US carriers adjusted their total capacity for October downward during the past two and a half weeks. As of 17 September, total capacity in available seat miles for US airlines in October was down 52%, compared with October 2019. Domestic capacity was down 44%, while international was down 60%. As of 5 October, US airlines' total capacity in October is down 60% year-on-year. Domestic capacity is down 46%, and international is down 73%. The number of daily travellers clearing US Transportation Security Administration checkpoints in the early days of October has increased slightly on a year-on-year basis. From 1 to 4 October, the number of travellers clearing TSA checkpoints between has been down 65% versus the same weekdays a year ago. Through much of September, the number of travellers clearing TSA checkpoints was down around 70-75%. It remains to be seen if continued improvement in US traveller throughput and a rise in late bookings give US carriers the confidence to do more than merely shift existing capacity toward leisure destinations. International travel restrictions remain in place, impeding any hopes for real growth in that sector. "Significant improvements [in international travel] are unlikely before summer 2021, in our view, as global travel restrictions remain in place," Bloomberg Intelligence analyst George Ferguson writes in a 30 September research note. Total capacity in November will be down 45%, compared with November 2019, as of 5 October. Airlines are likely to reduce existing capacity as the month draws near. In addition, US carriers could potentially make significant cuts to their networks in November if the federal government cannot come to terms on an extension of the US CARES Act payroll support program. Restrictions for airlines receiving CARES Act funds expired at the end of September, making it possible for these airlines to eliminate US destinations from their networks, or to lay off and cut the pay of their workers.

Source: Cirium

European Commission regulators are proposing extending by a further six months and widening the scope of the temporary relaxations around state aid rules under which a string of airlines have been supported through the global pandemic. As the coronavirus crisis hit the Commission introduced, through three separate amendments, temporary measures easing state aid rules around areas such as recapitalisation, sub-ordinated and the protection of jobs. These relaxations were due to expire at the end of the year, aside for recapitalisation measures that could already be granted until 30 June 2021. Countries across Europe have provided support for struggling airlines, among the hardest hit sectors from the pandemic, under the temporarily relaxed state aid rules. Amid the rise in virus cases across Europe, now competition commissioner Margrethe Vestager is proposing extending these measures until next summer - and expanding their scope. The Commission says the objective of extending existing provisions is to enable member states to support businesses during the coronavirus crisis, especially where the need or ability to use the temporary framework has not fully materialised so far. But citing “the continued economic uncertainty and the needs of businesses with significant turnover losses”, it is also proposing extending the scope of temporary framework to enable member states to contribute to the fixed costs of companies that are not covered by their revenues. ”Supporting these companies by contributing to part of their costs on a temporary basis aims at preventing the deterioration of their capital, maintaining their business activity and providing them with a strong platform to recover,” it says. The Commission is also adapting the conditions for recapitalisation measures under the temporary framework, in particular for the state’s exit from company’s where it was already a shareholder prior to the recapitalisation. ”The proposed changes would allow the state to exit from the equity of such enterprises through an independent valuation, whilst maintaining the safeguards to preserve effective competition in the single market. ”Over the past seven months, our State Aid Temporary Framework has paved the way for almost €3 trillion ($3.5 trillion) of member state potential support to businesses hit hardest by the coronavirus crisis,” says Vestager. ”The effects of the crisis will stay with us for a while. That’s why we are proposing to prolong the Temporary Framework until mid-next year and adjust it to continued needs of businesses, while protecting the EU’s Single Market. We will decide on the way forward taking into account the views of all member states.

Source: Cirium

South African Airways’ maintenance arm, SAA Technical, has started reinstating its services after suspending them to four customers over outstanding payments. It says it has reached an agreement with two of these customers – SAA itself and sister carrier Mango – but is still holding talks with the other two. SAA Technical chief executive Adam Voss says the company is seeking “resolution and settlement” on the issue. “The decision we took to suspend services to our customers was not taken lightly,” he adds. Voss points out that the maintenance firm’s staff had been “adversely impacted” by cash-flow problems, and paid only 25% of their salaries in September, and the company needed to protect its commercial interests. Suspension of aircraft services to SAA was lifted on 30 September, after making payments, and that against Mango on 2 October. The maintenance firm says it is discussing with unions the balance of payments for workers’ September salaries. “We know that many of our customers were not able to trade and generate much-needed revenue to pay for services rendered,” says Voss. But he adds that customers will have to provide “upfront payment” for SAA Technical work. “Discussions are ongoing with all affected customers to find solutions on how to address the legacy issues that resulted in the suspension of the maintenance services,” the company states.

Source: Cirium