Major Japanese carriers have shrunk domestic schedules after the country entered a state of emergency to try and halt the spread of Covid-19. This applies to Tokyo, Osaka, and five other prefectures, and was effective 8 April. It takes the form of a request rather than an order, but gives authorities more power to encourage people to stay home and businesses to close. In response, Japan Airlines (JAL) said on 10 April it was stepping up cuts to its domestic network over the next couple of weeks. From 12-19 April, JAL is increasing average daily flight reductions by 194 to 415, meaning its domestic network has been cut by 49% for that period. By comparison, its domestic network was reduced by 16% between 6-28 March. For the rest of April, its domestic network will be reduced by about 32% compared to its normal schedule. In a 9 April update, All Nippon Airways (ANA) said it was changing flight frequencies for certain cities, affecting a total of 1,523 flights serving 56 routes. A scan of the schedules indicates frequencies on ANA's domestic routes affected are roughly halved. AirAsia Japan will also halt all domestic flying with from 9-30 April.

Source: Cirium

WestJet plans to rehire 6,400 employees if Canada's government passes the proposed wage subsidy programme that would make C$71 billion ($50.6 billion) available to companies that lost 15% of their revenue in March year-over-year due to the coronavirus pandemic Canada's Prime Minister Justin Trudeau on 8 April said he is working to recall parliament and pass the proposed legislation, called the Canada Emergency Wage Subsidy (CEWS). Lower demand due to the coronavirus pandemic forced the Calgary-based airline on 24 March to lay off nearly half of its workforce - about 6,900 employees -through both "voluntary and involuntary leaves”, WestJet chief executive Ed Sims said at the time. If CEWS legislation is passed, it would not bring all those employees back to work during the downturn but would help nearly all those laid off to "make ends meet" by returning them to the company payroll, Sims says 8 April, “We will not be grounding this airline unless instructed to by the governments," Sims says. "I will reiterate our intention to continue serving the 38 cities to which we currently fly, and I am proud we continue to do so. While most of these cities will see less flights over the course of the week, we continue to be there for them.” Air Canada is also watching for Ottowa to approve CEWS legislation, having announced its intent to seek wage subsidies for 36,000 domestic employees, including roughly 16,500 workers who have already lost their jobs. The CEWS legislation, proposed in March, is intended to encourage employers who already have laid off workers to put them back on the payroll. The programme would reimburse up to 75% of employees’ salaries to a maximum of C$847 weekly, according to the government’s website. It would be in place for a 12-week period and apply retroactively from March 15 to June 6.

Source: Cirium

As a health emergency, the Covid-19 crisis will soon enough shift gears; residents of Wuhan are emerging from lockdown and restrictions on daily life will ease in other hard-hit regions. This scourge will likely be manageable and expectations of an ongoing public health struggle may prove overly pessimistic. But whatever the long-term impact of this tragedy, spring 2020 will leave aviation to grapple with a series of shocks. When travel restrictions relax, expect some rapid recovery to satisfy pent-up demand for must-do travel. But that surge of activity may be short lived. The economic reality is that a worldwide recession was looming even before pandemic made it a hammering reality. Thus for the medium term – two or three years at least – the economic environment will be characterised by interest rates at essentially zero and very low oil prices, with corporate and personal debt dangerously high. Demand for travel will be way down on levels only recently assumed to prevail. Hence demand for new aircraft will be very weak; there are plenty of perfectly serviceable examples in storage and in a cheap fuel recession there is no financial incentive to pay money for replacements with more efficient engines. Talk of a unique post-pandemic opportunity for a “green reset” that pushes aviation along the path to a more sustainable future is wishful thinking. Reality check: governments will not impose taxes on tickets and fuel; airlines will focus on survival, which means devising viable business models that downsize fleets and fill seats while rebalancing volume and margin. As most people will be wary of spending hours packed at close quarters with potential virus carriers, an increasing percentage of those seats will be in expanded business-class cabins. For Airbus, Boeing and their multitude of suppliers, the days of planning for an output ramp-up are ancient history. For them, this rebalancing of volume and margin will mean fewer aircraft but cannot mean higher prices – so the answer must lie in imaginative finance. Here, a page from the automotive industry’s market distress playbook may be handy – create attractive grant and finance schemes that encourage airlines to scrap old aircraft for new. For the foreseeable future, new aircraft will burn money. But the fact that they also burn less fuel has green appeal that may even attract some much-needed largesse from governments and lenders.

Source: Cirium