South African Airways’ rescue practitioners have been instructed to produce a formal business plan for airline within 25 days, after a parliamentary standing committee expressed dissatisfaction with a draft publication.The standing committee on public accounts is also seeking a full schedule of fees from the practitioners, their advisers, and others involved in the five-month effort to rescue the carrier which has become mired in political controversy. Committee chairman Mkhuleko Hlengwa – hosting a 15 May session over video link, made difficult by technical issues – said there was a need for “more interaction” with the practitioners. “The more they provide answers, the more questions arise,” he said. “It’s a case of classical musical chairs. It’s what has characterised the operation over the past five months. It’s what has landed us with a R10 billion bill.” Committee members are to compile a list of questions to put to the practitioners and have set a 26 May deadline for responses. While the committee was provided with a draft rescue plan, it says the “late submission” meant the members “could not engage” with it, and the practitioners have been given 25 days to produce a formal plan. Practitioner Les Matuson acknowledged the committee’s remarks and told its members that his team would “accelerate production of the business rescue plan”. SAA Group’s draft full-year accounts to 31 March 2019, presented during the session, showed the company made a pre-tax loss of R5.09 billion ($274 million), on revenues of R27 billion. Its total liabilities of R27.4 billion were nearly twice its total assets. In a cash-flow diagram the practitioners showed the company had opening cash of R118 million when it entered business rescue, eight months later, on 5 December. This was supplemented by a R5.5 billion drawdown in post-commencement funding, as well as R5.3 billion in receipts plus around R280 million in VAT and charter revenues. Public enterprises minister Pravin Gordhan told the committee that creditors and employees were informed at various stages that SAA “would be rescuable”, and that under legislation the practitioners would normally have to produce a business rescue plan within 25 days, subject to possible extensions. “No-one anticipated an extension of five months,” he said. The practitioners pointed out to the committee that they did not have specific experience in turning around distressed airlines, and recruited specialist Alvarez & Marsal which had expertise in the field, and a presentation of restructuring options was made to the department of public enterprises and the treasury in mid-December 2019. According to a timetable given to the committee, further analysis and presentations followed in early January 2020 and, in mid-January, the practitioners were advised that the government supported an option to restructure SAA through a new financially-sustainable holding company, preserving around 5,000 jobs. This option would cost around R7.7 billion, the practitioners informed the committee, as a result of creditor repayments, retrenchment costs for SAA and its subsidiaries, recapitalisation, and restructuring expenses. The practitioners also approached the Development Bank of South Africa in January for funding. The timetable indicates that initial post-commencement funding of R2 billion, granted as the airline entered business rescue, had been exhausted within a few days, and the Development Bank agreed in January to loan R3.5 billion. The bank had also expressed interest in acquiring SAA low-cost carrier Mango, maintenance arm SAA Technical, and possibly the frequent-flyer division Voyager. With the “breathing space” of the loan, the timetable states, the practitioners were granted an end-March extension to publish a business rescue plan, and intended to produce a draft plan for the week of 16 March. The committee was informed that the practitioners had carried out cash-management initiatives including renegotiation of contracts – yielding up to 40% discounts on aircraft leases – cancellation of duplicate and non-essential services, and suspension of onerous provisions. Suspension of loss-making routes was also imposed from early February, in line with the restructuring option chosen by the government, and in March a retrenchment process started. But the coronavirus outbreak in South Africa, coinciding with the proposed business plan publication date and forcing a rethink on the funding requirements and the strategy for SAA’s operations. The government subsequently declared it would not support extending foreign currency borrowing limits to permit foreign financing of the rescue plan, nor would it back a care-and-maintenance budget, and was unable to provide any additional funding to the business rescue process. By the end of April, the practitioners told the committee, the five-month rescue plan had cost more than R9.98 billion, including R1.9 billion on fuel, nearly R1.3 billion on salaries, R1.2 billion on aircraft leases, some R1.2 billion on services from regional carrier Airlink, and R929 million on SAA Technical. “Resilience and ability of an airline to survive is predicated on ability to access significant cash reserves and strong balance sheets,” the practitioners told the committee. “SAA has neither.”

Source: Cirium

Boeing intends to model the potential spread of coronavirus on aircraft as part of an effort to address onboard coronavirus contagion risks and reassure pandemic-weary passengers that air travel is safe. Called “Confident Travel Initiative”, the effort will see Boeing give airlines guidance aimed at minimising the pathogen’s spread on aircraft, says Boeing executive Mike Delaney, who is leading the initiative. Boeing hopes modelling will predict how the virus might spread through aircraft with differing seating configurations. The company hopes to determine how variables such as coughing (with or without masks) and use of hand sanitizer might affect potential contagion. “We are using science as opposed to anecdotes… [and] emotionally-driven responses,” says Delaney, who is also Boeing’s vice-president of digital transformation. The move comes one week after University of Washington School of Public Health dean Hilary Godwin warned lawmakers about the risk of coronavirus transmission on aircraft. Godwin said keeping passengers safe will be “inherently challenging” on aircraft, where passengers sit close together for extended periods. Boeing already has a firm grasp of how air flows within its cabins – entering from the ceiling, flowing downward and exiting through floor vents. Half the air pumps in fresh through the engines, the other half runs through high-efficiency particulate air (HEPA) filters that trap most virus. Cabin air changes 20 to 30 times hourly, says Delaney. “We are very confident [passengers] are in an environment that is extremely safe to begin with,” he says. The Chicago-based airframer is initially modelling a generic Boeing twin-aisle aircraft, though it may develop type-specific models. Boeing’s goal is "to ensure that… passengers and crew can safely fly on commercial flights with minimal impact” to aircraft and airline operations, says Delaney. His team will identity the best means to prevent the virus from entering the aircraft, and the best way to kill pathogens that find their away aboard. The team will recommend how crews should respond if passengers become sick in flight. Boeing is coordinating its work with trade groups like IATA and the Aerospace Industries Association, and working with health organisations. It has also spoken about the topic with Airbus, says Delaney. Asked about his programme’s budget, Delaney says Boeing’s senior executives told him, “What you need, ask for it. You’ll get it.”

Source: Cirium

Latvian carrier Air Baltic intends to resume scheduled operations on 18 May, both from its Riga base and from Estonian capital Tallinn. Air Baltic says it will operate flights from Tallinn to Amsterdam, Copenhagen and Oslo, and has received all permissions for these services. From Riga, the carrier will start on 18 May daily flights to Tallinn and, on 25 May, services to Lithuanian capital Vilnius, Air Baltic's website indicates. A schedule and booking facilities for the flights have been made available on the airline's website. Air Baltic suspended scheduled operations on 14 March, ahead of most carriers in Europe, as the Latvian government shut the country's borders to international scheduled traffic. Since then, the carrier has operated a number of repatriation flights. As previously outlined by Air Baltic, it will resume operations with Airbus A220s only and retire its Boeing 737 Classics and De Havilland Canada Dash 8 turboprops. Cirium fleets data shows Air Baltic has 22 A220-300s, 12 Dash 8-400s and four 737-300s. All but two A220s are listed as being in storage. Prior to the coronavirus crisis, Air Baltic had a plan to operate an all-A220 fleet from 2023. Chief executive Martin Gauss states that the carrier is "well positioned" for the operational restart with the fleet concentration around the A220. The airline will hand out to passengers face masks and disinfectant wipes. But Gauss says: "We are still continuing our work on specific guidelines for various other safety activities."

Source: Cirium