China Eastern Airlines enjoyed a boost in operating and net profit last year while strengthening its cash position, but the coronavirus pandemic is creating "significant uncertainty" in 2020. The Shanghai-based carrier's operating profit gained 8.3% to CNY10 billion ($1.4 billion) for the year ended 31 December 2019. Net profit increased 18.3% to CNY3.2 billion. These figures came from revenues of CNY121 billion, up from CNY115 billion in 2018. China Eastern reported cash and cash equivalents of CNY1.4 billion at the end of 2019, compared to CNY646 million at the end of 2018. The outlook for 2020, however, is not so clear, as the coronavirus pandemic has created "significant uncertainty" for its domestic and international business. "[T]he general impact on the operation and financial condition of the group for the year cannot be precisely predicted currently," it says. Throughout 2019, China Eastern, which says it has been "continuously practising the vision of green development and optimising its fleet structure in recent years", introduced 44 aircraft to its fleet and retired one aircraft. "With the introduction of new aircraft, such as A350-900, B787-9 and A320neo, the group’s fleet age structure still continues to remain young," it says. At period-end, the company's fleet had an average age of 6.4 years. The airline adds that the daily utilisation rate of its passenger jets increased by 0.12h per aircraft year-on-year to 9.55h. As at 31 December 2019, the group operated a fleet of 734 aircraft, comprising 723 passenger aircraft and 11 business aircraft held under trust. Among these are 14 737 Max aircraft, grounded since March 2019. This has only been compounded by the worldwide grounding of passenger jets as the coronavirus crisis wipes out air travel demand. China Eastern originally planned to introduce 11 Boeing 737 Max 8s in 2019, ten of which were not delivered by the end of the year. It was also planning to introduce 34 and 12 737 Max 8s, respectively, and retire 12 and eight 737-800 or 737-700 aircraft, respectively, in 2020 and 2021. The company says: "The group is negotiating with Boeing regarding the time for resumption of operation and delivery of B737 Max 8, which is still with greater uncertainty."

Source: Cirium

Air Canada says it is cutting 16,500 employees and slashing its network by up to 90% in April and May, confirming earlier reports in Canadian media. “Due to the unprecedented impact of Covid-19 upon its business, the airline will reduce capacity for the second quarter of 2020 by 85%-90% compared to last year’s Q2 and will place 15,200 members of its unionised workforce on off duty status, and furlough about 1,300 managers. The workplace reductions will be effective on or about April 3 and are intended to be temporary,” the airline writes in a statement on 30 March. News of the staff reduction, which accounts for more than half the airline’s total staff of 30,000, comes two weeks after Canada’s largest airline announced it had temporarily laid off 5,100 flight attendants. It is unclear if the 16,500 staff cuts announced on Monday include the 5,100 attendants. ”To furlough such a large proportion of our employees is an extremely painful decision but one we are required to take given our dramatically smaller operations for the next while. It will help ensure that Air Canada can manage through this crisis that is affecting airlines everywhere,” says chief executive Calin Rovinescu. In addition to the staff reductions, Air Canada will be taking extraordinary measures to protect its liquidity, including cutting salaries of top executives, delaying share buy-backs, drawing down lines of credit and implementing a cost reduction and capital deferral program, the company says. The union representing the airline’s flight attendants, the Canadian Union of Public Employees, says it does not have any information regarding ”additional” layoffs among flight attendants. That could imply that the 5,100 layoffs announced on 20 March are part of the 16,500 mentioned on Monday. This past weekend, Air Canada said it was continuing repatriation flights for Canadians who have been stranded overseas as the coronavirus brought most international air travel to a near-standstill. On 28 March alone, the company says it operated 59 flights carrying 8,500 passengers. Between 27 and 29 March, the company will have brought home about 22,500 passengers on 175 flights form Asia, Europe, Latin America and the United States, the airline says in a statement on 29 March. Earlier this month, Air Canada had said it will draw down most of its network but keep some trans-border and international flights after 1 April “to maintain a number of ‘air bridges’ to facilitate essential travel and ensure the continued movement of emergency supplies and other vital goods”. The carrier withdrew earnings guidance for 2020 and 2021, and requested government aid to ease financial losses it expects to suffer in the coming months.

Source: Cirium

Virgin Australia is seeking A$1.4 billion ($865 million) in financial support from the Australian government to battle the downturn caused by the coronavirus crisis. “It is a preliminary proposal and remains subject to approval by the Virgin Australia Holdings Board and the Australian government and may or may not include conversion to equity in certain circumstances,” it said today in a stock-exchange disclosure. The carrier paused trading from today but posted a response to media reports. Many airlines, now burning through cash reserves as the coronavirus crisis grounds their fleets, have called on governments to provide financial support and help pay wages. The Australian government announced on 18 March an aviation relief scheme worth A$715 million, comprising the waiver of certain fees and charges. A separate package for regional air travel, worth an initial A$198 million, was unveiled over the weekend. Justifying its call for support, Virgin Australia, which has suspended most of its domestic and international flying, said it, like other companies, is already taking a range of measures. “However, support will be necessary for the industry if this crisis continues indefinitely, to protect jobs and ensure Australia retains a strong, competitive aviation and tourism sector once this crisis is over,” it states. Other carriers have boosted liquidity by extending loans or raising equity. Virgin Australia’s local rival Qantas said on March 25 that it has secured A$1.05 billion ($625 million) against seven of its Boeing 787-9s. IAG, which owns British Airways, Iberia, Aer Lingus and Vueling, announced on 30 March that it extended its $1.38 billion credit revolver by one year. Singapore Airlines plans to issue S$5.3 billion ($3.7 billion) in equity and S$3.5 billion in 10-year mandatory convertible bonds to help see it through the crisis. Air New Zealand secured standby funding of up to NZ$900 million ($540 million) from the government to keep it supported.

Source: Cirium