Airline bankruptcies and restructurings (foreign)


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Unless fares were to increase substantially.

Saw this on Airliners, and it fits with these times of 'making America great again'. While United is taking billions in subsidies, they are outsourcing American jobs to India.  Can't wait to hear

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United plans to add 25,000 flights in August as customers ‘are slowly returning’

PUBLISHED WED, JUL 1 20207:00 AM EDTUPDATED 16 MIN AGO
 
KEY POINTS
  • United’s 25,000 additional flights still bring its August 2020 schedule to just 40% of flights in 2019.
  • United and other carriers are grappling with how to cater to an uptick in demand with the impact of Covid-19.
  • The airline is also increasing international flights, with destinations including Lima, Peru, Shanghai and Frankfurt, Germany.
 

United Airlines is planning to add about 25,000 flights in August compared with this month, hoping to capitalize on an uptick in air travel demand, particularly to leisure destinations ranging from Bozeman, Montana, to Bangor, Maine.

The airline said it wants to stay nimble to cater to the ebbs and flows of demand as spikes in coronavirus cases shift around the U.S. and that demand has started to level off.

“The demand did flatten out over the past week or so,” Ankit Gupta, United’s vice president of domestic network planning said on a media call Wednesday.With the increase in flights next month, United will still be flying about half of its August 2019 domestic capacity and a quarter of the international service it operated last year. In comparison, this month it plans to fly about 30% of its domestic service as the same month last year, and just 16% of international service, the airline said. Among the international service United plans to add in August are flights to Lima, Peru, Shanghai and Frankfurt, Germany.

The virus, and the measures taken to try to stop it from spreading, have shuttered key tourist attractions and prompted stay-at-home orders, devastating air travel. The number of people passing through U.S. airport security checkpoints in June was less than one-fifth last year’s levels, according to federal data.

While the European Union continues to bar Americans from travel amid the pandemic and vice versa, the new United schedule is based on current demand trends, said Patrick Quayle, the airline’s vice president of international network and alliances. Much of the recent demand has been one-way tickets, indicating customers repatriating, he said.

Delta Air Lines, for its part, is delaying until next month the start of flights from New York’s John. F. Kennedy International Airport to Lisbon, Portugal, and to Athens, Greece, that were scheduled for July. It’s also delaying Atlanta to Lagos, Nigeria and JFK to Accra, Ghana.

American Airlines said Wednesday that it expects a prolonged slump in demand for travel abroad. The Fort Worth, Texas-based carrier is planning for its international long-haul capacity next summer to be 25% lower than the same period of 2019 and that it will eliminate 19 international routes.

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American Airlines says it’s overstaffed by 20,000 employees for fall schedule

PUBLISHED THU, JUL 2 20209:52 AM EDTUPDATED 11 MIN AGO
KEY POINTS
  • American and its competitors are trying to reduce head count because of weak travel demand.
  • U.S. carriers are prohibited from laying off or cutting the pay rates of staff through Sept. 30 under terms of $25 billion in federal aid.
  • American said it reduced its daily cash burn from $100 million a day in April to less than $35 million a day in June.
 

An airline employee walks past empty American Airlines check-in terminals at Ronald Reagan Washington National Airport in Arlington, Virginia, on May 12, 2020.

An airline employee walks past empty American Airlines check-in terminals at Ronald Reagan Washington National Airport in Arlington, Virginia, on May 12, 2020.
ANDREW CABALLERO-REYNOLDS

American Airlines on Thursday told staff it has more than 20,000 employees it doesn’t need for its reduced fall schedule as the carrier and its competitors face weak demand for air travel during the coronavirus pandemic.

The Fort Worth-based carrier and other U.S. airlines are urging employees to take buyouts or early retirement options to reduce headcount before turning to involuntary measures like layoffs.

U.S. carriers are prohibited from laying off or cutting the pay rates of their staff through Sept. 30 under the terms of $25 billion in government payroll support aimed at softening the impact of the virus on their business.5

der CARES Act
 

“We currently anticipate having 20 to 30% — or more than 20,000 — more team members on payroll than we need to operate our schedule this fall,” CEO Doug Parker and President Robert Isom said in a staff note. “To be clear, this doesn’t mean 20,000 of our team members will be furloughed in October, it simply means we still have to work to do to right-size our team for the airline we operate.”

American and its competitors have been shoring up liquidity and cutting costs as demand remains a fraction of 2019 levels, even for the peak summer travel season.

American and four other airlines reached agreements for portions of $25 billion in federal loans to weather the crisis, the Treasury Department said Thursday. American said it expects to finalize the loan in the third quarter.

At the depths of the demand crisis in April, American had around $11 million in cash receipts, which rose to $358 million in May and more than $1 billion in June, the executives said.

 

“While that improvement is encouraging, it’s compared to an average of $4.2 billion each month during the same period in 2019, so we have a ways to go,” Parker and Isom wrote.

The carrier was burning less than $35 million a day at the end of June, down from $100 million a day in April, they said.

American expects international travel demand will stay muted into next year. Earlier this week, it said its long-haul international schedule in summer 2021 would be down 25% from what it offered in the 2019 season and that it would cut 19 routes.

The carrier is also planning to cut wide-body cabin crew staffing for international and transcontinental routes and will shrink some of its flight-attendant bases and scrap bases in the Raleigh-Durham area and in St. Louis.

WATCH: American airlines to lift capacity cap on flights

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Coronavirus: Air France set to cut more than 7,500 jobs

  • 3 July 2020GETTY IMAGES
 

Air France-KLM plans to cut more than 7,500 jobs at its French arm as the airline industry reels from the coronavirus crisis.

Europe's second-biggest airline will cut 6,560 staff at Air France, with its regional French carrier Hop! losing 1,020 jobs, the company said on Friday.

In a statement, the firm said: "Recovery looks set to be very slow" due to uncertainties around Covid-19.

The cuts will take place over the next three years.

The group also cited the lifting of travel restrictions and changing customer demand as potential cause for concern in the future.

At the height of the pandemic, revenues fell by 95% and the Air France airline was losing €15m (£13.5m) per day.

Air France does not expect that activity will return to its pre-pandemic level before 2024.

The group's flagship airline expects to have cut more than 6,000 jobs by the end of 2022, out of a current total of 41,000 staff.

"Natural departures", such as retirements and employees who leave of their own accord, are expected to make up about half of the reductions at Air France.

Its sister airline Hop! will see 1,020 jobs cut over the next three years. It currently employs more than 2,000 people.

 

The company said: "Air France and Hop! are working together with the unions to implement plans that give priority to voluntary departures, early retirement arrangements and professional and geographical mobility."

Air France also said that a wider "reconstruction plan" would be presented at the end of July, along with one for the wider Air France-KLM group.

Union members and staff staged protests at several sites across France on Friday, including outside the company's offices near Roissy-Charles de Gaulle airport.

The French government has pledged billions of Euros to support Air France-KLM and the wider aviation industry as demand for travel has crashed as a result of coronavirus-related lockdown measures.

Loans to Air France were contingent on the carrier scrapping some domestic flights in a bid to cut its carbon emissions.

Other airlines have also been forced to adopt similar measures in anticipation of a long, slow return to former levels of demand.

EasyJet previously said that it may need to reduce staff numbers by up to a third because of the coronavirus pandemic.

In June, Lufthansa said it planned to cut 22,000 jobs, and British Airways said in April that it could cut up to 12,000 jobs from its 42,000-strong workforce.

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Pilot stand-off piles more pressure on El Al

By David Kaminski-Morrow3 July 2020

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Israeli carrier El Al is putting another 400 personnel on furlough after the carrier’s pilots chose not to operate a number of the airline’s services.

The airline had been operating a limited number of passenger and cargo services from Israel, although its scheduled passenger flights had been suspended until 31 July.

But it says the “non-staffing” of flights by the airline’s pilots has forced it to cancel remaining services at least until this date.

El Al has been trying to reach an agreement with the Israeli finance ministry for a $400 million loan but requires productivity deals with its employees.

The airline is under increasing financial pressure having recorded a heavy first-quarter loss and it has warned that the loan is crucial to its survival.

Chief financial officer Dganit Palti says the crisis has resulted in a “serious liquidity problem” at the airline.

Palti states that the airline had a substantial cash balance of $264 million at the beginning of the year.

But the burden of debt taken on during the fleet modernisation, as El Al replaced its Boeing 767s and 747s with 787s, has been exacerbated by the slump in the airline’s revenues – down 25% in the first three months.

“The decrease in fuel prices – which in normal times is a blessing – has led to losses in hedging transactions which, at low consumption rates, are in part not recognized as effective,” says Palti.

El Al recorded a charge of $56 million attributed to this situation in the quarter.

It has secured agreements to defer lease payments, and increased its liquidity by arranging the sale-and-leaseback of three aircraft. The company has also sold its stake in logistics firm Maman.

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SIA Group sends another two A380s and two 787s to Alice Springs

By Cirium3 July 2020

  • Singapore Airlines Group recently parked another four aircraft – two Airbus A380s and two Boeing 787-8s – at Alice Springs Airport in Australia.

The company tells Cirium it now has a total of 22 aircraft parked there, at Asia Pacific Aircraft Storage.

This comprises seven A380s and three 777-200ERs from the mainline carrier, six 737 Maxes from regional unit SilkAir, as well as four A320s and two 787s from low-cost subsidiary Scoot.

In response to Covid-19’s impact on air travel, the group will cut approximately 94% of passenger capacity originally scheduled for July. Out of the SIA Group’s fleet of about 200 aircraft, 25 are deployed on passenger services, it says. Its fleet of seven freighters are operating as normal, while about 30 passenger aircraft have been deployed on pure cargo services.

“As a result, Singapore Airlines [Group] has parked a large number of its aircraft at Singapore Changi Airport, with a few aircraft parked overseas. The aircraft are parked in locations where they can be appropriately maintained during this period. We will continue to monitor the situation and, when appropriate, will return the aircraft to Singapore ahead of reintroducing them to our operations.”

It adds: “Singapore Airlines follows the stringent maintenance procedures set by the aircraft manufacturers to ensure that the aircraft remain airworthy while they are parked. Dedicated maintenance teams are looking after the aircraft during this time. ”

yourfile

The group is also expecting the return of seven 777-200s it owns, from NokScoot, which is 49% owned by Scoot.

“We are progressively taking back the Boeing 777-200 aircraft as NokScoot does not have the ability to make lease payments. We will make a decision on the aircraft in the near future.”

Cirium fleets data show the 777-200s with NokScoot average 18 years of age. These have an average indicative market lease rate of $192,000 and an average indicative market value of $15 million.

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SA Express jets and other assets put up for auction

By David Kaminski-Morrow5 July 2020

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Assets of South African regional carrier SA Express, including Bombardier CRJ200 jets, are being offered for sale through an online auction as the airline edges towards liquidation.

The airline was placed in provisional liquidation on 28 April but a final liquidation order has been deferred until early September.

But an online auction platform, Go-Dove, is seeking expressions of interest for several assets of the airline which, it states, are “immediately available for negotiation”.

The site is advertising sale of the business in its entirety, but is also inviting offers from purchasers for specific assets as well as investment offers from potential equity partners.

Its list of available assets includes CRJ200s, engines, spares and retables, ground-support equipment, tooling, and workshop equipment.

Auction CRJ200

Source: Go-Dove

This CRJ200, ZS-NME, features on the SA Express auction site

The platform is also advertising operating and maintenance licences, IT infrastructure, and other intangible assets “required to operate [an] airline in southern Africa”.

Owing to the coronavirus crisis, it points out to buyers, there might be “some difficulty in viewing and collection of assets”. The assets will be sold on an “as is, where is” condition, it states, and the buyer will be responsible for prior inspection.

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Portuguese state takes control of TAP to prevent bankruptcy

By Cirium3 July 2020

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Portugal’s government has agreed to pay €55 million ($62 million) to increase its stake in national carrier TAP to 72.5% in order to prevent the airline from going bankrupt.

The government currently holds a 50% stake in TAP after partially privatising it in 2015.

The state originally sold a 61% stake in the airline to Atlantic Gateway – a consortium comprised of Portuguese businessman Humberto Pedrosa and JetBlue Airways and Azul founder David Neeleman – but later increased its shareholding back up to 50% from 34%. This left Atlantic Gateway with a 45% stake, the remaining 5% being held by TAP employees.

Neeleman has now agreed to sell his 22.5% stake back to the government, leaving Pedrosa with 22.5% and employees with 5%.

Portuguese infrastructure minister Pedro Nuno Santos states that “the alternative was insolvency”, adding that “the loss of TAP would go far beyond the effort that we will have to make to maintain it”.

The renationalisation will unlock a €1.2 billion state rescue loan for TAP, which was approved by the European Commission in June but had been subject to approval from the airline’s board.

“The state now takes 72.5% of the capital of the TAP group, ensuring control of the company,” states Portuguese finance minister Joao Leao. “In this way, it is possible to unblock the loan to TAP and avoid the bankruptcy of an essential company for the country.”

Portugal’s government says it will not run the airline following the transaction but will hire “a company specialised in looking for qualified, experienced and competent aviation managers in the international market”.

On 30 June, TAP disclosed plans to further reduce its fleet after first-quarter net losses almost quadrupled to €395 million amid the Covid-19 pandemic.

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United warns 36,000 employees of potential job cuts as pandemic roils travel demand

PUBLISHED WED, JUL 8 202011:27 AM EDTUPDATED 14 MIN AGO
KEY POINTS
  • United is warning about 36,000 frontline employees about potential furloughs.
  • The terms of $25 billion in federal aid prohibit airlines from laying off or furloughingworkers until Oct. 1.
  • Airlines are urging employees to take buyouts or early retirement packages to avoid involuntary cuts.
 

 

 

United Airlines on Wednesday said it is warning about 36,000 frontline employees — more than a third of its staff — about potential job cuts as the coronavirus pandemic continues to roil travel demand.

Federal law requires employers to give staff notice about possible layoffs or temporary furloughs 60 days in advance. United and other airlines that took $25 billion in federal payroll support are prohibited from laying off, furloughing or cutting the pay rates of staff until Oct. 1.

In a memo sent to employees Wednesday, United said just because workers receive a WARN notice it doesn’t mean they will definitely be furloughed and it said it will try to exhaust voluntary measures before cutting workers. Some of the workers may be called back to work but that will depend on a return to demand, which some industry executives say could take years.

United shares were down 2.2% after the announcement on potential furloughs, slightly lower than earlier in the session.

The furloughs would apply to unionized workers and warnings are going to some 15,000 flight attendants, more than half of the airline’s cabin crew and more than 2,200 pilots.

“The United Airlines projected furlough numbers are a gut punch, but they are also the most honest assessment we’ve seen on the state of the industry,” said Sara Nelson, a flight attendant for the airline and president of its labor union, the Association of Flight Attendants.

United, Delta and American and other airlines have been urging workers to take early retirements, buyouts and other voluntary measures as the carriers scramble to cut costs. But travel demand is a fraction of last year’s just as what is usually the peak summer travel season hits. That presents a bleak outlook for the industry, and voluntary measures may not be enough to reduce airlines’ costs to match weak demand.

 

United executives have said that despite a resurgence in past weeks, demand has started to slip, as new coronavirus cases rise and travel restrictions take effect.

United had about 96,000 employees as of the end of last year.

The airline is negotiating with its pilots’ labor union about early retirements, a United executive said.

Labor unions, including the flight attendants’ AFA, last month asked Congress to extend aid to support airline workers’ jobs through the end of March.

 
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EDITORS' PICK|28,809 views|Jul 3, 2020,06:10am EDT

Billionaire Branson Back From The Brink: Virgin Group’s Coronavirus Business Rescue Plan Takes Shape

David DawkinsForbes Staff
 
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  •  

After months of uncertainty, billionaire Sir Richard Branson has all but seen off a threat that brought his Virgin business empire to its knees.

Following reports this week that Virgin Group has raised $250 million to prop up Virgin Atlantic, a company insider told Forbes that the “three and a half month slog” is finally delivering results. A formal confirmation of the restructuring is pencilled in for mid July.

The news marks what could be the beginning of the end for a torrid period for one of the U.K.’s best known billionaires. Since March, Branson has been forced onto the back-foot over an allegation in Parliament that he should use his net worth to bail out his businesses, and questions over his tax status and residency in the British Virgin Islands.

However, the mood has changed within the Virgin Group. Branson is on the verge of raising the $1 billion plus figure to help secure his business empire after the arrival of the coronavirus pandemic—$500 million from Delta (through deferments and waivers alongside Virgin Group), $300 million debt funding from the Elliott Management group, and $500 million from selling shares of Virgin Galactic SPCE +12.7% from May through June.

 

Further concessions and reorganization of credit card hold backs could bring in another $310 million if needed.

 
 

The FT reported on Wednesday that Virgin Group will provide $250 million in cash immediately to support the beleaguered Virgin Atlantic airline, alongside additional shareholder support of about $500 million that has also been committed mostly from Delta Airlines, which owns 49% of Virgin Atlantic. Virgin Group, owners of 51%, will support Delta with its Atlantic commitment going forwards.

As a third part of Branson’s recovery plan, Virgin Atlantic is pushing on with the last leg of discussions with Paul Singer’s Elliott Management hedge fund, Centerbridge Partners, and Davidson Kempner Capital Management (hedge fund) as part of the process to raise an additional $300 million in debt funding, according to the FT. There are believed to be three different offers on the table, none of which involve a transfer of equity and are described to Forbes by a source with knowledge of the negotiations as being part of a “straight debt deal.” 

Liquidity Restored

With $500 million raised from the hastily arranged sale of Virgin Galactic shares, the larger Virgin group has the ability to secure the future of its main interests, namely Virgin Atlantic. Although funding has also been made available from the Galactic share sale for Virgin Orbit, Branson’s small satellite offering, viewed as having great potential by Branson but still very much in a growth and investment stage of its business lifecycle.

At the opposite end of its lifecycle, Virgin Australia airline, which plunged into administration in late April, could also see investment from Branson in the recapitialization and recovery of the Aussie fleet. The price of getting the beleaguered airline could cost Branson over $69 million (USD). Branson’s 10% stake in Virgin Australia has been wiped by the administration process but Virgin Group CEO Josh Bayliss made it clear it wasn’t over for Branson in Australia in late April he said that Virgin Group would work with the administrators, investors and government, “to ensure that Australia maintains two airlines."

After months of misery, things are finally looking up for Virgin. Following the coronavirus calamity, a number of pieces of the recovery jigsaw have fallen into place for Branson and his team.

Firstly, Virgin Galactic, Branson’s most liquid asset, saw a positive rise to its share price that had fallen to $9 in mid March from a high of $20 in February. In May the Galactic price had returned to over $17, making the $500 million share sale raise (slightly) less heartbreaking for the group.

Secondly, the private debt sale that has brought hedge funds like Elliott to the table is described as winning “extremely strong interest” over the last few months. There was a period at the peak of the pandemic when this was far from certain. The decision to bring in Houlihan Lokey HLI -1.7%, an investment bank charged by Virgin to find private funding after the U.K. government walked away from negotiations in April, looks increasingly likely to deliver a positive outcome.

Finally, on the plight of Virgin Atlantic's staff, representatives worked with the two main unions to reach an agreement quicker than expected. Although 3,000 staff will lose their jobs, the communication with staff has been “up front and consensual,” according to a source with knowledge of the negotiations. By comparison U.K. MPs recently labelled Virgin Atlantic’s great rival British Airways “a national disgrace,” labelling attempts to lay off 12,000 staff and put  30,000 employees on new contracts, “a calculated attempt to take advantage of the pandemic,” as reported by the Guardian.

Further details on Virgin’s restructuring are expected in July.

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AIRLINES

United, pilots union reach tentative agreements for early retirements and voluntary furloughs

PUBLISHED THU, JUL 9 20209:52 PM EDTUPDATED MOMENTS AGO
KEY POINTS
  • United is the last of the biggest four U.S. carriers to reach an agreement for early leaves for their pilots.
  • The tentative deal comes a day after United said 36,000 employees could be furloughed this fall if there aren’t enough buyout and early retirement volunteers.
  • Airlines are prohibited from laying off or furloughing workers through Oct. 1 under the terms of federal aid.
 

A United Airlines Boeing 777-200 aircraft

A United Airlines Boeing 777-200 aircraft
Nicolas Economou | NurPhoto | Getty Images

United Airlines and the union that represents its some 13,000 pilots have reached a tentative agreement for voluntary furloughs and early retirement packages, the latest effort to slash costs as the coronavirus pandemic devastates travel demand.

United is the last of the major U.S. carriers to reach such an agreement with pilots.

 

The deal comes as chances for a recovery in air travel grow more remote as cases of Covid-19 spike and states like New York and New Jersey issue quarantine orders for some arriving travelers in a bid to stop the disease from spreading, executives have warned.

 
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The deal would need to be ratified by union leaders next week, the union said in a note to its members, which was viewed by CNBC. The details weren’t immediately disclosed.

The agreement was announced a day after United warned about 36,000 employees ⁠— close to 40% of its workforce ⁠— that they could be potentially furloughed when the terms of federal aid that prohibit job cuts expire on Oct. 1. That included possible furloughs of more than 2,200 United pilots.

“Unfortunately, this may not be the full extent of the furloughs, and we must be prepared for more based on the Company’s plan to be 30 percent smaller next summer,” Capt. Todd Insler, chairman of the United chapter of the Air Line Pilots Association, wrote to members Thursday.

United didn’t immediately comment.

 

United and other airlines are urging employees to take early retirements or buyouts in order to limit layoffs when the terms of the $25 billion in payroll support run out in the fall.

AmericanDelta and Southwest have already reached agreements for early retirement packages for pilots. Delta last month came to an agreement that includes partial pay for pilots for three years or until they reach the federally-mandated retirement age of 65 as well as health care and travel benefits. It also said it was warning more than 2,500 pilots about possible furloughs.

Airline executives say travel restrictions and new coronavirus cases are dashing hopes for a turnaround in the summer, generally the most lucrative season for carriers.

Delta CEO Ed Bastian told staff on Thursday that over the July 4 holiday weekend, the airline carrier about 20% of the number of travelers it flew last year and said the Atlanta-based airline is hesitant about expanding its schedule.

“And while we’re adding back about 1,000 flights systemwide this month, we’re still operating just about 30 percent of our normal July schedule,” Bastian said in an employee memo. “The continued growth of the virus through the Sun Belt, coupled with quarantine restrictions being implemented in large markets in the northern part of the country, give us renewed caution about further schedule additions at this time.”

Airlines’ earnings season kicks off next Tuesday when Delta is scheduled to report second-quarter results, followed by United and American the week after.

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Pandemic sours Delta’s investments in foreign airlines, costing $2 billion

PUBLISHED TUE, JUL 14 20201:35 PM EDT
KEY POINTS
  • Delta has aggressively pursued investments in foreign airlines in recent years to help grow abroad.
  • The carrier posted charges of more than $2 billion related to those soured investments.
  • International air travel demand plunged in the pandemic due to weak demand and travel restrictions.
 

Aeromexico airplanes at Mexico City International Airport.

Aeromexico airplanes at the Mexico City International Airport.
John Gress | Corbis | Getty Images

Delta Air Lines spent years amassing equity stakes in foreign airlines from the U.K. to Chile to grow internationally and gain sway over those carriers. The coronavirus pandemic has upended those plans and is proving costly as financial turmoil hits airlines around the world.

Foreign-ownership rules generally prohibit outright ownership of airlines in other countries but equity investments and other partnerships have proved popular for airlines eager to gain access to international markets.

 

But international travel has been particularly challenging in the pandemic as carriers grapple with not only concerns over the virus but outright travel bans. Delta’s domestic passenger revenue, which makes up more than three-quarters of ticket sales, dropped 93% in the second quarter from a year ago, but revenue fell 98% in Latin America and 97% for trans-Atlantic routes.

 
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Delta on Tuesday posted a net loss of $5.7 billion in the second quarter, its largest quarterly loss in 12 years. The Atlanta-based airline took $2.1 billion in charges tied some of those investments in foreign airlines. It wrote down $1.1 billion on its investment in LATAM Airlines, Latin America’s largest carrier, which filed Chapter 11 bankruptcy protection in May, less than a year after Delta announced it was buying a 20% stake, snatching the carrier away from its previous partner, American.

It also took a $770 million write-down in its Aeromexico investment after suffering financial losses and the Mexican airline filed for Chapter 11 bankruptcy protection. And Delta took a $200 million charge on its investment in Virgin Atlantic.

Delta still has a framework in place for strategic partnerships with those airlines, which gives it further reach into those markets and vice versa.

Delta noted that the governments in these airlines’ home countries didn’t provide financial support like the $50 billion in loans and direct federal aid set aside for U.S. airlines.

“While each of these is disappointing, none of our partners’ home countries were prepared to provide governmental financial support similar to what the U.S. Treasury did with the CARES Act which necessitated their decisions to restructure,” Delta CEO Ed Bastian said in an earnings call Tuesday. “We have the most -- the utmost confidence in all of our partners and remain firmly committed to our partnerships, which will be important when we rebuild a much more resilient international network in the recovery.”

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Nearly 17,000 Southwest employees sign up for buyouts, voluntary leave as furlough threat looms

PUBLISHED MON, JUL 20 20201:25 PM EDTUPDATED 6 MIN AGO
 
 
KEY POINTS
  • Nearly 17,000 Southwest employees, or 28% of the workforce, signed up for leaves of absence or early retirement.
  • Thousands of others at other carriers have also signed up for unpaid or partially paid leaves or buyouts.
  • More than 2,200 Delta pilots have volunteered to retire early.
 

A Southwest Airlines jet leaves Midway Airport on January 25, 2018 in Chicago, Illinois.

A Southwest Airlines jet leaves Midway Airport on January 25, 2018 in Chicago, Illinois.
Scott Olson | Getty Images

More airline employees are signing up for buyouts, leaves of absence and early retirements as the threat of furloughs looms this summer amid the Covid-19 crisis.

Close to 17,000 employees or about 28% of Southwest Airlines’ workforce has signed up for partially paid extended leaves of absence or outright buyouts, the company’s CEO, Gary Kelly, told employees Monday. Nearly 4,400 put their hands up for buyouts while close to 12,500 expressed interest in extended time off, Kelly said in a staff memo seen by CNBC.

 

Airline executives have urged employees to take unpaid or partially paid time off. Companies are offering a host of buyout and early retirement programs as well as unpaid or partially paid temporary time off that provide health-care benefits but reduce carriers’ labor expense. The results of the programs comes as demand for air travel eases during the all-important summer travel season.“Overall, I’m very pleased with the response to these programs,” Kelly said in the memo, which was reported earlier by the Dallas Morning News. “I’m incredibly grateful to those of you who answered the call. I know there are stories behind every one of those 16,895 decisions — from your incredible history at Southwest Airlines, to stories of what’s ahead in your next phase.”

Southwest, which reports quarterly results before the market opens on Thursday, didn’t immediately comment.

At Delta Air Lines, the deadlines for pilots to apply for early retirement packages closed Sunday and 2,235 of them signed up, according to their union.

“The voluntary early-out program participation exceeded our expectations, which is positive,” said Air Line Pilots Association spokesman and Delta pilot Christopher Riggins.

 

Delta last month said close to 2,600 pilots would be warned about potential furloughs when the terms of federal aid expire this fall. The carrier said more than half of its more than 14,000 pilots would be eligible. When settling on the number of jobs at risk, Delta had already factored in routine retirements as pilots approach the federally mandated retirement age of 65.

“This is meaningful progress as we look to mitigate furloughs and our teams are hard at work to determine next steps and evaluate how the pilot early retirement may affect Delta’s overall pilot staffing outlook,” the airline said in a statement.

Delta’s early retirement program provides pilots partial pay for up to three years and extended health insurance coverage.

Delta last week asked pilots to reduce their minimum hours by 15%, a plan that the airline says would avoid involuntary furloughs for a year, CNBC first reported.

Shares of Southwest and Delta were each down more than 3% in afternoon trading. United and American were each down more than 4%.

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United Airlines loses $1.6 billion in the second quarter as pandemic saps travel demand

PUBLISHED TUE, JUL 21 20204:16 PM EDTUPDATED 27 MIN AGO
  • A plunge in air travel demand is driving multi-billion-dollar losses for airlines.
  • United Airlines executives will hold a call with analysts at 10:30 a.m. ET Wednesday.
  • United and its competitors have scrambled to cut cash burn since the pandemic began.
 

 

 

United Airlines posted a $1.63 billion net loss for the second quarter, driven by a plunge in air travel demand because of the coronavirus pandemic, the carrier said Tuesday.

Revenue fell more than 87% from a year earlier to $1.48 billion from a in the three months ended June 30, compared with analysts’ estimates for sales of $1.32 billion.

The Chicago-based carrier and other large-airline competitors that spent years building up their networks are grappling with what are expected to be long-lasting impacts of the pandemic.United said it expects to reduce its cash burn to $25 million a day in the third quarter from an average daily burn of $40 million in second quarter. The carrier has slashed thousands of flights and parked hundreds of planes to cut its cash burn.

United earlier this month warned 36,000 employees that their jobs are at risk this fall when the terms of federal payroll support expire in October.

United’s shares were down 1.4% in postmarket trading.

United executives will hold a call with analysts to break down their results and outlook at 10:30 a.m. ET Wednesday.

 

Southwest Airlines and American Airlines are scheduled to report quarterly results before the market opens on Thursday.

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  • 2 weeks later...
1 hour ago, dagger said:

I'm not sure what Virgin is up to. A Chapter 15 filing is meant to be complementary to filing for bankruptcy protection in one's home market. So far, I have seen nothing about a filing in the UK.

Non U.S.-companies use Chapter 15 to block creditors who want to file lawsuits or tie up assets in the United States.

Reuters has a good summary

https://www.reuters.com/article/us-virgin-atlantic-bankruptcy/virgin-atlantic-airways-seeks-us-chapter-15-bankruptcy-protection-idUSKCN2502RZ

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Quote

Virgin Australia Creditors to Lose Almost Everything Under Bain

August 24, 2020. - Bloomberg News
by By Angus Whitley

Unsecured creditors of Virgin Australia Holdings Ltd. will lose almost all their original investment under a deal to sell the collapsed airline to private equity firm Bain Capital.

The average return to those creditors will be between 9% and 13%, and even less if the proposed deal is voted down, administrator Deloitte said in a report Tuesday. Shareholders including marquee names such as Singapore Airlines Ltd. and Etihad Airways PJSC are getting nothing.

Priority creditors and employees will be repaid in full, according to the report.

Virgin Australia failed in April under A$6.84 billion of debt as coronavirus-related travel restrictions took their toll.

 

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American Airlines to cut 19,000 jobs as travel falls

A member of a ground crew walks past American Airlines planes parked at the gate during the coronavirus disease (COVID-19) outbreak at Ronald Reagan National Airport in Washington, U.S., April 5, 2020.Image copyrightREUTERS

American Airlines, the world's biggest airline, has said it will cut 19,000 jobs in October when a government wage support scheme extended to airlines during the pandemic comes to an end.

The cuts, on top of voluntary departures and leave, will leave its workforce 30% smaller than it was in March.

Other carriers have warned of similarly large cuts amid a slump in air travel.

United last month said as many as 36,000 jobs were at risk.

Germany's Lufthansa has warned it may cut 22,000 positions, while British Airways is slashing 12,000 jobs.

The reductions come amid warnings that the impact of the pandemic will cause airline losses of more than $84bn (£64bn) globally this year.

In the US, the terms of a $25bn (£19bn) government bailout barred airlines from making significant job cuts before 30 September. While airlines have called for further support, talks in Washington about an aid package collapsed this month without a deal.

American had received $5.8bn from the payroll aid programme. It recently announced plans to suspend service to 15 smaller airports in the US due to low travel demand.

"We must prepare for the possibility that our nation's leadership will not be able to find a way to further support aviation professionals and the service we provide, especially to smaller communities," chief executive Doug Parker and president Robert Isom said in a message to staff.

In the letter, executives said they expected American to be flying at about 50% capacity in the final three months of 2020. International flights are expected to be reduced to 25% of 2019 levels.

American said it expected fewer than 100,000 people to be working in October, down from 140,000 at the beginning of March.

In addition to the 19,000 cuts, about 12,500 people have voluntarily left the airline since March. Another 11,000 will be on voluntary leave in October.

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Saw this on Airliners, and it fits with these times of 'making America great again'.

While United is taking billions in subsidies, they are outsourcing American jobs to India.  Can't wait to hear the cries of 'they stole our jobs' when it was given away for profit.

https://www.airliners.net/forum/viewtopic.php?f=3&t=1450981

Some job searchers have noticed that United is expanding it's office in Gurgaon India. Former corporate positions that were previously housed in Chicago and Houston are now being opened in India. United's office in Gurgaon is not new, it originally started as a call center over 15 years ago, however only in the past year have they expanded hiring to include analysts and engineer level positions.

https://twitter.com/winglets747/status/ ... 9121897474

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