Air passenger demand will not completely recover from the coronavirus until at least 2023, ratings agency Moody's has warned. "Health concerns, changes in corporate travel policies, potential restrictions on international arrivals, and lower discretionary spending because of weaker GDP and higher unemployment will constrain air passenger demand into 2022," it writes in a sector analysis. Although Moody's believes that demand in 2023 "could approach" the level of 2019, "the uncertain timing of the coronavirus receding on a more permanent basis makes forecasting a challenge". Carriers have responded to the crisis by boosting their liquidity, but this has pushed debt levels in some companies to dangerous levels. Airlines with debt assessed by Moody's have on average 450 days of liquidity, but for many players it is significantly less. The agency expects carriers to burn cash in 2020 and, in many cases, next year too because of depressed passenger volumes. "The airlines we rate will carry on average 20-30% more debt in 2023 compared with 2019, with leverage on average 0.5x-1.5x higher." Many carriers will struggle to survive this period, leading to greater consolidation as those with the weakest finances and that do not benefit from state support fail. This will leave "fewer, larger companies, polarised between more efficient operators and strategic state-supported airlines". Even relatively well-capitalised airlines will see their finances stretched during this period. "Holding sufficient liquidity to operate through a substantial grounding period may not be sufficient for airlines to avoid a financial restructuring," Moody's highlights. Structural changes are likely to impact the sector well into the coming decade. Enhanced health screening could deter passengers even once fears of virus transmission have abated, while corporate travel may also be suppressed. Governments may also demand deeper emissions cuts from carriers as climate-change concerns continue to rise in importance.

Source: Cirium

IndiGo is offering both passenger and cargo charter services in an apparent bid to increase revenues during the coronavirus pandemic demand slump. A page on the Indian low-cost carrier's website asks customers for details including start and end destination, date of flight and number of passengers or details of cargo to be carried. Passengers or travel agents must then submit a form with their contact details. IndiGo describes the service as its "all-new charter service that allows you to fly at your convenience and comfort". It does not say which aircraft types will be used, though images of ATR and Airbus A320 aircraft are published on the webpage. IndiGo has 266 aircraft in its fleet, including 102 A320neos, 16 A321neos, 123 A320ceos and 25 ATR72-600s. IndiGo declines to share more information on the plans, saying only that it is making preparations to announce more information "in a while". IndiGo's passenger charters will be restricted to domestic flights for now, as international passenger flights remain banned in India. Domestic flights have been allowed since 25 May, and 46,102 passengers flew on 4 June, according to a Twitter post by aviation minister Hardeep Singh Puri.

Source: Cirium

All Armenian carriers have been blacklisted by the European Commission, after more than six months of discussions with the Civil Aviation Committee of Armenia over safety concerns relating to its oversight capability. Two Armenian airlines – Aircompany Armenia and Armenia Airways – as well as the Civil Aviation Committee were visited in February by a European air safety delegation, following notification of the concerns the previous October. The on-site visit resulted in multiple findings with particular unease over staff training and serious deficiencies in effective capacity to conduct certification and oversight properly. “It is clear from the assessment visit report that the committee has a systemic weakness in terms of personnel management,” says documentation accompanying the blacklisting decision. The visit revealed the committee lacked procedures to determine manpower requirements and training requirements, as well as their implementation. It also lacked a structured document-management system to assure certification traceability as well as quality-management functions needed to oversee administration and effective transposition of legal, regulatory and technical requirements. “The committee was unable to provide requested evidence of activities performed as part of the initial air operator certificate process for its certified air carriers,” the blacklist documentation states. Examination of the carriers during the visit turned up “several issues”, it adds, which “should have been detected” as part of regulatory oversight. Six operators and the Civil Aviation Committee were invited to a formal European safety hearing on 12 May. These operators included Aircompany Armenia, Atlantis Armenian Airlines, Atlantis European Airways, Armenia Airways, Armenian Helicopters, and hot-air balloon firm Skyball. During the hearing the Armenian committee outlined the safety improvements made since the visit, particularly regarding personnel and document management, improvements to the flight operations department, air operator certification, and inspector training. The regulatory also informed that it had taken steps to revoke certification from Armenian carriers considered non-compliant with international safety standards. While the European safety team acknowledged that the situation in Armenia has resulted from a “long period of inefficiency and neglect”, and that rectification measures are being pursued with government support, they added that the Civil Aviation Committee’s capability to oversee aviation activities is “insufficient” and does not meet minimum standards. “Significant further improvement of the committee’s capabilities will be necessary in order to address the current safety deficiencies,” the blacklist documentation adds, citing the deficiencies with personnel management and training, as well as “inadequate” certification processes and “ineffective” oversight. While the six aviation operators provided evidence to the hearing, they failed to convince the European safety team that they were capable of independent self-regulation. “None of the information or evidence provided by any of the air carriers, before or during the hearing, provided…the assurance that the lack of safety oversight by the Civil Aviation Committee could be mitigated through the air carriers’ own compliance and safety systems,” the documentation says. European transport commissioner Adina Valean says the decision to impose a blanket blacklisting on Armenia was unanimous, but that the Commission and the European Union Aviation Safety Agency are “ready to co-operate and invest in Armenia to improve its aviation safety”.

Source: Cirium