dagger

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  1. https://www.bloomberg.com/news/articles/2020-04-01/ugly-qantas-feud-puts-spotlight-on-ethics-of-airline-bailouts An ugly feud is escalating between Qantas Airways Ltd. and its closest Australian competitor over the ethics of state aid, just as airlines facing collapse around the world race to secure bailouts. With demand all but gone, Qantas is hunkering down to weather the coronavirus crisis after a run of record profits. It has furloughed most staff and used planes as collateral to swell its cash reserves to A$3 billion ($1.8 billion). Meanwhile Virgin Australia Holdings Ltd., unprofitable for seven years, has asked for a A$1.4 billion government loan that would convert into equity if unpaid. Qantas argues that Virgin’s record shouldn’t be rewarded with a bailout, while Virgin has accused Qantas of spreading false rumors about Virgin’s cash position. The dispute intensified Wednesday after Australia’s corporate regulator said it’s investigating allegations against Qantas, which may have influenced the share prices of both airlines. Qantas said the claims “are categorically wrong.” The fight for credit is likely to play out between strong and weak airlines globally as the sector teeters on the brink. Without government help, more than half the world’s carriers face bankruptcy within two to three months, the International Air Transport Association said. Airlines worldwide face a $252 billion passenger revenue shortfall this year, according to IATA. Airlines Seen Burning $61 Billion in Roughest Stretch of Crisis Dubai became the latest government to grant financial aid, pledging to assist Emirates. Carriers from Air France-KLM to Deutsche Lufthansa AG have asked for help, while a U.S. stimulus package includes support for airlines. The U.K., in contrast, has ruled out immediate direct aid to the aviation industry. Flybe, Britain’s largest domestic airline, collapsed on March 5 after the government earlier this year decided not to defer its massive tax bill even as it struggled with a virus-caused traffic plunge. Desperate Airlines Turn to European Governments for Support Virgin, which had about A$1.1 billion in cash at the end of 2019, said Tuesday it’s seeking the loan as part of a A$5 billion support package it wants for the Australian aviation industry. The government has already announced a sector-wide package worth about A$1 billion. Qantas said it doesn’t need any more government help, but also said any bailout should be proportionate, so that capital markets aren’t distorted. If Virgin obtained a A$1.4 billion convertible loan, Qantas should in turn receive A$4.2 billion in funds because its revenue is three times larger, a spokesman said. “When good companies have managed their position very well, the government should let them manage their way through this, and not look after the badly managed companies,” Qantas Chief Executive Officer Alan Joyce said last month. “Qantas needs to be treated equally.” The Airlines Most at Risk as Virus Strikes $252 Billion Blow It’s a conundrum for the state. Finance Minister Mathias Cormann said this week the government doesn’t plan to take a stake in an airline, but still wants two viable carriers to compete with each other after the crisis. And there’s another complication. A bailout would mean helping Virgin’s foreign shareholders: HNA Group Co., Nanshan Group, Etihad Airways PJSC and Singapore Airlines Ltd. “It’s a really tough one,” said Daniel Mueller, a fund manager at Vertium Asset Management in Sydney. “The government won’t have a choice if it wants two airlines. It really depends on your moral values.”
  2. My wife just had a great experience with AC. Had a reservation for a departure next week to an EU country, which won't let her in. Route in question is cancelled, and no connecting flight to her destination from FRA where she could have flown - except that the EU wouldn't have let her in. Got a full cash refund without an argument.
  3. I'm scratching my head at the notion that anyone outside of a Postmedia journalist expects Westjet to disappear. Now, whether Gerry Schwartz will like the bailout terms is another matter.
  4. https://www.newswire.ca/news-releases/controlled-access-to-airport-installations-856606918.html QUÉBEC, March 30, 2020 /CNW Telbec/ - The ministère des Transports wishes to inform the population, as well as air carriers and operators, that access to airport installations is now controlled. This measure applies to flights to all airports (whether they are under provincial, federal or municipal jurisdiction, or private businesses) located in the eight regions where non-essential travel is restricted by the gouvernement du Québec. The restrictions aim to protect these regions from COVID-19. Non-essential travel to and from the following eight regions is restricted: Bas-Saint-Laurent, Abitibi-Témiscamingue, Côte-Nord, Nord-du-Québec, Saguenay–Lac-Saint-Jean, Gaspésie–Îles-de-la-Madeleine, Nunavik and Terres-Cries-de-la Baie-James. Passengers should take note of the following instructions before going to any airport. 1. The passenger must not exhibit any symptoms of COVID-19 (cough, fever, etc.). 2. The airline ticket must be booked beforehand. 3. Travel must be essential (for work in a service or business considered essential, for humanitarian or health reasons, etc.) Passengers should contact their air carrier for any other questions. Private aircraft operators are expected to ensure that passengers comply with instructions 1 to 3. During the pandemic The ministère des Transports (MTQ) continues its operations while actively keeping track of the evolution of the pandemic. The MTQ's mission is to ensure the sustainable mobility of people and goods throughout the province using efficient and safe transportation systems that contribute to Québec's development. The MTQ invites anyone who wishes to know more about COVID-19 to visit Québec.ca/coronavirus or call 1 877 644-4545.
  5. Interestingly, there is talk about regulating capacity in the US by route. For example, American handles a particular route for everyone, United another for everyone. It sounds like a dog's breakfast of an idea. You then have to regulate fares.
  6. Sunwing sounds a bit desperate https://ca.rogers.yahoo.com/news/sunwing-laying-off-1-500-080000791.html
  7. United, at least, is being open and up front today that even with the bailout, layoffs are inevitable because the economy is not going to come roaring back all at once, or soon.
  8. They will need another bailout come summer if they are going to pay people to sit around doing literally nothing. Especially, since most of those employees are likely to be told to stay at home and self-isolate.
  9. I don't know that you can make blanket statements like that. While fatalities are heavily concentrated among seniors, the CDC reported Wednesday that 38% of people hospitalized with the virus in the US are aged 20-54. And nearly have of the patients in ICUs are under 65. That doesn't take into account those people who recover at home but whose symptoms are those of a nasty persistent flu. I emphasize "nasty, persistent". It can take two weeks to shake off all the symptoms. Also, people are working longer and are not so easily replaced in some professions and trades, and sensors perform services like child care in many households to permit their children to work two jobs to enjoy a decent standard of living. I know a 70+ year old working construction cranes because there is a shortage of crane operators. He had retired, but was tempted out of retirement to resume his old trade. As you likely know, young people haven't been entering the trades in sufficient numbers to replace retiring baby boomers, which has caused some of the latter to fill gaps as consultants or part time specialists.
  10. 49 tonnes according to Delta https://www.routesonline.com/news/29/breaking-news/290490/delta-operating-cargo-only-flights-with-a350s-777s/
  11. I suppose a Chapter 11 could stick MAX owners with the bill, but would, say, Air Canada buy another Boeing plane without being compensated. Boeing would end up with a list of captive US customers, forced to support the domestic airframer. Otherwise, the world will be buying Airbus almost exclusively. Ergo, I don't expect Boeing to foist the bill on its customers. It might try to get them to convert compensation claims into deep discounts on other planes.
  12. https://www.newswire.ca/news-releases/air-canada-begins-operating-cargo-only-flights-carrying-vital-supplies-necessary-goods-826789173.html Starting with the 787s, presumably moving to larger aircraft like the 777-300ERs as the latter wrap up special rescue flights Cargo rates are soaring, fuel prices are tanking. I suspect AC can build a decent network of cargo flights, keeping as many pilots from the wide body pools active. MONTREAL, March 25, 2020 /CNW Telbec/ - Air Canada said today that through its Air Canada Cargo division it has begun using its aircraft to operate cargo-only flights to Europe, with other flights planned for Latin America and South America. The aircraft on these flights carry no passengers but move time-sensitive shipments, including medical supplies to combat COVID-19, and goods to support the global economy. "Air Canada Cargo has long served as a vital link in global supply chains and with the disruption arising from the COVID-19 pandemic our capabilities are more important than ever. Although we have announced very significant temporary capacity reductions and our passenger flights are largely dedicated to bringing Canadians home, Air Canada's aircraft and our expertise in handling cargo are valuable assets that we can use to move medical supplies and other essential goods to keep the world economy going. We have already begun flights to Europe, and we are planning to expand this program to Latin America and South America, as well as within Canada, including remote communities using Air Canada Express aircraft. In addition to providing a much-needed service, these cargo-only flights are also supporting jobs at Air Canada," said Tim Strauss, Vice President of Cargo, at Air Canada. The first cargo-only flights departed from Toronto this past week for Frankfurt, London and Amsterdam, which are all both important business centres and connection points for onward cargo shipments. The flights were operated using Boeing 787 aircraft capable of carrying 35 tonnes of cargo, the equivalent of about 80 grand pianos. Shippers and freight forwarders using the service are charged a flat rate for both directions and Air Canada Cargo is also introducing a fractional program, so shippers who do not require a whole aircraft can book space. The arrangements with the shippers and freight forwarders contain clear provisions to ensure that these essential goods are being sold at fair market rates and to authorized suppliers. Air Canada Cargo is now exploring opportunities to offer this service domestically. It is working with various governments to assess the demand and assist in moving relief goods from multiple markets within Canada. This includes using smaller Air Canada Express regional aircraft to operate to less-well served, smaller or remote regions in Canada with medical and other emergency supplies in support of local governments. Air Canada does not operate cargo aircraft, instead its Air Canada Cargo division manages and markets excess belly space on the airline's regular passenger flights for shippers operating worldwide. To facilitate the cargo-only flights, Air Canada Cargo has created five, segment-specific sales teams to focus on the unique needs of the customers at different levels in the supply chain. For more information, including shipper inquiries, please see https://www.aircanada.com/cargo/en/.
  13. The US situation is going to be BS heaped on BS. There is no appetite to give the airlines money without strings. Boeing - supposedly heading for Chapter 11 if it doesn't get a bailout - said today it wouldn't accept one if it comes with significant strings.
  14. This happened because one trainee at Ronkonkoma tested positive. Update as of 2100 EDT Saturday - https://twitter.com/jonostrower/status/1241529951976706050
  15. Historically, the Canadian government has never ponied up the kind of big bailout cash for airlines that the US does, and will. We already see United, for example, jockeying for cash, telling employees they may be laid off if the government doesn't come up with a big bailout. Now ask yourself, if UA gets a lot of cash, without strings, is it really going to keep on the 70% of its staff with nothing to do? That would be an extraordinarily stupid use of bailout cash because if this proves to be a long slow recovery, the airline would run out of cash paying tens of thousands of employees over months to stay at home. So linking continued employment to a bailout is BS. That why Canadian carriers are moving aggressively on layoffs, likely work sharing for the rest, etc. They know the government isn't going to make them whole. This will be a substantial money losing year for all Canadian carriers, no matter what relief they get from the feds. In all likelihood, the help that comes will be in any form but no-strings cash. It might be loans, deferrals, perhaps rebates that convert into tax liabilities that will reduce future profitability, etc etc. Its unlikely that airlines will get enough help to make them attractive for a takeover, just less of a dog under current circumstances. By the way I love our airlines, but I subscribe to the notion that sometimes, because of crappy factors like pandemics or volcanoes or terrorists, airlines will have bad years financially. That's the nature of the business. The government in this case should probably offer help, but not so much to make up for all the lost profitability. There will be very good years ahead, there is going to be a lot of pent-up demand to visit relatives and be tourists again, and all those business conferences and trade shows will be much more useful to go to for having been cancelled in 2020. And while some people are obviously being hurt financially, a lot of others have nothing to spend money on - prime candidates to reward themselves with a trip once things move back towards normal. Remember, the 1918-19 Spanish flu was followed by the Roaring Twenties. That's why I think the massive bailouts US airlines want - and may get - are nuts. Let the money go to people, let the airlines have enough to stay solvent and solid with the expectation that they will make back all their losses - and more - starting next year.