IAG cuts further capacity as losses continue to mount

International Airlines Group (IAG) has reported a huge loss for the third quarter and confirmed it will make further capacity cuts for the rest of the year.

 

Total revenue at the group - which owns British Airways, Aer Lingus and Iberia - declined by 83 per cent to €1.2 billion over the past three months, compared to €7.3 billion last year.

 

Overall IAG lost €1.3 billion over the period, compared to a €1.4 billion profit last year.

 

Passenger capacity, expressed in available seat kilometres, declined by 78.6 per cent in the quarter.

 

Passenger traffic, measured in terms of revenue passenger kilometres, declined by 88 per cent.

 

Seat load factor declined by 39 points to 49 per cent.

 

Stephen Gunning, chief financial officer with IAG, said: “Recent overall bookings have not developed as previously expected due to additional measures implemented by many European governments in response to a second wave of Covid-19 infections, including an increase in local lockdowns and extension of quarantine requirements to travellers from an increasing number of countries.

 

“At the same time, initiatives designed to replace quarantine periods and increase customer confidence to book and travel, such as pre-departure testing and air corridor arrangements, have not been adopted by governments as quickly as anticipated.”

 

In response to the high uncertainty of the current environment, IAG now plans for capacity in quarter four of this year to be no more than 30 per cent compared to 2019.

 

As a result, the group no longer expects to reach breakeven in terms of net cash flows from operating activities during the next three months.

 

The group has previously hoped to fly around 40 per cent of its planned capacity.

 

IAG added, as of September, it had total liquidity of €6.6 billion, comprised of €5.0 billion of cash, cash equivalents and interest-bearing deposits and €1.6 billion of undrawn and committed general and aircraft facilities.

 

In addition, €2.74 billion of gross proceeds from the capital Increase were received in early October for a total pro-forma liquidity of €9.3 billion.

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Cathay Dragon shutdown with immediate effect

Cathay Pacific chief executive, Augustus Tang, said: “The global pandemic continues to have a devastating impact on aviation and the hard truth is we must fundamentally restructure the group to survive

 

Cathay Pacific has confirmed regional subsidiary Cathay Dragon will cease operations after three decades with immediate effect.

 

The decision comes as part of a wider restructuring of the Hong Kong-based carrier in the wake of the Covid-19 shutdown.

 

Cathay said it hoped to continue to operate most of the routes currently offered through Cathay Dragon, mainly using wholly-owned subsidiary HK Express.

 

This, however, requires regulatory approval.

At the same time, Cathay said it would cut 8,500 jobs, or around a quarter of its workforce.

 

Through a recruitment freeze and natural attrition, the group said it had already shed 5,900 jobs, with 5,300 going in Hong Kong and a further 600 overseas.

 

Hong Kong-based cabin and cockpit crew members will also be asked to take a pay cut.

Cathay Pacific chief executive, Augustus Tang, said: “The global pandemic continues to have a devastating impact on aviation and the hard truth is we must fundamentally restructure the group to survive.

 

“We have to do this to protect as many jobs as possible, and meet our responsibilities to the Hong Kong aviation hub and our customers.

 

“Our immediate priority is to support those affected by today’s announcement.

 

“We are deeply saddened to part ways with our talented and respected colleagues, and I want to thank them for their hard work, achievements and dedication.”

 

Cathay Pacific said it would be offering severance packages that go “well beyond” statutory requirements.

 

It will also be extending medical benefits and staff travel entitlements, as well as providing counselling and job transition support services.

 

Tang said: “We have taken every possible action to avoid job losses up to this point.

 

“We have scaled back capacity to match demand, deferred new aircraft deliveries, suspended non-essential spend, implemented a recruitment freeze, executive pay cuts and two rounds of Special Leave Schemes.

 

“But in spite of these efforts, we continue to burn HK$1.5-2 billion cash per month.

 

“This is simply unsustainable.

 

“The changes announced today will reduce our cash burn by about HK$500 million per month.”

 

Cathay said it expected to fly half as many passengers next year as it did in 2019.

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Etihad Airways welcomes first flight from Tel Aviv

This is the latest development in a growing cooperation between the two nations following the establishment of diplomatic ties, and the signing of the Abraham Accords between the United Arab Emirates and Israel in Washington in September

 

Etihad Airways has become the first GCC carrier to operate a commercial passenger flight to and from Israel.

 

The departure will bring top travel and tourism leaders from Israel to the United Arab Emirates.

 

The historic flight departed Tel Aviv earlier, operated by an Etihad Boeing 787 Dreamliner for the three-and-a-half-hour journey.

 

The trip was flown in partnership with the Maman Group, and the return journey will depart Abu Dhabi tomorrow.

As a travel trade mission, the flight will bring a group of tourism industry leaders, key corporate decision makers, travel agents and cargo agents, along with media to experience Abu Dhabi, at the invitation of Etihad Airways and representatives of tourism industry.

 

This is the latest development in a growing cooperation between the two nations following the establishment of diplomatic ties, and the signing of the Abraham Accords between the United Arab Emirates and Israel in Washington in September.

 

It also follows Israeli national airline El Al’s first symbolic commercial flight between Tel Aviv and Abu Dhabi on August 31st.

 

Mohamed Mubarak Fadhel Al Mazrouei, chairman, Etihad Aviation Group, said: “This flight is a historic opportunity for the development of strong partnerships here in the United Arab Emirates, and in Israel, and Etihad as the national airline, is delighted to be leading the way.

 

“We are just starting to explore the long-term potential of these newly forged relationships, which will be sure to greatly benefit the economies of both nations, particularly in the areas of trade and tourism, and ultimately the people who call this diverse and wonderful region home.”

 

As an important facilitator of trade, the flights between Tel Aviv and Abu Dhabi will also carry commercial cargo sourced from, and destined for, points across Etihad’s global network, in addition to commercial guests.

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New Covid-19 testing options rolled-out at Heathrow Airport

The facilities, located in Terminals 2 and 5, will initially offer passengers travelling to Hong Kong and Italy the option to fulfil those countries’ pre-departure testing requirements at the airport before they fly

A new pre-departure rapid testing facilities has been launched at Heathrow.

 

The testing facilities, a UK first, are described by officials at the airport as a critical step in the recovery of the aviation sector, restoring traveller confidence and re-opening routes from the UK to the rest of the world.

 

They will be run by Collinson and Swissport.

 

The facilities, located in Terminals 2 and 5, will initially offer passengers travelling to Hong Kong and Italy the option to fulfil those countries’ pre-departure testing requirements at the airport before they fly.

 

These countries currently require passengers to provide evidence of a negative Covid-19 test prior to departure, but allow for testing technologies that can deliver fast results.

 

These tests, including Lamp and Antigen tests, can easily be administered pre-flight at the airport.

 

These tests differ from RT-PCR, which a growing number of countries and territories around the world, including Cyprus, Greece, Bahamas, and Bermuda now require to be shown at check-in.

 

Unlike RT-PCR tests, Lamp and Antigen tests can be processed quickly and without being sent to a laboratory.

 

However, they are viewed as less accurate than the more sensitive RT-PCR option.

 

Heathrow chief executive, John Holland-Kaye, said: “Many other countries are already using testing to keep their borders safe while restarting trade and travel.

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Hong Kong, Singapore sign agreement to establish air travel bubble

Both cities are major aviation hubs, and the international air route between the two cities was among the busiest in the Asia-Pacific region before the pandemic

Hong Kong and Singapore have reached an in-principle agreement to establish a bilateral air travel bubble.

 

The move could help revive cross-border air travel between the two aviation hubs in a safe and progressive way, authorities said.

 

Hong Kong and Singapore enjoy strong trade, investment, finance, tourism and people-to-people ties.

 

Both cities are major aviation hubs, and the international air route between the two cities was among the busiest in the Asia-Pacific region before the pandemic.

 

YK Pang, chairman of the Hong Kong Tourist Board, said, “We welcome the Singapore government’s announcement of the in-principle agreement to establish a bilateral air travel bubble between Hong Kong and Singapore.

“The announcement is a timely match with the Hong Kong’s launch of a standardised hygiene protocol for tourism-related sectors with the Hong Kong Quality Assurance Agency, which was announced last week.

 

“The protocol allows the tourism-related sectors to be well-prepared to welcome visitors back, while bolstering visitors’ confidence in travelling to Hong Kong.”

 

New Zealand and Australia launched a similar travel bubble last week.

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