Today’s image is ANA’s A380 with the Orange Honu Livery. It made us smile and thought our readers would enjoy seeing it as well.

PXCOM

PXCom luanches Sanitized Travel-dedicated apps for IFEC platforms. It is a proven fact that keeping the middle seat empty is nonsense both economically speaking and from an overall hygiene standpoint. It has been widely debated over the past few weeks.

However, inflight social distancing can be organized. Once again, PXCom brings to the market evidence that inflight servers can be used far beyond plain entertainment, by launching the In-Cabin Mobility Management (IC2M by PXCom) software suite dedicated to dramatically improve the inflight social distancing.

Such suite is formed of 4 modules that the airline can choose either separately or in a bundle:

  • Toilets Queuing Management to avoid passengers gathered around the restrooms,
  • Overhead bin access regulation to ensure minimum distance as a passenger wants to access to its personal belongings
  • Disembarkation Process, to organize a guaranteed social distance as the passenger leave the aircraft.
  • Muti-chat: Passenger chat to avoid passengers from different rows physically connecting to discuss and also, passenger to cabin crew chat to minimize surface contact.

“Our customers are really excited about these capabilities, as we anticipate a 60% drop down of unmanaged in-cabin movement” states Cyril JEAN, PXCom CEO, “Of course all these digital services are fully customizable in order to integrate each of our customer’s management rules in consistency to its product experience.”

Empty the seat back pocket

Earlier in 2018, Marketplace analyzed over 100 samples on 18 flights, finding mold, staph and potentially harmful pathogens. It is not about proven or non-proven contagion threat; it is all about the trust factor and passenger’s concern for their health and safety.

To respond to this passenger expectation, PXCom has also launched the digitized safety & hygiene card.

Upon his first connection, the passenger is displayed a swipeable safety and hygiene card, in his desired language, which content is directly bound to the aircraft he is seating in. Thanks to PXCom technology, the content of this interactive card is managed from the cloud-based back office and can be updated as often as the hygiene measures evolve, through the media content update process.

At the end of the swipe, the passenger can either acknowledge and be redirected to the homepage of the IFE GUI or jump into the destination airport’s specific hygiene measures.

This innovative offering complements solutions from PXCom that are already flying for inflight mag digitization, interactive meals menu cards and onboard shopping catalog, that are also ancillary revenues generators.

Of course, air regulations still require the safety card to be physically present onboard the aircraft, but thanks to PXCom solution, cabin crew can be informed in real time about which passenger has not been through the card, offering such passenger to be provided with printed copies.

Trust is the new currency

Among the airline community, everybody has been largely informed that flying is still highly secure when it comes to contamination risks whenever passengers and cabin crew wear masks. But beyond the airline professionals, casual passengers are widely frightened by the idea of being contaminated during their flight.

As a result, PXCom Post-Covid solutions not only bring new capabilities for inflight hygiene, but they are also highly valuable assets that help airlines in regaining passenger confidence.

Easy to roll out on the w-IFE/IFC platforms, as any PXCom solutions, these new digital services are compliant with any seatback screens platform.

Definitely, an important differentiating marker in an ever-tougher period.


GOGO

Gogo Business Aviation hit 3,000 daily flights late last week, showing strong signs of recovery from the COVID-19 related single-day low-point of 378 daily flights in mid-April.

“I’m encouraged because we’re seeing several positive trends taking shape in the market,” said Sergio Aguirre, president of Gogo Business Aviation. “We’ve strived to be a good partner with our customers to get through a very difficult time together, and we’re now in the midst of a measurable recovery as flight activity increases.”

Business aviation hit a low point in mid-April when many aircraft owners chose to park their aircraft and 30 percent of Gogo Business Aviation’s accounts chose to reduce their spending through either account suspensions or service-plan downgrades.

Since that time, however, nearly 60 percent of Gogo’s suspended customers have reactivated their service, with approximately 80 percent reverting to their original service plan.

The number of flights flown with active Gogo service onboard has continued to increase, reaching 3,039 flights last Thursday, close to Gogo’s pre-COVID average of 3,500 flights per day. Gogo is actively working with customers to reactivate service quickly as flying activity increases, and installations of new AVANCE L5 and L3 are on the rise.

“I’ve been amazed with the level of productivity and engagement our employees have delivered to help our customers, and the company, get through this unique and challenging time,” Aguirre added. “And from an innovation standpoint, we have several positive developments that will be released in the coming weeks that will make your Gogo inflight experience even better.”


SITA

The global air transport industry is grappling with one of the single biggest challenges it has ever faced: how to recover from a historic decline in air travel, caused by COVID-19. While travel restrictions are starting to ease, and the ATI is beginning to remobilize, no-one knows exactly what the next few months will bring. What is clear, however, is that the industry will need to be able to adapt to a new – and changeable – operating environment; one that requires operators to keep passengers feeling safe and reassured, keep flights to time, and meet sustainability targets – all on a tightened budget.

Digitalization is vital here. Airlines and other businesses are going to need the flexibility, adaptability and automation offered by digital transformation to ride out the pandemic’s fall-out, adjust their business models and succeed into the future. To help them do it, they’ll need the right mix of solutions and expertise on their side – digitalizing to adapt to the needs of the future.

Many airlines are facing restart with a scaled back and more scattered workforce. They are also weighing up a lot of big unknowns: which routes should be reopened and when, depending on country restrictions? How many passengers will return, and how quickly? Which aircraft should fly or be grounded? And what size flight and cabin crew will they need to serve them?

Airlines are facing all these questions, while knowing the rules could change from one day to the next. Digitalizing technologies and innovations enable enhanced air/ground connectivity, communications and operational efficacy, and pool the latest real-time information, to support informed and timely decision-making. These prime resources help airlines flex and adapt to changing needs. While ideally being fast and simple to deploy, and intuitive to use, digital tools can also streamline routine tasks through automation to minimize workload.

Such solutions are very much the remit of SITA FOR AIRCRAFT, SITA’s connected aircraft domain of expertise.
Digitalizing to work smarter and leaner is the key. SITA has developed a suite of connected applications and services, and technological capabilities that help airlines work in this more flexible, adaptive, automated and collaborative way. They help bring enhanced operational- and cost-effectiveness, while giving greater visibility over the ‘live’ nose-to-tail operation – whether that’s around situational weather events or restrictions, identifying the least cost-routing channels available for ACARS messaging, the status of passenger, cargo and aircraft health, or fueling requirements.

With the SITA crew applications, airlines can ensure passenger safety and satisfaction onboard, while alleviating paper-based processes to make flights more sustainable.
Their cabin connectivity solutions, meanwhile, give passengers the low-touch autonomy they desire, enabling them to use their own devices to surf, stream, and pay and verify, contact-free.

And, for all of SITA’s solutions and services, they strive to work closely with customers to develop flexible business models that can readily adapt to reflect needs as they change.
“We’re here to help you through.”

SITA FOR AIRCRAFT is proud to play a part in advancing the flexible, agile solutions that can support their customers through this challenging time. They are 100% dedicated to the industry and its success and are here to help it navigate the right path to recovery.

Find out more by exploring their website.


AIRBUS

Following an extensive two-year flight test program, Airbus  successfully concluded its Autonomous Taxi, Take-Off and Landing (ATTOL) project.In completing this project, Airbus has achieved autonomous taxiing, take-off and landing of a commercial aircraft through fully automatic vision-based flight tests using on-board image recognition technology – a world-first in aviation. In total, over 500 test flights were conducted. Approximately 450 of those flights were dedicated to gathering raw video data, to support and fine tune algorithms, while a series of six test flights, each one including five take-offs and landings per run, were used to test autonomous flight capabilities.

The ATTOL project was initiated by Airbus to explore how autonomous technologies, including the use of machine learning algorithms and automated tools for data labeling, processing and model generation, could help pilots focus less on aircraft operations and more on strategic decision-making and mission management. Airbus is now able to analyze the potential of these technologies for enhancing future aircraft operations, all the while improving aircraft safety, ensuring today’s unprecedented levels are maintained.

Airbus will continue research into the application of autonomous technologies alongside other innovations in areas such as materials, alternative propulsion systems and connectivity. By leveraging these opportunities, Airbus is opening up possibilities for creating new business models that will transform how aircraft are developed, manufactured, flown, powered and serviced.

The rapid development and demonstration of ATTOL’s capabilities was made possible due to a cross-divisional, cross-functional, global team comprising of Airbus engineering and technology teams, Airbus Defence and Space, Acubed (Project Wayfinder), Airbus China and ONERA under the leadership of Airbus UpNext.

Also From Airbus:

Airbus plans to further adapt to COVID-19 environment. Airbus announced plans to adapt its global workforce and resize its commercial aircraft activity in response to the COVID-19 crisis. This adaptation is expected to result in a reduction of around 15,000 positions no later than summer 2021. The information and consultation process with social partners has begun with a view to reaching agreements for implementation starting in autumn 2020.

The commercial aircraft business activity has dropped by close to 40% in recent months as the industry faces an unprecedented crisis. Commercial aircraft production rates have been adapted accordingly. Airbus is grateful for the government support that has enabled the Company to limit these necessary adaptation measures. However with air traffic not expected to recover to pre-COVID levels before 2023 and potentially as late as 2025, Airbus now needs to take additional measures to reflect the post COVID-19 industry outlook.

Following the in-depth analysis of customer demand that has taken place over recent months, Airbus anticipates the need to adapt its global workforce due to COVID-19 by approximately:

● 5,000 positions in France
● 5,100 positions in Germany
● 900 positions in Spain
● 1,700 positions in the UK
● 1,300 positions at Airbus’ other worldwide sites

These figures include the Airbus subsidiaries Stelia in France and Premium AEROTEC in Germany. However, they do not include approximately 900 positions stemming from a pre-COVID-19 identified need to restructure Premium AEROTEC in Germany, which will now be implemented within the frame of this global adaptation plan. The details of this COVID-19 adaptation plan need to be finalized with social partners.
While compulsory actions cannot be ruled out at this stage, Airbus will work with its social partners to limit the impact of this plan by relying on all available social measures, including voluntary departures, early retirement, and long term partial unemployment schemes where appropriate.

“Airbus is facing the gravest crisis this industry has ever experienced,” said Airbus CEO Guillaume Faury. “The measures we have taken so far have enabled us to absorb the initial shock of this global pandemic. Now, we must ensure that we can sustain our enterprise and emerge from the crisis as a healthy, global aerospace leader, adjusting to the overwhelming challenges of our customers. To confront that reality, we must now adopt more far-reaching measures. Our management team and our Board of Directors are fully committed to limiting the social impact of this adaptation. We thank our governmental partners as they help us preserve our expertise and know-how as much as possible and have played an important role in limiting the social impact of this crisis in our industry. The Airbus teams and their skills and competences will enable us to pursue our ambition to pioneer a sustainable future for aerospace.”


OTHER NEWS

Dublin | June 22, 2020– The “Passenger Air Transport Industry 2020-2030 – COVID-19 Impact and Recovery Assessment” report has been added to ResearchAndMarkets.com’s offering.

This report covers market characteristics, size and growth, segmentation, regional and country breakdowns, competitive landscape, market shares, trends and strategies for this market. It traces the market’s historic and forecast market growth by geography. It places the market within the context of the wider passenger air transport market, and compares it with other markets.

The global passenger air transport market is expected to decline from $641.8 billion in 2019 to $628.8 billion in 2020 at a compound annual growth rate (CAGR) of -2.1%. The decline is mainly due to economic slowdown across countries owing to the COVID-19 outbreak and the measures to contain it. The market is then expected to recover and grow at a CAGR of 8% from 2021 and reach $765.1 billion in 2023.

Asia-Pacific was the largest region in the global passenger air transport market, accounting for 30% of the market in 2019. North America was the second largest region accounting for 30% of the global passenger air transport market. Africa was the smallest region in the global passenger air transport market.

Mobile technology and applications are becoming a latest trend in passenger air transportation industry. Passengers are using mobile-enabled applications to book their tickets and manage their journey. Passengers want personalized information about their flight, their baggage and how to find their gate directly on their mobile device. Alaska Airlines, American Airlines, Delta Air Lines, Frontier Airlines, and Hawaiian Airlines are providing these mobile apps to book a flight ticket.

Report Scope

  • The market characteristics section of the report defines and explains the market.
  • The market size section gives the market size ($b) covering both the historic growth of the market, the impact of the Covid 19 virus and forecasting its recovery.
  • Market segmentations break down market into sub markets.
  • The regional and country breakdowns section gives an analysis of the market in each geography and the size of the market by geography and compares their historic and forecast growth. It covers the impact and recovery trajectory of Covid 19 for all regions, key developed countries and major emerging markets.
  • Competitive landscape gives a description of the competitive nature of the market, market shares, and a description of the leading companies. Key financial deals which have shaped the market in recent years are identified.
  • The trends and strategies section analyses the shape of the market as it emerges from the crisis and suggests how companies can grow as the market recovers.
  • The passenger air transport market section of the report gives context. It compares the passenger air transport market with other segments of the air transport market by size and growth, historic and forecast. It analyses GDP proportion, expenditure per capita, passenger air transport indicators comparison.

Key Topics Covered

1. Executive Summary

2. Report Structure

3. Passenger Air Transport Market Characteristics

3.1. Market Definition

3.2. Key Segmentations

4. Passenger Air Transport Market Product Analysis

4.1. Leading Products/Services

4.2. Key Features and Differentiators

4.3. Development Products

5. Passenger Air Transport Market Supply Chain

5.1. Supply Chain

5.2. Distribution

5.3. End Customers

6. Passenger Air Transport Market Customer Information

6.1. Customer Preferences

6.2. End Use Market Size and Growth

7. Passenger Air Transport Market Trends And Strategies

8. Passenger Air Transport Market Size And Growth

8.1. Market Size

8.2. Historic Market Growth, Value ($ Billion)

8.2.1. Drivers Of The Market

8.2.2. Restraints On The Market

8.3. Forecast Market Growth, Value ($ Billion)

8.3.1. Drivers Of The Market

8.3.2. Restraints On The Market

9. Passenger Air Transport Market Regional Analysis

9.1. Global Passenger Air Transport Market, 2019, By Region, Value ($ Billion)

9.2. Global Passenger Air Transport Market, 2015-2019, 2023F, 2025F, 2030F, Historic And Forecast, By Region

9.3. Global Passenger Air Transport Market, Growth And Market Share Comparison, By Region

10. Passenger Air Transport Market Segmentation

10.1. Global Passenger Air Transport Market, Segmentation By Type, Historic and Forecast, 2015-2019, 2023F, 2025F, 2030F, $ Billion

  • Domestic Air Passengers
  • International Air Passengers

10.2. Global Passenger Air Transport Market, Segmentation By Class, Historic and Forecast, 2015-2019, 2023F, 2025F, 2030F, $ Billion

  • Business Class
  • Economy Class

11. Passenger Air Transport Market Metrics

11.1. Passenger Air Transport Market Size, Percentage Of GDP, 2015-2023, Global

11.2. Per Capita Average Passenger Air Transport Market Expenditure, 2015-2023, Global

Companies Mentioned

  • American Airlines
  • Delta Airlines
  • UnitedContinental
  • Deutsche Lufthansa
  • Air France KLM

For more information about this report visit https://www.researchandmarkets.com/r/syslym

 

June 23, 2020–

Our global air transport industry is grappling with one of the single biggest challenges it has ever faced: how to recover from an historic decline in air travel, caused by COVID-19.

While we’re seeing travel restrictions starting to ease, and the ATI beginning to remobilize, no-one knows exactly what the next few months will bring.

What is clear, however, is that the industry will need to be able to adapt to a new – and changeable – operating environment; one that requires operators to keep passengers feeling safe and reassured, keep flights to time, and meet sustainability targets – all on a tightened budget.

Digitalization is vital here. Airlines and other businesses are going to need the flexibility, adaptability and automation offered by digital transformation to ride out the pandemic’s fall-out, adjust their business models and succeed into the future. To help them do it, they’ll need the right mix of solutions and expertise on their side.

Digitalizing to adapt to the needs of the future

Many airlines are facing restart with a scaled back and more scattered workforce. They are also weighing up a lot of big unknowns: which routes should be reopened and when, depending on country restrictions? How many passengers will return, and how quickly? Which aircraft should fly or be grounded? And what size flight and cabin crew will they need to serve them?

Airlines are facing all these questions, while knowing the rules could change from one day to the next.

Digitalizing technologies and innovations enable enhanced air/ground connectivity, communications and operational efficacy, and pool the latest real-time information, to support informed and timely decision-making. These prime resources help airlines flex and adapt to changing needs. While ideally being fast and simple to deploy, and intuitive to use, digital tools can also streamline routine tasks through automation to minimize workload.

Such solutions are very much the remit of SITA FOR AIRCRAFT, SITA’s connected aircraft domain of expertise.

Digitalizing to work smarter and leaner

We have developed a suite of connected applications and services, and technological capabilities that help airlines work in this more flexible, adaptive, automated and collaborative way.

They help bring enhanced operational- and cost-effectiveness, while giving greater visibility over the ‘live’ nose-to-tail operation – whether that’s around situational weather events or restrictions, identifying the least cost-routing channels available for ACARS messaging, the status of passenger, cargo and aircraft health, or fueling requirements.

With our crew applications, airlines can ensure passenger safety and satisfaction onboard, while alleviating paper-based processes to make flights more sustainable.

Our cabin connectivity solutions, meanwhile, give passengers the low-touch autonomy they desire, enabling them to use their own devices to surf, stream, and pay and verify, contact-free.

And, for all our solutions and services, we strive to work closely with customers to develop flexible business models that can readily adapt to reflect needs as they change.

We’re here to help you through

In my new role heading SITA FOR AIRCRAFT, I am proud to play a part in advancing the flexible, agile solutions that can support our customers through this challenging time. We’re 100% dedicated to this industry and its success – and are here to help it navigate the right path to recovery.

Find out more by exploring sita.aero/aircraft

Honeywell working to protect people returning to work and public places with individual personal protective equipment kits

Phoenix, AZ | June 2, 2020–Honeywell is helping provide a safer and healthier travel experience with new Honeywell Safety Packs designed to better protect airline passengers and crew while flying.

The kits — which come in sealed packets containing gloves, masks and hand wipes — are a part of Honeywell’s comprehensive efforts to help protect people as they return to public spaces and workplaces. These efforts include new technology to detect elevated body temperature, monitor air quality in buildings and determine if people in large groups are social distancing properly. Beyond use for air travel, the Honeywell Safety Packs will also be available for use in office buildings, warehouses, retail stores, sports arenas, schools and other public spaces.

“We strive to provide airlines with products and systems that help keep their passengers and employees safer,” said Mike Madsen, president and CEO, Honeywell Aerospace. “That goal of making safety simple and accessible remains the same, but the solution has evolved. Through collaboration with other Honeywell businesses, we acted quickly to develop a brand-new solution for aircraft hygiene.”

A recent informal survey conducted by Honeywell found that frequent flyers desire personal protective equipment, and that an array of solutions will help give them peace of mind to travel again.

“Health and safety are at the core of everything we do at Honeywell, and we’re bringing new solutions to the market that build on our long legacy of safety innovation,” said Will Lange, president of Honeywell’s personal protective equipment business. “From body temperature monitoring systems powered by artificial intelligence to N95 face masks, we’re helping improve safety for workers and workplaces.”

Honeywell offers two versions of the safety packs for air travel: one for passengers and one for the flight crew. The passenger version is designed for single use and contains latex-free gloves, a safety mask and hand wipes. Kits for crews and airline employees are available for single or longer-term use, with an option for a reusable version that has a mask with interchangeable filters, reusable safety glasses and hand wipes.

Both versions of the safety kits come in resealable bags for easy transportation and are available for airline, cargo and business aviation aircraft. The kits’ packaging can also be branded by the airline.

Honeywell Safety Packs are part of a strategic initiative among Honeywell’s businesses to come together to quickly develop solutions that are helping important sectors of the global economy recover. In addition

to this product family, Honeywell is also developing a full line of products to help airlines manage new protocols for cleaning, screening and social distancing.

From the check-in line to the cockpit, Honeywell’s experience in air travel, spanning components, airport management systems, personal protective equipment and building management technologies, makes it uniquely positioned to craft innovative solutions for the individual needs and challenges of airlines, airports and aircraft operators worldwide. In addition to air travel, across Honeywell, the company offers similar products for buildings, workers, manufacturing, entertainment, health care and supply-chain solutions.

  • March quarter 2020 GAAP pre-tax loss of $607 million or $0.84 per share
  • March quarter 2020 adjusted pre-tax loss of $422 million or $0.51 per share
  • Delta ended the March quarter 2020 with $6.0 billion in unrestricted liquidity

Atlanta, GA | April 22, 2020– Delta Air Lines reported financial results for the March quarter 2020 and outlined its response to the COVID-19 global pandemic.

“These are truly unprecedented times for all of us, including the airline industry. Government travel restrictions and stay-at-home orders have been effective in slowing the spread of the virus, but have also severely impacted near-term demand for air travel, reducing our expected June quarter revenues by 90 percent, compared to a year ago,” said Ed Bastian, Delta’s chief executive officer. “Delta is taking decisive action to prioritize the safety of our employees and customers while protecting our business and bolstering liquidity. I am especially proud of the incredible work the Delta people are doing to keep our nation’s airways open, playing an active role in the fight against the virus.”

Bastian continued, “I would like to thank the President, members of Congress, and the Administration for their bipartisan support of the Payroll Support Program under the CARES Act, which recognizes the important role the airlines play in the U.S. economy. The Payroll Support Program will help safeguard Delta jobs while positioning our nation for recovery.”

Response to COVID-19

Network and Customer Experience

To address the challenges of COVID-19, the company is taking the following actions:

  • Making significant capacity reductions for the June quarter versus prior year with total system capacity down 85 percent, including domestic down by 80 and international capacity down by 90 percent
  • Adopting new cleaning procedures on all flights, including fogging on all aircraft overnight and sanitizing high-touch areas like tray tables, entertainment screens, armrests and seat-back pockets before boarding
  • Taking steps to help employees and customers practice social distancing, including blocking middle seats, pausing automatic upgrades, modifying our boarding process and moving to essential meal service only
  • Extending 2020 Medallion Status an additional year, rolling Medallion Qualification Miles into 2021, and extending Delta SkyMiles American Express Card benefits and Delta Sky Club memberships
  • Giving customers flexibility to plan, re-book and travel including extending expiration on travel credits to two years

Community Response

Delta and its 90,000 employees are taking an active role in our nation’s fight against the virus by:

  • Offering free flights to medical professionals fighting COVID-19 in the hardest-hit areas of the U.S.
  • Chartering international cargo-only flights to provide healthcare workers with materials needed to do their jobs
  • Operating charters and specially approved scheduled flights to nations around the world to repatriate more than 28,000 people displaced by the virus to the U.S.
  • Manufacturing tens of thousands of face shields and masks at Delta Flight Products to aid healthcare workers
  • Partnering with the U.S. military to develop and manufacture secure, sterile transport pods at Delta TechOps, which will safely transit infected personnel to hospitals and medical centers
  • Donating over 200,000 pounds of food to hospitals, first responders, community food banks, and organizations including Feeding America

Expense Management

The company expects June quarter total expenses to decline by approximately 50%, or $5 billion, over prior year due to reduced capacity, lower fuel and cost initiatives, including:

  • Parking more than 650 aircraft
  • Consolidating airport facilities, with temporary concourse and Delta Sky Club closures
  • Instituting a company-wide hiring freeze and offering voluntary leave options with 37,000 employees taking short-term unpaid leave
  • Reducing salary expense through pay reductions for executive management and reduced work schedules across organization

Balance Sheet, Cash and Liquidity

Delta’s top financial priority remains preserving cash and enhancing liquidity. Accordingly, the company has taken the following actions:

  • Raised $5.4 billion of capital since early March, including securing a $3.0 billion secured term loan, closing $1.2 billion in aircraft sale leasebacks, issuing $1.1 billion in AA, A and B tranches of our 2020-1 Enhanced Equipment Trust Certificates (EETC), and funding $150 million in private aircraft mortgages to enhance liquidity and satisfy maturing obligations
  • Drew down $3 billion under existing revolving credit facilities
  • Reduced planned capital expenditures by more than $3 billion, including working with original equipment manufacturers to optimize the timing of our future aircraft deliveries and deferring aircraft mods, IT initiatives, and ground equipment refreshment
  • Extended payment terms with airports, vendors and lessors
  • Suspended shareholder returns, including the Company’s stock repurchase program and future dividend payments

CARES Act Relief

The company expects to receive relief from the Coronavirus Aid, Relief and Economic Security (CARES) Act in the following forms:

  • Payroll support of $5.4 billion, comprised of $3.8 billion of direct relief and a $1.6 billion low-interest, unsecured 10-year loan. Delta has already received $2.7 billion of these funds and expects to receive the remainder over the next three months. As consideration, the U.S. Treasury will receive warrants to purchase over 6.5 million shares of Delta common stock at a strike price of $24.39 with a 5-year maturity
  • Eligibility for $4.6 billion in secured loans, if the company chooses to apply and accept funds

“With the significant impact of COVID-19 on Delta’s revenue, we were burning $100 million per day at the end of March. Through our decisive actions, we expect that cash burn to moderate to approximately $50 million per day by the end of the June quarter,” said Paul Jacobson, Delta’s chief financial officer. “The decade of work we put into the balance sheet to lower debt and build unencumbered assets has been critical to our success in raising capital and we expect to end the June quarter with approximately $10 billion in liquidity.”

March Quarter Results

Adjusted results primarily exclude the impact of mark-to-market (“MTM”) adjustments.

  • Adjusted pre-tax loss of $422 million or $0.51 per share
  • Total revenue of $8.6 billion, down 18 percent versus prior year, with total unit revenue down 13 percent
  • Total expense decreased $450 million driven by lower fuel, partially offset by higher revenue- and capacity-related expenses, with non-fuel unit cost (CASM-Ex) up 9 percent compared to prior year
  • Fuel expense decreased 19 percent relative to March quarter 2019. Delta’s fuel price for the March quarter of $1.81 per gallon included a $29 million benefit from the refinery
  • At the end of the March quarter, the company had $6.0 billion in unrestricted liquidity

Forward Looking Statements

Statements in this press release that are not historical facts, including statements regarding our estimates, expectations, beliefs, intentions, projections or strategies for the future, may be “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. All forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from the estimates, expectations, beliefs, intentions, projections and strategies reflected in or suggested by the forward-looking statements.  These risks and uncertainties include, but are not limited to, the material adverse effect that the COVID-19 pandemic is having on our business; the impact of incurring significant debt in response to the pandemic; possible effects of accidents involving our aircraft; breaches or security lapses in our information technology systems; disruptions in our information technology infrastructure; our dependence on technology in our operations; the performance of our significant investments in airlines in other parts of the world; the restrictions that financial covenants in our financing agreements could have on our financial and business operations; labor issues; the effects of weather, natural disasters and seasonality on our business; the effects of an extended disruption in services provided by third parties; the cost of aircraft fuel; the availability of aircraft fuel; failure or inability of insurance to cover a significant liability at Monroe’s Trainer refinery; the impact of environmental regulation on the Trainer refinery, including costs related to renewable fuel standard regulations; our ability to retain senior management and key employees; damage to our reputation and brand if we are exposed to significant adverse publicity; the effects of terrorist attacks or geopolitical conflict; competitive conditions in the airline industry; interruptions or disruptions in service at major airports at which we operate; the effects of extensive government regulation on our business; the impact of environmental regulation on our business; and the sensitivity of the airline industry to prolonged periods of stagnant or weak economic conditions; uncertainty in economic conditions and regulatory environment in the United Kingdom related to the exit of the United Kingdom from the European Union.

Additional information concerning risks and uncertainties that could cause differences between actual results and forward-looking statements is contained in our Securities and Exchange Commission filings, including our Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2019 and our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2020. Caution should be taken not to place undue reliance on our forward-looking statements, which represent our views only as of April 22, 2020, and which we have no current intention to update.

 

There may be a glimmer of light at the end of the tunnel as there are signs that the aviation industry has seen the bottom of the crisis and started the slow recovery. Readers will see a report from IATA reflecting this uptick. We also note in Other News an article from the New York Times that talks about when epidemiologists will be willing to undertake 18 everyday activities, including flying. – definitely worth the read!


IATA

The International Air Transport Association (IATA) announced that demand for air services is beginning to recover after hitting bottom in April. Passenger demand in April (measured in revenue passenger kilometers or RPKs), plunged 94.3% compared to April 2019, as the COVID-19-related travel restrictions virtually shut down domestic and international air travel. This is a rate of decline never seen in the history of IATA’s traffic series, which dates back to 1990. More recently, figures show that daily flight totals rose 30% between the low point on 21 April and 27 May. This is primarily in domestic operations and off of a very low base (5.7% of 2019 demand). While this uptick is not significant to the global dimension of the air transport industry, it does suggest that the industry has seen the bottom of the crisis, provided there is no recurrence. In addition, it is the very first signal of aviation beginning the likely long process of re-establishing connectivity.

“April was a disaster for aviation as air travel almost entirely stopped. But April may also represent the nadir of the crisis. Flight numbers are increasing. Countries are beginning to lift mobility restrictions. And business confidence is showing improvement in key markets such as China, Germany, and the US. These are positive signs as we start to rebuild the industry from a stand-still. The initial green shoots will take time—possibly years—to mature,” said Alexandre de Juniac, IATA’s Director General and CEO.

IATA calculated that by the first week of April, governments in 75% of the markets tracked by IATA completely banned entry, while an additional 19% had limited travel restrictions or compulsory quarantine requirements for international arrivals. The initial flight increases have been concentrated in domestic markets. Data from late May show that flight levels in Republic of Korea, China and Vietnam have risen to a point now just 22-28% lower than a year earlier . Searches for air travel on Google also were up 25% by the end of May compared to the April low, although that’s a rise from a very low base and still 60% lower than at the start of the year.
“For aviation, April was our cruelest month. Governments had to take drastic action to slow the pandemic. But that has come with the economic cost of a traumatic global recession. Airlines will be key to the economic recovery. It is vital that the aviation industry is ready with bio-safety measures that passengers and air transport workers have confidence in. That’s why the speedy implementation of the International Civil Aviation Organization’s (ICAO) global guidelines for safely re-starting aviation is the top priority,” said de Juniac.


SITA

SITA has made several changes to its executive management team responsible for SITA’s product portfolios. These appointments come at crucial juncture as the air transport industry begins the difficult task of restarting operations after a lengthy shutdown due to the COVID-19 crisis.

David Lavorel, previously CEO of SITA FOR AIRCRAFT, has been appointed to head SITA AT AIRPORTS AND BORDERS, SITA’s airport and border solution portfolio. A key focus in 2020 will be to support SITA’s airline and airport customers to implement smart solutions to accommodate new passenger processes required to ensure the health and safety of travelers and employees. SITA is well placed to support the re-engineering of the passenger journey and to manage rapidly changing requirements at the border with the delivery of new solutions such as SITA’s cloud-based, open API platform, SITA Flex.

David will replace Matthys Serfontein, who will be retiring from SITA after 13 years. Sébastien Fabre, previously VP Airline & Airports Portfolio, will replace David to head SITA FOR AIRCRAFT. As airlines globally begin to resume flights, they will increasingly turn to SITA FOR AIRCRAFT to deliver new operational efficiencies such as faster turnarounds while extracting the full benefit of modern connected aircraft.

Barbara Dalibard, CEO, SITA, said: “Ensuring strong leadership of our key business areas is especially important as we look to support the industry as it begins to return to the skies. After more than a decade proving themselves highly capable of driving innovation while ensuring continued customer satisfaction, Sébastien and David are perfectly placed to steer the business through the new challenges and deliver solutions that help support the industry’s recovery.”
The new appointments came into effect from June 1, 2020.


Airbus

Airbus’ 2020 gross orders by May 31st totaled 365 aircraft and net orders stood at 299 aircraft. The Company registered zero cancellations in May and no new orders. During the month, 24 deliveries were achieved from the A220, A320 and A350 XWB aircraft families. Business in May brings the overall total orders logged by Airbus since its creation to 20,407 commercial aircraft, which includes 642 A220s, 15,572 A320 Family aircraft, 1,819 A330s, 930 A350 XWBs, and 251 A380s. In May, Airbus delivered two A220-300 to Air Canada and 18 A320 Family aircraft including the first A320neo to Wizz Air. For Airbus widebody aircraft, four A350 XWBs were provided in both A350-900 and A350-1000 configurations. Airbus’ backlog of aircraft remaining to be delivered as of 31st May stood at 7,621, comprising 527 A220s, 6,199 A320 Family aircraft (including 6,139 A320neo Family), 322 A330s (including 287 A330neo family), 564 A350 XWBs and nine A380s.

More News from the company: Airbus named Anand Stanley as President Airbus Asia-Pacific, effective 1 July 2020. Based in Singapore, Anand Stanley will lead the strategy and future positioning of Airbus and its divisions across the region. In this role he will have responsibility for commercial aircraft sales and customer affairs, group-wide government affairs, industrial and joint venture partnerships, as well as the local operations at Airbus sites across the region. Anand Stanley reports to Christian Scherer, Airbus Chief Commercial Officer and Head of International, and will work closely with the Heads of Region for the Airbus Helicopters and Defence and Space divisions who are co-located at the company’s Asia-Pacific headquarters in Singapore.

Anand Stanley joined Airbus in 2018 as President & Managing Director of Airbus India, where he has overseen the Airbus business development and advanced the company’s position with key stakeholders, including customers, government agencies and industry partners. Prior to joining Airbus, Anand Stanley held senior positions in the civil aerospace, defence and helicopter markets, as well as in strategic management and M&A planning, having worked with the Linde Group, UTC, Pratt & Whitney, Lockheed Martin and Sikorsky. Over his career he has worked extensively internationally, with more than two decades of involvement in Asia and the Pacific region.

“Anand has brought a wealth of experience to Airbus and managed the company’s operations in India with very positive results,” said Christian Scherer. “His proven track record makes him the right choice to lead Airbus in the key Asia-Pacific market. We know that we can count on Anand to focus on supporting our customers in these most challenging times, while developing further our position as the leading partner for the aerospace sector in the region.”

Anand Stanley has an MBA from the University of Virginia-Darden in the US, a Bachelors of Engineering from Andhra University, as well as a postgraduate degree from IMI-Delhi.Anand Stanley succeeds Patrick de Castelbajac, who is leaving Airbus.

“On behalf of all of us at Airbus, I would like to thank my friend Patrick for his contribution and strong engagement during his years with Airbus and wish him all the very best in his personal and professional future,” added Christian Scherer.


Boeing

The Boeing Order Book at the end of April placed some 4,633 Boeing 737 MAX aircraft on order, with some 387 delivered to date.


Other News

Global passenger traffic declined by -55.9% year-over-year in March

Montreal | June 5, 2020–Airports Council International (ACI) World reports that global passenger traffic declined by -55.9% year-over-year by the end of March as a result of the unfolding COVID-19 pandemic. This followed a drop of -10.7% in February.

Global passenger traffic experienced an overall drop of -22.7% for the first quarter of 2020. The 12-month rolling average for the global industry entered negative territory, recorded at -3.1% by month’s end.

The effect on the freight industry were not yet as significant in March, with global volumes declining by -14.4% compared to March 2019 and resulting in a -6.9% drop for the first quarter of 2020. The global 12-month rolling average continued to be negative at -3.8% by the end of the month.

ACI collects and analyses data from a significant sample of airports that provide regular reports on monthly passenger and air freight statistics, forming part of the world’s most comprehensive source for airport data.

“The second week of March was a turning point for the reaction to the COVID-19 pandemic as national governments implemented strict confinement measures which brought the industry to a virtual halt,” ACI World Director General Angela Gittens said.

“While the crisis’s impact on passenger traffic was mostly in the Asia-Pacific in February, March figures showed its spread across the world, affecting both domestic and international markets.

“Global freight volumes have not been affected to the same extent as passenger traffic. The need to move time-sensitive shipments and vital supplies, including urgent medical supplies, and goods to support the global economy, helped the freight industry avoid the level of declines in demand experienced by the passenger traffic segment.”

Passenger traffic

Global international and domestic markets posted unprecedented declines falling by -62.4% and -50.6% respectively. The 12-month rolling average for the international segment was recorded at -2.6% and the domestic segment at -3.4%.

Among major regional markets, Asia-Pacific continues to be the most impacted with declines of -77.6% in March for its international market and -54.4% to its domestic market. The Middle East recorded a loss of -58.6%.

North America and Europe were also badly affected by the ongoing crisis losing more than half of their international traffic in March (-50.4% and 60.1% respectively). Those significant losses brought the 12-month rolling averages to -7.7% for Asia-Pacific, -1.1% for North America and -1.8% for Europe.

Africa’s gains in the first two months of 2020 were erased by significant losses in March (-46.0%) bringing its total passengers’ figures for the first quarter to -11.1%. Latin America-Caribbean’s good performance in the beginning of the year was offset by a loss of -41.1% in March compared to the prior year.

Freight volumes

The international freight market moved significantly into negative territory in March with a loss of -15.7% compared to the slight gain of +0.4% in February. For the third consecutive month, domestic freight continued its downward trend reaching -11.1% for the month down from -2.4% in February and -4.4% in January. As a result, total freight figures for March as well as the 12-month rolling average posted significant declines at -14.4% and -3.8% respectively.

The impact of the COVID-19 pandemic has started to appear in all major freight markets. The global double-digit decline posted in March was mostly driven by Asia-Pacific (-17.2%) and Europe (-16.4%). North America, on the other hand, recorded a less significant drop of -6.6% in total freight volumes mitigated by a relatively modest decrease in its domestic traffic of -1.6%. North America’s international freight market, however, showed signs of weakness in falling by -13.8% for the month of March.

The Middle East (-17.9%), Africa (-20.8%) and Latin America-Caribbean (-23.4%) posted declines in line with major markets for March 2020.

Around the globe many governments have started the slow and cautious steps toward opening their economies. In the aviation sector, we have seen a slight up tick in the number of individuals traveling and have heard and/or seen the various reports of some flights experiencing 90% capacity, causing angst in many of the travelers (and probably the flight crew as well). There are several links in today’s Noted Elsewhere section of IFExpress addressing this very issue. We also are seeing the airlines, their employees, and airports grapple with how to safely resume operations. This includes spooling up for more self-check-in kiosks, temperature tests by TSA, increased sanitizing and disinfecting efforts both in the airport and on the plane, social distancing at the gate and while boarding, as well as, the requirement for passengers to wear masks during boarding and on the flight. Add to the scenario the discussion of requiring immunity passes and at airport testing for COVID-19 and all of the sudden we are easily facing a 4 hour process from check-in to boarding the airplane – even for a short domestic flight. What is crystal clear is that for the foreseeable future the journey is going to be laden with pitfalls, filled with stress and be as far from our dream of the seamless travel experience as you can get.

The challenge we face is how to address these issues. The quicker we can build traveler confidence in the airport/travel process the faster our industry will rebound – that’s a no brainer. This will take not only familiarity with the new procedures and faith that they work, but from a personal perspective, they need to be somewhat standardized. Over the past nineteen years, nothing has irritated me more, and made traveling more stressful, than the different TSA requirements from country to country – and this is coming from a person who has traveled a lot! In other words, there needs to be collaboration and agreement on the various processes and requirements on a global scale in order to build back confidence.

The other items that will drive recovery in our industry are agility and innovation. The companies, whether they are airlines, IFEC suppliers, OEMS or airports; that are forward thinking and grasp this opportunity to not only embrace new technologies but implement them will be those that not only survive but maybe thrive. AI, block chain and big data have long been technology buzz words and topics at numerous industry conferences but now is the time to leverage those technologies in order to operate more efficiently and make every decision and dollar count.


Reader Opinion

Recently, several aviation aficionados had a back-and-forth dialog about the state of the industry, particularly the challenges Boeing is, and has been, facing. IFExpress was given permission to publish their opinions as long as the correspondents remained anonymous. The following is a portion of that communication.

Initial Comments:

“I worked at Boeing for over 20+ years, mostly during the 70’s and 80’s. At that time, the company was run by engineers and pro-technology folks. There was a dynamic shift in corporate philosophy when Boeing bought McDonnell Douglas.

Matt Stoller recently wrote: “Similarly, Boeing once made great planes, now it has great connections and big bailouts, an engineering powerhouse turned into a financial engineering powerhouse.” Further, in 2019 he wrote this article that really comes to point today.

Today, Boeing is run in Chicago & New York by ‘money managers’, the tech equity has vanished – and unless the tekkies take over, it just might be something else in the future!”

Response:

“I agree with your sentiment as well as Matt Stoller’s detailed coverage.

I think there is another perspective which typically is not found in aviation trade publications or general business journals like the WSJ.  And the subject and focus of that perspective is “character” and by that I mean good character, truth, integrity, and honesty driven from the top down to the shop floor.  Once the accountants and the money managers took power, the technical concerns were secondary.  Technical issues were dismissed and, if not dismissed entirely, there was a cost number put on the issue and they called it a “risk factor”.

Remember the Pinto?  After a couple of Pintos crashed in fiery and deadly accidents, the plaintiff’s lawyers, through discovery of Ford’s internal memos, found that the Pinto fuel tanks were subject to explosions upon impact.  Ford knew this.  The Ford design and test engineers raised their concerns internally.  The accountants, the lawyers, and the actuaries ran the calculations comparing the cost of fuel tank design fixes versus a payout in a lawsuit.  The design fix lost because it was calculated to be cheaper to pay the judgement or settlement.  I saw a photo of a young man who survived his Pinto rear-ender and his face looked like a mud slide of flesh.  Yes, he won a few million dollars from Ford but his face still looked like a mud slide of flesh.  I’ll never forget his photo.

The decisions that Boeing made on the MAX-8 design showed total dedication to the cost-benefit calculation rather than doing the design safely and properly and not one concern for 346 dead airline passengers.  Shame!

This attitude bleeds over to other design projects as well.  I know for a fact that the 787 was managed in the same way.  Thank God there have been no crashes (that I know of) but I know design economies were forced on engineers for the forward landing gear as well as (some) cabin systems.  How do I know?  Because I was in the meetings.

This is where the obsession with quarterly earnings growth leads to trouble and Boeing plays the game to meet or beat the earnings target each time and not care so much for the quality or safety of the product.  With respect to the Max-8 debacle, I hate to say it, but I see very little indication that Boeing has learned a lesson from this sorry episode.

Boeing needs a visionary leader who drives the principle of “Always Do the Right Thing” and not cut corners and mislead the customer (and traveling public).  Do this and the stock market will respond favorably.”


Boeing

On May 14, 2020 Boeing appointed Mike Delaney to lead the company’s Confident Travel Initiative, effective immediately. Working across the industry, Delaney’s team will work to develop new solutions to help minimize air travel health risks amid the COVID-19 pandemic and drive awareness of health safeguards already in place. Delaney brings 31 years of Boeing experience to the role, including previous executive leadership positions in airplane development and engineering, and currently serves as vice president of Digital Transformation at Boeing Commercial Airplanes. “As air travel slowly begins to resume and restrictions ease around the globe, health and safety remain our top priorities for our teams who design, build and service the airplanes and all those who fly on them,” said Boeing President and CEO David Calhoun. “Mike’s deep technical expertise, leadership skills, industry knowledge and great passion for our customers make him uniquely qualified to lead this effort.”

The Confident Travel Initiative team will work with airlines, global regulators, industry stakeholders, flying passengers, infectious disease experts and behavioral specialists to establish industry-recognized safety recommendations. The team is also advising operators on existing, approved disinfectants that are compatible with the airplane flight decks and cabins and testing other sanitizers. “Our commitment to ensuring the health of airline passengers and crews is unwavering,” said Delaney. “We’re working with partners to enhance aircraft cleanliness procedures and identify other areas to further reduce the risk of airborne illness transmission.”

Boeing’s effort will build on the industry’s enhanced safety approaches – including enhanced cleaning, temperature checks and the use of face coverings – and promote the proven systems already in place to help maintain cabin cleanliness. One such system is the air filtration system present on all Boeing airplanes. The air filtration system incorporates High Efficiency Particulate Air (HEPA) filters similar to those used in hospitals and industrial clean rooms. HEPA filters are 99.9+% effective at removing particulates such as viruses, bacteria and fungi before air is recirculated back to the cabin. Boeing continues to research and evaluate new technologies to enhance safety, including ultraviolet light disinfecting systems and antimicrobial coatings for high-touch surfaces. The company is working with academics, health experts and learning institutions worldwide to field studies and facilitate research on reducing the potential of disease transmission on airplanes. “Air travel is coming back,” said Delaney. “As that happens, we want passengers and crews to board Boeing airplanes without hesitation.”


Museum of Flight Pathfinder Award

Congratulations Bob Bogash! He has just won the latest Seattle Museum of Flight Pathfinder Award, and while many readers have not met or even heard of Bob, we wanted to tell you a little about him as he has worked with us, he also contributed information, pictures and aviation news for all our readers in IFExpress – and yes, he lives and breathes flying!

First the award: “The Museum of Flight’s Annual Pathfinder Awards honors individuals with ties to the Pacific Northwest who have made significant contributions to the development of the aerospace industry. Pathfinder Award recipients are selected by The Museum of Flight, the Pacific Northwest Section of the American Institute of Aeronautics and Astronautics and representatives of other aviation and aerospace organizations and companies throughout the Northwest.”

Here is Bob’s website and if you like aviation history, this is for you.Bob’s efforts in bringing older planes and aviation history to the museum may be hard to beat because aviation is his life, even while retired.

Why Bob Won: “Bob and others set a goal to bring the B-52 from Paine Field to The Museum of flight. In the process the B-52 was disassembled and trucked to the museum. The wings, rudder, elevator, vertical and horizontal stabilizers were removed. The whole plane was cleaned and repainted. It was quite a sight being trucked into its present site. Bob had a major role in seeing this happen. Bob’s actions to bring the B-52 to be the centerpiece for the Welcome Home Vietnam Veteran’s Park was 50 years late, but it brings a lump to my throat when I go by it and realize we were finally thanked for our service. For Mr. Bogash’s action in helping to bring the B-52 as a centerpiece for the Welcome Home Vietnam Veteran’s Park and giving us a special place to honor men like Marvin Shields, he will always hold a special place in my heart. I strongly recommend Mr. Bob Bogash for a Pathfinder Award. (This was a recommendation by a museum docent.)

Noted Bob; “As I’ve mentioned before, recognition by one’s peers is far more important to me than a plaque on the wall. And for that, I thank you sincerely. You are the folks I admire, and so your support is all the more humbling. It’s now 55 years since I first became involved with the hatchling Museum Of Flight and became increasingly devoted to expanding its collection with some great and deserving historic aircraft. I take great pride in walking around the campus and seeing so many of the fabulous airplanes I worked so hard to acquire over so many years — and recalling all the travails involved in bringing them to their present state of glory – and to have flown three on their final flights!” Bob went on: “Maybe, these airplanes will be my contribution to that wondrous world of aviation that I love so much and which has wonderfully loved me back.”
Congratulations Bob!


Other News

Commerce subcommittee to hold hearing tomorrow on role of aviation in mitigating the spread of COVID-19

Washington DC | March 3, 2020–  Today, U.S. Senator Maria Cantwell (D-WA), Ranking Member of the Senate Committee on Commerce, Science, and Transportation, sent letters to major airlines and airports asking for their plans of action in response to the rapidly spreading coronavirus (or SARS-CoV-2, abbreviated as COVID-19) and its effects on commercial aviation and the traveling public. To date, there have been nine coronavirus deaths in Cantwell’s home state of Washington.

The letters come one day before the committee’s Subcommittee on Aviation and Space will hold a hearing on the role of the aviation industry in containing the spread of COVID-19.

“Since COVID-19 was first identified in Wuhan, China late last year, the virus has spread to a number of countries throughout the world, including the United States, by air travel,” Senator Cantwell wrote to major airlines. “This spread has raised understandable concerns by public health officials and the traveling public about measures that can be taken to prevent the further spread of COVID-19 through air travel.”

Senator Cantwell also wrote, “…we want to work with U.S. air carriers to fully understand and mitigate risk to air carrier personnel and the traveling public.” 

In her letters, Cantwell requested specific information regarding pandemic response plans, aircraft and airport cleaning policies, existing protocol for notifying passengers when any serious communicable disease is detected, and flight cancellation policies when a passenger suspects that they have a serious communicable disease.

Senator Cantwell questioned the airlines and airports on the impact to consumers, asking them to detail their policies “for notifying other passengers on a flight or within a terminal where COVID-19 or other serious communicable disease is detected in a person transiting the facility.” 

The full text of the letters can be found HERE and HERE.

Today’s image is of three Boeing Dreamlifters that were carrying eye goggles and face shields from China to the United States.

Since the last issue of IFExpress our industry is continuing to try to find a tenuous path forward. Many airlines are converting passenger cabins into cargo friendly environments (see the story below from Carlisle IT) in an effort to get their assets back flying. We are also seeing how the airlines are moving forward in regards to passenger transport: the requirement for wearing face masks onboard, loading from the tail-forward, etc. As the weeks unfold, we will begin to see what the new ‘normal’ may start to look like. IFExpress is leading off with an feature from Laurent Safar, CEO of Adaptive Channel (an IFE and digital press CSP) regarding what a post-COVID-19 world may mean for inflight magazines.


The Future of Inflight Magazines in a Post-Coronavirus World

By Laurent Safar, CEO of Adaptive Channel

2020 has not been – and will, most likely, not be – the year that any of us expected. Of course, I’m referring to the COVID-19 pandemic that has effectively shut down all aspects of the travel industry, with the aviation industry being particularly hard hit.

Although the CARES Act in the US (and other international governmental aid packages) offers airlines a lifeline in these financially-challenging times, no airline will come out of this unaffected – but some will be facing a much better financial outlook, post-Coronavirus, than others.

What are the factors that will decide which airlines are most successful, post-virus?

This can be answered in one word: innovation.

Now is the time for airlines to establish their post-Coronavirus operational strategy so they will be ready when the demand returns. Airlines must dig deep and truly think outside-of-the-box when it comes to how they will fulfill passengers’ needs, while cutting costs and boosting revenue.

New Priorities

The current crisis will accelerate all digital transformations that are already underway. Like the travel industry, COVID-19 has caused significant changes to the retail industry; specifically, the need for online shopping as a replacement to brick-and-mortar stores, both because of consumers’ increased vigilance about potential contagions and government shut-down of non-essential businesses.

Although it’s impossible for us to travel digitally (until Captain Kirk makes that possible!), the aviation industry can learn quite a bit from the way the switch to digital happened, almost overnight, in the retail industry.

As in the retail industry, post-Coronavirus travelers will expect a very different travel/inflight experience. Health and safety will be front-of-mind for passengers and, they will be looking to airlines to implement strategies to protect them from potential contagions that they may encounter while traveling; as such, inflight amenities and services will need to be considered and updated to address passengers’ health-related concerns, post-Coronavirus.

It’s common knowledge that an airline cabin can contain many different contagions. While most passengers assume the bathroom and seats would have the most germs, the truth shows that many surprising places – like the seat pocket, seatbelt, tray table and fan nozzle – actually have a great deal more bacteria, perhaps because the obviously dirtier places are cleaned/sanitized regularly by crew.

A Canadian study showed that “Seat pockets are extremely dirty, with a high aerobic count, mold, coliforms, and E.coli found on various samples.”

If that’s not enough, a study by Auburn University, showed that “MRSA germs could survive for up to 7 days on seat pocket cloth.” As well, “cold and influenza viruses can survive for hours on fabric and tissues, and even longer (up to 48 hours) on nonporous surfaces like plastic and metal,” making the seat pocket – and the glossy inflight magazine that comes out of it, a potential health liability.

So how can airlines provide for their germ-conscious passengers in a post-Coronavirus world?

First, it’s important to put yourself in your germ-conscious passengers’ shoes; you’ll quickly see that the airplane and seats could be perceived, by passengers, as a possible cesspool of germs – and your airline must act today to ensure that you’re ready to greet these passengers – with their new needs and wants – when the industry picks up again.

Today’s passengers will want some pretty big changes: of course, more regular disinfection must be a priority post-virus – including the seat, seatbelt, tray table and seatback pocket – even during short turnarounds. Another very important way to significantly decrease passengers’ exposure to contagions, is to eliminate hard copy inflight magazines and, instead, share the same content via a digital magazine. The switch from hard-copy newspapers to digital newspapers, readable on the same device as digital magazines, is another way to offer passengers the press content that they want, both inflight and in the lounge, from the safety of their own device (via the airline’s mobile app or a web portal in lounges).

A recent Future Travel Experience article agreed: “ – passengers may be more wary of touching inflight entertainment (IFE) screens and may turn to their own devices en masse. There could be an opportunity here for airlines, or more specifically airline apps. Airlines may have more success in convincing passengers to use their apps if it adds value at every touchpoint – from checking in and navigating through the terminal, to controlling IFE and even interacting with cabin crew – creating a real opportunity for them to promote relevant ancillary services through their mobile apps to an almost captive audience.”

If you’re still not convinced about the value of digital press content in a post-Coronavirus world, here are some other key benefits to this innovative strategy:

BOOST ANCILLARY REVENUE

Digital press content gives airlines incredible insight into passengers’ interests, needs and wants. The content-rich nature of newspapers and magazines gives airlines the opportunity to mine data that will improve their ability to deliver targeted, compelling ads more effectively to the right passenger, at the right time – drastically improving an airline’s travel retail conversion rates, by leveraging up-selling and cross-selling opportunities.

CUT COSTS

Eliminating hard copy press is also a great way to cut airlines’ operational costs; by eliminating the extra weight that hard copy newspapers and magazines add to each flight, airlines will experience a significant cost reduction on fuel. “According to research from Boeing, removing the weight of print newspapers and magazines equates to an annual savings of over $4.5 million for a fleet of wide-body aircraft operating 1,000 flights per day.”

As well, offering digital press eliminates the logistical costs associated with providing hard copy newspapers and magazines, giving airlines another way to decrease their operating costs, during this very difficult time.

SAVE THE ENVIRONMENT, ONE FLIGHT AT A TIME

Today’s passengers are also very environmentally conscious, giving airlines who prioritize improving their overall environmental impact a significant financial advantage when appealing to travelers. By eliminating paper waste from hard copy newspapers and magazines (and the weight associated with them) onboard, airlines use less fuel on each flight, decreasing the airline’s overall carbon dioxide (CO2) emissions and improving their carbon footprint – and, as a result, making their airline much more attractive to potential guests.

It’s A Brand New (Digital) World

As you can see, the change from hard copy inflight magazines and newspapers to digital press will improve your PaxEx and NPS, create new ancillary revenue opportunities, offer valuable ways to cut logistical and operational costs, give your airline a financial advantage over other airlines who aren’t prioritizing improving their environmental impact and, most importantly, it will reassure health conscious travelers of their safety during their flight.

Airlines worldwide have already started implementing the switch to digital press inflight because they recognize their passengers’ general discomfort with touching anything they don’t know is completely clean and sanitized; we expect to see many more forward-thinking airlines adopting digital press, through their IFE solution, in the coming weeks and months – after all, it will be an operational imperative for all airlines worldwide during the very – slow- Coronavirus-impacted travel market – and beyond!

About Adaptive

Adaptive is an experienced inflight entertainment (IFE) and digital press content service provider (CSP) for the global aviation industry. Adaptive’s industry-leading IFE solution, ACES, delivers curated IFE content in multiple languages, encompassing diverse, globally relevant media at touchpoints throughout the entire customer journey: before, during and after the flight.

More information can be found at adaptive-channel.com or by email at contact@adaptive-channel.com.


Carlisle Interconnect Technologies (CIT) Is Making The Passenger Cabin Cargo Friendly

Carlisle Interconnect Technologies (CIT), a division of Carlisle Companies Incorporated (CSL), is pleased to announce special missions and temporary passenger cabin reconfigurations for airlines seeking to move more cargo on their passenger aircraft. Tenencia, a CIT company and European Union Aviation Safety Agency (EASA), Design Organization Approvals (DOA), and Production Organizations Approvals (POA) holder, offers turnkey kit design, procurement, installation support as well as regulatory approval services to give airlines greater flexibility in optimizing their aircraft.

“We are committed to helping our customers and the aerospace industry navigate these uncertain times,” said Jeff Behlendorf, director of product management, integrated products at CIT. “Our expertise in cabin reconfiguration and aircraft certification enable airlines to quickly pivot and adapt to evolving market conditions, which call for additional methods of transporting critical goods while the industry experiences a low demand for passenger travel.”

CIT offers a full-range of capabilities for minimal or more complex configurations, including:

  • Rapid development and EASA DOA approval of complete cabin reconfiguration and new cargo Layout of Passenger Accommodations (LOPA)
  • Special missions support, including patient transport
  • Cargo restraint and net installation
  • Floor cargo loading evaluation
  • Cabin seat removal to reduce wear and tear on the passenger interior
  • Cockpit equipment and avionics modifications

These capabilities are part of CIT’s nearly 80-year history of providing the highest quality aircraft modification packages using Supplemental Type Certificates (STCs) for airlines, avionics manufacturers, and Maintenance, Repair and Overhaul (MRO) partners. The company is also a member of the Independent Aircraft Modifiers Alliance (IAMA), an alliance of leading companies in the avionics industry that are committed to common standards for documentation and quality of STCs. This new offering helps airlines meet evolving fleet needs in today’s challenging environment.

For more information, please contact Tenencia via email.


Airbus

Airbus logged net orders in April for nine commercial aircraft from its A320 product line from Avolon. By April 30th, Airbus’ gross orders in 2020 totaled 365 aircraft. After cancellations the net orders stand at 299 aircraft. During the month, 14 deliveries were made from the A320, A330 and A350 XWB aircraft families. Business in April brings the overall total orders logged by Airbus since its creation to 20,407 commercial aircraft, which includes 15,572 A320 Family aircraft, 1,819 A330s, 930 A350 XWBs, 642 A220s and 251 A380s. In April, 12 A320neo Family aircraft were delivered. For Airbus widebody aircraft, one A350 XWBs was provided in the A350-900 configuration; along with one A330ceo. Among the month’s notable deliveries was the first 100% e-deliveries to Pegasus Airlines. Airbus’ backlog of aircraft remaining to be delivered as of 30th April stood at 7,645, comprised  6,217 A320 Family aircraft, 529 A220s, 322 A330s, 568 A350 XWBs and nine A380s.


Boeing

Three Boeing Dreamlifters Transport PPE to South Carolina for COVID-19 Recovery Efforts Across the State:

  • Boeing transported more than 150,000 protective eye goggles and face shields as part of the company’s ongoing COVID-19 airlift efforts
  • Partnered with the Medical University of South Carolina (MUSC) to deliver the goggles and face shields to frontline health care professionals in the MUSC Health system
  • PPE to be used by MUSC Health care team members to assist with statewide COVID-19 community testing and outreach efforts, which are critical to recovery and a staged economic revitalization

Three Boeing Dreamlifters Transport PPE to South Carolina for COVID-19 Recovery Efforts Across the State – May 11, 2020


Other News

 

 

 

  • Abu Dhabi International Airport’s cargo facilities fully operational, processed 7,315 cargo flights in March
  • Etihad Airways repatriation and humanitarian flights departing from Abu Dhabi International Airport
  • Comprehensive health and safety measures implemented across all Abu Dhabi Airports facilities in response to global COVID-19 pandemic

Abu Dhabi, UAE | May 11, 2020–Abu Dhabi Airports is supporting global efforts to combat the COVID-19 pandemic by ensuring the safe, secure and efficient transport of essential supplies and equipment through Abu Dhabi International Airport, in addition to facilitating a number of repatriation and humanitarian flights.

Abu Dhabi International Airport is the primary gateway to Abu Dhabi and a key global transit hub for passengers and airfreight, offering connections to the world’s key markets. Its specialist cargo facilities offer significant capacity for transhipments and the efficient handling of time and temperature-sensitive goods.

Shareef Al Hashmi, Chief Executive Officer of Abu Dhabi Airports, said: “This is a critical time for the aviation sector and our nation as we come together to combat the global COVID-19 pandemic. We are committed to ensuring the health and safety of our employees, stakeholders and passengers as we continue to operate our airports and facilities in order to provide our communities and healthcare centres with the goods and equipment they need.”

“We do not take this responsibility lightly and have mobilised special teams to enhance our cargo operations and facilitate the necessary repatriation and humanitarian flights departing from Abu Dhabi International Airport. I am especially proud of our employees’ continued dedication and commitment during this challenging time,” added Al Hashmi.

Waleed Salem Al Hemeiri, Acting Deputy Chief Operations Officer of Abu Dhabi Airports, said: “Abu Dhabi International Airport has implemented a range of special measures across its cargo and passenger operations, including workforce cluster management, thermal imaging cameras at key transit areas, free COVID-19 tests for passengers and employees and roster realignment to ensure the continued safe and efficient management of vital supplies and repatriation flights.”

“We are coordinating with all relevant authorities, partners and suppliers at Abu Dhabi International Airport to bolster the UAE’s efforts to protect public health and maintain the integrity of our operations,” added Al Hemeiri.

Cargo and airfreight

Cargo operations at the airport are ongoing 24 hours a day, 7 days a week, facilitating the supply of vital equipment and goods to communities and healthcare facilities across the UAE and the world. During the month of March, the airport processed 7,315 cargo flights and 51,885,686 million kilograms of cargo, handling on average more than 1,800 flights and 13 million kilograms of cargo per week.

Over the past month, the UAE capital’s cargo hub experienced heavy import cargo volumes, mainly made up of commodities like facemasks and medical supplies, in addition to traditional airfreight items and an increase in perishable traffic, especially meat.

Logistics operators and cargo carriers such as Etihad Cargo have increased operations, making use of available capacity during the airport’s reduced passenger flight schedule. Its freighter network has introduced capacity to countries including India, Singapore, Thailand, Indonesia, Philippines, South Korea and other destinations. Additionally, Etihad Cargo’s freighter network from Abu Dhabi offers flights to Riyadh, London, Hong Kong and Shanghai.

Repatriation and humanitarian flights

Following the suspension of all commercial passenger flights to and from the UAE on 26 March 2020, Abu Dhabi International Airport has facilitated a number of repatriation and humanitarian flights for Emiratis returning to the UAE as well as expatriates and foreign nationals departing for their countries of origin.

Etihad Airways has been operating special flights from Abu Dhabi to London, Zurich, Brussels, Tokyo, Dublin, Amsterdam, Melbourne, Seoul, Singapore, Manila and Jakarta. In addition to enabling passengers reach their desired destinations, the flights are utilising their belly-hold capacity to transport critical cargo.

Prioritizing health and safety

Abu Dhabi Airports is coordinating and collaborating with all relevant authorities including the Abu Dhabi Government, General Civil Aviation Authority, Department of Health, and Ministry of Health and Prevention to ensure every available precautionary measure is being taken to protect the health, safety and wellbeing of its employees, stakeholders and passengers.

The robust set of precautionary measures include thermal screening at passenger and staff entrances, free COVID-19 Polymerase Chain Reaction (PCR) testing for passengers and employees, workforce cluster management and regular risk assessments in coordination with Etihad Airways medical teams, enforcement of social distancing guidelines and roster realignment to ensure ample staffing at all times, in addition to the frequent sterilisation of workspaces and common areas throughout Abu Dhabi International Airport’s facilities.

  • Highlights Actions to Manage Impact of COVID-19 on Aviation Markets

Chicago, IL | May 11, 2020–Gogo (NASDAQ: GOGO), the leading global provider of broadband connectivity products and services for aviation, today announced its financial results for the quarter ended March 31, 2020.

Q1 2020 Financial Highlights

  • Consolidated revenue of $184.5 million; Net loss of $84.8 million, which includes charges of $46.4 million related to the impairment of certain long-lived assets and $6.8 million in additional credit loss reserves taken during the quarter.
  • Adjusted EBITDA(1) of $25.7 million.
  • BA Reportable Segment Profit of $35.9 million, up 6% from Q1 2019.
  • Cash Flow from Operating Activities of $38.0 million; Free Cash Flow(1) of $22.7 million.
  • Cash and cash equivalents were $214.2 million as of March 31, 2020, including $22 million drawn in March from the Company’s ABL Credit Facility. This compares to cash and cash equivalents of $170.0 million as of December 31, 2019.
  • Reached 1,511 2Ku and 1,758 total CA satellite aircraft online as of March 31, 2020, with a backlog of ~800 2Ku aircraft(2). In Q1 2020, 2Ku aircraft online increased by 104.

Summary of Actions in Response to COVID-19 Related Decline in Air Traffic

  • On April 22, 2020, the Company announced comprehensive actions in response to the COVID-19 related decline in air traffic. These measures include:
    • A furlough of approximately 54% of the workforce effective May 4, 2020. The furloughs impact approximately 600 employees across all three of Gogo’s business segments and corporate personnel.
    • Compensation reductions for nearly all personnel not impacted by furlough, including 30% for the CEO and Board of Directors and 20% for the executive leadership team.
    • Ongoing negotiations with suppliers and customers to improve contract terms, the delay of aircraft equipment installations, the deferral of capital equipment purchases, and the reduction of marketing, travel and non-essential spend.
    • The submission of applications to the U.S. Treasury Department for an $81 million grant and a $150 million loan under the recently enacted CARES Act. If Gogo receives government assistance, it will modify the announced personnel actions to comply with the terms of that assistance.

First Quarter 2020 Consolidated Financial Results

  • Consolidated revenue of $184.5 million declined by 8% from Q1 2019.
    • Service revenue of $150.8 million declined by 9% from Q1 2019, driven by a decline in CA-NA service revenue partially offset by growth in BA service revenue.
    • Equipment revenue of $33.7 million declined 2% from Q1 2019, driven by a decline in BA equipment revenue offset by growth in both CA-NA and CA-ROW equipment revenue.
  • Net loss of $84.8 million increased from a net loss of $16.8 million in Q1 2019, due primarily to a $46.4 million charge related to impairment of long-lived assets and lower Adjusted EBITDA.
  • Adjusted EBITDA decreased to $25.7 million, down from $38.0 million in Q1 2019, primarily due to lower CA-NA segment profit partially offset by improved BA segment profit. Adjusted EBITDA includes a $6.8 million charge for expected credit losses due primarily to the impact of COVID-19, largely from one international airline partner.

“We started the year well ahead of plan, but Commercial Aviation demand fell sharply in March due to COVID-19 and has deteriorated further in Q2,” said Oakleigh Thorne, Gogo’s President and CEO. “There has also been a slowdown in new activations and an increase in account suspensions in our Business Aviation segment, which we expect will negatively impact BA revenue in Q2.”

“The Gogo team responded quickly to COVID-19 with actions to reduce costs, maintain our strong global franchise and ensure our long-term financial viability,” Thorne said. “I think we are well positioned to get through this crisis and am extremely proud of the efforts and sacrifices of our Gogo team in these difficult times.”

“To ensure our long-term liquidity, we are aggressively executing on our previously announced 16 levers to manage costs,” said Barry Rowan, Gogo’s Executive Vice President and CFO. “Our stronger than expected cash position exiting 2019 and through the first four months of 2020 has positioned us to manage through this difficult period and we are committed to continuing this heightened level of financial and operational discipline.”

First Quarter 2020 Business Segment Financial Results

Business Aviation (BA)

  • Total revenue increased to $70.9 million, up 1% from Q1 2019, driven by 8% service revenue growth offset by a decline in equipment revenue.
  • Service revenue increased to $57.7 million, up 8% from Q1 2019, driven by a 7% increase in ATG units online and a more than 2% increase in average monthly service revenue per ATG unit online.
  • Equipment revenue decreased to $13.2 million, down 24% from Q1 2019, due to lower ATG and satellite unit shipments.
  • Reportable segment profit increased to $35.9 million, up 6% from Q1 2019, with a reportable segment profit margin of nearly 51%. Q1 2020 reportable segment profit margin was an all-time quarterly record for BA, driven largely by higher service gross margin.

Commercial Aviation – North America (CA-NA)

  • Total revenue decreased to $80.1 million, down 17% from Q1 2019.
  • Service revenue decreased to $73.8 million, down 20% from Q1 2019, primarily due to the impact of COVID-19, the full impact of American Airlines switching to the airline-directed model, the deinstallation of Gogo equipment from certain American Airlines aircraft during 2018 and the first half of 2019, and the recognition of product development-related revenue from one of our airline partners in the first quarter of 2019.
  • Equipment revenue increased to $6.3 million, up 56% from Q1 2019, due primarily to more installations under the airline-directed model.
  • Reportable segment profit decreased to $15.9 million, down 48% from Q1 2019, due to lower service revenue partially offset by a combined 32% decline in engineering, design and development, sales and marketing and general and administrative expenses.
  • Aircraft online increased to 2,480 as of March 31, 2020 from 2,412 as of March 31, 2019, due to an increase in 2Ku and ATG aircraft partially offset by the previously planned removal of older mainline ATG aircraft from airlines’ operating fleets.
  • Take rates declined to 13.3% in Q1 2020, down from 13.9% in Q1 2019. Q1 2020 take rates were above the average take rate of 13.2% in 2019.
  • Net annualized ARPA decreased to $99,000, down from $126,000 in Q1 2019, due to the full impact of American Airlines transition to the airline-directed model, product development-related revenue in the first quarter of 2019 and the impact of COVID-19.

Commercial Aviation – Rest of World (CA-ROW)

  • Total revenue increased to $33.4 million, up 1% from Q1 2019.
  • Service revenue decreased to $19.2 million, down 3% from Q1 2019, due to lower ARPA caused by the negative effect of COVID-19 on global commercial air travel partially offset by an increase in aircraft online.
  • Equipment revenue increased to $14.2 million, up 8% from Q1 2019, due to an increase in spare parts sold under the airline-directed model, partially offset by fewer installations under the airline-directed model.
  • Reportable segment loss improved to $17.4 million, a 4% improvement from Q1 2019, due to declines in cost of equipment revenue, engineering, design and development expenses, and sales and marketing expenses partially offset by an increase in general and administrative expenses which was primarily due to the establishment of credit loss reserves stemming from the impact of COVID-19, the majority of which related to a single international airline partner. The financial condition of this airline partner continued to deteriorate to the point of entering administration subsequent to March 31, 2020, which we expect will result in additional credit losses in Q2 2020.
  • Aircraft online increased to 833 as of March 31, 2020, up from 641 as of March 31, 2019.
  • Take rates declined to 12.3% in Q1 2020, down from 13.6% in Q1 2019.
  • Net annualized ARPA of $97,000 in Q1 2020 declined from $136,000 in Q1 2019, due primarily to the growth in new aircraft fleets online, which typically initially generate lower net annualized ARPA, and the negative effect of COVID-19 on global commercial air travel.
(1) See “Non-GAAP Financial Measures” below.
(2) Please refer to the definition of “backlog” in our Form 10-K for the year ended December 31, 2019 as filed with the Securities and Exchange Commission on March 13, 2020, under the heading “Contracts with Airline Partners” in Item 1.

COVID-19 Update
Given the continued significant impact that COVID-19 pandemic is having on global air travel, Gogo is not providing 2020 financial guidance in this release. Gogo is closely tracking the evolving impact of COVID-19 on global travel and its airline partners.

Conference Call
The Company will host its first quarter conference call on May 11, 2020 at 8:30 a.m. ET. A live webcast of the conference call, as well as a replay, will be available online on the Investor Relations section of the Company’s website at http://ir.gogoair.com. Participants can access the call by dialing (844) 464-3940 (within the United States and Canada) or (765) 507-2646 (international dialers) and entering conference ID number 3031017.

Non-GAAP Financial Measures
We report certain non-GAAP financial measurements, including Adjusted EBITDA, Free Cash Flow and Unlevered Free Cash Flow in the supplemental tables below.  Management uses Adjusted EBITDA, Free Cash Flow and Unlevered Free Cash Flow for business planning purposes, including managing our business against internally projected results of operations and measuring our performance and liquidity. These supplemental performance measures also provide another basis for comparing period to period results by excluding potential differences caused by non-operational and unusual or non-recurring items. These supplemental performance measurements may vary from and may not be comparable to similarly titled measures used by other companies. Adjusted EBITDA, Free Cash Flow and Unlevered Free Cash Flow are not recognized measurements under accounting principles generally accepted in the United States, or GAAP; when analyzing our performance with Adjusted EBITDA or liquidity with Free Cash Flow or Unlevered Free Cash Flow, as applicable, investors should (i) evaluate each adjustment in our reconciliation to the corresponding GAAP measure, and the explanatory footnotes regarding those adjustments, (ii) use Adjusted EBITDA in addition to, and not as an alternative to, net loss attributable to common stock as a measure of operating results and (iii) use Free Cash Flow or Unlevered Free Cash Flow in addition to, and not as an alternative to, consolidated net cash provided by (used in) operating activities when evaluating our liquidity.

Cautionary Note Regarding Forward-Looking Statements

Certain disclosures in this press release and related comments by our management include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  These forward-looking statements include, without limitation, statements regarding our business outlook, industry, business strategy, plans, goals and expectations concerning our market position, international expansion, future technologies, future operations, margins, profitability, future efficiencies, capital expenditures, liquidity and capital resources and other financial and operating information. When used in this discussion, the words “anticipate,” “assume,” “believe,” “budget,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “future” and the negative of these or similar terms and phrases are intended to identify forward-looking statements in this press release.

Forward-looking statements reflect our current expectations regarding future events, results or outcomes. These expectations may or may not be realized. Although we believe the expectations reflected in the forward-looking statements are reasonable, we can give you no assurance these expectations will prove to have been correct. Some of these expectations may be based upon assumptions, data or judgments that prove to be incorrect. Actual events, results and outcomes may differ materially from our expectations due to a variety of known and unknown risks, uncertainties and other factors. Although it is not possible to identify all of these risks and factors, they include, among others, the following: the duration for which and the extent to which the COVID-19 pandemic continues to impact demand for commercial and business aviation air travel globally, including as a result of governmental restrictions on travel and social gatherings and overall economic conditions; the failure to successfully implement our cost reduction plan and other measures taken to mitigate the impact of COVID-19 on our business and financial condition, including efforts to renegotiate contractual terms with certain suppliers and customers; the loss of or failure to realize the anticipated benefits from agreements with our airline partners or customers on a timely basis or any failure to renew any existing agreements upon expiration or termination, including the results of our ongoing discussions with Delta Air Lines with respect to its transition to free service, which may involve a decision to pursue supplier diversification for its domestic mainline fleet; the failure to maintain airline and passenger satisfaction with our equipment or our service; any inability to timely and efficiently deploy and operate our 2Ku service or implement our technology roadmap, including developing and deploying upgrades and installations of our ATG-4 and 2Ku technologies, Gogo 5G, any technology to which our ATG or satellite networks evolve and other new technologies, for any reason, including technological issues and related remediation efforts, changes in regulations or regulatory delays affecting us, or our suppliers, some of whom are single source, or the failure by our airline partners or customers to roll out equipment upgrades or new services or adopt new technologies in order to support increased demand and network capacity constraints, including as a result of airline partners shifting to a free-to-passenger business model; the timing of deinstallation of our equipment from aircraft, including deinstallations resulting from aircraft retirements and other deinstallations permitted by certain airline contract provisions; the loss of relationships with original equipment manufacturers or dealers; our ability to make our equipment factory line-fit available on a timely basis; our ability to develop or purchase ATG and satellite network capacity sufficient to accommodate current and expected growth in passenger demand in North America and internationally as we expand; our reliance on third-party suppliers, some of whom are single source, for satellite capacity and other services and the equipment we use to provide services to commercial airlines and their passengers and business aviation customers; unfavorable economic conditions in the airline industry and/or the economy as a whole; governmental action restricting trade with China or other foreign countries; our ability to expand our international or domestic operations, including our ability to grow our business with current and potential future airline partners and customers and the effect of shifts in business models, including a shift toward airlines providing free service to passengers; an inability to compete effectively with other current or future providers of in-flight connectivity services and other products and services that we offer, including on the basis of price, service performance and line-fit availability; our ability to successfully develop and monetize new products and services, including those that were recently released, are currently being offered on a limited or trial basis, or are in various stages of development; our ability to certify and install our equipment and deliver our products and services, including newly developed products and services, on schedules consistent with our contractual commitments to customers; the failure of our equipment or material defects or errors in our software resulting in recalls or substantial warranty claims; a revocation of, or reduction in, our right to use licensed spectrum, the availability of other air-to-ground spectrum to a competitor or the repurposing by a competitor of other spectrum for air-to-ground use; our use of open source software and licenses; the effects of service interruptions or delays, technology failures and equipment failures or malfunctions arising from defects or errors in our software or defects in or damage to our equipment; the limited operating history of our CA-ROW segment; contract changes and implementation issues resulting from decisions by airlines to transition from the turnkey model to the airline-directed model or vice versa; increases in our projected capital expenditures due to, among other things, unexpected costs incurred in connection with the roll-out of our technology roadmap or our international expansion; compliance with U.S. and foreign government regulations and standards, including those related to regulation of the Internet, including e-commerce or online video distribution changes, and the installation and operation of satellite equipment and our ability to obtain and maintain all necessary regulatory approvals to install and operate our equipment in the United States and foreign jurisdictions; our, or our technology suppliers’, inability to effectively innovate; obsolescence of, and our ability to access parts, products, equipment and support services compatible with, our existing products and technologies; costs associated with defending existing or future intellectual property infringement, securities and derivative litigation and other litigation or claims and any negative outcome or effect of pending or future litigation; our ability to protect our intellectual property; breaches of the security of our information technology network, resulting in unauthorized access to our customers’ credit card information or other personal information; our substantial indebtedness, including additional borrowings pursuant to the CARES Act, if any, limitations and restrictions in the agreements governing our current and future indebtedness and our ability to service our indebtedness; our ability to obtain additional financing for operations, or financing intended to refinance our existing indebtedness on acceptable terms or at allincluding any loans pursuant to the CARES Act; fluctuations in our operating results; our ability to attract and retain customers and to capitalize on revenue from our platform; the demand for and market acceptance of our products and services; changes or developments in the regulations that apply to us, our business and our industry, including changes or developments affecting the ability of passengers or airlines to use our in-flight connectivity services; a future act or threat of terrorism, cybersecurity attack or other events that could result in adverse regulatory changes or developments, or otherwise adversely affect our business and industry; our ability to attract and retain qualified employees, including key personnelincluding in light of recent furloughs and salary reductions; the effectiveness of our marketing and advertising and our ability to maintain and enhance our brands; our ability to manage our growth in a cost-effective manner and integrate and manage acquisitions; compliance with anti-corruption laws and regulations in the jurisdictions in which we operate, including the Foreign Corrupt Practices Act and the (U.K.) Bribery Act 2010; restrictions on the ability of U.S. companies to do business in foreign countries, including, among others, restrictions imposed by the U.S. Office of Foreign Assets Control; difficulties in collecting accounts receivable; our ability to successfully implement improvements to systems, operations, strategy and procedures needed to support our growth and to effectively evaluate and pursue strategic opportunities; and other events beyond our control that may result in unexpected adverse operating results.

Additional information concerning these and other factors can be found under the caption “Risk Factors” in our annual report on Form 10-K for the year ended Dec. 31, 2019 as filed with the Securities and Exchange Commission (“SEC”) on March 13, 2020 and in our 10-Q for the quarter ended March 31, 2020 as filed with the SEC on May 11, 2020.

Any one of these factors or a combination of these factors could materially affect our financial condition or future results of operations and could influence whether any forward-looking statements contained in this report ultimately prove to be accurate. Our forward-looking statements are not guarantees of future performance, and you should not place undue reliance on them. All forward-looking statements speak only as of the date made and we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Loss of more than 4.6 billion passengers and $97 billion in revenue forecast for 2020

Montreal | May 5, 2020– Airports Council International (ACI) World has released updated modelling that shows the worsening economic impact on the global airport industry.

The forecasts of prolonged – and more widespread – impacts and effects of the COVID-19 pandemic have resulted in worsening predictions for traffic and revenue losses for airports across all regions.

ACI World now estimates a reduction of more than two billion passengers at the global level in the second quarter of 2020 and more than 4.6 billion passengers for all of 2020. The estimated decline in total airport revenues on a global scale is estimated to be $39.2 billion (figures in US Dollars) in the second quarter and more than $97 billion for 2020.

This outlook provides yet another stark illustration of the need for government assistance for airports to preserve essential operations and to protect the jobs and livelihoods of the millions of people that work in airports around the world. Last week, ACI World and the International Air Transport Association (IATA) came together to call for urgent tax relief and direct financial assistance that is to the benefit of the entire aviation ecosystem.

“The impact of the COVID-19 pandemic on airports, the wider aviation ecosystem, and the global economy continues to worsen and represents an existential threat to the industry unless governments can provide appropriate relief and assistance,” ACI World Director General Angela Gittens said.

“As traffic and revenue have collapsed, the airport industry has taken all possible measures to preserve stability, but the challenge remains that a significant portion of airport costs are fixed.

“Airports are critical in the air transport ecosystem which is a key driver of local, regional and national economies and the communities they serve, and this global economic multiplier effect needs to be safeguarded to help underpin recovery.

“Jobs need to be protected and airports given financial support so people can rapidly return to work while operations can be scaled up to meet demand as the industry restarts.”

ACI World has applauded those governments around the world that have acted to support airport jobs and operations, but time is running out for assistance to be provided.

ACI World has called for comprehensive financial relief including wage subsidy schemes to allow continued operations and a rapid return to full operations, the protection of airport charges and revenues, urgent tax relief to provide much-needed financial oxygen to airports to ensure continuity of operations and safeguard airport jobs, waivers to airport rents and concession fees, the continuation of charges on air cargo operations to maintain essential airside and cargo facilities. Grants and subsidies, secured financing, loans at preferential rates, and bank guarantees should be made available.

“Financial relief and assistance is urgently needed but it is crucial for the prospects of a balanced recovery that any assistance benefits the entire aviation ecosystem and does not target once sector over other,” Angela Gittens said.

This past week the industry gathered together via a live online broadcast event hosted by Apex and Inmarsat Aviation to address the challenges the aviation sector is facing as a result of the global pandemic and economic crisis. More than 3,000 individuals logged on to watch and participate in the 7+ hour event. The synopsis is outlined below and there is a link provided if you didn’t manage to attend the live session. Overall, there was a thread of cautious optimism throughout the various presentations/discussions but there was no sugar coating the fact that we are all in for a long, hard road on the way to recovery. Over the coming weeks, we will see more and more of  these live broadcast events as the industry seeks a path forward. Welcome to the new normal! So let’s delve into this week’s news.


FlightPlan

The global aviation industry came together on April 29, 2020 for a unique all-day broadcast event to encourage collaboration during the most challenging and unpredictable time in its history. FlightPlan: Charting a Course into the Future, hosted by Inmarsat Aviation and the Airline Passenger Experience Association (APEX), saw more than 50 leading voices exchange views on the present and future of aviation. Over 3,000 viewers tuned in from almost 100 countries worldwide for a series of live debates, interviews and news analysis. Experts voice confidence in eventual bounce-back for aviation industry Nick Careen, Senior Vice President of Airport Passenger Cargo and Security at the International Air Transport Association (IATA), observed that although the COVID-19 pandemic has “no parallel to draw upon in recent memory –  the airline industry has illustrated time and time again that if there’s any industry in the world that knows how to deal with a crisis, it’s this one”. Careen predicted that changes to airline passenger journeys as a result of COVID-19 may include staggered boarding processes, alongside faster adoption of biometrics and self-service technologies in the airport. Christoph Mueller, who has previously served as CEO of Malaysia Airlines and Chief Digital and Innovation Officer at Emirates Group, gave some reassuring words of encouragement to airlines: “I have a lot of confidence that at least a lot of airlines will come out of this crisis with a new and regained strength.”

In an interactive poll[1], FlightPlan viewers were invited to share their own predictions on the COVID-19 recovery phase throughout the day. Highlights from the results included:

  • Four in ten (43%) predicted that recovery will take from 18 months to three years
  • Four in ten (44%) said the industry was poorly prepared for COVID-19
  • Nearly two fifths (36%) stated that governments have helped the industry to navigate the pandemic, but could have done more
  • 9 in 10 (87%) expect to see more deep cleaning and slower turnarounds
  • 86% believe that personal protective equipment (PPE) will become standard for cabin crews in the coming months
  • 8 in 10 (80%) expect thermal scanners to become part of the passenger journey
  • Only 9% see blood tests for airline passengers becoming the norm

Unified effort essential to tackling aviation’s environmental impact

Discussing some of the ambitious sustainability targets the industry has previously set itself, such as net-zero carbon emissions by 2050, the experts agreed that collaboration was fundamental. Anko Van Der Werff, CEO of Avianca, argued that “the whole ecosystem needs to work together on this.” Paul Stein, Chief Technical Officer at Rolls Royce, added that the impact of single-nation initiatives has been limited and a “coalition of the willing” with industry bodies, airlines, manufacturers and fuel providers is needed.
Encouragingly, industry leaders expressed confidence that COVID-19 will not interrupt progress on sustainable aviation and may even push the topic higher on the agenda. Stein reflected that “the post-COVID-19 world is going to be one that will recognize the fragility of the planet – sustainability isn’t just going to come back to the point it was before COVID – it’s going to be an even stronger issue.” The FlightPlan poll results reflected this view, with 40% of respondents agreeing that COVID-19 will accelerate the drive to reduce emissions. Digitization will catalyze industry recovery and future growth Rupert Pearce, CEO of Inmarsat, spoke about the power of connectivity to drive global development and industry recovery. Although “2019 already feels as though it belongs to a different era”, Pearce remarked that the pandemic has not slowed the fourth industrial revolution. “I believe that digitalization lies at the heart of our ability to first survive this crisis, and then to drive our ability to rebound from it and start to thrive in whatever new reality lies in front of us.”

The next generation of passengers were at the center of a discussion around the need for airlines to continue preparing for the future. Behavioral scientist Rory Sutherland spoke of Generation Z’s “incredible need to travel”, observing that his own children “don’t see it as a privilege – they kind of see it as a right”. Aviation analyst Alex Macheras delved deeper into their digital expectations, adding that “if airlines are going to better satisfy Gen Z, inflight connectivity will continue to be a driving force.” Other experts agreed that these attributes, paired with growing spending power, will put young passengers in the driving seat when it comes to digital transformation in the cabin. Philip Balaam, President of Inmarsat Aviation, said: “As we look towards recovery and ensuring long-term resilience, there will be no one-size-fits all approach. However, it will remain important that airlines can differentiate for customers. It’s clear that the safety of consumers will continue to be at the forefront in this new world, and that digitization and innovation will be crucial to driving much-needed efficiencies, reducing environmental impact and improving passenger experience.”

Reflecting on the event, Dominic Walters, Vice President at Inmarsat Aviation, commented: “In times of crisis, it’s imperative that industries collaborate to find the best way forward. With so many of this year’s leading aviation events cancelled, we wanted to connect the industry in a unique and helpful way, and the response has been phenomenal. Together, more than 50 leading voices shared a clear shared message – that while the aviation industry contends with a period of extreme uncertainty, these clouds will eventually clear. Now is the time to focus on accelerating our recovery and rebuilding an industry that is stronger, more agile and fit for the future.” And, you can watch the whole event here.


Thales

Thales has deployed the world’s first GSMA-certified eSIM activation solution on Google Cloud. This solution will offer telecom operators secure and highly scalable support to manage increases in mobile subscriptions for eSIM-capable devices. It also lets them benefit from the reliability of Google Cloud’s carbon neutral technology. eSIM adoption is being fueled by a new generation of smartphones, tablets, wearables and new IoT use-cases. Thales’ subscription management expertise not only ensures seamless remote activation of a vast number of devices, but also provides data analytics and protection of the subscriber’s data.

  • Thales to use Google Cloud technology to deliver highly secure and scalable activation of eSIM (embedded SIM) capable devices.
  • The solution enables telecom operators to support a massive global increase in the volume of embedded mobile subscriptions (ABI Research expects around 1 Billion eSIM-capable devices to be shipped annually by 2024).
  • The Thales-operated solution provides secure eSIM management services and provides compliance with data protection and privacy requirements.

Airbus

Airbus posted 481m Euro net loss for 1Q20 (vs 40m Euro net profit in 1Q19) on 15% lower revenues, citing COVID-19. It has withdrawn all delivery guidance after already reducing monthly production rates to 40 A320s, two A330s, six A350s and four A220s. It has net cash position of 3.6b Euro. Furthermore, the airframer is furloughing some 3,200 workers in Broughton in the UK.

Airbus is developing a modification for A330 and A350 family aircraft which will enable airlines to install freight pallets directly onto the cabin floor seat tracks, after removal of the economy-class seats. This solution will help with the airlines’ own business continuity, and also alleviate the global shortage of ‘belly-freight’ air cargo capacity due to the widespread grounding of long-haul aircraft in the context of the COVID-19 pandemic. Additionally, it helps the industry to address the high demand for humanitarian flights to transport large quantities of medical equipment and other supplies rapidly over large distances to where they are needed.

Compared with loading cargo onto seats, this Airbus solution facilitates easier and quicker loading and unloading operations, as well as reduced ‘wear & tear’ to the seats themselves. Other important benefits include the added security of robust fire protection, and the 9g load restraint capability to prevent anything from shifting in flight. The modification is packaged for operators as an Airbus Service Bulletin (SB). Under this arrangement Airbus defines the engineering work-scope and also manages the process for obtaining the one-time certification from the European Union Aviation Safety Agency (EASA). Its scope includes the removal of the seats & IFE (Inflight entertainment), installation of cargo pallets and associated safety equipment – and also the re-installation of the original passenger cabin elements for reverting back to passenger operations. The SB approach will also be valid beyond the COVID-19 pandemic.


Boeing

On April 30, 2020  Boeing  released the following Statement on the Bond Offering: “We’re pleased with the response to our bond offering today, which is one of several steps we’re taking to keep liquidity flowing through our business and the 17,000 companies in our industry’s supply chain. The robust demand for the offering reflects strong support for the long-term strength of Boeing and the aviation industry. It is also in part a result of the confidence in the market created by the CARES Act and federal support programs that have been put in place – a testament to the Administration, Congress and the Federal Reserve. As a result of the response, and pending the closure of this transaction expected Monday, May 4, we do not plan to seek additional funding through the capital markets or the U.S. government options at this time. The bond offering includes debt instruments with an aggregate principal amount of $25 billion across seven tranches with maturities ranging from three to 40 years. We will continue to assess our liquidity position as the health crisis and our dynamic business environment evolve.”

On April 30, 2020 Boeing conducted a productive and successful first flight of the second 777X airplane. Captain Ted Grady, 777X project pilot, and Captain Van Chaney, 777/777X chief pilot, flew for 2 hours and 58 minutes over Washington state before landing at Seattle’s Boeing Field at 2:02 p.m. Pacific. Designated WH002, this airplane is the second of four in a dedicated flight test fleet and will test handling characteristics and other aspects of airplane performance. An array of equipment, sensors and monitoring devices throughout the cabin allows the onboard team to document and evaluate the airplane’s response to test conditions in real time. The 777X test plan lays out a comprehensive series of tests and conditions on the ground and in the air to demonstrate the safety and reliability of the design. To date, crews have flown the first airplane nearly 100 hours at a variety of flap settings, speeds, altitudes and system settings as part of the initial evaluation of the flight envelope. With initial airworthiness now demonstrated, the team can safely add personnel to monitor testing onboard instead of relying solely on a ground-based telemetry station, unlocking testing at greater distances. The 777X includes the 777-8 and the 777-9, the newest members of Boeing’s market-leading widebody family. Below is a comparison between the dash 8 and dash 9:

  • Seat Count (Typical 2-class)
    777-8: 384 passengers
    777-9: 426 passengers
  • Engine
    GE9X, supplied by GE Aviation
  • Range
    777-8: 8,730 nautical miles (16,170 km)
    777-9: 7,285 nautical miles (13,500 km)
  • Wingspan
    Extended: 235 ft, 5 in (71.8 m)
    On ground: 212 ft, 8 in (64.8 m)
  • Length
    777-8: 229 ft (69.8 m)
    777-9: 251 ft, 9 in (76.7 m)
  • Program Launch: 2013
  • Production Start: 2017
  • Ground Testing: 2019
  • First Flight: January 25, 2020
  • First Delivery: 2021

Additionally, “BOEING announced plan to lower its number of employees by roughly 10% company wide, including 15% cut across its commercial airplanes and services businesses, as well as corporate functions.”

Lastly, the First Quarter Financial Results are listed below:

  • Financial results significantly impacted by COVID-19 and the 737 MAX grounding
  • Revenue of $16.9 billion, GAAP loss per share of ($1.11) and core (non-GAAP)* loss per share of ($1.70)
  • Operating cash flow of ($4.3) billion; cash and marketable securities of $15.5 billion
  • Total backlog of $439 billion, including over 5,000 commercial airplanes

Other News

Dublin, Ireland | May 1, 2020– The “COVID-19 Impact on Airport Operations Market by Technology (Passenger Screening, Baggage Scanners, Smart Tag & RFID, E-gate & E-Kiosk, 5G infrastructure, Cybersecurity Solutions and Ground Support Equipment) and Region – Global Forecast to 2025” report has been added to ResearchAndMarkets.com’s offering.

The airport operation technologies market in a realist scenario is projected to grow from USD 6.2 billion in 2020 to USD 11.2 billion by 2025, at a CAGR of 12.6% from 2020 to 2025.

In the short term, the market is expected to see a huge drop from 2020 to 2021 (12.4%) and is expected to see a slight recovery from 2021 to 2022. The COVID-19 crisis has created a demand for facial recognition solutions that will have no need for human interference. At the same time, fingerprint scanners are expected to be phased out. Amid the COVID-19 crisis, various airports across countries have ordered thermal scanners and infrared scanners for passenger screening. For instance, demand for thermal imaging cameras that can detect fevers from a distance has soared as nations ramp up surveillance and quarantine measures.

The increase in demand for passenger screening and management systems at airports is anticipated to boost the growth of the market during the forecast period. However, the decrease in air passenger traffic across the globe is limiting the overall growth of the market.

Based on technology, the biometric solutions segment is anticipated to grow at the highest CAGR during the forecast period

Technologies such as self-service and facial & voice recognition have been introduced for passenger identity, check-ins, and availing boarding passes. These technologies at airports have improved customer service, reduced operational costs, and increased revenues of airlines as well as airports. Airports with such technologies are able to cope with the COVID-19 outbreak better. Demand for smart passenger screening solutions is expected to surge post the COVID-19 pandemic in the long term, as airports will strive to maintain vigilance levels.

The spread of COVID-19 is posing serious challenges for airlines, airports, and their ecosystems. In the long term, however, the pandemic could help catalyze investments in new technologies and radically reshape the industry.

Asia Pacific is estimated to lead the airport operations market in 2020 Airports Council International (ACI) Asia-Pacific warns that the prolonged duration of the COVID-19 outbreak will significantly impact the region’s airports and prevent them from achieving previously-forecasted growth prospects. The airport association urges regulators and governments to implement well-defined adjustments and relief measures tailored to suit local-level contexts. According to ACI World estimates, Asia Pacific is impacted the worst, with passenger traffic volumes down 24% for the first quarter of 2020 compared to forecasted traffic levels without COVID-19. After fighting the COVID-19 pandemic, China’s aviation industry is moving into the recovery stage, and it is unsurprising that Chinese airlines are the ones bucking the global trend and adding capacity. Moreover, Chinese airports are deploying 5G-powered robots for terminal operations, which can help reduce the chances of spreading COVID-19 as well as increase the handling capacity of passengers.

Key Topics Covered:

1 Introduction

2 Research Methodology

3 COVID-19 Impact on Airport Ecosystem

3.1 Introduction

3.2 Impact on Airport Value Chain

3.2.1 Equipment Suppliers

3.2.2 Ground Operators

3.2.3 Service Providers

3.2.4 Technology Providers

3.3 Macro Indicators

3.3.1 Drivers

3.3.1.1 Demand for Smart Technologies and Management Systems at Airports

3.3.2 Restraints

3.3.2.1 Decrease in Passenger Traffic

3.3.2.2 Reduction in Airline Capacity Utilization & Flight Operations

4 Short-Term Strategies of Airport Technology Companies and Operators

4.1 Introduction

4.2 Impact on Airport Operators

4.2.1 Maintaining Current State of Operations

4.2.2 Health and Safety of Staff, Passengers, and Other Stakeholders

4.2.3 Cost Control and Managing Working Capital

4.2.4 Managing Suppliers, Vendors, and Customers

4.2.5 Capacity Building to Mitigate Similar Threats

4.3 Impact on Airport Technology Companies

4.3.1 Product & Service Offerings

4.3.2 Enhanced Customer Support

4.3.3 Contract Management

4.4 Winning Strategies by Airport Technology Companies

4.5 Publisher Viewpoint

5 COVID-19 Impact on Airport Operation Customers

5.1 Introduction

5.2 Strategic Shifts in Airport Operations

5.2.1 Business/Operating Models

5.2.2 Revenue Mix & Cost Structure

5.3 Airport Operations

5.3.1 Capacity Utilization and Cost Optimization

5.3.2 Technology Use Cases and Innovation

5.3.3 Spending & Investment Priorities

5.3.4 Risk Management and Business Continuity

5.4 Airport Business Strategy

5.4.1 Connected/Smart Airports

5.4.2 Digitalization Trends

5.4.3 Enhancing Passenger Experience

6 Impact of COVID-19 on Airport Operation Technologies Market, by Technology

6.1 Introduction

6.2 Impact on Airport Operation Technologies Market, 2018-2025, (Usd Million)

6.2.1 Baggage Scanners

6.2.2 Passenger Screening

6.2.2.1 Handheld Scanners

6.2.2.2 Walk-Through Metal Detectors

6.2.2.3 Full-Body Scanners

6.2.3 E-Gate & Kiosk

6.2.3.1 Smart Biometric Systems

6.2.3.2 Smart Boarding Systems

6.2.4 Cybersecurity Solutions

6.2.5 Smart Tags & Rfid

6.2.6 Ground Support Equipment

6.2.7 5G in Airports

7 Regional Analysis

7.1 Introduction

7.2 North America

7.3 Europe

7.4 Asia Pacific

7.5 Rest of the World

8 Appendix

8.1 Knowledge Store: Publisher’s Subscription Portal

8.2 Author Details

For more information about this report visit https://www.researchandmarkets.com/r/9cs0gs

Ottawa, Ontario | May 1, 2020– Joyce Carter, Canadian Airports Council chair and president and CEO of Halifax Stanfield International Airport, and CAC Vice Chair and Fort McMurray International Airport president and CEO RJ Steenstra, appeared before the House of Commons Standing Committee on Finance today. They were there to address the current state of Canada’s airports and urge further government action on relief measures that include permanent rent relief, loan or bond guarantees and funding for small airports.

In front of a video background showing her airport’s empty departures hall, Ms. Carter clearly articulated the dramatic impact of the nation-wide travel restrictions, telling the committee, “We expect to see just 200 travellers today, compared to a daily average of 11,000.”

Since the onset of COVID-19, there has been precipitous decline in Canadian air traffic –and revenues. Overall passenger traffic declined by 90 percent in April, and it is expected to continue at this low level until travel restrictions are lifted, with revenue losses estimated at more than $2 billion.

Ms. Carter thanked the government for their early assistance in the crisis by providing ground lease rent relief, which is helping preserve some cash flow in 2020, particularly for Canada’s eight busiest airports that pay 97 percent of the rent.

Her address to the Committee emphasized that rent relief in itself is not a total solution and more support is required for the short and long term viability of Canada’s airports. Throughout this crisis, airports have remained open to repatriate Canadians, safely move goods and essential workers, and facilitate medevac and other important services.

“Airports have moved quickly to reduce operating expenses – including closing sections of our facilities and cutting wages and staff – but many of our costs are fixed,” she explained. “Costs related to safety, security, and runway maintenance cannot be cut in proportion to reduced traffic.”

While maintaining day-to-day operations, airports are also challenged to meet their capital debt obligations and comply with new and costly regulatory requirements related to runway safety and accessible air travel.

“We do not oppose these requirements but wonder how we’ll pay for them based on our current financial situation,” she said.

Over the past several weeks, the CAC and member airports have been in discussions with government officials on a series of measures that will help airports of all sizes sustain operations in the coming months, which were outlined by Ms. Carter to the Committee.

The first would be to permanently eliminate airport ground lease rent, preserve cash, focus on operations during the recovery, and to pay off incremental debt acquired during the pandemic.

The second recommends loan or bond guarantees and preferred payment designation for airport lenders to relieve the cash pressures caused by current debt obligations and allow airports to continue to borrow at favorable rates.

The final recommendation addresses the needs of rural and remote communities by providing a funding stream for airports with a smaller number of passengers, to cover essential operating expenses so they can continue to connect their communities to much needed goods, workers, medical supplies, and emergency services.

“Pre-COVID, Canada’s airports supported nearly 200,000 jobs, resulting in $13 billion in wages and $7 billion in taxes to all levels of government,” said Ms. Carter. “The health of the entire air transport system is not only essential to serving communities and Canadians through this crisis, but also key to our economic recovery once we begin to reopen the economy.”

As expected, our industry is continuing to contract as a result of the ongoing pressures from COVID-19. Today’s issue of IFExpress features announcements from industry vendors and OEMs about current and forecasted reductions in their work force. Airlines are starting to address what flying may look like with social distancing still in effect but after the Stay Home, Stay Safe orders are loosened. This is certain to be a continuing discussion in the weeks ahead. The IFExpress team will keep you appraised as this story continues to evolve.

Now let’s take a look at some of the announcements from the past seven days.


GOGO

Gogo announced that effective May 4, it will furlough approximately 60% of its workforce and reduce compensation for most other employees as part of a broad-based cost reduction plan due to the impact of COVID-19. The furloughs will impact more than 600 employees across all three of Gogo’s business segments. The time and duration of those furloughs will vary based on workload in individual departments. Salary reductions will begin at 30% for the CEO, then 20% for the executive leadership team, and feather down from there. In addition, Gogo’s Board of Directors has agreed to reduce their compensation by 30%. Certain types of employees, such as hourly workers, will not have their compensation reduced. Approximately 60% of Gogo’s revenue comes from its two commercial airline segments. Passenger traffic on commercial airlines using Gogo’s service has declined 95% this month compared to the prior year, resulting in a projected 60-70% reduction in sales for the month of April. The remaining 40% of Gogo’s revenue comes from its business aviation segment which has seen a sharp decrease in flight activity. Additionally, since many business aircraft are flying less frequently, there has been an increase in requests for one-month account suspensions and a dramatic decrease in new plan activations for the month of April. “The health and safety of our employees and customers is our first and most important priority, but the long-term health of our business is also a critical focus area,” said Oakleigh Thorne, president and CEO of Gogo. “In March, we announced 16 levers that we can employ to dramatically lower our costs in order to ensure our long-term viability, and we believe we are implementing the appropriate measures to accomplish that goal.”

In addition to personnel actions, the Gogo 16-lever plan includes, among other actions, renegotiating terms with suppliers, delaying aircraft equipment installations, deferring purchases of capital equipment, reducing marketing and travel expenses and eliminating non-essential spend. “We established best- and worst-case scenarios and action plans against the 16 levers based on market conditions against those scenarios,” Thorne said. “Based on where the market is today, we believe these personnel actions are necessary, and if conditions worsen, we have additional levers to pull if needed.”

Gogo also announced that it has applied for an $81 million grant and a $150 million loan under the recently enacted CARES Act. If Gogo receives government assistance, it will modify the personnel actions announced to comply with the terms of that assistance. Prior to this announcement, Gogo has already implemented several cost-cutting measures related to personnel, including a hiring freeze, suspension of 2020 merit salary increases, and deferral of the CEO’s 2019 bonus. Gogo had $216 million cash on hand as of the close of business on April 20, 2020, including $22 million drawn under its revolving credit facility.

Gogo intends to provide an update on its response to the pandemic and share further details on the steps it is taking to strengthen its financial position when it hosts its first quarter 2020 earnings conference call. “The impact of COVID-19 on air travel, and a challenging economy in general, mean we have to make tough decisions, including implementing these essential cost reductions,” said Thorne. “I am proud of our Gogo employees, who have risen to the challenge to ensure that our business continues to operate smoothly and effectively during this difficult time.”


BOEING

On April 21, 2020 Boeing announced key organization and leadership changes aimed at driving greater cross-company integration and continuous improvement; aligning enterprise services to current business conditions while increasing value; streamlining senior leadership roles and responsibilities; and preparing now for the post-pandemic industry footprint. The changes are effective May 1.

A newly formed group — Enterprise Operations, Finance & Strategy — will consolidate several important areas, bringing together teams responsible for manufacturing, supply chain and operations, finance, enterprise performance, strategy, enterprise services and administration. Led by Greg Smith, executive vice president, Enterprise Operations, and chief financial officer, this new global organization will embed operational excellence and consistent lean principles across Boeing and its supply chain, and restore production and supply chain health as Boeing and the broader aerospace industry recover from the COVID-19 pandemic.

Corporate Audit will join Smith’s new group and continue to report directly to the Boeing Board of Directors Audit Committee as it does today, providing independent, objective assurance and advisory services to improve company operations.

Jenette Ramos, senior vice president of Manufacturing, Supply Chain & Operations, will bring 34 years of Boeing experience, leadership and operational skills to a special assignment in support of Smith and Boeing President and CEO David Calhoun.

The company also is combining its legal and core compliance programs, including global trade controls, ethics and business conduct, into a single organization led by Brett Gerry, chief legal officer and executive vice president of Global Compliance. This approach will enhance Boeing’s already strong compliance and internal governance program through focused accountability for, and a more integrated approach to, Boeing compliance responsibilities. It also will help the company proactively address new legal and compliance obligations arising from an increasingly complex global regulatory environment.

To accelerate this important work and to build on the existing strength of its compliance and ethics program, Boeing soon will name a chief compliance officer who will be responsible for leading the company’s compliance, ethics and trade control activities. This person will report to Gerry, with a direct reporting line to Calhoun and the board’s Audit Committee on compliance and ethics issues.

Finally, Boeing Government Operations, led by Executive Vice President Tim Keating, will assume responsibility for the company’s Global Spectrum Management activities, which ensure the safe, efficient and compliant use of radio frequency spectrum in Boeing products and operations.

“I am confident these changes will drive greater alignment among our functions; better equip our commercial, defense and space, and services businesses to deliver on customer commitments in a changing marketplace; and support our continuous efforts to develop talent through challenging leadership assignments,” said Calhoun. “Special thanks to Greg, Brett, Tim and Jenette for taking on new leadership responsibilities.”

Coinciding with these organization changes, Diana Sands, senior vice president of the Office of Internal Governance and Administration, has decided to retire from Boeing later this year after nearly 20 years with the company and following a thorough transition of responsibilities. “Over the past two decades, Diana has played a key role in developing an industry-leading ethics and compliance program, served in several critical finance roles and been a strong advocate for advancing diversity and inclusion across the company,” said Calhoun. “The Boeing Board of Directors and I are deeply grateful for Diana’s leadership, integrity and dedicated service.”

Also from Boeing: 

On April 25th the company announced that it has terminated its Master Transaction Agreement (MTA) with Embraer, under which the two companies sought to establish a new level of strategic partnership. The parties had planned to create a joint venture comprising Embraer’s commercial aviation business and a second joint venture to develop new markets for the C-390 Millennium medium airlift and air mobility aircraft. Under the MTA, April 24, 2020, was the initial termination date, subject to extension by either party if certain conditions were met. Boeing exercised its rights to terminate after Embraer did not satisfy the necessary conditions. “Boeing has worked diligently over more than two years to finalize its transaction with Embraer. Over the past several months, we had productive but ultimately unsuccessful negotiations about unsatisfied MTA conditions. We all aimed to resolve those by the initial termination date, but it didn’t happen,” said Marc Allen, president of Embraer Partnership & Group Operations. “It is deeply disappointing. But we have reached a point where continued negotiation within the framework of the MTA is not going to resolve the outstanding issues.”

The planned partnership between Boeing and Embraer had received unconditional approval from all necessary regulatory authorities, with the exception of the European Commission.

Boeing and Embraer will maintain their existing Master Teaming Agreement, originally signed in 2012 and expanded in 2016, to jointly market and support the C-390 Millennium military aircraft.

Lastly, Boeing Dreamlifter Transports 1.5M Face Masks for COVID-19 Response

  • Partnered with Prisma Health, Atlas Air and Discommon Founder Neil Ferrier to bring 1.5 million medical face masks to healthcare professionals in South Carolina
  • Boeing Dreamlifter becomes the largest aircraft ever to land at Greenville-Spartanburg International Airport
  • Additional airlift transport missions with the Boeing Dreamlifter and ecoDemonstrator are planned in the future

OTHER NEWS

Montreal | April 27, 2020– The International Air Transport Association (IATA) called on regulators to take urgent action to help civil aviation operate seamlessly and safely between states during the COVID-19 pandemic, as well as to help facilitate the restart when the virus is contained. Specifically, IATA asked states to take the following immediate steps:

  • Work with the aviation industry to find temporary measures to ensure that licenses and certificates critical to managing aviation safety are extended to remain valid;
  • File their temporary measures with the International Civil Aviation Organization (ICAO);
  • Recognize the measures of other states that are filed with ICAO.

Many aviation regulators around the globe have already taken the necessary steps to provide airlines and licensed crew with the required flexibility, such as extensions to the validity periods for licenses, ratings and certificates, so operational capabilities can be maintained. However, to be effective, these measures must be filed with ICAO so that they can be visible to and recognized by counterpart states. Without mutual recognition, airlines are faced with uncertainty over whether they might be restricted by the states whose territory they enter.

‘’Safety is always the top priority. We therefore commend ICAO for their swift action to facilitate the sharing of states’ temporary regulatory extensions, making it easier for states to extend their mutual recognition,’’ said Gilberto Lopez Meyer, IATA’s Senior Vice President, Safety and Flight Operations.

At present, many of the world’s aviation regulators are not able to perform their standard administration of various licenses, as their operations have also been impacted by the COVID-19 outbreak. In order not to further impede global aviation, ICAO has established the COVID-19 Contingency Related Differences (CCRD) system. This enables all states to record any differences to their standard policies and to make a clear statement that they accept other states’ differences through a new form.  This will ensure safe continuity of flights between countries in a harmonized, documented process.

Letter from the Editor

The stay-at-home orders have affected millions of people, resulting in unprecedented unemployment rates in the U.S. and Europe, which are rising higher and faster than they ever have before. Compared to a year ago, the global aircraft capacity in available seat-miles is currently down by approximately 59%. Add to this that IATA is forecasting airline losses to exceed $252 billion, which could easily be revised upward in the next few weeks. The understatement of the week is that COVID-19 is having a devastating effect on our industry.

Damage has been done, much like what we experienced after September 11, 2001, and the financial crisis of 2008 – but on an even greater, global scale and we may well have past the point of a V-shaped recovery. As those events changed how governments, businesses, and the public functioned; so will this forever change us as well.

What might we expect these changes to look like? It is not unreasonable to expect new procedures to be put into place to manage the risk of reinfection: body temperature scanners at airports, immunization passports for travelers on every flight – much like today’s security screening but focused on the traveler’s health. After 9/11 it took the flying public almost a decade to adjust to the changes in travel and accept the ‘new normal’. So it is not unrealistic to expect that it will take a while for passengers to embrace the travel process post COVID-19.

Also, virtual meetings are becoming part of everyone’s lives – even those who are the most technologically challenged seem to be using applications like Zoom, FaceTime, Skype, etc. to fill the need to socialize. I am willing to bet that each of you has used one or more of these in the past week to stay connected with friends, family, and colleagues. For work, the virtual meeting has become business as usual right now and we are all discovering, out of necessity, how easy and useful these video conferences can be. This will undoubtedly contribute to a slower uptake in passenger traffic growth once things begin to return to ‘normal’, or should I say, the new normal.

The pandemic has also had an impact on the number of aircraft anticipated to be in service in 2021. The forecast is there will be 1,200 fewer jetliners flying than last year (2019). This is also going to impact the number of pilots, maintenance technicians, flight crew, attendants, etc. needed.

This is all a vivid reminder that aviation has, and always will be, a cyclical business. Historically, with each upturn in the cycle, our industry grows, renews and often performs better than it did before. This is what we need to keep focused on right now. The only big question we currently face is how long will this down turn last?

Stay Home, Stay Healthy – Tricia

Patricia Wiseman – Editor, Publisher & Co-Founder


SATCOM DIRECT

Satcom Direct (SD), the business aviation solutions provider, is launching a new webinar series to ensure customers remain continually informed and updated about SD products, services and partner relationships. Grouped by product category, the inaugural webinars will explain the latest SD updates and product enhancements by delivering content created in direct response to customer queries and information requests. The agendas incorporate themes that are relevant and essential for effective management of flight operations and aim to improve customer understanding of the extensive SD Xperience portfolio. Each webinar will also detail how to maximize new and existing products in dynamic, unpredictable operating environments to effectively manage evolving situations. The first four workshops are scheduled as follows:

  • 21 April, 13:00 UTC – SD Connectivity: detailing network and service updates along with SD partner information.
  • 05 May, 13:00 UTC – SD Hardware: updates on router, modem and antenna products and how best to select and optimize them.
  • 19 May, 13:00 UTC – FlightDeck Freedom®: latest on datalink services supporting mandatory requirements for the flight deck.
  • 02 June, 13:00 UTC – SD PostFlight and SD Pro®: updates on platform functionality and optional third party integration.

The one-hour webinars will be delivered online to registered SD clients by an SD subject matter expert. Materials will be conveyed through presentations, graphics and interactive tools and are designed to stimulate participation and discussion, whilst allowing customers to address individual needs and queries. For customers unable to participate, the webinars will be available for review through the SD Learning Management System (LMS) portal after each workshop.


GALGUS

IFExpress received an email from Jose Gonzalez, CEO & Co-Founder of Galgus. Galgus is part of the Wi-Fi community and works in the IFEC industry with VT Miltope on their CHT (Cognitive Hotspot Technology). Galgus has put together a YouTube video show casing how important Wi-Fi is and how the technology is facilitating working, studying, entertaining and engaging remotely during this pandemic. We thought we would share their tribute and recognition with you, our readers. Can you imagine this quarantine without #WiFi? – YouTube


COLLINS AEROSPACE

Collins Aerospace Systems, a unit of Raytheon Technologies Corp., recently announced Troy Brunk has been named president, Interiors, reporting to Collins Aerospace president Stephen Timm. He succeeds Dave Nieuwsma, who was recently named president, Avionics, for Collins Aerospace. In his new role, Brunk leads a broad portfolio of aircraft interior systems for seating, lighting, galley, oxygen, passenger service, evacuation, de-icing, lavatory, waste and potable water for commercial and military customers around the globe. Brunk’s 27-years with Collins Aerospace has included leadership roles of increasing responsibility. Most recently he served as vice president and general manager for the Communication, Navigation & Guidance Solutions portfolio for the company’s Mission Systems business. In this role, Brunk oversaw a broad portfolio of military applications and solutions, ranging from communication and navigation, to actuation and guidance, and health and fuel sensing systems. Brunk also served as vice president and general manager for Airborne Solutions, where he oversaw the avionics and flight deck solutions for military fixed-wing aircraft and helicopters.


VALOUR

Valour Consultancy, an independent provider of market intelligence services to firms in the global aerospace and maritime markets, is delighted to reveal that it has been honored with the prestigious Queen’s Award for Enterprise. The company is one of a select group of organizations nationally to be recognized with the accolade, which is the highest official UK award available to British businesses. Valour’s award is given for outstanding achievement in the category of International Trade after increasing its overseas sales by an incredible 157 per cent over the last three years.

“It goes without saying that we are immensely proud of this achievement, which is the culmination of years of hard work and sacrifice in establishing Valour as a reputable source of business intelligence” said co-founders, Joshua Flood, Craig Foster and Daniel Welch. The trio also expressed their gratitude to those that have supported the company’s phenomenal growth in recent years. “This award is testament to the hard work and dedication of our staff who have consistently delivered outstanding results and often make themselves available at all hours to answer client enquiries. We’d also like to give a special mention to those companies located around the world that continue to have faith in us to provide them with the means to make more informed business decisions, even in these uncertain times”. Valour Consultancy is headquartered just outside of Grantham in the United Kingdom and maintains additional offices in London, as well as in Melbourne, which is home to its subsidiary, Valour Consultancy Australia. Since its founding in 2012, the firm has become a trusted provider of insight and analysis to many of the world’s largest companies. This includes aircraft manufacturers, large global satellite operators, multinational service providers and a range of the world’s best-known airlines.

Valour Consultancy will celebrate the award during a royal reception for Queen’s Awards winners and intends to host its own celebration later in the year.


LUFTHANSA

#WeAreInThisTogether is Lufthansa’s motto in these unusual times and the carrier is setting a sign to express its bond with the airline’s passengers: Frequent flyers who considerably contribute to the airline’s success get access to all the digital publications that they usually are only provided with when flying. Media Carrier as a leading provider of digital content supports this initiative, providing its technical platform and content for this initiative. Frequent flyers get an access to 781 newspapers and magazines from around the world and enjoy digital reading. The portfolio meets every taste, containing business papers, lifestyle publications, regional newspapers and international magazines, and offers daily inspiration and entertainment. All publications can easily be downloaded in pdf format to any digital device and are then available to read for an unlimited period of time. Apart from free offers, users can also buy publications.


AIRBUS

Airbus SE shareholders approved all resolutions on the agenda for its 2020 Annual General Meeting, including the election of two new directors, while René Obermann formally succeeded Denis Ranque as Chairman at a Board meeting immediately afterwards. Owing to the global coronavirus outbreak, shareholders were encouraged to vote by proxy instead of attending the AGM physically in Amsterdam, in line with public health and safety measures. Shareholders showed a very high level of voting and strong engagement despite the COVID-19 situation, with 575 million votes expressed, up 5% compared to the 2019 AGM and representing around 74% of the outstanding share capital. On 23 March, Airbus announced that it was withdrawing a voting item from the original AGM agenda related to the proposed payment of the 2019 dividend. The withdrawal of the dividend proposal was one of a number of measures announced by the Company to bolster liquidity and its balance sheet in response to the COVID-19 crisis. Following shareholder approval, Mark Dunkerley and Stephan Gemkow each joined the Board as non-executive directors for a period of three years. Dunkerley has extensive experience of the commercial airline and aviation industry and is currently a Member of the Board of Spirit Airlines, Inc., while Gemkow is a Member of the Board of Amadeus IT Group and a former airline executive with 22 years at Deutsche Lufthansa AG.

The mandates of non-executive directors Ralph D. Crosby, Jr. and Lord Drayson (Paul) were each renewed for three years. Denis Ranque and Hermann-Josef Lamberti both stepped down as planned from the Board and its committees at the close of the AGM. At the meeting immediately following the AGM, the Board approved the planned appointment of René Obermann as Chairman of the Board of Directors. In April 2019, Airbus announced that Obermann had been selected by the Board to succeed Denis Ranque as Chairman. As previously stated, Denis Ranque asked to leave the Board to pursue other interests when his mandate expired at the close of the 2020 AGM, following seven years as Chairman. “It has been a great honour to serve Airbus as Chairman these past years and I extend my best wishes to René, the Board and the Company as a whole,” said outgoing Airbus Chairman Denis Ranque. “I’d also like to thank shareholders for their support along these years and today for having voted through these important AGM resolutions at a very high level despite the COVID-19 outbreak. With a renewed management team, under Guillaume’s strong leadership, and an experienced Board, your Company is in good hands as it heads into its sixth decade.”


BOEING

Boeing will resume all Commercial Airplanes production in a phased approach at its Puget Sound-region facilities this week, after suspending operations last month in response to the COVID-19 pandemic. At all of its sites, the company has taken extra precautions and instituted comprehensive procedures to keep people safe and fight the spread of COVID-19.

“The health and safety of our employees, their families and communities is our shared priority,” said Stan Deal, president and CEO of Boeing Commercial Airplanes and senior executive in the Pacific Northwest. “This phased approach ensures we have a reliable supply base, our personal protective equipment is readily available and we have all of the necessary safety measures in place to resume essential work for our customers.”

Approximately 27,000 people in the Puget Sound area will return to production of the 747, 767, 777 and 787 programs, supporting critical global transportation infrastructure, cargo services and national defense and security missions. The 737 program will resume working toward restarting production of the 737 MAX. Boeing South Carolina remains in a suspension of operations at this time. Earlier this week Boeing restarted mostly defense production operations in the region with approximately 2,500 people. Employees in the Puget Sound for the 737, 747, 767 and 777 will return as early as third shift on April 20 with most returning to work by April 21. Employees for the 787 program will return as early as third shift April 23, with most returning to work by April 24.
The company’s practices reinforce enhanced cleaning, employee health and physical distancing in partnership with employees. Aligned with federal and state guidance, these practices include:

  • Staggered shift start times to reduce the flow of employees arriving and departing work
  • Visual controls such as floor markings and signage to create physical distance
  • Face coverings will be a requirement for employees at Boeing sites in Washington. Employees are strongly encouraged to bring in their own procedural mask or face covering; those who do not have a mask available will be provided with one.
  • Providing required personal protective equipment to employees working in areas where physical distancing cannot be maintained for an extended period
  • Asking employees to perform self-health checks before coming to work and to stay home if they are ill
  • Employee wellness checks at the beginning of every shift and voluntary temperature screening at many manufacturing locations
  • Contact tracing when an employee tests positive for COVID-19 to reduce risk to teammates
  • Continued virtual meetings and employees who can work from home will continue to do
  • Transportation and common areas adjusted for physical distancing
  • Hand-washing stations in high-traffic areas and additional cleaning supplies available

Enhanced measures will continue until conditions allow for a return to regular work and cleaning processes. Boeing will continue to monitor government guidance on COVID-19, assess impact on company operations and adjust plans as the situation evolves.

Boeing completed its first COVID-19 transport mission, using a 737-700 aircraft from its corporate fleet to bring personal protective equipment (PPE) from China to the United States. Working in partnership with FIRST Robotics Founder Dean Kamen, the company transported 540,000 medical-grade face masks that will be delivered to healthcare professionals battling COVID-19 in New Hampshire. Kamen, who has a longstanding relationship with Boeing through FIRST Robotics, is also a founder of DEKA Research and Development Corporation. “Another life-saving delivery of PPE has arrived in New Hampshire,” said Governor Chris Sununu.

Boeing continues to support local communities and the heroic healthcare professionals working tirelessly to stop the spread of COVID-19. Additional airlift transport missions with the Boeing Dreamlifter and ecoDemonstrator are planned in the future. Boeing is coordinating closely with U.S. government officials on how to best assist areas with the greatest need. “I want to personally thank Governor Sununu, the entire New Hampshire congressional delegation and Dean Kamen for their leadership in helping secure and distribute this much-needed personal protective equipment for our frontline healthcare workers and first responders here in New Hampshire,” said Dave Calhoun, Boeing president and CEO. “We are honored to have conducted today’s airlift mission and we look forward to providing continued support in the fight against this pandemic.”

Also from Boeing: Brazil’s GOL reached agreement with Boeing on financial compensation related to 737 MAX grounding and then they cancelled 34 of their remaining 129 MAXs on order.


OTHER NEWS

Washington DC | April 13, 2020– Ms. Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF) issued the following statement:

“Today, I am pleased to say that our Executive Board approved immediate debt service relief to 25 of the IMF’s member countries under the IMF’s revamped Catastrophe Containment and Relief Trust (CCRT) as part of the Fund’s response to help address the impact of the COVID-19 pandemic.

“This provides grants to our poorest and most vulnerable members to cover their IMF debt obligations for an initial phase over the next six months and will help them channel more of their scarce financial resources towards vital emergency medical and other relief efforts.

“The CCRT can currently provide about US$500 million in grant-based debt service relief, including the recent US$185 million pledge by the U.K. and US$100 million provided by Japan as immediately available resources. Others, including China and the Netherlands, are also stepping forward with important contributions. I urge other donors to help us replenish the Trust’s resources and boost further our ability to provide additional debt service relief for a full two years to our poorest member countries.”

The countries that will receive debt service relief today are: Afghanistan, Benin, Burkina Faso, Central African Republic, Chad, Comoros, Congo, D.R., The Gambia, Guinea, Guinea-Bissau, Haiti, Liberia, Madagascar, Malawi, Mali, Mozambique, Nepal, Niger, Rwanda, São Tomé and Príncipe, Sierra Leone, Solomon Islands, Tajikistan, Togo, and Yemen.

“Overall, it could be a very bad year for the economy,” Ben Bernanke said. “The U.S. economy could shrink 30% or more this quarter as stay-at-home orders aimed at slowing the coronavirus outbreak choke off business.” Unfortunately, this scenario is not limited to the U.S.  – for the most part it is a global issue facing a broad spectrum of businesses, including aviation. We continue to see a reduction in activity in the aviation sector, primarily due to the decrease in demand for air travel due to COVID-19 and it looks like this may well be the trend for a good part of 2020. Many airlines have parked/stored the majority of their fleet, some routes are flown with a handful of passengers – if the carrier is lucky, and airframers are looking at order cancellations and reduced aircraft deliveries for 1Q20. It goes without saying that our industry is undergoing a radical change and all sectors within it are bracing for the trickle-down effect on their businesses. In fact, one of the major IFEC vendors has reduced their staff by 200+ people in the last week – most likely the first of many companies to do so. The IFExress team will endeavor to keep you appraised of the latest developments, so stay tuned.


AIRBUS
After a solid commercial and industrial performance at the beginning of the year, Airbus is now revising its production rates downwards to adapt to the new Coronavirus market environment.

In Q1 2020, Airbus booked 290 net commercial aircraft orders and delivered 122 aircraft. A further 60 aircraft were produced during the quarter, highlighting the solid industrial performance, however they remain undelivered due to the evolving COVID-19 pandemic.

36 aircraft were delivered in March across the different aircraft families, down from 55 in February 2020. This reflects customer requests to defer deliveries, as well as other factors related to the ongoing COVID-19 pandemic.
The new average production rates going forward have been set as follows:
● A320 to rate 40 per month
● A330 to rate 2 per month
● A350 to rate 6 per month

This represents a reduction of the pre-coronavirus average rates of roughly one third. With these new rates, Airbus preserves its ability to meet customer demand while protecting its ability to further adapt as the global market evolves.

Airbus is working in coordination with its social partners to define the most appropriate social measures to adapt to this new and evolving situation. Airbus is also addressing a short-term cash containment plan as well as its longer-term cost structure.

“The impact of this pandemic is unprecedented. At Airbus, protecting our people and supporting the fight against the virus are our chief priorities at this time. We are in constant dialogue with our customers and supply chain partners as we are all going through these difficult times together”, said Airbus Chief Executive Officer Guillaume Faury. “Our airline customers are heavily impacted by the COVID-19 crisis. We are actively adapting our production to their new situation and working on operational and financial mitigation measures to face reality.”

In its effort to support the fight against the COVID-19, Airbus has carried out extensive work in coordination with social partners to ensure the health and safety of its employees. This has been achieved by implementing new stringent work standards and processes. Airbus is contributing to the development, sourcing and ferrying of medical equipment, including facemasks and ventilators, in support of medical health services.


BOEING

Today (April 14, 2020), Boeing announced their 1Q 2020 deliveries for commercial aircraft, which totaled 50 jetliners – compared to 149 in 1Q 2019. The 50 aircraft were comprised of the following: five 737s, zero 747s, ten 767s, six 777s, and twenty-nine 787s.

The company has also been hit by an additional 75 737 MAX cancellations from Irish leasing company Avolon, bringing the total number of jetliners removed from the company’s order book in March to 300+ aircraft as airlines adjust their fleets in response to COVID-19.

Also, Boeing will deliver the first set of reusable 3D-printed face shields to support healthcare professionals working to stop the spread of COVID-19. The Department of Health and Human Services (HHS) accepted the initial shipment of 2,300 face shields this morning. The Federal Emergency Management Agency (FEMA) will deliver the shields to the Kay Bailey Hutchison Convention Center in Dallas, Texas, which has been established as an alternate care site to treat patients with COVID-19. Boeing is set to produce thousands more face shields per week, gradually increasing production output to meet the growing need for Personal Protective Equipment (PPE) in the United States. Distribution of additional face shields will be coordinated with HHS and FEMA based on immediate needs. Boeing is producing face shields with additive manufacturing machines at company sites in:

  • St. Louis, Missouri
  • China Lake, El Segundo, and Huntington Beach, California
  • Puget Sound region of Washington State
  • Mesa, Arizona
  • Huntsville, Alabama
  • Philadelphia, Pennsylvania
  • Charleston, South Carolina
  • San Antonio, Texas
  • Salt Lake City, Utah
  • Portland, Oregon

Boeing subsidiaries Argon ST in Smithfield, Pennsylvania, and Aurora Flight Sciences in Bridgeport, West Virginia, are also participating in this project. Solvay, a long-time Boeing supplier, provided the clear film for the face shields. Another supplier, Trelleborg Sealing Solutions, donated the elastic used for the adjustable headband. Face shield production and donations are part of a larger Boeing effort to leverage company and employee resources to aid with COVID-19 recovery and relief efforts. To date, the company has donated tens of thousands of units of PPE – including face masks, goggles, gloves, safety glasses and protective bodysuits – to support healthcare professionals battling COVID-19 in some of the hardest-hit locations in the United States. Boeing has also offered use of its unique airlift capabilities, including the Boeing Dreamlifter, to help transport critical and urgently needed supplies to healthcare professionals. The company is coordinating closely with government officials on how best to provide airlift support. “Boeing is proud to stand alongside many other great American companies in the fight against COVID-19, and we are dedicated to supporting our local communities, especially our frontline healthcare professionals, during this unprecedented time,” said Boeing President and CEO David Calhoun. “History has proven that Boeing is a company that rises to the toughest challenges with people who are second to none. Today, we continue that tradition, and we stand ready to assist the federal government’s response to this global pandemic.”


OTHER NEWS

  • Face shields to be donated to healthcare professionals fighting COVID-19
  • FEMA will direct initial shipment to Kay Bailey Hutchison Convention Center in Dallas

Chicago | April 10, 2020–Boeing today will deliver the first set of reusable 3D-printed face shields to support healthcare professionals working to stop the spread of COVID-19. The Department of Health and Human Services (HHS) accepted the initial shipment of 2,300 face shields this morning. The Federal Emergency Management Agency (FEMA) will deliver the shields to the Kay Bailey Hutchison Convention Center in Dallas, Texas, which has been established as an alternate care site to treat patients with COVID-19.

Boeing is set to produce thousands more face shields per week, gradually increasing production output to meet the growing need for Personal Protective Equipment (PPE) in the United States. Distribution of additional face shields will be coordinated with HHS and FEMA based on immediate needs. Boeing is producing face shields with additive manufacturing machines at company sites in:

  • St. Louis, Missouri
  • China Lake, El Segundo, and Huntington Beach, California
  • Puget Sound region of Washington state
  • Mesa, Arizona
  • Huntsville, Alabama
  • Philadelphia, Pennsylvania
  • Charleston, South Carolina
  • San Antonio, Texas
  • Salt Lake City, Utah
  • Portland, Oregon

Boeing subsidiaries Argon ST in Smithfield, Pennsylvania, and Aurora Flight Sciences in Bridgeport, West Virginia, are also participating in this project.

Solvay, a long-time Boeing supplier, provided the clear film for the face shields. Another supplier, Trelleborg Sealing Solutions, donated the elastic used for the adjustable headband.

Face shield production and donations are part of a larger Boeing effort to leverage company and employee resources to aid with COVID-19 recovery and relief efforts. To date, the company has donated tens of thousands of units of PPE – including face masks, goggles, gloves, safety glasses and protective bodysuits – to support healthcare professionals battling COVID-19 in some of the hardest-hit locations in the United States.

Boeing has also offered use of its unique airlift capabilities, including the Boeing Dreamlifter, to help transport critical and urgently needed supplies to healthcare professionals. The company is coordinating closely with government officials on how best to provide airlift support.

“Boeing is proud to stand alongside many other great American companies in the fight against COVID-19, and we are dedicated to supporting our local communities, especially our frontline healthcare professionals, during this unprecedented time,” said Boeing President and CEO David Calhoun. “History has proven that Boeing is a company that rises to the toughest challenges with people who are second to none. Today, we continue that tradition, and we stand ready to assist the federal government’s response to this global pandemic.”

Boeing taps into additive manufacturing expertise and offers up Dreamlifter to help respond to COVID-19 crisis.

March 30, 2020–Boeing announced it is activating its additive manufacturing network to 3D-print face shields for health care workers, and is offering up the Dreamlifter to help respond to the COVID-19 pandemic.

Boeing employees will 3D-print the personal protective equipment (PPE) using additive manufacturing machines in St. Louis, Missouri; El Segundo, California; Mesa, Arizona; Huntsville, Alabama, and Philadelphia, Pennsylvania – as long as those facilities remain in operation, consistent with federal, state and local health orders.

Depending on the size of the machine, up to 24 face shield frames can be 3D-printed each day. The company announced it is targeting an initial production rate of several thousand a week.

“We have open capacity, goodwill and a multitude of eager employees waiting and wanting to help in this crisis,” said Melissa Orme, vice president of Boeing Additive Manufacturing (BAM).

The design includes a 3D printed frame with an adjustable headband that allows a clear plastic face shield to be easily snapped onto the frame. Boeing is evaluating the best way to quickly cut the plastic needed for the face shields, leveraging advanced cutting technology used for aircraft parts.

Face shields and other PPE have been in such short supply that some doctors and nurses have turned to swimming goggles and other homemade options.

“This is a first-step solution to do what we can right now to help,” said Carlton Washburn, a program manager in BAM. “I’ve only seen positive behavior and amazing support from people – both inside of Boeing and externally – trying to offer help. It makes Boeing’s mission to protect people very real to me.”

The 3D printed face shields solution was developed by employees from Boeing Additive Manufacturing; Boeing Research & Technology; Boeing Defense, Space & Security; Supply Chain and HorizonX; along with support from Accenture, hospitals and universities.

“Boeing employees are always ready and willing to step up and help in times of need, and this is just another incredible example of that,” said Tim Keating, executive vice president of Government Operations. “I’m proud of all the work being done to support our communities during this challenging time. We hear you, we’re listening, and keep the ideas coming.”

The company also announced its intent to offer the use of the Boeing Dreamlifter, one of the largest cargo carriers in the world, to help transport critical and urgently needed supplies to health care professionals.

The Dreamlifter fleet consists of four specially adapted Boeing 747s with a max cargo weight of 63,000 pounds per plane. Boeing is coordinating closely with government officials on how best to provide support.

To date, Boeing has donated tens of thousands of masks, gloves and other equipment to hospitals in need.

The company is also analyzing several other ways it can engage its engineering, manufacturing and logistics expertise to help the cause. Additional details, including ways in which Boeing employees can continue to give back, will be communicated soon.

Geneva | April 7, 2020– The International Air Transport Association has released  new analysis showing that some 25 million jobs are at risk of disappearing with plummeting demand for air travel amid the COVID-19 crisis.

Globally, the livelihoods of some 65.5 million people are dependent on the aviation industry, including sectors such as travel and tourism. Among these are 2.7 million airlines jobs. In a scenario of severe travel restrictions lasting for three months, IATA research calculates that 25 million jobs in aviation and related sectors are endangered across the world:

  • 11.2 million jobs in Asia-Pacific
  • 5.6 million jobs in Europe
  • 2.9 million jobs in Latin America
  • 2.0 million jobs in North America
  • 2.0 million jobs in Africa
  • 0.9 million jobs in the Middle East

In the same scenario, airlines are expected to see full year passenger revenues fall by $252 billion (-44%) in 2020 compared to 2019. The second quarter is the most critical with demand falling 70% at its worst point, and airlines burning through $61 billion in cash.

Airlines are calling on governments to provide immediate financial aid to help airlines to remain viable businesses able to lead the recovery when the pandemic is contained. Specifically, IATA calls for:

  • Direct financial support
  • Loans, loan guarantees and support for the corporate bond market
  • Tax relief

“There are no words to adequately describe the devastating impact of COVID-19 on the airline industry. And the economic pain will be shared by 25 million people who work in jobs dependent upon airlines. Airlines must be viable businesses so that they can lead the recovery when the pandemic is contained. A lifeline to the airlines now is critical,” said Alexandre de Juniac, IATA’s Director General and CEO.

Looking Ahead: Re-booting the Industry

Alongside vital financial relief, the industry will also need careful planning and coordination to ensure that airlines are ready when the pandemic is contained.

“We have never shuttered the industry on this scale before. Consequently, we have no experience in starting it up. It will be complicated. At the practical level, we will need contingencies for licenses and certifications that have expired. We will have to adapt operations and processes to avoid reinfections via imported cases. And we must find a predictable and efficient approach to managing travel restrictions which need to be lifted before we can get back to work. These are just some of the major tasks that are ahead of us. And to be successful, industry and government must be aligned and working together,” said de Juniac.

IATA is scoping a comprehensive approach to re-booting the industry when governments and public health authorities allow. A multi-stakeholder approach will be essential. One initial step is a series of virtual meetings—or summits—on a regional basis, bringing together governments and industry stakeholders. The main objectives will be:

  • Understanding what is needed to re-open closed borders, and
  • Agreeing solutions that can be operationalized and scaled efficiently

“We are not expecting to re-start the same industry that we closed a few weeks ago. Airlines will still connect the world. And we will do that through a variety of business models. But the industry processes will need to adapt. We must get on with this work quickly. We don’t want to repeat the mistakes made after 9.11 when many new processes were imposed in an uncoordinated way. We ended up with a mess of measures that we are still sorting out today. The 25 million people whose jobs are at risk by this crisis will depend on an efficient re-start of the industry,” said de Juniac.

Summit dates are being confirmed in the expectation of a start before the end of April.

Toulouse | March 30, 2020–The Spanish Government announced new measures on 29 March in the fight against COVID-19. These measures are taking effect between Monday 30 March and Thursday 9 April inclusive and restrict all non-essential activities across the country.

Some key activities in Commercial Aircraft, Helicopters and Defence and Space remain essential. Minimum activity in these areas for necessary support functions such as Security, IT, Engineering, will remain under the stringent health and safety measures implemented by Airbus to protect its employees against the COVID-19 pandemic.

All other activities in Commercial Aircraft, Defence and Space as well as Helicopters in Spain will be paused until 9 April, the date when it is foreseen that restrictions will be lifted.

Airbus will closely work with its social partners to apply the social measures applicable under the latest restrictions. Airbus employees in Spain whose jobs are not linked to production and assembly activities and can work from home will continue to support Airbus business continuity in these difficult times.

As a leading company, Airbus needs to retain its ability to support the global crisis efforts, support customers, suppliers and continue to bring its essential contribution to society.