May 28, 2020

Oops, Our Bad
In yesterday’s story about LATAM rejecting aircraft leases, we said that 17 of the 19 aircraft are held by Wilmington Trust. Wilmington Trust is just the trustee — it has no actual exposure and is not driving any of the decisions by LATAM.

American & Delta Offer Buyouts & Early Retirement to Cut Staff Levels; Air Canada Prepares for Layoffs

1 In another effort to dramatically cut costs as airlines adjust to what they see as the new, smaller normal, both American Airlines and Delta Air Lines have offered thousands of management employees offers of early retirement and buyouts in lieu of involuntary layoffs that will otherwise come when the CARES Act expires this fall.

American is planning to cut around 5,000 jobs from its management and support staff — approximately 30% of the current workforce. Employees will have until June 10 to apply for one of the voluntary buyout options. American is offering those who volunteer a couple of packages with a mixture of pay, health, and travel benefits. Those who roll the dice and attempt to ride it out but are laid off will not receive any severance or travel privileges.

AA had around 130,000 employees at the end of 2019 and nearly 40,000 have already accepted an early retirement or voluntary leave. This new offer is not for leave; it’s a permanent separation.

Delta has put out offers to its employees for voluntary separation as well. Delta had 91,000 employees at the end of 2019 and is looking to reduce its workforce a significant amount, but it hasn’t set the same hard target as American.

Delta employees who take the buyout offer will receive between four and 20 weeks of severance depending on their seniority, plus a year of paid medical coverage and one year of travel benefits. Those who qualify for early retirement would receive up to 26 weeks of severance, two years of medical coverage and a year of travel benefits.

Meanwhile, north of the border, half of the workforce at Air Canada — nearly 20,000 — is facing the possibility of layoffs. Air Canada suffered a C$433 million (~US$310 million) loss in Q1, the first quarter in seven years that saw negative operating revenue compared to the previous year. The airline is currently seeing demand at about 5% of where it was last year and is looking to dramatically reduce its staffing levels to curtail its cash burn.


Delta, United, & British Airways Extend Waivers, Credit Validity

2 There’s good news for travelers on the change fee waiver front as Delta is extending its waiver for new bookings through June 30. It was originally set to expire on May 31.

Any Delta tickets purchased from March through June of this year can be changed without a change fee for up to a year from the date of purchase — with the caveat that a fare difference may apply.

This compares favorably to the June waiver extension announced yesterday by American. AA’s extension required that the original travel date be no later than September 30 with the credit being valid for use through the end of 2021. Delta is not imposing such a restriction, allowing customers to change any booking made by June 30.

United’s updated waiver will also allow those who book by June 30 to make a one-time change with no fee any time over the next 12 months. Like Delta, United has no restriction on travel dates.

Across the pond, British Airways is making moves as well — allowing US/Canada customers whose tickets were set to expire between April 1 and July 31 to rebook for travel through December 31. As an added bonus, all who choose to rebook will receive a complimentary stiff upper lip greeting upon checking in for their new flight.


Southwest Extends Schedule Through January Adding Several New Routes

3 Southwest Airlines on Thursday announced its current schedule will be extended through January 4 with the addition of several new routes, including the restoration of routes that the airline has not flown in several years.

Highlights of Southwest’s new service include a greater focus on four traditional Southwest strongholds: Phoenix, Denver, Las Vegas, and Nashville. Beginning November 1, Southwest will operate two new Cranky-approved routes from Long Beach (LGB) to Phoenix (3x daily) and Austin (1x daily). Staying in Southern California, Southwest will add 6x weekly service from Orange County (SNA) to Nashville and Ontario (ONT) to Houston/Hobby.

Beginning December 17, Southwest will begin daily service from Phoenix to Memphis. Denver will see three new destinations — Birmingham (BHM), Wichita (ICT) and Little Rock (LIT) all receiving once-daily service.

Atlanta will also receive three new destinations — Oklahoma City (OKC), a route Southwest last flew in 2016, Omaha (OMA), and Louisville (SDF), which Southwest last operated from Atlanta in 2014. All three new destinations from Atlanta will see 3x daily roundtrip service.

What isn’t mentioned is that Atlanta will also be losing some service. A look at southwest.com shows that Atlanta to Los Angeles (LAX) and Oakland (OAK) appear to be gone. It’s unclear what else might be disappearing. Further analysis will be possible this weekend when the data is updated with Diio by Cirium.


Germany Hopes to Reduce Travel Restrictions on 31 European Countries

4 Germany is hoping to lift a travel warning for 31 European countries from mid-June, with reports that social distancing rules imposed to avoid the coronavirus could be eased from June 29, a week earlier than planned.

German regions are in talks with Chancellor Angela Merkel on how to further relax restrictions introduced in March to slow the spread of the new coronavirus.

In addition to Germany’s 26 partner countries in the European Union, these include the UK, and the four states of the border-free Schengen area, which are not members of the EU: Iceland, Norway, Switzerland and Liechtenstein. 

In order to jump start its local economies and welcome back tourists, the German government is considering renaming Oktoberfest to Wheneverfest and starting the beer-drinking festival as soon as the borders are reopened.


The Bright Side: TAP Returning to North America & Introduces Three New Routes

 5 In an e-mail to travel agents on Thursday, TAP Air Portugal announced it would be returning to North America next week, reinstating 2x weekly service from its Lisbon hub to Newark.

TAP then plans to return service to three other North American gateways: Boston, Miami and Toronto/Pearson as each will receive 2x weekly service beginning in July.

In addition to the service restoration, TAP will be commencing service on three new routes. Beginning July 1, TAP will serve Ponta Delgada (PDL) in the Azores 3x weekly from Boston.On July 2, it will begin 2x weekly service to PDL from Toronto/Pearson. Lastly, on July 30, TAP will start 3x weekly service from Lisbon to Montréal (YUL).

These new additions come as the airline introduces TAP Clean & Safe, its blandly-branded standard of hygiene, health and sanitary safety.

Airline Potpourri

  • Air New Zealand will ground its fleet of 15 777’s through at least the end of 2020. Previous reports had suggested they would be grounded for a few months beyond that, so… good news?
  • Austrian now plans to resume flight operations on June 15.
  • Delta plans to add approximately 100 flights to its schedule in June, including the return of 18 international destinations from its Atlanta hub.
  • Edelweiss resumed operations today, May 28, with its first flight from its Zurich (ZRH) hub to Faro (FAO) in Portugal.
  • South African‘s goal of restarting domestic operations by mid-June is currently in doubt, as is the state of the entire airline’s future.
  • Tailwind plans to launch commuter ops this June in conjunction with Southern Air Express using seaplanes in New York.

Andrew’s Moment of Levity

I bought a thesaurus on Amazon but it got lost during delivery and never made it here. I can’t find the words to describe how angry I am.