July 24, 2020

Southwest Pledges No Layoffs or Furloughs Through 2020, Empty Middles Through October

1 During its earnings call on Thursday, Southwest Airlines announced it would not be laying off or furloughing any staff through the end of the calendar year. Airlines are not permitted to let anyone go until October 1 when the CARES Act funding expires, but Southwest becomes the first U.S. airline to guarantee all of its jobs are safe beyond October 1.

Famously, Southwest has not laid off or furloughed any employees in its 50-year history. Thus far, 7% of the workforce has accepted an early retirement buyout package, while 27% have accepted the buyout or extended unpaid leave.

Despite posting a $915 million loss in Q2, Southwest ended the quarter with the strongest liquidity of the big four U.S. airlines. It had $15.5 billion of liquidity at the end of June with an estimated Q3 daily cash burn of $21 million.

Southwest also has extended its empty middle seat policy another month through the end of October. Originally, it was set to expire on September 30, but passengers can now book on Southwest knowing they’ll have an empty middle seat at least through Halloween.

And those that are flying with the empty middle seat will need to wear a mask — no exceptions — as mentioned in yesterday’s Daily. CEO Gary Kelly on CNBC Thursday made the point “You have to wear pants, why can’t we mandate that you have to wear a mask in a pandemic?” To that, mask-refusers replied — “Good point. I shouldn’t have to wear pants either. DOWN WITH PANTS!”


Emirates to Offer Coronavirus Travel Insurance

2 As airlines continue to jockey amongst themselves to find new ways to improve customer confidence and encourage bookings, Emirates will become the first airline to guarantee to cover expenses for customers infected with the virus while traveling overseas.

Customers can book on the Emirates website or via their friendly travel agent (maybe Cranky Concierge?) and are covered for 31 days after the date of the first flight in the itinerary. Upon hearing this news, Floridians instantly booked flights for early next week and went to the beach without masks.

The offer is valid through October 31 and includes €150,000 coverage for virus-related expenses as well as quarantine housing expenses up to €100 a day for 14 days.


Alaska Will Need 7,000 Fewer Employees

3 Alaska Airlines is the latest airline to caution that it might be forced to furlough employees when CARES Act funding dries up on October 1.

During its earnings call on Thursday, CEO Brad Tilden warned that the airline may need to take the drastic measure in spite of it reducing daily cash burn by 70%

Alaska currently has 30% of its staff on voluntary leave, but will still be forced to send WARN Act notices on August 1 to prepare for additional layoffs if needed. Additionally, the airline is also reducing its management positions by 300 people, representing approximately 15% of the current workforce.


Via Air to be Rebranded and Relaunched

4 Via Air, which declared bankruptcy and halted operations in October of 2019, is back… sort of. Wexford Capital LP thinks now is the right time to start an airline, so someone there must read the Cranky Daily. Wexford is acquiring much-maligned Via Air via bankruptcy court and plans to rebrand the airline and get it back in the air.

Wexford and the new airline’s COO Wayne Heller stated the familiar refrain we’ve read from each of the new airlines that have announced their launch in the last two weeks: it plans to serve small, underserved markets.

Wexford has a history of investing in the airline industry, such as founding Republic Airways who’s COO was…wait for it…Wayne Heller. It’s taking another crack at it in the post-pandemic world, joining an ever-growing list of airlines that (probably incorrectly) see this as an opportunity


Iran Claims U.S. Fighter Jet Intercepted Iranian Passenger Flight

5 Media reports in Iran — so take it for what it’s worth — claim that a US fighter jet flew perilously close to an Iranian passenger plane in Syrian airspace. The U.S. government doesn’t deny there was a fighter jet close to the Mahan Air aircraft, but it does deny that it was too close.

Iran’s Irib state news agency alleges the pilot of the Mahan Air aircraft had to quickly change altitude which resulted in injuries to several passengers.

Video posted by Irib shows one jet from the window of the plane and a passenger who had blood on his face. The U.S. government said that its jet was at a safe distance and that the bleeding was clearly caused by an allergic reaction to Mahan Air’s appalling in-flight catering.

The Mahan Air flight, which was en route from Tehran to Beirut, landed safely in Beirut before refueling and returning to Tehran incident-free.


Airline Potpourri

  • Air India has pledged that no employees would lose their jobs due to the pandemic.
  • Air New Zealand expects to be back to 70% capacity in August.
  • British Airways has extended its change fee waiver to all bookings made through September 30.
  • El Al has a suitor as Eli Rosenberg has made a $75 million offer for a controlling stake of the airline.
  • JetStar Asia has extended its service suspension through August 14 with the exception of twice-weekly service to Bangkok and Kuala Lumpur plus once-weekly service to Manila.
  • KLM has resumed service to China with a once-weekly to Shanghai/Pudong.
  • Lufthansa will begin new service to the Canary Islands with twice weekly service from Frankfurt to both Gran Canaria (LPA) and Tenerife (TFS) on October 3.
  • Singapore Airlines raised an additional $540 million to increase its liquidity.
  • Stobart Air will launch a new route from Manchester (MAN) to to Belfast (BHD) beginning September 14.
  • WestJet is retiring its fleet of 767s.

Andrew’s Moment of Levity

Not to brag, but I made six figures last year. I was named worst employee at the toy factory.