Passenger air traffic in the Latin America region remained hard-hit by coronavirus measures in July, with many countries still severely restricting flights as they handle the global pandemic. On routes to, from and within the Latin America and Caribbean region, demand measured in RPKs dropped 88% in July year-over-year, according to IATA. Capacity, as measured in ASKs, was down 83% in the same period. Load factors reached 63%. Figures were worse for airlines based specifically in the region, with July demand down 95% year-over-year and not changing much from the 97% decline in June. Capacity was down 93% in July, and load factors were 58%. Latin America also had the most significant declines in international demand and capacity compared with other regions, IATA says. International demand for Latin American carriers dropped 32% in July on a year-over-year basis, compared with 29% in June. Capacity was down 45%. “That market is still very much controlled,” Peter Cerdá, IATA’s regional vice president, the Americas, tells Cirium. “We’re six months into this crisis, [and] the vast majority of our countries still have either 100% country restrictions or closures, entry restrictions or quarantine. That has put a huge burden on the sector.” Several key markets continue to have closed or restricted borders, only allowing their own residents into their country. That is still the case in Colombia, Chile, Argentina and Panama. However, Cerdá notes that Panama is allowing carriers to transit through its Tocumen hub on the way to other countries. The region has seen some movement in recent weeks, with Colombia restarting domestic flights on 1 September. The Colombian government also recently committed $370 million in debtor-in-possession financing to Avianca, a move that the industry applauded but did garner criticism from some citizens, who argue that money should be spent elsewhere. IATA continues to push for countries in the region to offer airlines more financial support. “We are pushing for government aid as long as it is fair and available to all the parties,” Cerdá says. Meanwhile, aviation on a global basis is doing better. Global RPKs were down 80% in July year-over-year. In June, that number was 87%.

Source: Cirium

The boss of London Heathrow airport is urging the UK and USA to co-operate on a pilot programme to test passengers flying between London and New York for Covid-19 before they board to avoid them having to quarantine on arrival. Such a scheme, using the latest testing technology that can provide results within hours, would help kick-start one of the world’s busiest long-haul air routes and restore wider confidence in aviation, says John Holland-Kaye. Speaking on an Aviation Club UK webinar today, Holland-Kaye said a bilateral initiative could be “up and running within a week or two” if both governments agreed on common testing standards. “The UK is in a perfect position to lead this effort,” he says. Holland-Kaye suggests that with current coronavirus infection rates below 1% in most countries, the vast majority of would-be travelers are virus-free. Yet, worries about importing cases has led many nations, including the UK, to impose quarantine restrictions of up to 14 days on those arriving from much of the world, with lists of at-risk territories changing at short notice. “Few people will fly with this quarantine roulette,” he says. “We need a process that ensures that the 99% or more of people who do not have Covid can begin travelling again.” He says that, if successful, the scheme could be extended to other popular destinations in countries with which the UK has a strong partnership, including the United Arab Emirates and some European states. But he says that the impetus must come from industry itself. “The [UK] government does not have the bandwidth – it is worrying about schools, the health service, jobs, infection rates,” he says. “We have the opportunity to take the lead on this. If we can come to them with a solution, we have a better chance of making headway. If we just complain, we make their lives harder.” Holland-Kaye says the UK economy is being particularly crippled by the pandemic because of its dependence on global trade and services. “We were a powerhouse going into this crisis, punching well above our weight, and aviation was the lifeblood of the economy,” he says. “Heathrow was the best connected airport in the world, and global companies chose the UK because of its easy access.” The UK government’s failure to follow the example of the US and other major European countries to provide specific financial support for its airlines and airports will “put a limit on the recovery of the economy”, he says. “How does the UK plan to be global Britain coming out of this, if it is increasingly dependent on Air France and Lufthansa for global connectivity?”

Source: Cirium

United Airlines says that it will involuntarily furlough 16,370 employees at the end of this month as the long-term effects of the corona virus crisis continue to take its toll on the air transport industry. But that number is about 55% less than the initial estimates and the number of employees who were warned in July that their jobs may be on the chopping block. Officials at the Chicago-based airline say that the difference is due to a large number of employees who have chosen to take early exit or a variety of voluntary leave programs. Nonetheless, that number was not high enough to avoid furloughs completely, the company says. “Unfortunately, all of our efforts so far to cut costs, raise debt and introduce voluntary options have not been enough to avoid involuntary furloughs entirely,” the company tells its employees in an internal memo on 2 September. “Today, each of our operations leaders communicated directly with their teams to share the heart-wrenching news that approximately 16,000 United employees will be notified of an involuntary furlough effective as early as October 1.” On 8 July, United sent out so-called WARN notices, a federal requirement when mass layoffs are imminent, to 36,000 employees telling them their roles may be in danger. Since that date, about 7,400 employees have decided to voluntarily leave the company completely, either through separation agreements or early retirements, the carrier says. For all of the work groups, the actual furloughs, as the numbers stand currently, will be less than the number of WARN notices sent out in July. Of the total, the work groups which will be most affected are pilots and flight attendants. Currently about 2,850 pilot and 6,920 flight attendant roles will be eliminated. The company says that 450 pilots took advantage of the early retirement scheme it offered, and that it is still in negotiations with the union so a final number is still not yet available. Pilot furloughs come with additional complexity over other work groups because of the extensive training requirements each pilot needs by law to maintain currency. In addition, should a pilot be shifted from one aircraft type to different type, he or she must complete a certain number of hours of initial training, and maintain currency with regular recurrent training afterwards. So when pilots are furloughed, bringing them back is often more difficult than with other work groups, officials say. PAYROLL SUPPORT EXTENSION? Many US airlines and their unions have pushed lawmakers to pass an extension of the payroll support program that so far helped keep airlines afloat after the corona virus brought air transport to a near-standstill earlier this year The US government set aside about $58 billion in grants and loans for the industry as part of the $2 trillion CARES Act, as long as no involuntary furloughs took place until the end of September. That deadline is fast approaching and passenger demand has not rebounded enough to allow the carriers to operate as they had prior to the global pandemic.
”To be clear, an extension would be the one thing that would prevent involuntary furloughs on October 1 and hopefully delay any potential impact on employees until early 2021,” the airline says in the memo to its workers. United says it would be open to an extension of the program with similar conditions. “That is a deal that we would readily and happily accept,” says one official who asked not to be named. The airline also says that during the month of September it will be flying about 63% of capacity that it had in the same month a year ago. That’s up from the lows in April and May, but is still dragging on the company’s bottom line. United has said it does not expect normalization of operations and widespread travel demand to return until a vaccine is widely available.

Source: Cirium