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LATEST NEWS

Wednesday, July 1st, 2020

easyJet to optimize network and bases, to close Standstead, Southend and Newcastle

easyJet has started formal consultation on June 30, on proposals with employee representatives including BALPA and UNITE on all of its U.K.-based pilots and crew. The proposals include the potential closing of three of its bases in the U.K. – London Stansted, London Southend and Newcastle. These airports would remain part of easyJet’s route network.

EasyJet has informed all employees who may be directly affected by these proposals and will be providing full support to its people during this difficult time. The carrier stated that it is fully committed to work closely with its employee representatives during these consultations with the aim of minimizing job losses as far as possible.

Since the pandemic began, easyJet has taken decisive actions to remove cost and non-critical expenditure from the business at every level to mitigate the impact however, in line with IATA projections, easyJet believes that the levels of market demand seen in 2019 are not likely to be reached again until 2023.

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May Air Cargo shows slight pickup

The International Air Transport Association (IATA) has released data for global air freight markets in May showing a slight improvement in the air cargo market. But capacity remains unable to meet demand as a result of the loss of belly cargo operations on passenger aircraft that have been parked.

Global demand, measured in cargo tonne-kilometers (CTKs), fell by 20.3% in May (-21.5% for international operations) compared to the previous year. That is an improvement from the 25.6% year-on-year drop recorded in April.

Global capacity, measured in available cargo tonne-kilometers (ACTKs), shrank by 34.7% in May (-32.2% for international operations) compared to the previous year, a slight deceleration from the 41.6% year-on-year drop in April.

Belly capacity for international air cargo shrank by 66.4% in May compared to the previous year due to the withdrawal of passenger services amid the COVID-19 crisis (up slightly from the 75.1% year-on-year decline in April). This was partially offset by a 25.2% increase in capacity through expanded use of freighter aircraft.

The cargo load factor (CLF) rose 10.4 percentage points in May. This was a slight decrease from the 12.8 percentage point rise in April. However, the extent of the increase suggests that there is still pent-up demand for air cargo which cannot be met due to the continued grounding of many passenger flights.

Global export orders continue to fall but at a slower pace. The Purchasing Managers Index (PMI) tracking new manufacturing export orders improved from the trough seen in April despite remaining in contractionary territory.

“Air cargo demand is down by over 20% compared to 2019. And with most of the passenger fleet grounded capacity was down 34.7%. The gap between demand and capacity shows the challenge in finding the space on the aircraft still flying to get goods to market. For that the prospects for air cargo remain stronger than for the passenger business but the future is very uncertain. Economic activity is picking up from April lows as some economies unlock. But predicting the length and depth of the recession remains difficult,” said Alexandre de Juniac, IATA's Director General and CEO.

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Boeing delivers 2,500th AH-64 Apache helicopter

Boeing has delivered its 2,500th AH-64 Apache helicopter, an E-model Apache for the U.S. Army, from the company’s production line in Mesa, Arizona.

The first production AH-64, an A-model Apache, rolled off the assembly line on September 30, 1983, and was delivered by Boeing heritage company McDonnell Douglas to the U.S. Army in January 1984. Today, Boeing is producing and delivering AH-64E helicopters to a growing list of customers around the world.

Legacy Apache deliveries, including new-build and remanufactured helicopters, include 937 A-models through 1997, more than 1,000 AH-64Ds between 1997 and 2013, and more than 500 E-models since 2011.

Hi Air signs purchase agreement for two ATR 72-500 aircraft

ATR has sold two ATR 72-500 aircraft from its asset management portfolio to Hi Air. With this purchase the South Korean start-up, which began operations in December 2019, will increase its ATR fleet to four. The two additional aircraft will be delivered in August and October.

Supported by the superior economics and versatility of the ATR 72, which burns 40% less fuel and emits 40% less CO2 than a comparable regional jet, the airline is already ready to grow its fleet and expand the number of routes it offers. This summer, Hi Air will launch services on five domestic routes, including to the popular tourist destination of Jeju Island.

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Delta to add almost 1,000 flights system-wide in July

As economies reopen and border restrictions lift, Delta will add almost 1,000 flights system-wide in July, boosting service and nonstop connectivity to popular summer destinations and major business markets.

Customers traveling or considering travel this summer can feel confident in a safe experience throughout the journey, from check-in to baggage claim. Delta has implemented several measures to encourage extra space and provide peace of mind at the airport, as well as committed to capping cabin seating at 60% in Main Cabin and 50% in First Class and blocking middle seats through Sept. 30, 2020.

Even with the modest growth in demand, Delta’s July schedule will be approximately 65% smaller than the same time last year, including reductions of about 60% for U.S. domestic travel and nearly 85% for international.

As to the remainder of the summer travel season, the airline will stay focused on adding seat capacity, gradually rebuilding its footprint in local markets and resuming high-demand service suspended due to travel restrictions.

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Air Canada discontinues service on 30 domestic regional routes and closes eight stations in Canada

Air Canada has said that it is indefinitely suspending service on 30 domestic regional routes and closing eight stations at regional airports in Canada.

These structural changes to Air Canada's domestic regional network are being made as a result of continuing weak demand for both business and leisure travel due to COVID-19 and provincial and federal government-imposed travel restrictions and border closures, which are diminishing prospects for a near-to-mid-term recovery.

As the company has previously reported, Air Canada expects the industry's recovery will take a minimum of three years. As a consequence, other changes to its network and schedule, as well as further service suspensions, will be considered over the coming weeks as the airline takes steps to decisively reduce its overall cost structure and cash burn rate.

As a result of COVID-19, Air Canada has reported a net loss of CA$1.05 billion in the first quarter of 2020, including a net cash-burn in March of CA$688 million. The carrier has undertaken a range of structural changes including significant cost savings and liquidity measures, of which this announced service suspensions form part. Other measures include:
  • A workforce reduction of approximately 20,000 employees, representing more than 50% of its staff, achieved through layoffs, severances, early retirements and special leaves;
  • A company-wide cost reduction and capital deferral program, that has to date identified around CA$1.1 billion in savings;
  • A reduction of its system-wide capacity by approximately 85% in the second quarter compared to last year's second quarter and an expected third quarter capacity reduction of at least 75% from the third quarter of 2019;
  • The permanent removal of 79 aircraft from its mainline and Rouge fleets;
  • And raising approximately US$5.5 billion in liquidity since March 13, 2020, through a series of debt, aircraft and equity financings.
Further initiatives are being considered.

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Norwegian in dispute with Boeing – cancels 97-aircraft order

In a statement issued by the Norwegian low-cost carrier, Norwegian Air Shuttle (Norwegian) confirmed that recent talks with Boeing with regard to the financial losses it suffered both from the grounding of the 737 MAX after two fatal crashes and engine issues with the Dreamliner 787 have “not led to an agreement with a reasonable compensation.”

Norwegian, like most airlines, had been heavily hit by the drop in demand from passengers as a consequence of the COVID-19 pandemic and as a consequence decided to cancel its current orders for 93 737 MAX jets and five 787 Dreamliners. Norwegian has also filed a legal claim against the world’s second-largest planemaker for the return of payment made for these aircraft. In addition, it is seeking compensation payments for losses incurred from the grounding of the 737 MAX and also technical issues it had encountered with the 787 Dreamliner after technical problems had been discovered with the Trent 1000 engines which had  “affected reliability and resulted in premature and unplanned maintenance, which has disrupted the company’s operations and caused further significant losses.”

Norwegian is Europe’s fourth-largest low-cost carrier behind Wizz Air, easyJet and Ryanair, and is the largest Scandinavian carrier. It has four fully owned subsidiaries, namely Ireland-based Norwegian Air International, U.K.-based Norwegian Air UK, Swedish-based Norwegian Air Sweden, and Norway-based Norwegian Long Haul. Combined, the group operates a fleet of 122 aircraft and serves 149 individual destinations both regionally in Scandinavia, and internationally to places such as London and several Mediterranean airports. The low cost carrier still has 30 Airbus A321LR jets on order with delivery due to commence in 2021.

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Embraer delivers third C-390 Millennium to Brazilian Air Force

Embraer has delivered the third multi-mission medium airlift C-390 Millennium in the series to the Brazilian Air Force (FAB). The aircraft will be operated by First Troop Transport Group (1st GGT). Similar to the first two units delivered in 2019 and the additional 25 which will be delivered to the FAB, this third unit is prepared to perform aerial refueling missions, with the KC-390 Millennium designation.

The C-390 Millennium was developed as a joint project between the Brazilian Air Force and Embraer to set new standards for efficiency and productivity in its category, while delivering the lowest life-cycle cost in the medium airlift market. The aircraft, which has also received orders from the Portuguese Government, can perform a variety of military and civilian missions, including humanitarian missions, medical evacuation, search and rescue, aerial firefighting, cargo and troop transport, aerial delivery and aerial refueling.
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