Lufthansa Group will put all of its Airbus A380s and 10 of its A340-600s into long-term storage, only to be reactivated in the event of an "unexpectedly rapid market recovery", and will permanently remove the remainder of its A340-600 fleet from service. The German airline group says that the outlook for international air transport has "significantly worsened" in recent weeks, forcing it to revise its capacity expectations downward. While it had previously aimed to offer 50% of its prior-year capacity on its long-haul network and 55% on short-haul in the fourth quarter of this year, Lufthansa now says it expects capacity to be "in a range between 20% and 30%", compared to the same period in 2019. As a result, it foresees a group-wide reduction of 150 aircraft "by the middle of this decade". In addition to previously-communicated fleet cuts including the removal from service of six A380s in the spring, Lufthansa says its remaining eight A380s and 10 A340-600s "will be transferred to long-term storage and removed from planning". The remaining seven A340-600s will be "permanently decommissioned". The aircraft removals will result in a further impairment charge of €1.1 billion ($1.3 billion), which will be accounted for in the third quarter of this year. The group took an impairment charge of nearly €570 million in the first half of 2020, including €300 million relating to the withdrawal of aircraft. In August, the company said that the figure was connected to 65 aircraft which were being permanently grounded. These aircraft comprised six A380s and five Boeing 747s, plus 11 A320s from the Lufthansa mainline fleet, as well as a pair of Lufthansa Cargo MD-11Fs. It also previously announced that three 767s and 13 Bombardier Q400s were being removed from Austrian's operation, and that Brussels Airlines would take out two leased A330s and eight A319s, while Lufthansa's Eurowings division would withdraw 15 leased Q400s. Lufthansa Group also plans to make additional job cuts on top of its previously-announced intention to slash the equivalent of 22,000 full-time positions. Management positions will be reduced by 20% in the first quarter of 2021, while office space will be reviewed worldwide and reduced by 30% in Germany. Despite the worsened outlook, Lufthansa says it is still aiming for positive cash flows in 2021. In winter 2020/21, the group aims to reduce liquidity outflow to €400 million per month from €500 million a month. "The continuing high level of uncertainty in global air traffic makes short-term adjustments to the current market situation unavoidable for the foreseeable future," says Lufthansa, adding that the expansion of pre-flight Covid-19 testing is "an essential prerequisite for the resumption of global mobility".

Source: Cirium

South Africa’s government is insisting that flag-carrier South African Airways will not be liquidated, and that it will detail measures relating to funding the airline in upcoming legislation. Its department of public enterprises gave the reassurance as creditors met to discuss the airline’s future, after its rescue practitioners warned that critical funding had not been delivered. The department says there are 20 unsolicited expressions of interest under evaluation from potential investors in a restructured SAA. It adds that the government will “reprioritise” funds to finalise this restructuring and implement the rescue plan developed for the airline. This measure will be part of upcoming legislation, the Adjustments Appropriation Bill, which will be put before parliament. “The national carrier will not be liquidated,” says the department. It had pleaded for “patience” after the creditors’ meeting was called, insisting that efforts to locate funding sources were continuing, adding that it remained “sympathetic and deeply mindful” of SAA employees’ situation. The department reiterates its belief that SAA needs to secure a “credible” strategic equity partner that can offer specialist technical, financial and operational knowledge to the relaunched airline. It stresses that the government is working with transaction advisors to evaluate proposals from “several” potential equity partners for SAA. South African union NUMSA is claiming that workers at SAA – as well as regional operator SA Express, which has also been subject to business rescue – have not been paid “for months”. “We demand that [the treasury and department of public enterprises] put funding into SAA as they promised,” it says. “Where is the money?” The opposition Democratic Alliance party has accused the government of “fudge and bumbling” over SAA, claiming it has “misled” the country regarding a R10.4 billion ($640 million) funding package for the airline’s rescue. It believes the finance ministry and treasury have not agreed to provide the financial support, and that “no funding” will be supplied in the near future. The party is vehemently objecting to any taxpayer-funded bail-out of SAA, which it describes as a “dead duck”.

Source: Cirium

Two weeks, after five passengers on board a recent flight tested positive for the coronavirus. Hong Kong’s Civil Aviation Department has banned the carrier from operating flights between Kuala Lumpur and Hong Kong for a period of two weeks, effective immediately.
The five passengers were on the Cathay Dragon flight from the Malaysian capital on 18 September. All of them were connecting passengers travelling from India via an Air India Express flight, the carrier adds. Consequently, the aircraft operating the affected flight has been sent for deep cleaning, says the carrier, which is in the process of contacting all passengers who may have been in close contact with the infected passengers. The ban is a blow for Cathay Dragon’s plans for service resumption. The carrier states it was due to operate thrice-weekly flights to Kuala Lumpur. Both Cathay Dragon and parent Cathay Pacific have been operating skeletal networks in recent months, as travel restrictions crimped demand. Apart from Cathay Dragon, Indian flag carrier Air India also faced censure from Hong Kong authorities, after it was reported to have carried six passengers on board a flight from Delhi who tested positive for the virus. It is the second ban in recent months that Air India has received from Hong Kong, after it was found to have carried 11 passengers who tested positive in August. India has the second-most number of coronavirus cases in the world — behind the United States — at 5.3 million and rising.

Source: Cirium