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LATEST NEWS

Friday, July 3rd, 2020

Five American airlines agree deal on government loans with U.S. Treasury

Under a US$25 billion emergency loan program, five American airlines have confirmed they have successfully concluded negotiated loan deals with the U.S. Treasury. Unlike previous financial assistance in the form of payroll assistance which did not have to be repaid, this new financial aid will be in the form of a repayable loan, though the terms have not been disclosed.

While several more U.S. airlines are still in negotiations with the U.S government, American Airlines is due to close on a US$4.75 billion treasury loan in Q3, which is in addition to the payroll loan of US$5.8 billion already received. The four other airlines included in this agreement are Hawaiian Airlines, Spirit Airlines, Frontier Airlines and SkyWest Airlines.

American Airlines has also warned employees that in relation to anticipated demand during the fall period, the company was overstaffed. "We currently anticipate having 20 to 30% -- or more than 20,000 -- more team members on payroll than we need to operate our schedule this fall," they wrote in an employee memo. "To be clear, this doesn't mean 20,000 of our team members will be furloughed in October, it simply means we still have work to do to right-size our team for the airline we will operate."

However, a number of airlines are being ultra-cautious as a result of current spikes in coronavirus cases with several states now reporting their highest-ever daily numbers. From October 1, airlines can start to eliminate jobs of furlough staff, while last week a group of six American aviation unions advised lawmakers that a further US$32 billion would be required to enable hundreds of thousands of workers to remain in employment through to March 2021.

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ACI and IATA call for governments to bear costs of public health measures

Airports Council International (ACI) World and the International Air Transport Association (IATA) have urged that costs related to public health measures aimed at mitigating the spread of communicable diseases should be borne by governments.

The COVID-19 pandemic’s effect on the industry and broader economy has halted aviation at global level, leading to multi-billion losses in revenue and traffic.

As the industry begins to restart and plan for a long-term, sustained recovery, the health and safety of passengers and staff remains the foremost priority for airports and airlines. The International Civil Aviation Organization (ICAO), through the Council Aviation Recovery Task Force (CART), has resolved to partner with its Member States, international and regional organizations, and industry to address the challenges and to provide global guidance for a safe, secure and sustainable restart and recovery of the aviation sector. ICAO’s TakeOff guidance outlines a number of new measures for safeguarding public health, which are already being introduced by airports and airlines around the world.

To ensure their efficacy, these measures - which include health checks, sanitization and social distancing - will require implementation by the appropriate national authorities. ACI and IATA believe that existing roles and responsibilities of governments, airlines, airports and other operational stakeholders should be respected in implementing the response to the COVID-19 outbreak. Airlines and airport operators should be included in national discussions to assess the practicalities of implementing the solutions proposed by ICAO aimed at harmonization across jurisdictions.

There is a recognition that a patchwork of different frameworks risks confusing travelers, introducing inefficiencies and unnecessary additional compliance costs on passengers, airports and airlines. Indeed, the World Health Organization’s International Health Regulations require governments to pay the costs of health measures.

“As airport and airline operations begin to slowly recover, the health and safety of passengers and staff is paramount and many new health measures are being considered by governments for implantation at airports,” ACI World Director General Luis Felipe de Oliveira said. “As the industry navigates the complexities of restarting operations, ACI believes the cost of any health measures that are required should be borne by governments. ACI and IATA are aligned on this issue, as set out in the Safely Restarting Aviation — ACI and IATA Joint Approach which was our input to ICAO’s TakeOff guidance. This laid out that public funding of health measures should be ensured, including but not limited to infrastructure or operational changes needed for their implementation.”

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Ryanair and U.K. pilot union BALPA agree on pay cuts

BALPA, the U.K. pilot union, has accepted a 4-year agreement for Ryanair's U.K. pilots, which includes a 20% pay reduction restored over 4 years, along with productivity improvements on rosters, flexible working patterns and annual leave to minimize U.K. pilot job losses.

The BALPA agreement was accepted by 96% of Ryanair’s U.K. pilots on a turnout of 90%.

Tor-Arne Fosser joins Norwegian as Executive Vice President Airline Ecosystem

Tor-Arne Fosser will join Norwegian as Executive Vice President (EVP) Airline Ecosystem from October 1, 2020. He is currently the Chief Marketing Officer for Telenor Denmark.

Fosser has worked over 16 years for Telenor, where he was also Senior Vice President for Marketing in the Telenor Group. He is now returning to Norway after almost two years in Copenhagen working as Chief Marketing Officer for the consumer market.

Fosser will take over from Brede Huser, who was appointed interim head of the Airline Ecosystem in June 2020.

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Helvetic Airways takes delivery of Embraer's 1,600th E-Jet

Embraer has delivered its 1,600th E-Jet, an E190-E2 to Helvetic Airways of Switzerland. Airlines and leasing companies from some 50 countries have added Embraer E-Jets to their fleets since the first-generation jets entered revenue service in 2004. The new, highly fuel-efficient second-generation E-Jets family, the E2s, started flying with airlines in 2018.

Helvetic Airways is currently transitioning from a fleet of first-generation E-Jets to E2s. The carrier received its first E190-E2 in October 2019 and has added four more since, as part of its fleet renewal program.

Helvetic flies the airplanes in a 110-seat single-class configuration on domestic and international routes. The carrier has firm orders for 12 E190-E2s and purchase rights for a further 12 E190-E2s with conversion rights to the E195-E2, bringing the total potential order to 24 E2 aircraft.

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Leonardo successfully issued €500 million bond

Leonardo successfully issued a €500 million bond. The offering, targeted to Italian and international institutional investors, has a 5.5-year tenor, maturity January 2026, and a fixed-rate coupon of 2.375%. The issue price was 98.933%. Coupons are paid annually in arrears. The notes will be listed on the Luxemburg Stock Exchange.

The success of the offering, 4 times oversubscribed, confirms the strong market interest in Leonardo. Leonardo will use the proceeds of the issue to refinance existing debt, extending the average debt life.
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