Thoughts this week – 9May20

This week, we look at

  1. More airlines are announcing increase in flights
  2. Delta and LATAM sign trans-American Joint Venture
  3. State Aid starts flowing to airlines
  4. Aircraft deliveries deferred
  5. Iberia to offer COVID-19 tests for all employees

More airlines are announcing flight schedules

More airlines are getting back to the air and increasing flights. Qatar Airways announced phased re-building of network with a target to fly to 52 destinations by end of May and to 80 destinations by end of June. German carrier Lufthansa also announced a marginal increase in flights in a phased manner and American Airlines opened reservations for its flights to Spain. In Asia, Vietnam is opening up aviation again with flights re-starting and Garuda Indonesia returned to flying, but only on domestic sectors.

Delta and LATAM sign trans-American JV

Delta Air lines and LATAM Airlines Group and its affiliates have signed a trans-American JV. Late last year, Delta announced its plans to buy 20% of LATAM and led to departure of LATAM from One World. The airlines had already started codeshare and frequent flier benefits and mutual lounge access. Once the regulatory approvals are in place, the JV will combine the carriers’ complementary route network between North and South America.

State Aid starts flowing

While the United States started aiding the airlines under the CARES Act, helping airlines pay salary bills with a combination of grant and loans, more governments have stepped up. Alitalia is in the process of being re-nationalized with the Italian government likely to inject EUR 3 billion. Qantas group secured a debt funding of $550 million and Lufthansa is in talks with the German government for aid and bailout. More and more countries are likely to work with airlines to come up with a program to help airlines get back to air. However, this aid could be in return of a percentage of ownership by the respective governments.

Aircraft deliveries deferred

Airlines the world over have started talking about deferring deliveries. IAG and jetBlue have made references to this during their communication with analysts and media after announcing the financial results. This will lead to a substantial impact for both Airbus and Boeing – who have restarted production and working out retrenchments.

Iberia to offer COVID-19 tests for all employees

Spanish carrier Iberia, part of IAG, will implement a special COVID-19 health plan. The plan calls for blood test to detect COVID-19 antibodies in employees returning to on-site work following furloughs. In May along, over 2500 employees will be tested with a plan to test all 17,000 employees by the end of the year.

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This can be downloaded as PDF here –Thoughts this week_2May to 8May

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