Virgin Australia bondholders and others demand alternative sale propositions be considered

Virgin Australia ©AirTeamImages

Bondholders in Virgin Australia Holdings (Virgin Australia) have made an application to the Takeover Panel seeking approval to submit an alternative purchase proposal to creditors to consider against the currently accepted offer from private equity group Bain Capital for an as-yet undisclosed sum. Bondholders are not the only ones to object to what they see as unacceptable sales processes carried out by the administrators, Deloitte, which had precluded them from submitting their own proposal. According to Reuters news agency, Singapore’s Broad Peak Investment Advisers and Hong Kong’s Tor Investment Management are also seeking interim orders allowing them to access information Read more

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Air France to cut staffing levels by 15%, Hop! by 50%. 7,500 jobs to go

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The flag carrying airline Air France, along with its low-cost subsidiary Hop!, are to make substantial staffing cuts as a direct consequence of the effect of the COVID-19 pandemic on air travel. Air France has indicated that it will shed 6,000 jobs from a workforce of approximately 41,000 staff, while Hop! will reduce its approximate 2,000 staff by 1,020. The carrier’s parent company, Air France-KLM is Europe’s second-largest carrier and the job cuts are anticipated to take place over a three-year period. After discussions with unions, the carrier confirmed that: “Air France and Hop! are working together with the unions Read more

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

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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. Read more

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Aeromexico files for Chapter 11 bankruptcy

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With Latin American (LaTam) governments refusing to bail out their struggling airlines, Aeromexico has become the latest LatAm carrier to file for Chapter 11 bankruptcy as the effect of the Covid-19 pandemic continue to wreak havoc with the travel industry. Aeromexico has made it clear that the bankruptcy filing was totally “voluntary” and that to all intents and purposes it would carry on with its current plans. This included quadrupling the number of international flights and doubling the number of domestic ones in August as restrictions on travelling are lifted. The Mexican carrier has confirmed that tickets, reservations, electronic vouchers Read more

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Major job losses likely at Airbus as world’s leading planemaker targets 40% drop in production

Airbus A320-200 production ©AirTeamImages

Speaking to German newspaper Die Welt, Airbus CEO Guillaume Faury confirmed plans for the world’s largest planemaker to reduce output by 40% over the next two years to counter the drop in demand for aircraft and delivery delay requests resulting from the effects on global travel by the COVID19 pandemic. The company is now in talks with unions ahead of any formal announcement which is expected at the end of July. Airbus needs to find a balance between job losses and financial aid being offered by European governments. “It’s a brutal fact, but we must do it. It is about Read more

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After fatal May 22 crash, Pakistan grounds 262 pilots on suspicion of license fraud

With initial investigations into the cause of crash involving a Pakistan International Airlines (PIA) Airbus A320 near Karachi on May 22 which killed 97 of the 99 passengers and crew on board, and one civilian on the ground, primarily being put down to pilot error,  Pakistan’s Aviation minister, Ghulam Sarwar Khan announced on June 26 that 262 pilots have had their licenses suspended under suspicion that they may not have personally taken the compulsory written exams. In 2012 Pakistan introduced its current examination system to meet international standards, written papers which still had to be taken by already qualified pilots. Read more

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Lufthansa shareholders agree on stabilization measures

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The shareholders of Deutsche Lufthansa AG have voted in favor of accepting the capital measures and the participation of the Economic Stabilisation Fund (WSF) of the Federal Republic of Germany in Deutsche Lufthansa AG. The corresponding proposal received the necessary majority at the Extraordinary General Meeting. The package provides for stabilization measures and loans of up to €9 billion. The WSF will make silent capital contributions of up to €5.7 billion to the assets of Deutsche Lufthansa AG. It will also establish a 20% stake in the share capital of Deutsche Lufthansa AG by way of a capital increase. This Read more

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Swissport reducing U.K. staffing levels by over 50%. 20,000 jobs at risk

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Two weeks after Swissport Belgium, part of Swissport International Ltd. filed for insolvency, ground handling company Swissport UK has announced it is reducing its U.K. staffing levels from 8,500 to under 4,000. The Swissport group of companies,  Swissport, which handles services such as passenger baggage and cargo for airlines, employed 64,000 workers worldwide prior to the pandemic. The move comes on the back of a 75% reduction in revenue as a consequence of the COVID-19 pandemic. The chief executive of Swissport Western Europe said the cuts were necessary to “secure the lifeline of funding from lenders and investors”, describing the Read more

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Lufthansa closes down SunExpress Germany

SunExpress Germany ©AirTeamImages

SunExpress Deutschland GmbH (Sun Express Germany), the joint venture carrier involving Lufthansa and Turkish Airlines, is to close with the loss of approximately 1,200 jobs. Sun Express Germany is a separate company to Turkish Sun Express, the latter concentrating predominantly on flights between Germany and Turkey, while the former serves a number of leisure destinations in the Mediterranean region, while also flying on behalf of Eurowings, the low-cost carrier. Sun Express Germany operated a fleet of over a dozen Boeing 787-300s, and also a number of Airbus A330-200s which it wet leased to Lufthansa’s Eurowings. It is anticipated that Eurowings Read more

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Textron ceases flight simulator production in Canada – up to 2,000 jobs to go

Textron Inc (Textron) has announced that its plant in Montreal, Canada, which manufactures flight simulators is to suspend production until further notice, endangering approaching 2,000 jobs across a number of business units. The suspension of operations is as a result of the effect the coronavirus pandemic has had on the travel industry. Textron also anticipates fewer sales for its Cessna business jets and ground support equipment for the foreseeable future.  “There has been a substantial decline in demand and order cancellations for flight simulators in light of the expected long-term impact of the pandemic on the commercial air transportation business,” Read more

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