Croatia Airlines is to hold an extraordinary general assembly to approve a recapitalisation scheme which involves raising Kn350 million ($54.7 million) through a share issue. Under the proposal, to be discussed at the 14 December assembly, the share capital of the airline would increase from Kn277.8 million to Kn627.8 million. Croatia Airlines would issue 35 million new shares, with a nominal value of Kn10. “The purpose of the share capital increase is to return the company’s capital and reserves to pre-crisis levels,” says the carrier. It says the increase in share capital shall be carried out through an investment agreement concluded between the airline and the Croatian state. Shareholders other than the government will be excluded from participating in the offer. Croatia’s transport ministry, on 13 November, put forward a proposal to inject Kn88.5 million into the company to compensate for damage inflicted by the pandemic from 11 March to 30 June. The ministry’s proposal says the payment of these funds must be made by 31 December at the latest. Croatia Airlines, it states, is “no exception” to the “devastating” effects on the aviation industry arising from the pandemic.“As a state-owned carrier, it has a strategic role in Croatia’s transport infrastructure, which has proved particularly crucial in this crisis period,” it adds. But it states that the carrier experienced “no significant financial shift” in the crucial summer months, when it would typically generate the largest inflow of funds under normal circumstances. Croatia Airlines’ latest financial disclosure shows it turned in an operating loss of Kn222 million and a net loss of Kn243 million for the nine months to 30 September. Passenger income fell by two-thirds to Kn393 million. Over the seven months of the crisis from March to September the airline cancelled 12,800 flights. It says revenues from tourism account for an “extremely large share” of the country’s GDP, and that both the pre-season and main tourism season have faced a substantial impact. Croatia Airlines had a fleet of 12 aircraft at the end of September, comprising six Airbus A320-family jets and six Bombardier Q400s. The airline cancelled plans to lease additional Bombardier CRJ and Q400 capacity for the peak season. “Given the circumstances and reduced demand, greater emphasis was placed on the use of the Q400 fleet, whose aircraft have a smaller capacity than the Airbus fleet,” it states. Croatia Airlines says the most significant risk affecting its operation is maintaining liquidity, particularly since the duration of the crisis is uncertain. The airline is not expecting a substantial improvement in performance as it heads into the low winter season. It says it has had to develop “several versions” of its crisis business plan, with the current one involving a reduction of flights since August owing to the “deterioration” of the epidemiological situation in Europe.

Source: Cirium

American Airlines expects to defer up to 18 Boeing 737 Max deliveries in the coming years but still anticipates acquiring 18 new Max from Boeing this year. The company is also deferring delivery of some Airbus A321s, American president Robert Isom says on 12 November. American currently has 24 737 Max in its fleet – all in storage due to the type’s grounding. Additionally, Boeing has in its inventory another 16 737 Max that it produced for American but, due to the grounding, has not yet delivered, says American. American intends to take delivery of those aircraft, plus another two it has on order, starting when the Federal Aviation Administration lifts the type’s grounding. Boeing predicts that will happen before year end. “Those 18 aircraft – we want them to come in,” Isom says, speaking during a transportation conference hosted by financial services company Baird. American reached a settlement with Boeing related to the delayed delivery of those jets, he adds. The Fort Worth-based airline is also scheduled to receive another 18 737 Max between 2021 and 2022. But American holds rights with Boeing to defer those deliveries. Market conditions would have to “get much, much better” for American to take those jets as scheduled, Isom says. “Assumptions are, over time, that they will be deferred.” The carrier has also deferred delivery of “four to five” A321s it had been scheduled to receive in 2021, he adds. The deferrals come as American has otherwise overhauled its fleet by retiring some 150 jets, including 757s, 767s, Embraer 190s and A330s. The retirements help streamline American’s pilot-training requirements and mean the carrier needs fewer pilots, Isom says. American aims to strip $1 billion from its 2020 costs through fleet changes and other cost-cutting measures. This year the carrier cut its workforce by about 40,000 staff, or roughly 30% of its 133,700-strong workforce at the end of 2019.

Source: Cirium

JetBlue Airways is the latest US carrier to announce plans to unblock middle seats, citing research showing passengers face a low risk of catching coronavirus on an aircraft. The New York-based low-cost carrier says on 12 November it will gradually remove seat blocks and open all seats from 8 January, following studies showing aircraft are “as safe or substantially safer than other more common settings.” “With the science validating the safety of the aircraft cabin, JetBlue will phase out seat blocks by early 2021,” chief operations officer Joanna Geraghty writes in a note published on the carrier’s website. “We have always been confident that the potential for transmission on the aircraft is extremely low,” she adds. JetBlue will cap loads at 70% until 1 December, after which it will raise that number to 85% through 7 January. After that, all seats will be available for booking. When the global pandemic began earlier this year, most airlines blocked middle seats, giving customers more space for social distancing. Airlines hoped that keeping passengers separated would encourage them to return to the air sooner. But as time passed and financial pressures on airlines mounted, many carriers, including Spirit Airlines, United Airlines and American Airlines, stopped the practice. Southwest Airlines has said it will begin unblocking middle seats on 1 December. That leaves Delta Air Lines the only other major US carrier to continue blocking the seats through early January. US airline lobby group Airlines for America (A4A), of which JetBlue is a member, said earlier in the day that the top nine US passenger airlines are still burning upwards of $180 million daily, and are desperately looking for ways to save money and generate revenue. So far this year, the nine have posted a combined $36 billion in losses. Industry analysts have said it is unrealistic to expect airlines to continue blocking middle seats in the long term. Hospital-grade air filters in aircraft along with enhanced cleaning protocols and personal protective equipment such as face coverings have been proven to be effective measures to limit or stop the spread of the virus on aircraft, studies have shown.

Source: Cirium