigured, and we have to be vigilant and agile to take advantage of those market opportunities,” Viva Air Colombia’s Chief Executive Officer, Felix Antelo, told Finance Colombia.

The experienced operators behind Viva Air Colombia are another reason why the airline is riding out 2020 better than most.  Viva Air Colombia is a private company backed by Irelandia Aviation. In addition to their Colombian airlines, Irelandia Aviation is behind Ryanair, Allegiant Airlines, Tiger Airways, and VivaAerobus. Irelandia Aviation like to run their airlines lean, keeping costs down, and that gives them an advantage over struggling legacy competitors.

Keeping the fleet simple helps Viva Air Colombia power forward

Besides ownership, one common denominator between these airlines is their straightforward fleets. Felix Antelo has been a big fan of the existing A320s Viva Air Colombia flies. He told Finance Colombia;

“The most efficient aircraft operating in Colombia is the Airbus A320. It also has a very efficient configuration due to the number of seats we have, and, as you well know, they consume less fuel. They have more reliability, (and) they fly more hours between maintenance.”

The A320neo builds on the A320’s efficiencies. CFM LEAP-1A engines will power the A320neos. These highly successful engines have sold around the world. They promise to bring further efficiencies to Viva Air Colombia. Airbus says that the engines and aircraft design improvements should cut fuel costs by 20%.

That will be music to the ears of Felix Antelo and his bosses in Ireland. 2020 has proved a challenging year for airlines in Colombia. Most international flights remain suspended. But when things start getting back to normal, Viva Air Colombia wants to be well placed to capitalize on it. Their shiny yellow A320neos will help them do that.

source https://simpleflying.com/viva-air-colombia-a320neo/

Qantas Wants State Borders To Be Reopened

Qantas is stepping up its long-running campaign to get borders within Australia re-opened. Border closures imposed by regional politicians are causing widespread chaos in Australia, not least among the airline industry. With Qantas generating the bulk of its revenue from domestic flying, border closures are hampering the airline’s ability to resume normal operations after COVID-19. Now Qantas is on a mission to get those borders open again.

Qantas boss argues for border closures on health rather than political grounds

Qantas boss Alan Joyce has long been critical of the lengthy border closures within Australia.

“Nobody has any issue with the international borders being closed – that’s protected Australia,” he said in August. But he’s criticized interstate border closures that are primarily driven by political rather than health imperatives.

“Some areas of Queensland, Tasmania, and other parts of the country, 30% of the jobs are dependent on tourism. If it’s safe to do it, it should be opened.”

There have been 26,513 cases of COVID-19 on Australia and 788 deaths, with the bulk of both occurring in Victoria. Australia’s powerhouse state, New South Wales, currently has 145 active cases and has averaged just seven new cases a day over the last week. Except for Victoria, most other states and territories are recording just a handful of COVID cases, if any.

Despite the low rates of COVID, the majority of Australia’s eight states and territories have kept their borders shut. Qantas’ normally bustling domestic flying is running at 20% of regular capacity. Against this backdrop, Qantas argues most interstate borders should re-open.

Qantas targets politicians from recalcitrant states

Rather than political expedience, on Wednesday, Qantas called for border closure decisions to be based on medical risk assessments and a standard definition of what constitutes a COVID hotspot. They’ve asked their employees (more than 20,000 of whom have been stood down since April due to border closures) to sign a petition calling for the borders to get re-opened.

Also, Qantas has written to state and federal politicians who represent constituents in states which did not agree to develop a road map out of hard border regimes following a National Cabinet meeting last Friday.

In the firing line are politicians from the states of Queensland and Western Australia.

“Qantas is united with other tourism stakeholders, not only in your electorate, but around Australia in calling for a nationally consistent framework that is balanced and proportionate, with defined thresholds informed by medical advice for the safe reopening of internal borders, excluding hotspot areas as determined by health authorities,” the letters said.

“Arbitrary border restrictions are having a profound economic and social cost to communities, businesses, supply chains, and jobs.”

Qantas takes the diplomatic route

Qantas is doing okay flying passengers within Queensland and Western Australia. Both are geographically large states. Queensland, in particular, has a decentralized population. It’s the interstate trunk routes these border closures are impacting. It’s also stifling transit traffic from regional areas onto interstate destinations through capital city airports. Qantas argues that Queensland banning entry to residents of Canberra, where there hasn’t been a COVID-19 case for two months, is absurd. The airline has a point.

“We have a situation where there are large numbers of states and territories that have had zero cases, and they’re not even open to each other. Western Australia, South Australia, Northern Territory, Queensland. Tasmania, we’ve got closure there still with very low cases, no cases, and it’s been like that for a while, and we don’t have any determination of when the borders will open,” Mr Joyce said last month.

Qantas is taking a relatively diplomatic path here. But Mr Joyce isn’t afraid of a barny or direct action. Canceling the Chairman’s Lounge memberships of a few recalcitrant State Premiers and senior public servants might prove a more effective way of bringing them around to their senses.

source https://simpleflying.com/qantas-state-borders-reopened/

Which Airlines Have Received The Most State Support Per Seat?

State aid for airlines is a vexed issue. Aid, in any form, runs counter to most mainstream economic theories. But state aid is a fact of life and even more so in 2020. As this year unravels, many airlines are relying on state aid to keep flying. Recent work by aviation analytical group OAG threw up some fascinating numbers regarding state aid for airlines.

Singapore Airlines standout beneficiary from state aid

In an OAG webinar last week, Strapped For Cash: How Airlines Can Survive Winter, airline analyst John Grant discussed the amount of state aid some airlines got this year.

Leading the pack was Singapore Airlines. That state-owned airline received a massive US$13 billion bailout earlier this year. Singapore Airlines was more disadvantaged by the travel downturn than most airlines. It solely flies international routes and has no domestic network to fall back on. But it also has the advantage of being backed by a rich country.

“In some parts of the world, governments do not have the cash to support their airlines. If you look in Latin America, in times of a pandemic, there are much bigger issues than purely refinancing or protecting your airlines,” said Mr Grant.

From January to August, Singapore Airlines had 6,613,702 seats available. It received US$1,315 in state aid per seat flown. Notwithstanding this largesse, John Grant says the Singapore Airlines example should not be seen purely as a bailout.

“It’s a more complex refinancing structure in Singapore than a loan. It’s an investment, and other considerations need to get taken into account.”

State-support-per-seat

Revenue per passenger-kilometer was down 99.5% for Singapore Airlines across the three months to June 30. The total cash revenue for that period was down 79.3% in the same period. Despite this, Singapore Airlines has the liquidity and the support to get through this travel downturn. Not all airlines do. And even airlines from affluent countries don’t always have governments willing to help out.

“There is very little state aid or support for Virgin Atlantic who’ve just managed to refinance and the IAG Group,” Mr Grant noted.

State aid provided to airlines that may not survive

In the list of top ten airlines by support per seat flown, there are several airlines whose medium to long term future is up in the air. Examples include Air Mauritius, Fiji Airways, and TAP Air Portugal. Air Mauritius had 597,763 seats available between January and August and received state aid of US$375 per seat flown. Fiji Airways had 610,507 seats available between January and August and received state aid of US$327 per seat flown. TAP Air Portugal had 5,587,908 seats available between January and August and received state aid of US$254 per seat.

Some aviation experts have questioned whether providing aid to these kinds of airlines is a case of throwing good money after bad. For example, in Fiji, an Opposition MP wants to establish a special committee to enquire into the financial state and overall viability of Fiji Airways. But John Grant says;

“You can see the size and the scale and the strategic value that governments are placing on their airlines, whether they are public sector or private sector.”

US airlines trailing the pack when it comes to state aid

In the ongoing discussion of state aid for airlines, US airlines have hogged the limelight, benefiting from funding via the CARES Act.  But overall, the amount of state aid the big US airlines have received per seat is a fraction of what airlines like Singapore Airlines, Cathay Pacific, KLM-Air France, and the Lufthansa Group have received.

Whereas Cathay Pacific received US$574 in state support per seat flown between January and August, Delta Air Lines received US$59, United Airlines received US$71, and American Airlines received US$52. In part, this can be explained by the large number of seats the US airlines have continued to operate. US airlines have been able to maintain domestic networks. Fallback domestic networks are not available for airlines like Cathay Pacific and Singapore Airlines.In any case, Mr Grant sees the need for state aid to continue flowing if airlines are to keep flying. He notes that the existing levels of state aid were designed to carry the airlines through to the end of the 2020 northern summer period. That’s ending soon. The OAG analyst says a lot more cash is going to be required in the coming months to see airlines flying through to summer 2021.

source https://simpleflying.com/state-support-per-seat/

Delta Air Lines Will Not Furlough Any Flight Attendants

Delta Air Lines will not be furloughing any flight attendants this fall. The last few months have been difficult for the carrier with billions of dollars in losses. This is some welcome news for flight attendants after months of uncertainty amid an unprecedented crisis.

No furloughs for flight attendants

View From the Wing reports that Delta will not be furloughing any of their thousands of flight attendants. This comes not too long after the airline announced it was furloughing nearly 2,000 pilots come October.

Delta Air Lines provided the following statement to Simple Flying:

“We’re grateful for the continued rallying spirit of Delta people during the pandemic. With the overwhelming response of flight attendants choosing to participate in our creative staffing options – and based on our current network schedule – we are positioned well to be able to successfully manage through our flight attendant overstaffing situation”

For the last few months, the whole airline industry has been in limbo with furloughs. United Airlines indicated it could furlough up to 16,000 employeesHawaiian Airlines issued notices to 442 pilots and flight attendants on impending furloughs, and American Airlines revealed about 17,500 upcoming furloughs.

Back in March, Delta Air Lines was one of the carriers that lobbied hard for government support and got it in the form of $5.4 billion in aid. That money is set to end on September 30th, meaning furloughs were possible from October 1st. So long as Delta received government aid, it could not involuntarily layoff or furlough any employees.

What would furloughs have accomplished?

It is no secret that every single airline is facing some difficult times with reduced bookings, record-low travel demand, and a choppy recovery filled with highs and lows. The fall is historically a low time for airlines before the Thanksgiving holidays hit. After experiencing a rough summer, no airline is very excited about the prospects of September, October, and November during these times.

Instead, airlines are looking towards next summer as the first real opportunity to get back to flying. Delta itself has highlighted its long-haul international route buildup on transpacific and transatlantic routes, with a robust schedule planned for next summer.

In May 2021, when Delta needs more flight attendants than it does in October, the airline would call the furloughed ones back to work and avoid having to hire and train new cabin crew recruits– which would be time-intensive and costly compared to furloughs.

How seat blocking plays a role

Seat blocking plays a huge role in Delta’s route plans for the fall. Consistently, Delta’s top brass and CEO, Ed Bastian, has stated he would rather add more flights on a route than open up seats for booking. Now, the airline is blocking middle seats all the way through January, meaning more customers can expect more space onboard Delta’s planes.

Those new flights do still need to be staffed. So, Delta does require a few more flight attendants than most other airlines, which have chosen instead to book to capacity rather than block out seats. Nevertheless, over the last few months, the number of flight attendants who have taken early outs and unpaid leaves have helped Delta avoid any furloughs. Now, the airline just has to hope the industry is in a far better place next May than it is right now.

source https://simpleflying.com/delta-no-flight-attendant-furloughs/