Alaska-based Ravn Air Group is furloughing its staff, cancelling all flights and filing for Chapter 11 bankruptcy protection in order to obtain debtor in possession funding as coronavirus devastates the airline industry. The parent company of regional carriers Ravn Air Connect, Penn Air, and Ravn Air Alaska announced the decision on 5 April, just three days after it parked its combined fleets except for three De Havilland Canada Dash 8 aircraft and limited its capacity to a handful of destinations. Its emergency steps are intended to buy time to apply for payroll grants from the federal CARES Act aid and seek "other sources of financial assistance", Ravn Air Group chief executive Dave Pflieger says in a statement. "That will allow us to weather the coronavirus pandemic and emerge successfully once it has passed," Pflieger says. "How long we must wait is uncertain, but I want to assure you that everyone here at Ravn is doing everything possible to get back in the air very soon, so we can resume the vital air service you depend on to get home to your families, to your businesses, to medical appointments, and to other duties that are essential to our communities." Alaska is the largest US state by landmass and the closest to the Arctic, so air freight deliveries and passenger flights are particularly important to connect the state's communities. The airline's sudden decision last week to ground most of its fleet left the US Postal Service scrambling to arrange other means for delivery to rural and isolated communities. The halt of Ravn's operations prompted Alaska Airlines chief executive Brad Tilden to reassure residents that it will coordinate with the state government and the Alaska Air Carriers Association to ensure communities stay connected. Despite its hiring freeze, Alaska Airlines will "host a job fair for Ravn employees impacted by that company’s cessation of service," Tilden says in a statement. "We will work to provide these experienced airline workers with support in seeking new employment, including connecting with other companies that may be hiring," he says. Alaska Airlines today cut its capacity to 20% for April and May, but commits to alleviate the impact of Ravn's shutdown by continuing service to Kodiak; initiating service to Cold Bay; beginning early seasonal service to King Salmon and Dillingham; and, "charter service to ensure critical work force movements".

Source: Cirium

South African carrier Comair has agreed to call off its planned acquisition of aircraft leasing specialist Star Air Cargo and Star Air Maintenance as it battles mounting challenges. Comair agreed a deal with sellers Sundrops Investments, Smashing Star Investments and Marcel Liebenberg last summer for the acquisition. Comair was to pay R75 million ($5.1 million) plus a profit-share payment, capped at R250 million, for the acquisition. The deal also included the option of a one-off R150 million settlement payment. But in a brief stock-market statement today, Comair says: "Shareholders are now advised that with effect from 31 March 2020, the parties by mutual consent, agreed to terminate the agreement, such that the agreement shall cease to have any further force or effect." While no reason has been specified for the deal being abandoned, the airline has been dealing with the impact of the coronavirus crisis on top of a series of existing challenges. Comair, which operates flights as a British Airways franchise carrier and under the Kulula low-cost brand, has suspended all flights until 19 April during South Africa's national lockdown. It last month said that for the "foreseeable future the primary focus will be on restructuring the balance sheet as well as cash preservation". Even before the coronavirus crisis, Comair had been dealing with challenges including a difficult economic environment, the grounding of the Boeing 737 Max and additional costs while it transitions to a new maintenance firm. "Our results for the first half of the 2020 financial year showed that although our revenue grew at 3% during the six months, we could not sustain the additional costs of 14% resulting from some under-performing investments and significantly higher fleet and maintenance costs which severely impacted the company’s profitability," said Comair chief executive Wrenelle Stander in a trading update on 23 March. "While the decision to renew our fleet was the right one at the time, the pace of renewal in an underperforming economy placed a burden on operating costs and profitability. In 2019 alone we took delivery of five additional Boeing 737-800 leases, as well as a new Boeing 737 Max 8 aircraft." The grounding of the Max added costs through the wet-lease of aircraft to replace three of the type, as well as through $45 million in cash being locked-up in pre-delivery and interest payments related to the acquisition. Meanwhile, the transfer of maintenance from SAA Technical to Lufthansa Technik, while progressing as planned, means that the airline will be paying for two providers until at least end June 2021. "Despite our efforts over the last few months to preserve cash, maintain liquidity; divestment from non-performing acquisitions; aggressive cost reduction across the group; taking back control of the fleet; and unlocking further operational efficiencies, more remains to be done," says Stander. Comair on 23 March initiated a formal labour restructuring process as part of further efforts to reduce its costs.

Source: Cirium

Virgin Australia has closed its New Zealand flight crew base, a move their union says affects around 600 jobs. The E tū union said in a 4 April statement that the carrier emailed staff the previous night telling them that the closure was effective immediately. Virgin Australia has already suspended operations at its Tigerair Australia subsidiary and asked for a A$1.4 billion ($840 million) government bailout as it battles the coronavirus-induced downturn. E tū assistant national secretary Rachel Mackintosh says the union "isn't convinced Virgin needed to close so quickly" and the carrier should have applied for the New Zealand government wage subsidy. “We are urging all employers, in aviation and beyond, to take advantage of the government wage subsidy and not let the workers bear the full brunt of the downturn,” she states. Virgin Australia said on March 25 that it was starting a consultation over the proposed closure of its New Zealand cabin crew and pilot base as part of measures “to streamline and safeguard the group’s domestic and short-haul international businesses through Covid-19.”

Source: Cirium