Woodward and Hexcel Corporation announced (06-Apr-2020) they have mutually agreed to terminate their all-stock merger agreement. The termination was approved by the board of both companies, in response to to the increasing impact on both the aerospace and industrial sectors, and global markets broadly, resulting from the health crisis caused by the COVID-19 pandemic. The pandemic has resulted in a need for each company to focus on its respective businesses and has impacted the companies' ability to realize the benefits of the merger during these unprecedented times. Neither party will be required to pay the other a termination fee as a result of the mutual decision to terminate the agreement. [more - original PR]
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China and other East Asian nations were in the frontline in the fight against coronavirus. It is reasonable to assume they should equally be the first to emerge. As we search for a tipping point in the global battle against COVID-19, these Asian markets may offer cause for optimism - or at least the signs of what the road back might look like.
The most recent schedule filings certainly support that emergence proposition, for domestic airline market regrowth. International expansion will be some time away as many countries remain effectively locked against international visitation.
In some cases it is two steps forward, one step back, as concerns remain about lingering pockets of contamination. But a consistent pattern is emerging of domestic markets that have turned the corner.
The domestic airline markets of China, Korea, Taiwan, Japan, and Indonesia are all clearly demonstrating a belief by their airlines that a corner has been turned, as they re-introduce capacity into the market. While welcome signs, they may not yet all be timely.
07-Apr-2020
COVID-19: Spain overtakes Italy as second highest COVID-19 cases: CAPA update 07-Apr-2020
Welcome to the latest edition of CAPA’s daily Coronavirus and Aviation global update. We offer this product to our active CAPA Members, as well as visitors to our website to help our industry navigate through this crisis.
The report contains a small selection of news briefs and CAPA commentary, on the US system and from each region.
Top news headlines:
- China air pax down 79% on 05-Apr-2020, although domestic capacity increases;
- Etihad Airways to trial self service health assessment technology;
easyJet successfully issues GBP600m CCFF short-term note, requests USD500m RCF drawdown
Following the aviation summaries, the report contains the latest coronavirus data, globally and by country.
- Global cases increase show signs of slowing;
- Spain overtakes Italy as second highest COVID-19 cases.
Premium Analysis
COVID-19: American Airlines' international route reductionsThe COVID-19 pandemic has created an extra layer of complexity for network planners worldwide as airlines are working carefully to preserve some level of network integrity once the crisis is over. But that remains a tricky exercise, since the duration of the pandemic remains anyone’s guess.
American Airlines has outlined its planned international reductions for the peak season in the Northern Hemisphere, which will result in a 60% cut in capacity. The adjustments include a mix of pushing back the dates for the resumption of service in some markets and a decision by the airline to eliminate seasonal services in a number of markets.
American’s hub in Philadelphia appears to be bearing the brunt of seasonal route cuts. The airline has launched numerous routes to secondary trans Atlantic markets, which were performing well before COVID-19 wiped out in demand in a matter of weeks.
American is striking an optimistic tone, noting that 25 seasonal flights are suspended until the US summer of 2021; however it is entirely too early to determine whether demand in some markets will regain pre-pandemic levels by next summer.
As demand for air travel disappears in the wake of the COVID-19 pandemic, passenger airlines operating around the world are turning to cargo in order to produce fractional revenue.
In the US, major passenger airlines – after turning their attention away from freight during the past year in order to push up revenues from credit card deals, frequent flyer miles and other general ancillary sales – are opting to operate cargo flights. North America’s cargo traffic declined by 3.4% in 2019, and cargo revenues for the largest US airlines fell solidly year-on-year.
Obviously, cargo is not a long term saviour for the airlines, as they continue to navigate fast-moving changes brought on by the COVID-19 outbreak, but operators are turning over every rock in order to recapture even a fraction of their lost revenue.
It might appear to be a strange time to be negotiating the sale of equity in an airport, but discussions between the Stobart Group and AviAlliance to that end over Southend Airport appear to have been progressing for some time. The deal could be worth up to GBP800 million.
The FTSE 250 Stobart Group encompasses road freight, rail and air transport. The group also has an interest in Carlisle Airport and Teesside Airport in northeast England, where it holds a 25% stake and a management contract. Stobart is in a difficult period, owing to liabilities arising from the collapse of the airline Flybe, in which it held a 30% stake.
Southend was once one of the UK’s busiest airports. Essex is a heavily populated county (1.5 million) to the east of London and a rail link directly to and from the airport means that it can be considered as an alternative airport to London City and London Stansted airports for those living in the east of London, and even in the centre.
The smallest of the London airports seems to be an obscure interest for the German company, but recent events highlighting the diminishing prospect of additional runways in London make Southend look like an enticing prospect.
26-Mar-2020
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7-Apr-2020 4:13 PM
ACI World issues airport best practices advisory bulletin in response to coronavirus impacts
ACI World issued (03-Apr-2020) an advisory bulletin on airport best practices in response to the effects and impact of the coronavirus. The bulletin provides guidance on accommodating parked aircraft, the maintenance of airside infrastructure, the management of airside operations teams and continuing essential cargo operations. ACI World director general Angela Gittens stated: "Despite the dramatic decline in passenger traffic, many airports remain open for cargo operations and the continuity of the air cargo business is essential for communities, the global economy at large and, for fighting the ongoing pandemic". [more - original PR]
El Al stated (06-Apr-2020) it received verbal advice from Israel's Ministry of Finance that at present the Ministry's position is not to approve an assistance package requested by the carrier. El Al's position is that it requires state support in the near future to cope with the negative impact of the coronavirus crisis. [more - original PR - Hebrew]
American Airlines extended the suspension and reduction of operations to 117 domestic services until 03-Jun-2020, excluding Miami-Columbia service and other services now cancelled, as per a 06-Apr-2020 GDS display and inventory. See the previous CAPA report for route details.
CAPA - Centre for Aviation, in a report entitled: 'UK aviation: Loganair seeks state help. Europe's #1 market falls 79%', stated (01-Apr-2020) total UK seat capacity is scheduled to be 1.3 million in the week commencing 30-Mar-2020, compared with 6.3 million in the equivalent week in 2019, according to the latest schedules data from OAG, combined with CAPA Fleet Database seat configurations. UK seats were down 79% year-on-year in the week of 30-Mar-2020, broadly in line with a 78% reduction across all of Europe. [more - CAPA Analysis]
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7-Apr-2020 3:01 PM
Ottawa International Airport Authority implements cost reduction measures amid coronavirus outbreak
Ottawa International Airport Authority president and CEO Mark Laroche stated (03-Apr-2020) the airport implemented the following measures to reduce costs in response to the outbreak of coronavirus:
- Halted spending on capital programmes: Some critical projects may move ahead slowly, but most have ceased. This action has reduced capital spending by at least CAD35 million (USD24.8 million);
- Terminal concession rollout programme, which was scheduled over two plus years, will now take longer and may look different to the initial programme presented in 2019;
- Construction of the Alt Hotel Ottawa Airport will be delayed;
- Cut spending on items that are not aligned with regulatory requirements or safety and security needs;
- Enacted a workforce cost and time adjustment programme across the organisation in the interest of avoiding layoffs. [more - original PR]
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