Consequences of Coronavirus pandemic have a considerable impact on Lufthansa result

Lufthansa Group has made this announcement:

Adjusted EBIT declines to minus 1.7 billion euros in the second quarter despite significant cost reductions
Comprehensive “ReNew” restructuring programme to ensure global competitiveness after the crisis
Lufthansa Cargo with strong second quarter
Number of employees already reduced by 8,300 – redundancies no longer ruled out in Germany as well
Normalization of demand to pre-crisis level expected for 2024 at the earliest

The collapse in demand for air travel due to the Coronavirus pandemic led to an 80 percent drop in revenue for the Lufthansa Group in the second quarter to 1.9 billion euros (previous year: 9.6 billion euros). Most of the revenue (1.5 billion euros) was generated by Lufthansa Cargo and Lufthansa Technik.

The Lufthansa Group Adjusted EBIT in the quarter under review amounted to minus 1.7 billion euros (previous year: 754 million euros), despite extensive cost reductions. Operating expenses were reduced by 59 percent, primarily through the introduction of short-time working for large parts of the workforce and the cancellation of non-essential expenditures. However, these measures were only partially able to compensate for the decline in sales. The consolidated net income of Lufthansa Group for the months April to June amounted to minus 1.5 billion euros (previous year: 226 million euros).

The logistics division benefited from stable demand. The loss of cargo capacity in passenger aircraft (“bellies”) led to a significant increase in yields. Lufthansa Cargo’s Adjusted EBIT thus rose to 299 million euros (previous year: minus 9 million euros).

First half of 2020
In the entire first half of 2020, Lufthansa Group revenue fell by 52 percent to 8.3 billion euros (previous year: 17.4 billion euros). Adjusted EBIT amounted to minus 2.9 billion euros (previous year: 418 million euros) and EBIT to minus 3.5 billion euros (previous year: 417 million euros). The difference between the two figures is mainly due to depreciation on aircraft and aircraft usage rights amounting to 300 million euros, goodwill impairments totaling 157 million euros and the impairment of joint venture holdings in the MRO segment totaling 62 million euros.

In addition, the negative market value development of fuel cost hedging contracts had a negative impact of 782 million euros on the financial result in the first six months of the year. Compared with the first quarter, this effect decreased by 205 million euros. The Lufthansa Group net result for the first half of the year thus amounted to minus 3.6 billion euros (previous year: minus 116 million euros).

Traffic development in the second quarter of 2020
In the second quarter of 2020, the Lufthansa Group airlines carried 1.7 million passengers, 96 percent fewer than in the previous year. Capacity fell by 95 percent. The seat load factor was 56 percent, 27 percentage points below the previous year’s figure. Freight capacity offered fell by 54 percent due to a lack of capacity on passenger aircraft. The decline in freight kilometers sold was 47 percent. This reflects an increase in cargo load factor by 10 percentage points, to 71 percent.

Traffic development in the first half of 2020
In the first six months, the Lufthansa Group airlines carried a total of 23.5 million passengers, two thirds fewer than in the same period last year (minus 66 percent). Capacity decreased by 61 percent. The seat load factor fell by 9 percentage points to 72 percent in the period. Freight capacity offered fell by 36 percent and cargo kilometres sold by 32 percent. This resulted in an increase in cargo load factor by 4 percentage points to 66 percent.

Cash flow and liquidity development
Capital expenditure fell to 897 million euros (previous year: 1,904 million euros) in the first half of the year, mainly due to postponing planned aircraft deliveries, with only 127 million euros of capital expenditure in the second quarter. The drastic reduction in capital expenditure, the Group-wide focus on securing liquidity and strict working capital management limited the cash outflow despite the significant drop in earnings. The adjusted free cash flow for the first half of the year thus amounted to minus 510 million euros (previous year: 269 million euros). Net debt increased by 10 percent compared with the end of 2019, to 7.3 billion euros.

Centrally available liquidity amounted to 2.8 billion euros on June 30, a decrease of 1.4 billion euros compared with the end of the first quarter (31 March 2020: 4.2 billion euros).

The funds agreed with the Economic Stabilization Fund of the Federal Republic of Germany (WSF) to stabilize Lufthansa Group are not yet included in the liquidity figures as of 30 June 2020. Including these funds amounting to 9 billion euros, the Group had a total of 11.8 billion euros in liquidity available as of 30 June 2020.

Since the beginning of July, the Group has received 2.3 billion euros from the stabilization package. As a result of the capital increase, with which the WSF has acquired a 20 percent stake in the company’s share capital, the Lufthansa Group received cash of around 300 million euros. The release of the first instalment of the KfW (Kreditanstalt für Wiederaufbau) loan contributed one billion euros, and the establishment of the WSF’s Silent Participation II provided a further one billion euros.

Cash outflows since the balance sheet date related primarily to the payment of refund claims for cancelled flights. In July, the Group paid out just under one billion euros. In total, the Group has so far reimbursed around two billion euros to customers in the current year 2020.

Lufthansa Group decides on “ReNew” restructuring program
The Group currently expects demand for air travel to return to pre-crisis levels in 2024 at the earliest. Lufthansa Group has therefore decided on a comprehensive restructuring programme entitled “ReNew”, which also includes the restructuring program already underway at the airlines and service companies.

The aim remains to maintain the global competitiveness and future viability of the Lufthansa Group. The program includes the reduction of 22,000 full-time jobs in the Lufthansa Group. The Group’s fleet is to be permanently reduced by at least 100 aircraft. Nevertheless, the capacity offered in 2024 is to correspond to that of 2019. To this end, productivity is supposed to be increased by 15 percent by 2023, among other things by reducing the number of the flight operations (AOCs) to a maximum of ten in future. The size of the Executive and Management Boards of the Group companies will be reduced and the number of executives in the Group is supposed to be lowered by 20 percent. In the administration of Deutsche Lufthansa AG, 1,000 jobs will be cut. The sum of these measures should make it possible to refinance the funds of the stabilization package as quickly as possible. The financial planning of Lufthansa Group stipulates that positive cash flows will be generated again in the course of 2021. Lufthansa Group currently (as of 30 June 2020) has 129,400 employees, about 8,300 fewer than at the same time last year. The Group’s objective was to avoid redundancies as far as possible. Against the background of the market developments in global air traffic and based on the course of the negotiations on necessary agreements with the collective bargaining partners, this goal is no longer realistically within reach for Germany either.

Carsten Spohr, Chairman of the Executive Board and CEO of Deutsche Lufthansa AG, said: “We are experiencing a caesura in global air traffic. We do not expect demand to return to pre-crisis levels before 2024. Especially for long-haul routes there will be no quick recovery.

We were able to counteract the effects of the coronavirus pandemic in the first half of the year with strict cost management as well as with the revenues from Lufthansa Technik and Lufthansa Cargo. And we are benefitting from the first signs of recovery on tourist routes, especially with our leisure travel offers of the Eurowings and Edelweiss brands. Nevertheless, we will not be spared a far-reaching restructuring of our business.

We are convinced that the entire aviation industry must adapt to a new normal. The pandemic offers our industry a unique opportunity to recalibrate: to question the status quo and, instead of striving for “growth at any price”, to create value in a sustainable and responsible way.”

Outlook
Since the beginning of July, the Group has further expanded its flight program. This primarily concerns short-haul leisure travel. Lufthansa Group had already made the expansion of its market position in this segment a focal point of its strategy before the Corona crisis. The airlines Eurowings and Edelweiss play an important role in this context.

In July, the Group gradually increased its offering to around 20 percent of the previous year’s level, with load factors of over 70 percent in European short-haul traffic.

In the third quarter, capacity offered is planned to increase to an average of around 40 percent of the prior year capacity on short- and medium-haul routes and to around 20 percent on long-haul routes. In the fourth quarter, capacity is planned to further increase to an average of around 55 percent (short- and medium-haul) and around 50 percent (long-haul). With this, the Group plans to return to 95 percent of the short- and medium-haul and 70 percent of the long-haul destinations by the end of the year. Thanks to a high degree of flexibility in supply and capacity planning, this figure can also vary at short notice.

Despite the capacity expansion, the Lufthansa Group also expects a clearly negative Adjusted EBIT in the second half of 2020 and thus a further significant decline in Adjusted EBIT for the full year. This reflects the expectation that important long-haul routes will continue to be served only to a very limited extent due to ongoing travel restrictions.

Swiss reports first-half operating loss

Swiss International Air Lines issued this statement:

The consequences of the coronavirus pandemic impacted severely on SWISS’s business results for the first six months of 2020. The Airline of Switzerland reported an operating loss of CHF 266.4 million for the period, which compares to an operating profit of CHF 245.3 million for the first half of 2019. Total 2020 first-half revenues amounted to CHF 1.17 billion, a 55-per-cent decline from the CHF 2.57 billion¹ of the prior-year period. SWISS²transported 64.0 per cent fewer passengers in the first half of 2020 than it had in the same period last year. First-half systemwide seat load factor amounted to 71.2 per cent, 10.8 percentage points down from its prior-year level. SWISS’s European services are seeing some revival in demand. But the corresponding trends on the intercontinental network, which is key to any substantial business recovery, have been markedly more modest to date. In view of the still highly dynamic situation, no full-year earnings forecast for 2020 can currently be made.

The massive restrictions on global air travel that have been imposed in response to the coronavirus pandemic have hit Swiss International Air Lines (SWISS) severely, too. For several weeks in spring only a minimal timetable of SWISS services could be offered, substantially reducing income levels. Total first-half revenues amounted to CHF 1.17 billion, 55 per cent down on the CHF 2.57 billion¹ of the same period last year. The operating result (or Adjusted EBIT) for the period declined accordingly: SWISS reported a first-half operating loss of CHF 266.4 million (which compares to an operating profit of CHF 245.3 million for the first half of 2019). In view of the still highly dynamic overall situation and the unpredictability of further developments, no forecast can yet be made for the 2020 full-year Adjusted EBIT result.

“Thanks to the prompt actions we took to safeguard our liquidity, our fixed costs have been substantially reduced,” says Chief Financial Officer Markus Binkert. “With the loans from the Lufthansa Group and the prospective bank credit facilities backed by the Swiss Confederation, our liquidity is secure. But we still need to further reduce our structural costs, to ensure that we can repay our loans as swiftly as possible.”

SWISS will make further comprehensive economies to enhance its cost structure over the next few months. These will include a thorough analysis of the deployment of its present aircraft fleet, and the cessation companywide of all investments which are not essential to flight and business operations.

Second quarter hit particularly hard by the coronavirus pandemic

While its effects were already felt in the first-quarter period, it was in the second quarter of 2020 that the coronavirus pandemic impacted particularly hard on SWISS’s business activities. With travel restrictions of growing severity increasingly imposed all over the world, the company was compelled to reduce its flight schedules to a minimum and park a large part of its aircraft fleet for several weeks. Revenues declined accordingly: the CHF 243.7 million generated for the second quarter of 2020 was 82.8 per cent down on the CHF 1.41 billion¹of the prior-year period. The period also produced an operating loss of CHF 182.3 million, which compares to an operating profit of CHF 196.9 million for the same period last year.

Massive declines in passenger numbers

SWISS² transported a total of 3,167,624 passengers in the first half of this year – 64.0 per cent fewer than it had in the prior-year period. A total of 29,667 flights were operated, 59.5 per cent fewer than in the first half of 2019. Some 57.1 per cent less capacity was offered systemwide in available seat-kilometre (ASK) terms, while first-half total traffic volume, measured in revenue passenger-kilometres (RPK), declined by 62.7 per cent. Systemwide seat load factor for the period amounted to 71.2 per cent, a decline from the prior-year period of 10.8 percentage points.

The steepest monthly year-on-year decline in passenger volumes was April’s 99.2 per cent. Passenger numbers for June were still 92.2 per cent down on 2019. June 2020 seat load factor amounted to 41.6 per cent, 45.5 percentage points below its prior-year level.

A focus on repatriation and cargo flights

In addition to maintaining a minimal network of air connections between Switzerland and the world, SWISS and its sister airline Edelweiss operated 35 repatriation flights until beginning of July 2020 flying some 7,400 travellers – mostly Swiss nationals – to Switzerland from all over the world as part of the largest repatriation programme ever conducted by the Swiss Federal Department of Foreign Affairs. The company’s Swiss WorldCargo division has also performed just under 600 dedicated cargo flights until the end of June, transporting over 15,000 tonnes of goods (primarily medicines and further medical items) to supply the Swiss people and support the Swiss economy.

Further service resumptions planned

SWISS’s minimal flight operations were steadily ramped up in June to 15 to 20 per cent of originally-planned capacity. By this autumn, around one-third of the company’s capacities should be on offer again to some 85 per cent of the destinations which enjoyed SWISS service before the crisis began. Two-thirds of the 91-aircraft SWISS fleet have been back in operation since July – 41 short-haul and 17 long-haul aircraft, the latter including three Boeing 777s that have been temporarily converted to carry cargo on their main deck, too.

SWISS has also developed a comprehensive protection concept to keep its customers’ air travel as safe as possible. The provisions here include the compulsory wearing of face masks on board, intensified aircraft cleaning and modified inflight service. And in addition to its flexible rebooking options, the company has also introduced a guaranteed return flight provision for all its European routes.

The present summer holiday season has brought strong demand – especially for European flights – and high seat load factors that are almost at their prior-year levels, albeit with substantially lower capacities. The increases in passenger numbers are mainly being seen in the tourist travel and the visiting-friends-and-relatives segments: demand remains extremely weak on the business travel front. Intercontinental traffic volumes are also recovering only very slowly, in view of the many immigration restrictions which are still in place here.

“These positive trends in the demand for air travel in Europe make us cautiously optimistic,” says SWISS CEO Thomas Klühr. “We are well aware, though, that we still have a long way to go before this crisis is overcome. And one crucial factor for our substantial and sustainable recovery will be the further developments in our intercontinental business, particularly to and from the key North America region.”

¹ SWISS adopted new accounting principles at the end of 2019 in compliance with those of the Lufthansa Group. Total revenues of CHF 1.42 billion for the second quarter and of CHF 2.58 billion for the first half of 2019 were previously reported in July 2019.

² excluding Edelweiss Air

Swiss International aircraft photo gallery:

Swiss International aircraft slide show:

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Coronavirus crisis puts pressure on Austrian Airlines’ Q2 results

Austrian Airlines has made this announcement:

As a result of the coronavirus crisis and the cessation of Austrian Airlines‘ flight operations for a period of close to three months, Austria’s national carrier generated adjusted earnings before interest and taxes (adjusted EBIT) of minus EUR 99 million in the second quarter of 2020, down from positive results of EUR 46 million in the prior-year quarter. Accordingly, the adjusted EBIT for the first half of 2020 equaled minus EUR 235 million. The number of passengers carried by Austrian Airlines fell by 70 percent to around 2 million due to the pandemic.

“The coronavirus crisis has hit the airline sector with full force. Worldwide travel restrictions almost completely brought flight operations to a standstill in the second quarter. Our business is slowly recovering since the resumption of flights on June 15”, explains Austrian Airlines CFO Wolfgang Jani.

Results in detail
With the exception of humanitarian cargo flights, the second quarter consisted of practically only two weeks of minimum operations in June. Whereas in the previous year the airline carried around four million passengers between April and June, this figure was only 53,000 in 2020. Revenue slumped by 94 percent to EUR 35 million. During the same period, total revenues fell by 90 percent to EUR 59 million (Q2 2019: EUR 610 million). Total expenses for the same period amounted to EUR 158 million, a decrease of 72 percent (Q2 2019: EUR 565 million) compared with the same quarter of the previous year. Adjusted EBIT ultimately amounted to EUR -99 million in the second quarter (Q2 2019: EUR 46 million).

In the first half of 2020, sales revenues fell by 67 percent to EUR 322 million (first half of 2019: EUR 973 million). In the same period, operating expenses fell by 44 per cent to EUR 598 million (first half of 2019: EUR 1,064 million). This was counteracted by a package of short-term cost-cutting measures and short-time working for the entire workforce. Adjusted EBIT, which excludes valuation losses on aircraft disposals, among other items, amounted to EUR -235 million (H1 2019: EUR -53 million). EBIT amounted to EUR -299 million.

Current booking development and capacity utilization
The coronavirus crisis and the related travel restrictions which impacted Austrian Airlines through no fault of its own continue to necessitate a large degree of flexibility in planning business operations. Landing bans in effect from July 16-31, 2020 resulted in flight cancellations and cut the passenger load factor from an average of about 70 percent to 60 percent. Nevertheless, Austrian Airlines registered a large number of short-term bookings, enabling the airline to look into the future with optimism.

In particular, holiday destinations are well booked. For example, routes such as Athens, Larnaca and Thessaloniki show an average passenger load factor of about 90 percent. In terms of flight traffic to neighboring countries, the aircraft flying to Germany and Switzerland show an average capacity utilization of between 60 and 70 percent.

“Business trips and tourist travel as well are slowing picking up steam”, Wolfgang Jani adds. “Nevertheless, we only expect a slow ramping up of the aviation industry. The crisis is far from over, and this will be reflected in the performance indicators for the entire year”, CFO Jani concludes.

In other news, Austrian Airlines calls for comprehensive COVID-19 testing to replace general landing and entry bans:

• A comprehensive COVID-19 testing program for travelers from high risk countries should bring back the freedom to travel
• Landing bans recently triggered widespread uncertainty on the part of travelers
• CEO von Hoensbroech: “Whoever is healthy and not infected should be allowed to travel.”

Last Friday the Austrian Federal Government allowed landing bans for flights from 18 countries to expire. These bans did not apply in other EU member states. Nevertheless, the many different travel regulations in the European Union make it more difficult for people to travel freely and for airlines to reliably plan flight schedules. At a press conference, Austrian Airlines CEO Alexis von Hoensbroech called for comprehensive COVID-19 tests to be carried out on all passengers from high risk countries as a means of alleviating this situation.

“The freedom to travel is an important cornerstone of our modern-day society which should not be curtailed in the long term. Whoever is healthy and not infected should also be allowed to travel”, Austrian Airlines CEO von Hoensbroech stated.

Because of the duration of the coronavirus crisis and the increasing uncertainty on the part of passengers, it makes good sense to introduce health checks on a global basis for people travelling by air. This can only be ensured by carrying out comprehensive COVID-19 tests on travelers from high risk countries. “We are advocating an international solution”, von Hoensbroech emphasizes. “No other means of transport offers as good an opportunity for health checks as the aviation sector. This possibility is exactly what we should leverage in order to facilitate travelling in times of the coronavirus without compromising health protection. This approach is also in the interests of passengers because a further step towards ensuring freedom of travel is also a further step towards returning to normalcy”, he adds. According to Austrian Airlines experts, public authorities and governments are now called upon to collaborate with the airlines in order to introduce safe, practical and cost-effective testing methods and to coordinate them on an international level.

Recently Lufthansa CEO Carsten Spohr joined other airline CEOs form Europe and the U.S. in a letter sent to U.S. Vice President Mike Pence and Ylva Johansson, EU Home Affairs Commissioner, demanding a U.S.-EU testing program to once again enable airlines to operate transatlantic flights. The testing program should replace entry bans and quarantine regulations. Austrian Airlines CEO von Hoensbroech also supports such a solution. “Good flight connections between the USA and Europe are essential for a strong ethnic and economic interdependence between our continents. For this reason, flight connections should be resumed as quickly as possible – of course by optimally combining the freedom to travel with the protection of people’s health”, Mr. von Hoensbroech concludes.

Finally, Austrian Airlines is adding further holiday destinations to its summer flight schedule. The Greek destinations Kalamata, Preveza, Skiathos and Skiros are back in the flight schedule since the beginning of August. Sardinia, with Cagliari and Olbia, and Sicily, with Catania, are also part of the Austrian Holidays program since August. In addition, Austria’s home carrier is also flying to Ibiza again. All flights take place once a week on Saturdays or Sundays.

From September, Austrian Airlines will also fly to the Canary Islands of Gran Canaria and Tenerife every Saturday. Austria’s home carrier is thus adding ten holiday destinations to its summer program. These and other holiday flights can be booked on the Austrian Holidays website and via travel agencies.

Austrian Airlines aircraft photo gallery:

Austrian Airlines aircraft slide show:

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JetBlue to block seats through October 15

JetBlue Airways today announced several updates to its Safety from the Ground Up program, a multi-layered commitment to the safety of its crew members and customers. JetBlue is extending its commitment to seat distancing for flights through at least October 15 by blocking middle seats in rows where parties are not traveling together. JetBlue is also extending its Go Back and Forth with Confidence initiative through October 15, which provides travel flexibility by waiving change and cancellation fees for new bookings. Finally, JetBlue is strengthening its face covering policy to prohibit masks with vents or exhalation valves, and will no longer allow customers to claim exemptions from wearing a face covering altogether.

“Our Safety from the Ground Up program continues to be a thoughtful and always evolving set of layered protection measures that demonstrates our commitment to keeping our crewmembers and customers safe while providing them with peace of mind in the air and on the ground,” said Joanna Geraghty, president and chief operating officer, JetBlue. “We continue to hear from our customers that added space onboard and travel flexibility are incredibly important to them during this time and we want them to know we are listening because we are all in this together.”

JetBlue’s safety program is focused on four areas: healthy crewmembers; clean air and surfaces; more space, fewer touchpoints; and travel flexibility. As part of its “more space, fewer touchpoints” focus, JetBlue’s seat distancing policy provides assurance that customers will not be seated directly next to someone they don’t know. Middle seats are blocked on its Airbus aircraft, and on its smaller Embraer 190 aircraft, JetBlue is blocking aisle seats. The airline does allow customers traveling together to sit in middle and aisle seats.

Strengthening safety with face covering policy adjustments

JetBlue was the first airline to require customers to wear a face covering during the entire travel journey, including at the airport. In line with information from the Centers for Disease Control and JetBlue’s own medical experts, starting August 10, the airline will no longer allow the use of face masks with vents or exhalation valves. JetBlue will also no longer allow customers to claim exemptions from wearing a face covering altogether.

“The simple act of wearing a proper face covering is one way we can all help ensure the safety of all JetBlue crewmembers and customers,” Geraghty said. “Our terminals and airplanes are a shared space, and every customer must wear a proper face covering or will need to delay their travel on JetBlue until face coverings are no longer required. Our policy is meant to offer the strongest level of protection for everyone given all that we currently know about how COVID-19 is transmitted.”

An acceptable face covering or mask must cover a customer’s nose and mouth and is required to board all JetBlue flights. If a crewmember identifies a face covering or mask that does not appear sufficient based on its features or potential lack of protection, they will provide a mask for the customer to use instead. Customers two years and younger will not be required to wear a face covering if they cannot maintain one.

Customers who do not agree to wear a face covering will not be allowed to board any aircraft, and customers who do not follow crewmember requests to wear a face covering while in flight will be reviewed for future travel on JetBlue.

Expanding safety technology

JetBlue has long been known for sourcing innovative technology, and the pandemic has created opportunities to expand on that innovation. Mostly recently, JetBlue partnered with Honeywell to pilot the company’s UV Cabin System. The system harnesses the power of UV-C lights connected to two arms on what looks like a high-tech beverage cart. The arms sweep the light over aircraft interior surfaces, helping to reduce viruses and bacteria. The airline is piloting the technology while continuing its hand cleaning and electrostatic disinfection.

JetBlue has also rolled out technology meant to further reduce common touchpoints. They include:

Mobile app check-in with touchless bag tag integration, avoiding the need to touch kiosks
Automated bag drop, avoiding close proximity with crewmembers
Touchless self-boarding, avoiding crewmembers handling boarding passes and personal devices
Mobile device remote control pairing for inflight entertainment, avoiding the use of in-seat remote and/or touchscreen menus onboard

A multi-layered safety program on the ground and in the air

As part of JetBlue’s Safety from the Ground Up program, the airline has expanded a number of new enhancements that further reduce common touchpoints on the ground and in the air.

JetBlue’s program puts in place safeguards across four focus areas, and the airline continues to work under the guidance of an infectious disease specialist and informed by CDC guidelines.

Healthy crewmembers

Steps to ensure the health and safety of JetBlue’s crewmembers include:

Conducting temperature checks for our pilots and inflight crewmembers
Providing paid sick leave and additional time off programs so crewmembers do not come to work sick
Following company-wide protocols for reporting cases of the coronavirus, notifications and return to work clearance
Providing disinfectant kits for pilot use on the flight deck
Requiring face coverings for all crewmembers while boarding, in flight, and when physical distancing cannot be maintained

Clean air and surfaces

JetBlue is using disinfectant approved to kill coronavirus and maintaining healthy air onboard its aircraft. Steps include:

More frequent disinfecting of common surfaces like kiosks and counters inside our airport terminals
Providing hand sanitizer throughout terminals and disinfectant wipes to customers on board upon request
Increasing aircraft cleaning before every flight and overnight, including surfaces that are touched most like tray tables
Using electrostatic sprayers to disinfect the inside of our aircraft
Piloting Honeywell’s UV Cabin System as another layer of protection against viruses and bacteria
Filtering cabin air through hospital-grade HEPA air filters with cabin air completely changing about every three minutes

More space, fewer touchpoints

To increase physical distancing and to decrease touchpoints, JetBlue is implementing the following steps:

Requiring face coverings for all customers during check-in, boarding and in flight
Blocking middle seats on larger aircraft and aisle seats on smaller aircraft for those not traveling together (at least through October 15)
Providing the most space between each row of seats in coach of any U.S. airline* and spacious seating on all aircraft
Requiring all travelers to complete a health declaration
Providing touchless check-in and boarding experiences using the JetBlue mobile app and self-boarding gates for many of our flights
Implementing a back-to-front boarding process for most customers to minimize passing in the aisle
Streamlining onboard service to minimize physical interactions and maximize safety and comfort
Using your personal device as a remote for seatback screens on select planes

Travel flexibility

JetBlue has adjusted policies allowing customers to choose to travel when they are comfortable:

Waiving change and cancel fees for tickets purchased by October 15 to give customers confidence when booking
Extending Travel Bank credit expirations to a 24-month period for credits issued between Feb. 27 and June 30
Providing 24/7 support and award-winning customer service

Southwest Airlines dials back cabin cleaning as number of flights increase

Southwest Airlines is reducing the amount of aircraft cleaning between flights due to an increased schedule.

From the Dallas Morning News:

Southwest Airlines dials back cabin cleaning as number of flights increase

Alaska Airlines strengthens face covering policy: No mask, no travel, no exceptions

Alaska Airlines has made this announcement:

As part of continuing efforts to keep guests and employees safe, Alaska Airlines announced today that all guests must wear a cloth mask or face covering at all times when at the airport or onboard Alaska aircraft.

Effective Aug. 7, all Alaska guests age 2 and older will be required to wear a cloth mask or face covering over their nose and mouth – with no exceptions. If a guest is unwilling or unable to wear a mask for any reason while at the airport, they will not be permitted to travel. If a guest refuses to wear a mask after boarding their flight, they will be suspended from future travel.

“We all need to look out for each other during this health emergency, and the best way we can do that – and prevent the spread of the virus – is to simply wear a mask or face covering when we’re around each other,” said Max Tidwell, Alaska Airlines’ vice president of safety and security. “Safety remains priority number one for Alaska Airlines and Horizon Air. Our tougher policy shows how important this issue is to us and our guests. If you don’t wear a mask, you won’t be flying with us.”

In late June, Alaska empowered its flight attendants to issue a final notice to any guest – in the form of a yellow card handed to them – who repeatedly disregards the requirement to wear a mask while onboard. Going forward, if a guest chooses not to comply after receiving the yellow card, his or her travel with Alaska will be suspended immediately upon landing. Any remaining portion of the guest’s itinerary will be canceled – including connecting or return flights – along with any future trips the guest has booked. The guest will be provided with a full refund for any unused travel and will be responsible for making their own travel arrangements from that point.

Since Alaska’s mask enforcement policy was enacted in May, the overwhelming majority of guests have respected the requirement – and many guests have raised concerns about the few who do not. For guests who forget their mask, Alaska will have them available upon request, in addition to providing individual hand-sanitizer wipes on board.

Acceptable face coverings:

Face coverings must be made from a cloth or other barrier material that prevents the discharge and release of respiratory droplets from a person’s nose or mouth.

Unacceptable face coverings:

Face coverings with direct exhaust valves.
Face coverings that do not cover a guest’s nose and mouth.
Face shields without masks.

Alaska will continue to block seats flights through Oct. 31 for physical distancing, while providing the opportunity for families and larger groups to sit near each other if requested. The airline’s “peace of mind” travel policy has been extended through Sept. 8, allowing guests to make adjustments to their travel plans with no change or cancellation fees.

Recently, nearly 100 actions have been implemented to keep guests and employees safe. Flyers must sign-off on a health agreement at check-in to acknowledge and attest to their willingness to adhere to the mask requirement. Other layers of safety include: enhanced cleaning of our planes in between every flight; hospital-grade HEPA air filters; an air filtration system that circulates fresh, outside air into the cabin every three minutes; limited onboard service to reduce interactions; hand-sanitizing stations throughout the journey and more, all a part of Alaska’s commitment to Next-Level Care.

Virgin Australia resets as a Boeing 737 operator, Tigerair Australia brand closed down

Virgin Australia Group has made this announcement:

Key points:

• Plan for a stronger, more profitable and competitive Virgin Australia coming out of voluntary administration
• Focus on delivering exceptional experiences at great value with Virgin Australia’s core domestic and short-haul international business
• Virgin Australia to provide customers with the value of travel credits post administration with validity dates extended for bookings made prior to administration
• Resetting Virgin Australia to meet lower global and Australian demand, including:
– Reduction in cost base to meet sector uncertainty and COVID-19 market conditions
– Securing approximately 6,000 jobs when the market recovers with 3,000 roles impacted
– Simplified all-Boeing 737 mainline fleet and the retention of the regional and charter fleet, but removing ATR, Boeing 777, Airbus A330 and Tigerair Airbus A320 aircraft types.
– Long-haul international flying important part of plan but suspended until global travel market recovers
– Tigerair Australia brand discontinued with Air Operator Certificate (AOC) retained to provide option for ultra-low-cost operations when market recovers.
– Continued commitment to regional and charter flying.

The Virgin Australia Group has announced a plan for a stronger, more profitable and competitive business, building on its unique culture and securing approximately 6000 jobs as it prepares to exit voluntary administration under the ownership of Bain Capital.

CEO COMMENTARY

Virgin Australia Group CEO and Managing Director Paul Scurrah said together with Bain Capital, the plan will help to re-establish Virgin Australia as an iconic Australian airline, bringing strong competition for travellers while securing approximately 6,000 direct jobs and indirect employment for more than 30,000 Australians.

“Our aviation and tourism sectors face continued uncertainty in the face of COVID-19 with many Australian airports recording passenger numbers less than three per cent of last year and ongoing changes to government travel restrictions,” said Mr Scurrah.

“Demand for domestic and short-haul international travel is likely to take at least three years to return to pre-COVID-19 levels, with the real chance it could be longer, which means as a business we must make changes to ensure the Virgin Australia Group is successful in this new world.

“In a country as big as Australia, strong competitive airlines are critical in helping restore the economy, which is why in the face of the worst crisis our industry has ever seen, a well-capitalised Virgin Australia Group with a solid and sustainable future is a great outcome for Australians and the nation’s economy.

“Even when we do see a return to pre-COVID-19 levels of travel, successful airlines will be influenced by demand and look very different than the way they did previously, requiring long-term capital, a lower cost base and be more focused on providing exceptional experiences through a combination of great people and world class technologies.

“Working with Bain Capital, we will accelerate our plan to deliver a strong future in a challenging domestic and global aviation market. We believe that over time we can set the foundations to grow Virgin Australia again and re-employ many of the highly skilled Virgin Australia team.

“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.

“Bain Capital recognises the importance of Virgin Australia’s loyal customers, and that’s why they will be provided the value of their travel credits post administration with validity significantly extended to ensure they have plenty of opportunity to book tickets to their favourite destinations.

“While these changes are important to manage the impact of COVID-19, they involve some very tough decisions. We expect approximately 3,000 roles will be impacted as a result of the changes announced today. However, our intention is to secure approximately 6,000 jobs when the market recovers with aspirations for up to 8,000 in the future. To those that leave the business, I want to thank them for the role they’ve played in making this a great airline. They will be closely supported through our alumni program, have all their entitlements honoured and be provided with a two-year extension of employee travel benefits and early access to retiree and long service benefits.

“Our people have shown incredible resilience under tough circumstances. They are what set the Virgin Australia Group apart and make us so unique. We hope to welcome many of them back as we start to grow again in the future.

“Virgin Australia has been a challenger in the Australian market for 20 years, and as a result of this plan and the investment of Bain Capital we are going to be in a much stronger position to continue that legacy.”

PLAN FOR A STRONGER VIRGIN AUSTRALIA GROUP

The plan is anchored around six key points:

1. Overhaul the cost base, and simplify everything, starting with the fleet

To build a successful airline, the Group will align costs with a depressed and uncertain revenue outlook, simplifying its fleet to realise cost efficiencies and remove operational complexity.

The Group will move to an all-Boeing 737 mainline fleet for domestic and short haul operations which will see the removal of ATR, Boeing 777, Airbus A330 and Tigerair Airbus A320 aircraft.

The Group’s regional and charter fleet will remain, while the company reviews options at Virgin Australia Regional Airlines (VARA), including different operating models to support continued regional and charter flying.

The Group will also undertake a supplier contract review across its operations including products, services and facilities to better align with the company’s future size and requirements and lowering costs significantly.

Virgin Australia will consolidate its footprint and will move its corporate headquarters to 275 Grey Street in Brisbane’s Southbank. This follows a consolidation of its corporate offices in Sydney.

Long-haul international operations are an important part of the Virgin Australia business. However, given current international travel restrictions, the airline will continue to suspend flights to Los Angeles and Tokyo with the intention to recommence and grow long-haul flights when sufficient demand returns. Customers will continue to have access to international markets through the airline’s codeshare partners.

The Tigerair brand will be discontinued in the market as there is not sufficient customer demand to support two carriers at this time. Tigerair Australia’s Air Operator Certificate (AOC) will be retained to support optionality to operate an ultra-low-cost carrier in the future when the domestic market can support it.

Note: Tigerair Australia suspended operations on March 25, 2020.

2. Focus on customer value

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 purpose of travel. The airline will serve business travellers, including corporates and customers travelling for a holiday and visiting loved ones, and maintain a two-class cabin offering.

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. Virgin Australia will also maintain a network of lounges in key domestic locations with a plan to re-open when demand returns.

Virgin Australia currently operates a reduced network of services to 28 towns and cities across Australia and will continue to add destinations and frequencies in line with demand and to support the nation’s economic recovery from COVID-19.

Virgin Australia will continue to focus on delivering the best on-time performance and maintain an exceptional safety record and safety culture.

In response to COVID-19, Virgin Australia has introduced a range of health and wellbeing measures including a pre-departure eligibility questionnaire, contactless check-in, expanded social distancing measures, and more frequent cleaning onboard and at the airport.

3. Harness culture

The Group’s culture is unique and is the heart and soul of both the airline and Velocity Frequent Flyer. Over the past 12 months, the Group has gone to great lengths to unlock its culture and harness the spirit of its people. The Group will continue to reinvigorate the Virgin Australia brand and its passion for customer service, while embracing the diversity, talent and strength of its people.

4. Investment in world class digital and data technologies

The Group will invest significantly in the comprehensive digital re-platforming of both the airline and Velocity Frequent Flyer program. It will accelerate the Group’s vision for the future, to not only improve Virgin Australia’s commercial capability and guest experience, but significantly enhance the employee experience and increase the pace of profitable revenue growth, enabling faster and bigger job growth opportunities.

5. Strong balance sheet and investment capital for both transformation and growth

The Group will emerge from Voluntary Administration with a strong balance sheet, worthy of an investment grade rating, providing resilience and future growth potential.

Backed by Bain Capital, one of the world’s leading private investment firms with more than $AUD150 billion assets under management, Virgin Australia will have a strong balance sheet to withstand material future shocks to the industry.

6. Jobs and future growth

The Group’s people have shown extraordinary resilience during this uncertain period and the focus now is to preserve as many jobs in the immediate term as possible while building a business that is healthy and sustainable for decades to come.

As a result of the changes announced today, including the transition to a single Boeing 737 fleet for domestic and short-haul flying, it is expected approximately 3,000 jobs will be impacted, primarily across the operations functions, and corporate roles which directly support the operation. Formal consultation with unions and employee groups has commenced today, and all options including voluntary redundancy, redeployment, leave without pay and flexible work arrangements will be explored to retain as many jobs as possible.

While devastating for our people, making these changes now will secure approximately 6,000 jobs once market demand recovers, with potential to increase to 8,000 jobs in the future. Team members who remain stood down as the Group waits for domestic and international travel restrictions to ease, or are on Leave Without Pay, will continue to receive the JobKeeper payment until it expires in March.

All team members that leave the business will depart with care and respect. Their entitlements will be paid in full and the Group is working with over 100 partners to identify short and long-term redeployment opportunities.

TRAVEL CREDITS AND SUPPORT FOR GUESTS

Bain Capital understands customers and staff are at the heart of the Virgin Australia business. As an acknowledgement of this, all travel credits and Velocity Frequent Flyer points will be carried forward under its ownership.

Virgin Australia will provide customers with the value of their travel credits post administration. To preserve value for customers with credits for bookings made prior to administration, booking dates will also be extended to 31 July 2022 for travel until 30 June 2023. Further information about the use of credits will be provided to customers in due course.

Customers and travel agents will be notified directly of any flight cancellations associated with the announcements made today. Tigerair Australia customers and those affected by any cancellations will be provided a travel credit for use on Virgin Australia operated services.

VOTE OF CREDITORS

Deloitte Restructuring Services partners and Administrators Vaughan Strawbridge, John Greig, Sal Algeri and Richard Hughes were appointed on 20 April 2020. They have entered into a binding sale agreement for the business with Bain Capital and continue to work with Bain and Virgin Australia management on the restructuring of the airline.

With full support of Deloitte and Bain Capital, this plan will form part of a Deed of Company Arrangement (DOCA), which will be put to a vote at the second creditors’ meeting.

Tigerair Australia aircraft photo gallery:

Tigerair Australia aircraft slide show:

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Brussels Airlines optimizes its short-haul product

Brussels Airlines has made this announcement:

Brussels Airlines optimizes its short-haul product and herewith closer aligns with the Lufthansa Group Network Airlines to offer its customers an even smoother travel experience. This way, the Belgian hub airline can participate in future Group-wide innovations. At the same time, the Belgian company chooses to continue to highlight its Belgian identity and promote Belgian partners. Five new travel fares will be available for bookings as from August 18 for flights as of September 1, 2020.

By introducing the Lufthansa Group travel fares on its short- and medium haul network, Brussels Airlines wants to offer its guests a smooth and consistent travel experience throughout all Lufthansa Group Network Airlines (Austrian, Brussels Airlines, Lufthansa and Swiss). With three new Economy Class fares, two Business Class fares and several add-ons, guests can tailor their travel to their preferences. By implementing Lufthansa Group standards, the Belgian airline will benefit too from investments by the Group in IT, product development and passenger experience. Brussels Airlines continues its buy-on-board concept* with delicious, healthy and fresh food from partners such as Foodmaker.The airline offers three different options in Economy Class:

Economy Light, the basic fare as lowest price option for the cost-conscious traveler who flies with hand luggage only, requiring limited flexibility.
Economy Classic, the standard fare for those who wish to travel with the classic comforts included in the price of their ticket, like a 23kg checked baggage and a limited degree of flexibility.
Economy Flex offers travelers a high degree of flexibility when organizing their travels, with a free change of reservation.

In all medium- and long-haul Economy Class fares, across the entire Lufthansa Group, 8kg carry-on baggage is included on top of a small personal item, so connecting flights across the Group Network Airlines are standardized.

Next to three Economy fares, the airline continues to offer the exclusive comfort of Business Class, with two different fares, tailored to the needs of business guests:

Business Saver: for guests who want to travel with Business Class comfort, requiring a certain degree of flexibility
Business Flex: for guests that want all Business Class comfort and full flexibility, including free refund

Both Business Class fares include two pieces of carry-on luggage of 8kg on top of a personal item.

Since the coronavirus crisis and as part of the new customer experience, all payments during the guests’ journey will be cashless. This concerns the payments at the airport for excess baggage as well as all payments on board.

Independent of which fare is chosen, seating together is included, and so is the caring service of Brussels Airlines’ ground staff and cabin crew. All new travel fares are eligible for rebooking.

Brussels Airlines aircraft photo gallery:

Brussels Airlines aircraft slide show:

https://airlinersgallery.smugmug.com/frame/slideshow?key=BVfgNz&speed=3&transition=fade&autoStart=1&captions=0&navigation=0&playButton=0&randomize=0&transitionSpeed=2

Virgin Atlantic files for bankruptcy protection in the United States

From CNN:

“Virgin Atlantic has filed for bankruptcy in the United States as it races to finalize a $1.5 billion plan to rescue it from the aviation industry’s worst crisis.

The company, which is based in the United Kingdom, filed for Chapter 15 bankruptcy protection in New York on Tuesday, which shelters the US assets of foreign companies undergoing restructuring proceedings in their home country.”

Read the full article.

Porter Airlines delays re-start to October 7

Porter Airlines is updating its return-to-service date to October 7, 2020 from the previously-announced target of August 31, 2020.

Key factors affecting the ability to restart service include the Canada-U.S. border remaining closed to non-essential travel until at least August 21; the Atlantic Canada travel bubble that restricts movement beyond the region; non-essential travel advisories issued by governments; and mandatory quarantine rules.

“We never intended to suspend operations for such an extended period of time,” said Michael Deluce, president and CEO, Porter Airlines. “Unfortunately, the layers of travel restrictions are serving to keep most people at home and show no signs of easing. We will continue making decisions based on how the situation evolves.”

Porter is waiving change and cancellation fees on all fares booked through October 7, including Porter Escapes vacation packages.

Porter temporarily suspended operations as of March 21, due to COVID-19.

Porter Airlines aircraft photo gallery: