Cash may run out for some airlines during tough winter season

This week IATA took a look at the cash position of the airlines reporting their second-quarter 2020 financial results (those in the chart represent 42% of global RPKs), to see how long their balances of cash and near cash assets would last if the rate of cash burn they faced in that quarter persisted. The answer, for the median airline, is just over 6 months. 

Many airlines, though not in all regions, have survived so far and had their cash balances boosted by Government aid, which totaled $161 billion worldwide by early September. Of course, airlines have also slashed costs to reduce cash burn. A smaller number of airlines also raised cash on the capital markets by issuing debt or equity and selling assets. Consequently, there is a group of airlines who have large cash balances that would last a long time, even at the 2020Q2 rate of cash burn. However, most airlines do not have this buffer. 

This second quarter measurement is a very stringent test of airline industry financial resilience (see latest Airlines Financial Monitor). Cash burn was probably at its worst in Q2 as the COVID-19 crisis hit hardest, but Q4 and Q1 next year are typically quarters of weak cash flows, even without 2nd waves of the virus. Existing cash balances are also not the only source of liquidity. Airlines can also raise cash from capital markets and by selling or borrowing against assets. But not all airlines are able to do this.

Even after taking this into account, since Government aid is starting to be withdrawn (e.g. wage subsidies), many airlines in the industry remain in a fragile financial state and will struggle to survive the weak winter months, unless we see a faster pace of recovery in air travel than we have today.

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Royal Air Force Chinooks continue to conduct support Operations in West Africa

RAF Chinooks currently deployed in Mali have continued to conduct key supporting missions for the French and Malian ground forces during the extreme weather conditions of the Malian wet season and the recent political instability.

Photo RAF / Crown copyright

Despite these challenges, the recently arrived C Flight from RAF Odiham based 18 (Bomber) Squadron, that have deployed to form 1310 Flight have maintained an intensive operational tempo. 1310 Flight RAF is integrated into the French, Groupement Tactique Désert-Aérocombat, that provides aviation support for the French led OP Barkhane counterinsurgency mission in the region.

Photo RAF / Crown copyright

RAF marks 80th anniversary of the Battle of Britain

A special Battle of Britain service was held at Westminster Abbey today as the culmination of a week of events held by the RAF to commemorate the 80th anniversary of this crucial battle in World War 2. Due to COVID-19 restrictions, the service was reduced in stature but not in spirit. This service included a reading from Prime Minister Boris Johnson, and Chief of the Air Staff, Air Chief Marshal Mike Wigston, CBE.

Photo RAF / Crown copyright

This year marks the 80th anniversary of the Battle of Britain, the first decisive battle in history fought entirely in the air. Battle of Britain Sunday commemorates a dramatic turning point in both the battle itself, and the history of the Second World War.

Service highlights included:

The Royal Air Force Ensign was borne through the church, presented, and laid upon the High Altar accompanied by the Band of the Royal Air Force Regiment

Air Chief Marshal Mike Wigston CBE ADC RAF, Chief of the Air Staff and Prime Minster Boris Johnson gave readings

During the Act of Remembrance the Battle of Britain Roll of Honour, which has the names of 1,497 pilots and aircrew killed or mortally wounded in the Battle, was borne through the church, escorted by the Squadron Standards of the former Battle of Britain Squadrons and a contingent of RAF Cadets

The Venerable (Air Vice-Marshal) John Ellis QHC RAF Chaplain-in-Chief of the Royal Air Force gave the Address

The Very Reverend Dr David Hoyle, The Dean of Westminster led the Act of Rededication

The Call of the Royal Air Force, the Last Post and Reveille closed the service

The Battle of Britain Memorial Flight performed a fly-past of three Spitfires and one Hurricane over the Abbey following the service

Photo RAF / Crown copyright

The 23rd Airbus A220 arrives for airBaltic

Photo airBaltic

airBaltic took delivery of its 23rd Airbus A220 aircraft today,  the jet registered as YL-AAW is the 23rd of the type to join the airlines fleet and sports the airlines new standard livery.

The aircraft flew directly from the factory in Montreal, Canada, touching down at the airline's home base of Riga Airport earlier this morning. It will soon be flying on regular scheduled flights for the carrier as it rebuilds its route network.

Photo airBaltic

Photo airBaltic

During August 2020, the Latvian airline carried 137 830 passengers, 9% less than in July 2020 from all three Baltic capitals to its network spanning Europe.

HTM-Helicopters to become the first operator to use the new H145 for Offshore Wind operations

Photo Airbus

Airbus Helicopters and HTM-Helicopters have signed a contract for the purchase of two additional H145 helicopters. HTM will be the first operator to use the new five-bladed H145 in the Offshore Wind segment.

“We thank HTM for their continued trust in Airbus Helicopters and our products”, says Thomas Hein, Head of Sales Western Europe at Airbus Helicopters. “Since HTM started offshore wind operations in 2008, they rely on H135 and H145 helicopters for their demanding operations.”

The delivery of the first helicopter, a four-bladed H145, is scheduled for the fourth quarter this year, while the second aircraft, a five-bladed H145 will be delivered mid next year. The four-bladed H145 will also later be upgraded with the new five-bladed rotor system by HTM’s maintenance organization.

The two new aircraft will be operated from HTM’s bases at Norden-Norddeich, Emden, Borkum and Helgoland. For their missions, which include passenger transport to and from wind farms and hoisting technicians to the wind-turbines, the two helicopters will be equipped with a powerful hoist, floatation equipment, and a cargo hook.

IATA says the proposed environment tax will destroy jobs and fail to decarbonize aviation

The International Air Transport Association (IATA) keen to be seen by its members as taking a stand on key issues, has issued a strongly worded warning regarding the proposed new environmental taxes in France will fail to decarbonize the aviation sector and eliminate 150,000 French aviation jobs.

The Convention Citoyenne pour le Climat (CCC) - a citizens’ body created under President Macron – is proposing a series of measures to curb aviation emissions, including an eco-tax on tickets issued in France, to raise 4.2 billion euros annually. France already imposes some of the heaviest aviation taxes in Europe.

The French Civil Aviation Authority (DGAC) estimates that if implemented the CCC proposal would lead to 150,000 job losses and cost the French economy EUR 5-6 billion in lost GDP.

Against those economic costs, the measures would reduce emissions by 3.5 million tonnes a year, which is less than 1% of France’s total emissions.

Lufthansa to launch 15 new summer destinations from Frankfurt in 2021

Cathedral of Jerez de la Frontera, Spain.

Additional vacation destinations in Greece, Spain, Egypt, Croatia, Cyprus,  Italy, Tunisia and Bulgaria in the flight schedule from Frankfurt

Lufthansa is consistently expanding its offering of flights to tourist and leisure destinations from Frankfurt.  During next year’s summer Season in 202115 new sunny destinations, which are highly attractive for holidaymakers, are now available for booking. The focus is on Greece (Corfu, Chania/Crete, Mykonos, Kos, Kavala/Thrace and Preveza/Peloponnese). Other attractive destinations in the program are in Spain (Jerez de la Frontera, Canary Islands and Tenerife will be continued from winter), Egypt (Hurghada), Cyprus (Paphos), Croatia (Rijeka), Italy (Lamezia Terme), Tunisia (Djerba) and Bulgaria (Varna).

The departure and arrival times of the new destinations are ideal for holidaymakers: Departures from Frankfurt were scheduled for the early morning hours and return flights to the Frankfurt Main metropolis in the evening.

Ryanair Cuts Capacity In October By Another 20%

As Failed Irish And EU Govt Travel Restrictions Damage Bookings

The budget airline Ryanair, has confirmed it would cut its October capacity by a further 20% -  that is in addition to the cut of 20% that has already been announced. Ryanair says it now expects its October capacity to fall to 40% of 2019 levels. 

Ryanair confirmed that these capacity reductions were necessary due to damage caused to forward bookings by continuous changes in EU Government travel restrictions and policies, many of which are introduced at short notice, which undermine consumers’ willingness to make forward bookings. In some countries (most notably Ireland), where the Govt have maintained excessive and defective travel restrictions since 1 July, Covid-19 rates have risen in recent weeks to 50 per 100,000 pop. – more than double those of Germany and Italy – where intra-EU air travel was freely permitted since 1 July.

Ryanair welcomes the EU Commission’s plan to remove intra-EU travel restrictions, subject only to the ECDC weekly update on Covid case / positive test trend rates by EU country and region, and calls for this coordinated approach to be immediately implemented by all EU States, especially Ireland, so that EU citizens can make essential bookings for business and family travel, free from the worry of flight cancellations and/or defective quarantine restrictions.

Airport News.......The UK’s first UV treatment of security trays installed at London Gatwick Airport

Laboratory tests demonstrate 99.9% disinfection rate with every tray treated immediately before each passenger uses it

System - provided by Smiths Detection - sees each tray pass through a covered ‘UV-tunnel’ fixed underneath the exiting hand luggage screening system

Treatment already in use at Gatwick and will be rolled out to eight security lanes - six for passengers and two for staff - by end of next month

London Gatwick is the first airport in the UK to treat its security trays with enough UV light energy to guarantee a 99.9% microbe disinfection rate – protecting passengers and staff and reducing the spread of coronaviruses, including COVID-19, and other infections on this high-touch surface area.

The new, highly effective system - provided by Smiths Detection - sees each tray pass through a covered ‘UV-tunnel’ fixed underneath the hand luggage screening system, as trays exit the scanners, so that every tray is treated immediately before each passenger uses it.

Following a one-month trial on a single security lane in July 2020, with laboratory testing demonstrating a 99.9% microbe disinfection rate, the new system will be rolled out on eight lanes in Gatwick’s North Terminal - six for passengers and two for staff - by the end of this month.

Delta and LATAM receive approval in Brazil for Joint Venture Agreement

Delta Air Lines and LATAM Airlines Group S.A. have received regulatory approval on Thursday for their trans-American Joint Venture Agreement (‘JVA’) from Brazil’s competition authority, the Administrative Council for Economic Defense (CADE).

The proposed JVA between Delta and LATAM, which was presented to the CADE on July 14, 2020,was approved without conditions, following an evaluation of free competition considerations and taking into account the unprecedented economic impact of COVID-19 on the airline industry. This is the first approval for the JVA between Delta and LATAM Airlines Group and its affiliates (‘LATAM’) since it was signed in May 2020.

The JVA aims to connect the carriers’ highly complementary route networks and provide customers with a seamless travel experience between North and South America, once all regulatory approvals are secured.

2.8 billion euros in ticket refunds already paid says Lufthansa

In the current year, the airlines in the Lufthansa Group have so far reimbursed around 2.8 billion euros to a total of 6.6 million customers (as of 16 September 2020). On average, around 1800 refunds were paid per hour in the last week.

The number of open ticket refunds fell to 900,000 transactions. It should be noted that new reimbursement claims are constantly arising because flights have to be cancelled or guests cancel. Lufthansa currently receives three times as many applications as before the pandemic. Therefore, the number of open refund claims will continue to develop dynamically, decrease further in the coming weeks, but will never reach zero.

Finnair partners with Terveystalo to offer coronavirus testing for travellers

Finnair partners with Terveystalo to offer

coronavirus testing for travellers

The European airline Finnair has started co-operation with private Finnish healthcare service company Terveystalo to offer its customers easy and fast access to coronavirus testing prior to travel. The service will be launched on 28 September 2020. 

Some countries require a negative coronavirus test result and a certificate from passengers arriving in the country. The partnership between Finnair and Terveystalo ensures that customers are provided a test certificate required by the destination country conveniently and in a timely manner. Furthermore, Finnair’s customers get access to testing services at a discounted price and with the possibility to buy with Finnair Plus points. 

Braniff Airways announces new endowment at the University of Texas in Dallas

Dallas-based Braniff Airways, d/b/a Braniff International, announces that the company has set up a permanent endowment at The University of Texas at Dallas, according to Braniff Chairman Richard Ben Cass. The global Airline’s extensive Public Relations Archives are housed in the History of Aviation Collection at the university located at the main campus near Richardson, Texas, north of Dallas.

The Braniff Airways Public Relations Archives Endowment will be specifically used for the care and archiving of the large collection that contains Braniff’s corporate communications files including press releases, photos, negatives and transparencies. In addition, the Archives include records from Braniff’s initial inception in 1926 to its cessation of air operations in May 1982. Braniff placed the Archives at UTD in February 1982 shortly before it closed but an endowment was not included at that time. Mr. Cass noted that this has now been corrected and the Archives will always be available for future generations to admire and enjoy.