Lufthansa airline Swiss has announced plans to cut its fleet by 15% and its headcount by a fifth as it attempts to right-size itself to serve what it perceives will be a permanently smaller customer base. "It has grown increasingly clear that our market is undergoing structural change, and that despite the actions which we were swift to take in response, a restructuring of our company now sadly seems unavoidable," says Swiss chief executive Dieter Vranckx. Such measures are required "in view of the continuing absence of any industry recovery", the carrier highlights, with demand expected to be around 20% lower over the "medium-term future". The carrier's overall fleet is being downsized by 15% from its 2019 levels, with short and medium-haul aircraft numbers being reduced from 69 to 59. Its long-haul fleet will decline from 31 aircraft to 26, through the retirement of five Airbus jets. Calling the Covid-19 crisis "the greatest challenge it has faced in its corporate history", it adds that frequencies on its short and long-haul routes are will be reduced compared to their pre-crisis schedule, while some intercontinental services will not return at all. The carrier is also extending its staff resizing programme that will reduce its total workforce by 1,700 full-time positions, or over 20% of the carrier's total, up from previous expectations for a reduction of 1,000 full time roles by the end of the year. This could result in the forced dismissals of up to 780 ground staff and flight crew, with the Zurich-based carrier having launched a consultation procedure on the changes. Swiss adds that it will continue to pursue its premium position in the market, maintaining operations at its hubs in Zurich and Geneva, "and ensure that Switzerland remains connected with the world." Its resizing and transformation plan will also entail a shift towards environmental responsibility through using sustainable aviation fuel, as well as "developing and refining intermodal transport solutions", it states. On 29 April the carrier reported an operating loss of Swfr201 million ($221 million) in the first quarter of 2021, compared with Swfr84.1 million during the same period a year ago. It carried around 290,000 passengers in the quarter, a decline of 90% year-on-year. Revenue passenger kilometres decreased by 90%, while capacity, as measured in available seat kilometres, was cut by 73%.

Fitch Ratings has downgraded the Class A certificates of Air Canada's 2013-1 enhanced equipment trust certificate (EETC) issuance as a result of the deterioration in Boeing 777-300ER values amid the pandemic. The US agency downgraded the certificates to "BBB" from "A-" as values for the 777-300ERs that back the transaction have declined by roughly 18% year-over-year, according to recent appraisals. Fitch has affirmed the Class B certificates at "BBB-". It notes that the 777-300ER, with its low cost per available seat mile, holds "strategic importance" in Air Canada's high-volume leisure routes and will likely be a "key asset" as travel begins to return to normalised levels. Fitch has affirmed Air Canada's 2020-2, 2017-1 and 2015-1 EETC Class A certificates at "A-", "A", and "A", respectively. The transactions continue to pass its "A" level stress tests, reflecting "relatively strong" collateral value performance. Loan to values (LTV) for each of these transactions are nearly "unchanged" from Fitch's prior review, as modestly lower aircraft values were largely offset by principal amortisation. Collateral for the 2017-1 and 2015-1 transactions consists of the newest generation technology aircraft including 737 Max types and 787s, which have "held up well" through the pandemic. The 2020-2 transaction includes some older aircraft and 777s which have fared worse, but the transaction has a relatively rapid amortisation profile, Fitch observes. Fitch has also removed Air Canada's 2017-1 transaction from rating watch negative. Fitch has affirmed Air Canada's 2017-1 class AA certificates at "AA-" and has removed the negative outlook. The affirmation is supported by adequate LTV headroom in Fitch's 'AA' stress scenario. Fitch calculates the maximum stress scenario LTV in this transaction at 89%, an improvement of roughly four percentage points from its prior review. Lower LTVs for the transaction are driven by a reduced stress rate applied to the 737 MAX aircraft, which Fitch has reduced to 25% from 30%, subsequent to the ungrounding of the Max aircraft by the Canadian government. The removal of the rating watch is due to the ungrounding of the Max, which previously was a risk to the transaction's ratings.
Collateral in the transaction consists of 737 Max 8s and 787-9s, the values for which have been relatively firm over the past year compared to other popular aircraft types. Fitch views both aircraft types as being well positioned to hold their value as air traffic continues to rebound. Fitch has affirmed all of Air Canada's class B certificates.

Total domestic traffic remained below 2019 levels in March but was significantly improved from February, data from IATA shows. Overall domestic traffic across regions, as measured in revenue passenger-kilometres, was down by 32% in March 2021 versus March 2019, compared with February's 51% decline. "The positive momentum we saw in some key domestic markets in March is an indication of the strong recovery we are anticipating in international markets as travel restrictions are lifted," IATA’s director general Willie Walsh states. "People want and need to fly. And we can be optimistic that they will do so when restrictions are removed." IATA notes that all markets except Brazil and India showed improvement in domestic traffic compared to February 2021, with China being the key contributor. Brazil reported a 54% decline in March compared to March 2019, as authorities tightened restrictions amid rising Covid-19 cases. India's declined by 32% versus two years ago, while China reported a 2.6% decline. Japan and Australia, which in the Asia-Pacific region are key domestic markets, saw March domestic traffic decline by 58% and 46% versus two years ago, respectively. The USA posted a 44% decline over the same period. Meanwhile, international traffic remained in the doldrums, declining by 88% in March versus March 2019 due to travel restrictions and marginally improved from February's 89% decline, IATA says. Airlines in the Asia-Pacific region recorded the greatest decline in international traffic in March, down by 95% versus March 2019 as the region continued to suffer from the steepest traffic declines for a ninth consecutive month. Capacity, as measured in available seat-kilometres, was cut by 87% and the load factor fell about 49 percentage points to just under 32%. European carriers were close behind, with an 88% decline in versus March 2019, slightly improved from February's 89% decline. Capacity was cut by 80% and load factor fell by 35 percentage points to 49%. For Middle Eastern airlines, international traffic fell by nearly 82% in March compared to March 2019, versus an 83% decline in February. Capacity fell by 67% and load factor declined 32 percentage points to 41%. North American carriers saw international traffic fall nearly 81% compared to two years ago. Capacity was cut by nearly 63%, while load factor dropped 41 percentage points to 43%. The data also shows an 82% decline in international traffic for Latin American airlines, in March versus the same month two years ago, compared with February's 84% decline. Capacity was cut by 77% compared with March 2019 and load factor dipped 18 percentage points to 64%, making it the best performer across regions for a sixth straight month. In Africa, airlines’ international traffic fell by 74% while capacity contracted by 62% and load factor fell 22 percentage points to 49%. Globally, overall traffic fell by 67% in March versus March 2019, compared with February's 75% decline.