In today’s update, Lufthansa slashes its fleet size, warning that recovery is likely to take years, not months, IATA warns 25 million aviation jobs could be lost worldwide, Jet2 aims to restart operations in June and Saab reduces working hours for 500 of its workforce.
Lufthansa shrinks fleet operations in radical restructure programme
The Executive Board of Deutsche Lufthansa AG has released details of a radical restructuring programme which will shrink operations following the coronavirus outbreak.
The restructure will include the permanent decommissioning of six Airbus A380s and seven A340-600s as well as five Boeing 747-400s. In addition, eleven Airbus A320s will be withdrawn from short-haul operations.
In a statement on the company’s website, the airline board said it “would take months until the global travel restrictions were completely lifted and years until the worldwide demand for air travel returns to pre-crisis levels.”
“Decision will affect almost all Lufthansa flight operations”
It added the extensive long term measures to reduce the fleet, flight operation capacities and administration had been based on this evaluation.
The statement said the decision would affect almost all flight operations of the Lufthansa Group. It added: “The six A380s were already scheduled for sale to Airbus in 2022. The decision to phase out seven A340-600s and five Boeing 747-400s was taken based on the environmental as well as economic disadvantages of these aircraft types. With this decision, Lufthansa will be reducing capacity at its hubs in Frankfurt and Munich.”
Lufthansa Cityline will also withdraw three Airbus A340-300 aircraft from service. The regional carrier has been operating flights to long-haul tourist destinations for Lufthansa for five years. Eurowings will also be reducing the number of its aircraft. In the short-haul segment, an additional ten Airbus A320s are planned to be phased out. Eurowings long-haul business which is run under the commercial responsibility of Lufthansa, will also be reduced.
Germanwings flight operations will be discontinued in line with the implementation of Eurowings objective of bundling flight operations into one unit. This measures was defined before the crisis and will now be accelerated. All options resulting from this are to be discussed with the respective unions.
Restructuring programmes intensified due to crisis
Restructuring programmes already initiated at Austrian Airlines and Brussels Airlines will be further intensified due to the coronavirus crisis with both companies working on reducing their fleets.
The statement added that SWISS International Air Lines will also adjust its fleet size by delaying deliveries of new short haul aircraft and consider early phase-outs of older aircraft.
Lufthansa Group airlines have additionally terminated almost all wet lease agreements with other airlines. The statement added Lufthansa Group aimed to offer continued employment to as many people as possible. It added that talks with unions and workers councils would be arranged quickly to discuss new employment models in order to preserve jobs.
IATA warns pandemic could cost 25 million aviation jobs worldwide
The International Air Transport Association (IATA) has warned that some 25 million jobs in aviation and related sectors could be lost as air travel demand continues to plummet during the COVID-19 crisis, according to the International Air Transport Association’s (IATA) latest study.
The warning is based on a scenario of severe travel restrictions lasting for three months and air travel demand recovery being delayed due to economic recession, the airline grouping said.
Out of the 25 million jobs at risk, the largest loss of some 11.2 million jobs are in Asia-Pacific, followed by 5.6 million jobs in Europe, 2.9 million jobs in Latin America, 2 million jobs each in North America and Africa, and 900,000 jobs in the Middle East.
Livelihoods of 65.5 million people dependent on aviation industry
In a statement, IATA warned that the livelihoods of some 65.5 million people were dependent on the aviation industry including 2.7 million airline jobs. The scenario predicts airlines are expected to see full-year passenger revenues fall by US$252 billion or 44 per cent in 2020, compared with 2019.
IATA said the second quarter of 2020 would be the most critical with demand falling 70 per cent at its worst point, and airlines burning through US$61 billion in cash.
IATA director-general and CEO Alexandre de Juniac called for greater government funding intervention to mitigate longer term economic impacts and save jobs. He said: “There are no words to adequately describe the devastating impact of COVID-19 on the airline industry. And the economic pain will be shared by 25 million people who work in jobs dependent upon airlines. Airlines must be viable businesses, so they can lead the recovery when the pandemic is contained. A lifeline to the airlines now is critical.”
Restarting industry will be “complicated”
“We have never shuttered the industry on this scale before. Consequently, we have no experience in starting it up. It will be complicated.”
IATA said the global industry would have to work together to adapt operations and processes to avoid reinfections via imported cases. And we must find a predictable and efficient approach to managing travel restrictions which need to be lifted, before we can get back to work. These are just some of the major tasks that are ahead of us. And to be successful, industry and government must be aligned and working together,” he added.
“We don’t want to repeat the mistakes made after September 11, 2001, when many new processes were imposed in an uncoordinated way. We ended up with a mess of measures that we are still sorting out today. The 25 million people whose jobs are at risk by this crisis, will depend on an efficient re-start of the industry.”
IATA represents 290 airlines, making up 82 per cent of global air traffic.
Jet2 set to restart operations in June
UK leisure carrier Jet2 aiming to resume operations on June 17, after it previously cancelling all flying until May 1.
The airline’s parent Dart Group says that it had extended the shutdown due to “the ongoing uncertainty caused by the COVID-19 pandemic.”
Dart notes that decisions are “under constant review” in line with guidance from governments and relevant authorities. Jet2 has 92 aircraft, of which 74 are Boeing 737-800s. The fleet also includes eight 737 Classics, nine 757s and a single Airbus A321. All of the aircraft are listed as being in storage.
Jet2’s regular network spans 82 destinations, operating from nine UK bases.
Airlines granted up to £1.1bn air traffic control fee holiday
Airlines are to be given more time to pay their European air traffic control fees with a deferral until November.
Air traffic across continental airspace has slumped by 90 per cent due to the coronavirus pandemic.Eurocontrol has confirmed carriers will be able to defer the payment of their share of the up to £1.1 billion in fees due to Europe’s air traffic management industry over the coming months.
It said with the “dramatic” reduction in operations, currently standing at a reduction of 90 per cent above European airspace, the disruption was likely to continue for a number of weeks. It added that the airline industry had sought Eurocontrol’s support to mitigate “its sudden and significant cash flow crisis”.
Director general Eamonn Brennan said he was pleased member states had approved what he described as an “essential measure”. “It will provide much-needed liquidity support,” said Brennan.
“Many airlines contacted Eurocontrol to confirm they would not be in a position to facilitate their next payments. With traffic down 90 per cent, our member states have clearly recognised the shared challenge.
“This payment deferral will ease the immediate burden on airlines and it provides certainty on financial planning to both airlines and air navigation service providers on when payments will be made after the crisis has abated.”
Saab reduces working hours for 500 employees
Saab has introduced reduced working hours for 500 employees at its Aerostructures business unit within its Industrial Product and Services (IPS) business area. A majority of these employees will work 60 per cent of their regular hours. The agreement is valid from April 14.
This far, the impact of COVID-19 on Saab has been low, given the company’s large order backlog and business model with long-term commitments. Saab’s business unit Aerostructures supplies products to the civil aviation industry, which has been affected considerably by the effects of COVID-19.
Saab has adjusted the business to adapt to reduced demand and disruptions in the supply chain, and Existing contracts and commitments will be fulfilled to ensure revised staffing level.