United Becomes First US Airline to Require Cabin Crew to Wear Masks — Are Passengers Next?
1 United Airlines flight attendants will be required to wear a mask or face-covering while on duty beginning today, April 24. The decision was welcomed by the Association of Flight Attendants (AFA) whose members work for United.
The AFA had made a request to the federal government to require masks in-flight for crew, staff and yes, passengers. Last week, Canada installed temporarily guidelines required face masks for passengers at the airport and in-flight, but the US government has not followed suit.
It will be worth watching to see what airlines, if any, match United with this requirement for in-flight crew, and to see if any airline will make the same requirement of passengers while waiting for the DOT to issue a ruling on the matter.
Virgin Australia Owes $4.4 Billion to Creditors
2 Virgin Australia owes $4.4 billion to its 10,000 creditors according to its administrators. The airline entered into voluntary administration this week, a process similar to Chapter 11 bankruptcy in the United States.
The administrators first plan to request a three-month waiver from the airline’s aircraft lessors in an effort to get cash reserves more under control. Virgin Australia owes $1.2 billion to its aircraft lessors, and $287 million to its employees.
Deloitte, which is handling the administration on behalf of the airline, is requesting an extension of up to four weeks from its appointment to decide if those leased planes are necessary for the airline to stay in business. If not, there’s talk that Virgin Australia will pursue a strategy of filling up all the planes that are behind on payments with Vegemite. This would result in a terrible stink engulfing the cabin to a point where the lessors do not want the planes back, and if you’re Virgin Australia — boom — free planes.
Lufthansa Files Q1 Financials and Like Everyone Else… Not Great, Bob.
3 Lufthansa Group (Lufthansa, SWISS, Austrian, Brussels and Eurowings) submitted its preliminary Q1 financials and the drop-offs are staggering. Similar to its brethren around the world, Lufthansa’s numbers tanked after a strong January and February. More doom is forecast for Q2.
Lufthansa Group saw its Q1 revenues fall 18% from €7.8 billion to €6.4 billion. March saw a dramatic drop in YoY revenue of 47% with a €1.4 billion drop from March 2019. With the extreme drop in the price of oil, Lufthansa Group expects its bottom line to receive another blow from the price of its fuel hedges — now well above market value.
Going forward, these airlines know they cannot sustain themselves on their cash reserves and expected future revenue. Each airline is currently in negotiation with its home government to request a financial lifeline. Currently, Lufthansa Group is working with about $4.4 billion of liquidity, with $900 million of that in financing measures and the remaining $3.5 billion tied up in bratwurst and Belgian waffles.
Indonesia Bans All Air Travel Through June 1
4 In an effort to prevent the spread of Coronavirus, Indonesia has banned all air travel in the country — commercial and private — through June 1. As a result, Lion Air will be launching a new service where it drives airplanes on roads to get passengers where they need to go. (We feel the need to point out that we’re kidding, because this doesn’t sound entirely false.)
The Bright Side: Norway Passes New Law That Could Save Norwegian Air
5 Norway’s legislature approved a new law Friday that relaxes regulations on companies attempting to restructure during the Coronavirus outbreak. The new law could potentially help save hundreds of Norwegian businesses, including low-cost carrier Norwegian Air.
The new Norwegian law requires that only 50% of shareholders and 50% of debtors agree on a restructuring plan, allowing companies more flexibility in how they survive the crisis. Norwegian is currently seeking to convert debt to equity in order to qualify for federal funding needed to survive the crisis. This is a still an uphill battle, but it does give Norwegian a shot at survival.
Airline Operation Potpourri
- Air New Zealand has postponed the start of its service to Newark until at least 2021. It also announced that its route between Los Angeles & London/Heathrow, which was already scheduled to disappear later this year, is done and not coming back.
- Alitalia will be fully-run by the Italian Government by June. The government said it plans to restart the airline with around 90 aircraft, compared to the 113 it had pre-outbreak. If there’s only one airline that survives this crisis, it will clearly be Alitalia.
- British Airways will up its number of weekly cargo flights between London and China to 21 in order to transport vital medical supplies and personal protective equipment (PPE).
- Cabo Verde Airlines has been suspended by the IATA from its Billing and Settlement Program due to its potential bankruptcy. This is a red flag.
- Cape Air had its request granted by the federal government to suspend service to New York/JFK through September 30.
- Icelandair will be converting three of its four 767s into cargo aircraft.
- Japan Airlines has extended the validity period of miles, e-JAL points and e-coupons that were set to expire through September 30. Registration with JAL is required to rescue your lost miles or credits.
- Thai Airways has requested $2.2 billion in aid from the Thai government to keep it funded through October.
- WestJet filed its schedule for May, featuring 584 domestic flights on 48 unique routes with 24 originating from its Calgary (YYC) hub.
Andrew’s Moment of Levity
I’ve been thinking about all the things I’ve been saving money on during the quarantine. Gas, dry cleaning, breath mints, pants…