Cathay Pacific will defer delivery of its Airbus aircraft by up to two years, and is in “advanced negotiations” with Boeing about delaying the delivery of the 777-9 widebody, in a bid to “produce cash savings” in the short to medium term. The deferrals on Airbus aircraft, announced in a rights issue prospectus, will affect A350-900s and A350-1000s, as well as sister carrier Cathay Dragon’s A321neos. The A350s, which were expected to be delivered between 2020 and 2021, will be delayed to 2020-2023, while the A321neos, which sister carrier Cathay Dragon and low-cost arm HK Express have on order, will be deferred from 2020-2023 to 2020-2025. Cathay has 12 A350s on order, comprising four -900s, and eight -1000s. It also has 21 Boeing 777-9s on order. Cathay Dragon and HK Express each have 16 A321neos on order. Cathay stated in a November investor presentation that these aircraft were expected to enter the respective fleets by 2024. The beleaguered carrier, which recently warned of a HK$9.9 billion ($1.28 billion) net loss for the six months ended 30 June, says that its monthly cash loss has reduced slightly after it took measures to cut costs and conserve cash. From an initial cash loss of HK$2.5 to 3 billion a month disclosed in June, the carrier states that it has now gone down to HK$1.5 billion a month, and is expected to remain at that level for the foreseeable future. Cathay, Cathay Dragon and HK Express have been hard hit by the collapse in travel demand from the corona virus outbreak. HK Express remains grounded, while Cathay and Cathay Dragon carried only 27,106 passengers – a 99.1% decline year on year. Cathay’s shareholders on 13 July approved a HK$39 billion recapitalisation plan, led by the Hong Kong government. Cathay first announced the plan, which comprises three tranches, in June. The carrier said that the recapitalisation plan was drawn up after exploring “available options”, and adds that it was necessary “to ensure it has sufficient liquidity to weather this current crisis”. Cathay’s management will also re-evaluate its business model in the longer term, and will, by the end of the year, make recommendations to its board on the “optimum size and shape” of the group.

Source: Cirium

Indian airline IndiGo is cutting 10% of its workforce due to the pandemic-induced industry downturn, saying cost cutting has been insufficient to prevent a company wide contraction. “It is impossible for our company to fly though this economic storm without making some sacrifices, in order to sustain our business operations,” IndiGo says in a 20 July statement. “After carefully assessing and reviewing all possible scenarios, it is clear that we will need to bid a painful adieu to 10% of our workforce.” “It is for the first time in the history of IndiGo that we have undertaken such a painful measure,” the low-cost carrier adds, noting that just six months ago it was planning for expansion. “This pandemic has forced us to reevaluate our best laid plans.” The company’s statement does not specify employee numbers or say the degree to which different employee groups are affected. IndiGo will pay affected employees severance equal to one month for every year of employment, up to 12 months of pay. Cabin crew may receive “longevity” bonuses and the company will continue providing medical insurance for all affected staff until December 2020, it says. IndiGo had attempted to keep the downturn from affecting its employees, and therefore paid full salaries in March and April, it notes. The airline subsequently implemented pay cuts and subjected staff to unpaid leave. “These cost savings are clearly not enough to offset the decline in revenues,” it says. IndiGo’s fleet includes 233 in-service aircraft, including 25 ATR 72-600 turboprops and 208 Airbus A320-family jets. It also has 41 Airbus in storage.

Source: Cirium

Two US lawmakers have asked the Federal Aviation Administration for results of an employee survey about the regulator’s safety culture as part of its investigation into the design, development and certification of the troubled Boeing 737 Max aircraft. In a letter to FAA administrator Steve Dickson dated 20 July, lawmakers say the survey data and related analytical products – including presentations, memos, reports and statistical analyses – will help shed light on factors related to two crashes that killed 346 people, including eight American citizens. The crashes led to the Max’s grounding in March 2019. The lawmakers who requested the documents are chair of the House of Representatives’ Committee on Transportation and Infrastructure Peter DeFazio, and chair of aviation subcommittee Rick Larsen. In particular focus is the FAA’s Office of Aviation Safety (AVS) management of the Organization Designation Authorization (ODA) program, which allows aerospace manufacturers to perform some certification work on behalf of the agency in order to standardise processes and potentially save time. Critics have described the ODA process as being ripe for abuse, saying that companies can place undue pressure on employees assigned to ODA units. The representatives argue that issues surrounding the ODA “played key contributing roles” in the accidents. “We understand that the FAA recently completed its ‘2019 AVS Safety Culture Survey’ and that it intends to utilise the results of this survey to ‘more effectively implement a new voluntary safety reporting program for AVS employees,’ according to an e-mail announcing the survey that was sent to FAA employees,” the representatives write. “These are positive steps. But the results must be thoroughly analysed and properly implemented.” The House committee has already held five hearings and interviewed more than a dozen witnesses about factors that contributed to the crashes. In a preliminary report, released in March, the committee cited design failures related to the aircraft’s Maneuvering Characteristics Augmentation System (MCAS) as well as Boeing’s lack of transparency with aviation regulators as factors contributing to the crashes. A scathing report published on 1 July by the Department of Transportation’s (DOT) Inspector General found that Boeing purposefully held back information about the automated flight-control system on its re-engineered 737 Max during the aircraft’s certification process, thus significantly downplaying the risk that it posed. DeFazio and Larsen have given the FAA until 28 July to comply with their request.

Source: Cirium