Air Canada trims 25% capacity and 1,700 jobs
January 14, 2021
Air Canada will trim 25% of its scheduled capacity for the first quarter and make various workforce reductions impacting 1,700 employees in response to Canada's pre-flight testing mandate intended to prevent the spread of a more contagious strain of the coronavirus first diagnosed in the UK. The Montreal-based flag carrier's capacity during the first quarter following this reduced schedule will now be down 80% compared with its capacity during the first quarter of 2019, Air Canada's chief commercial officer Lucie Guillemette states. “We have seen an immediate impact to our close-in bookings and have made the difficult but necessary decision to further adjust our schedule and rationalize our transborder, Caribbean and domestic routes to better reflect expected demand and to reduce cash burn," Guillemette says. "We regret the impact these difficult decisions will have on our employees who have worked very hard during the pandemic." The carrier is encouraged that Canada has already approved two vaccines and that its government "expects the vast majority of eligible Canadians to be vaccinated by September", Guillemette says. "We look forward to seeing our business start to return to normal and to bringing back some of our more than 20,000 employees currently on furlough and layoff,” she says. Canada's second-largest airline, WestJet, has also responded to the new virus testing mandate by suspending 24 routes and making workforce reductions that will impact 1,000 of its employees. Porter Airlines has also delayed its tentative date to restart its operations from February to March as travel demand is projected to shrink amid the new government rules. The interim order from Transport Canada requires that all travellers five years of age or older must provide proof to an airline that they have tested negative for coronavirus within 72 hours before boarding a flight to Canada. This pre-departure testing is in addition to the mandatory 14-day quarantine for new arrivals to the nation and other domestic travel restrictions. The testing rule takes effect between 7 and 14 January depending on the nation. Canada's coronavirus infection rate is lower per capita than that of the USA, European Centre for Disease Prevention and Control data shows. Travel restrictions in Canada may be playing a role in that lower rate. Air Canada will disclose financial results for its fourth quarter and full-year 2020 on 12 February.

United waives fare change charges for US-bound customers
January 14, 2021
United Airlines is waiving fare difference charges for international passengers who choose to travel to the United States before the nation’s blanket coronavirus testing requirement begins on 26 January. Chicago-based United says on 13 January the move will allow passengers more leeway in rebooking flights should they wish to travel prior to the date the new policy takes effect. “United will waive the fare difference for customers rebooking international tickets originally purchased on or before Jan. 12, 2021 for scheduled travel to the US through Feb 15, 2021,” the airline says. It adds that customers must choose to rebook their travel to begin on or before 25 January. Late last year, major US carriers eliminated booking change fees on most tickets, but this is the first time that they are expanding the free rebooking options to include fare differences. On 12 January, the US government said it will require inbound international air travellers to provide a negative coronavirus test result that is less than 72h old before entering the country. The Centers for Disease Control and Prevention (CDC), the national public health agency, said airlines will be responsible for ensuring that each passenger has either paper or electronic proof of the negative result prior to boarding aircraft bound for the USA. The country joins Canada and numerous other nations in introducing the widespread pre-departure test requirements, as new mutations of the coronavirus are tearing around the globe. Some airlines, like United, had been offering customers a pre-departure testing service prior to flights to specific overseas destinations which had imposed this requirement earlier. On 28 December, the US mandated testing for all passengers returning to the country from the United Kingdom, where a particularly virulent strain of the virus had been spreading. In the meantime, that mutation has also been detected in various locations in North America. International travel is still at a fraction of the level at which it was a year ago due to ongoing quarantine requirements and other mobility restrictions designed to stop the spread of the highly contagious virus. According to Johns Hopkins University, as of 13 January, more than 92 million people around the world have contracted the virus, and it has resulted in almost 2 million deaths.

Boeing closes 2020 with backlog down 22% in one year
January 13, 2021
Boeing logged another month of zero 787 deliveries in December 2020, while also receiving cancellations for another 105 737 Max. On the bright side, during December Boeing resumed 737 Max deliveries and landed new orders for 90 jets, including 737 Max and widebody freighters. The December activity leaves Boeing at year-end with 4,223 jets in its backlog, down 22% since the end of 2019 due largely to cancellations and accounting adjustments stemming from the pandemic-shattered aviation industry. “Through the global pandemic, we took meaningful steps to adapt to our new market, transform our business and deliver for our commercial, defence, space and services customers in 2020,” Boeing chief financial officer Greg Smith says. “The resumption of 737 Max deliveries in December was a key milestone as we strengthen safety and quality across our enterprise.” The 4,223 jets remaining in Boeing’s backlog include 3,321 737s, eight 747s, 75 767s, 350 777s and 469 787s. In December, the company delivered 39 jets, including 27 737 Max, one 737NG-based P-8 surveillance aircraft and 11 widebodies. Customers that received Max in the month included American Airlines (10 jets), CIT Aerospace (four), Copa Airlines (one), Minsheng Financial Leasing (one), SMBC Aviation Capital (three) and United Airlines (eight). The 11 widebodies delivered in December included one 747F to UPS, three 767Fs to FedEx, one 767F to UPS, two 767-based KC-46 tankers to military customers, three 777Fs to Qatar Airways and one 777F to China Airlines, Boeing says.
Boeing’s lack of 787 deliveries in December reflects ongoing inspections of the widebodies to ensure the jets meet Boeing’s quality standards, the company says. Those inspections centre on 787 fuselages. Boeing received 90 new-aircraft orders in the final month of 2020. Those included 75 737 Max orders from UK discount carrier Ryanair, seven 737 Max from unidentified customers and eight 777Fs from DHL Express. But during December, Boeing’s customers cancelled orders for 107 jets, among them 105 737 Max and two 787s. The Max cancellations included 66 aircraft scrubbed by Aviation Capital Group, 21 cancelled by SMBC, seven nixed by CDB Aviation, six cut by Air Lease and five (including one Boeing Business Jet variant) cancelled by unidentified customers. The two December 787 order cancellations came from Boeing Capital, the company says. Boeing says the Max cancellations provide some benefit by helping it gain more flexibility with how it manages the programme backlog and delivery schedule, and by protecting values. In all of 2020, Boeing lost 655 orders to cancellations and conversions, among them 641 737 Max cancellations. It also removed another 555 jets from its backlog to align with accounting standards. Boeing still holds orders for those 555 jets but has less certainty that customers will take deliveries. Boeing took orders for 184 jets in 2020. But cancellations and accounting adjustments pushed its adjusted orders to negative 1,026 aircraft.


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