Category: Transport

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Transport

JetBlue Temporarily Consolidates Service From Five US Cities

JetBlue will temporarily consolidate operations in five major metropolitan areas within the U.S. this spring amid unprecedented low demand for air travel during the coronavirus (COVID-19) pandemic.

From April 15 through June 10, JetBlue will consolidate its operations in Boston, Los Angeles, New York, San Francisco and Washington D.C., with flights operating at one or, in some cases, only two airports in each region.

In New England, JetBlue will temporarily suspend service from Rhode Island’s T.F. Green International Airport, consolidating service at Boston’s Logan International Airport.

Service will also be temporarily suspended at Hollywood Burbank Airport; Ontario International Airport; LaGuardia Airport; Westchester County Airport; Stewart International Airport; San Jose International Airport and Baltimore/Washington International Thurgood Marshall Airport.

The carrier announced that it will consolidate service at Los Angeles International Airport and Long Beach Airport in Southern California and John F. Kennedy International Airport and Newark Liberty International Airport in New York City.

“We face new challenges every day and can’t hesitate to take the steps necessary to reduce our costs amidst dramatically falling demand so we can emerge from this unprecedented time as a strong company for our customers and crew members,” said Scott Laurence, JetBlue’s head of revenue and planning.

JetBlue said that it also intends to file an exemption request with the U.S. Department of Transportation to temporarily suspend flying at other airports where current demand does not support service.

Overall, JetBlue has reduced flying network-wide by 80 percent per day in April in response to COVID-19.

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Delta Reducing Passengers, Blocking Middle Seats to Combat COVID-19

Delta Air Lines is implementing new policies in the fight against the coronavirus (COVID-19) pandemic.

Starting April 13 through May 31, Delta will reduce the number of passengers on each flight; block middle seats in Main Cabin, Delta Comfort+ and Delta Premium Select across all of its flights and pause automatic, advance Medallion Complimentary Upgrades, the carrier announced on Wednesday.

“Customers who want to practice responsible social distancing can explore options via the Fly Delta App or at Delta.com. Customers who prefer to be seated directly next to travel companions and family members or needing additional assistance should contact reservations ahead of travel or talk to a Delta agent upon arriving at the gate,” the airline stated.

The temporary changes come on the heels of the new Delta Clean standard established for the long term, which includes efforts to streamline food and beverage service onboard all flights to decrease touchpoints between customers and crew; boarding customers 10 at a time; helping passengers find new seats while complying with weight-and-balance restrictions at 10,000 feet and extending travelers’ ability to plan, re-book and travel for up to two years.

Delta added that customers still need to be seated within the same class of service and within three rows, whether in front or behind, their assigned seat to ensure a balanced distribution of weight inside the cabin for safe aircraft operation.

The airline also recently donated 200,000 pounds of food to hospitals and community food banks

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Transport

Some Flights Are Flying With Just One Passenger Each

Arguably the busiest metropolitan area in the world with three major airports, flights to and from New York City are almost always full.

In this time of the global coronavirus pandemic with travel restrictions, lowered demand for travel, severe cutbacks in service by the airlines and, specifically, major cuts in service to New York, the epicenter of the virus, it’s not surprising to see planes nearly empty.

But this is still shocking to hear.

On Sunday, April 5, a spokesperson for American Airlines confirmed to Fox News that the carrier flew nine flights out of New York City that had just one passenger on each plane.

Airlines are required to maintain a minimum service schedule as part of the CARES Act bailout stimulus package offered by the federal government, but that is still a surprising number.

In fact, according to Fox, American’s busiest flight from New York City’s LaGuardia Airport only had 27 passengers on board a plane with 172 seats, and at JFK International Airport, the busiest flight from the airline had 49 passengers.

It wasn’t any better a day later, as American Airlines said Monday that the busiest flight from LaGuardia only had 35 passengers, while the busiest flight from JFK had 25 passengers.

American announced last week it was joining other airlines in cutting back flights in and out of New York. It will only operate from 10 a.m. to 6 p.m. at the three major NYC airports and will not have overnight crews working.

“Although New York is one of the current COVID-19 hotspots in the U.S., all of us have an incredibly important role to play as we ensure the safety of our colleagues, communities and loved ones as we work to contain the virus,” American said in a memo to employees obtained by Fox News. “I am proud of the way our team has pulled together during these exceptional times and shown commitment to caring for each other. By working together, and taking aggressive steps to protect our team and manage our network, we can continue providing safe, efficient air travel, and be ready to step up when America and the world are ready to move again.”

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Transport

Class actions filed against United over refunds

United Airlines faces two federal class actions related to
its handling of refund requests during the Covid-19 crisis. 

Both cases were filed Monday in the Northern District of
Illinois, where United’s home base of Chicago is located. 

The carrier has faced scrutiny over the past month for
changing its refund policy repeatedly. Under Transportation Department
regulations, a flyer is entitled to a refund if the airline cancels his or her
flight and the customer chooses not to rebook or accept a voucher. 

One of the cases was brought by Vermont resident John Compo,
who paid $1,051 for a roundtrip ticket to New Zealand for travel beginning
April 6. After United emailed Compo on April 3 that his flight had been canceled,
Compo requested a refund via phone and online but was denied, the suit says. 

The other case was brought by Minnesota resident Jacob
Rudolph, who spent $1,521 on three tickets from Hilton Head, S.C., to
Minneapolis for travel on April 4. The flight was eventually canceled, the
lawsuit says.  However, over the course
of March 31 to April 2, United refused Rudolph’s refund requests.

The Compo lawsuit references United’s changing refund policy.
Until March 6, United’s stated policy was to provide refunds for travel delayed
more than two hours. Over the next eight days, the carrier changed its policy
three times, ultimately landing on one in which international ticket holders
could only get a refund if travel was delayed more than six hours. The policy
also stated that United would provide only a voucher until 12 months after the
originally scheduled flight. Only then would unused voucher holders be able to
get a refund. 

“In other words, rather than make its customers whole in
this time of need by refunding them monies they paid for flights they will
never take, United has elected to force its customers to provide it with a
one-year, interest free loan,” the suit says. 

The Rudolph case also references United’s repeated policy
changes. (United’s latest policy has done away with the 12-month wait period.
The carrier now says it will refund tickets to for flyers whose domestic or
international travel has been delayed more than six hours.)

In the Compo suit, the attorneys note that on April 3, the
Department of Transportation issued an enforcement order stating that airlines
continue to be required to issue prompt refunds when flights are canceled. 

The suits accuse United of fraud, unjust enrichment and
violations of state consumer protection acts. They ask the court to require
United to refund ticket holders, pay interest and to pay additional punitive
damages. 

The Compo case defines eligible class action participants as
anyone in the U.S. who purchased United tickets on or after Feb. 29 and either
sought to cancel their flights or had their flights canceled. The Rudolph suit
defines eligible participants as anyone in the U.S. who purchased United
tickets for flights from March 1 and who were either refused a refund or who
will seek a refund in the future. 

In an email, United spokeswoman Leslie Scott said that since
the start of the Covid-19 crisis, the carrier has implemented new policies
allowing customers to rebook travel or cancel trips and receive a voucher
without a fee. 

“Eligible travelers on domestic flights — and customers
with international tickets — can request a refund on United.com or may call
our contact centers if their flights have been severely adjusted or service to
their destination suspended either due to government mandates or United
schedule reductions related to Covid-19,” she said.

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Transport

On Average, US Airlines Have Enough Cash to Survive 8 Months

Time continues to be of the essence for virtually every business affected by the global coronavirus pandemic, and especially critical for a U.S. aviation industry that is facing the potential loss of several whole airlines.

According to a new report issued by financial services firm Raymond James and summarized by the aviation blog The Points Guy, domestic carriers have, on average, enough cash on hand to survive about eight months before they face bankruptcy or, worse, insolvency.

For some, it’s a little longer. Regional carrier SkyWest can go almost a full year with what it has in the bank.

For others, it’s a more pressing issue. According to Raymond James, American has enough cash to only last about 4.8 months. American is carrying the most debt among U.S. airlines.

Still, it’s better than the global average.

The International Air Transport Association (IATA) estimates global carriers have an average of three months of cash on hand. The Points Guy noted that IATA has previously said that nearly half of airlines could collapse or consolidate without government support.

“At times like this, it’s actually balance sheets that are critical to survival,” said IATA chief economist Brian Pearce during a press briefing in March.

What airlines need is revenue, but until the virus is completely obliterated, it appears that demand for travel will continue to be decreased. The Raymond James estimates do not include monies from the CARES Act, the stimulus package signed by President Trump last month that includes $25 billion in grants for airlines.

Here are the Raymond James estimates for each airline:

—SkyWest: 11.8 months of implied cash on hand

—Allegiant: 10.6 months

—Southwest: 9.4 months

—Spirit: 8.8 months

—JetBlue: 8.7 months

—Alaska: 6.6 months

—Mesa: 6.3 months

—Delta: 6.2 months

—United: 5.7 months

—American: 4.8 months

Raymond James calculated “implied months of cash on hand” by analyzing each carriers’ cash and credit reserves, and estimated cash burn. The calculations do not include any possible government funds from the CARES Act.

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Agents, Customers, Congress Frustrated Over Airline Refund Policies

Tammy Levent, a Palm Harbor, Fla. travel advisor, speaks for many agents—and airline customers, and members of Congress—when she says she is frustrated.

While nearly every major domestic airline is waiving change fees to rebook flights and providing credit for future travel in the wake of the coronavirus global pandemic, that credit is usually only good for one year from the date the original flight was booked. So if a customer booked a flight in November of 2019 to travel to Positano, Italy in June—as Levent did—you have to travel before November of 2020.

And with 10 million Americans having filed for unemployment in the last three weeks, either money is tight or, well, as Levent puts it, “Who goes to Positano in the fall and winter?”

“It’s a very difficult situation,” Levent told TravelPulse.com. “I will keep working on this, but I might have to tell one of my customers he’s losing $2,800 in flights.”

Rarely do Americans travel to Europe in the fall and winter, except perhaps at Christmas time, since many tourist and seasonal businesses close down. Positano, for example, is a gorgeous, romantic seaside town on the Amalfi Coast whose peak times are between March and October.

Levent, who said part of her frustration is that policies seem to change call to call, said that agents want a uniform policy.

“We would all be happy with an extended travel credit, voucher or whatever with penalties waived,” she said. “So if they booked in November or December of 2019, and they were traveling in June of 2020, extend that option not to November 2020 but November 2021. Allow customers to try to book the same time period but in the following year, or one year from when they were supposed to travel and not one year from date of booking.”

Pleas from Levent and the industry are not falling on deaf ears. She did receive a notice from Delta saying it would try to process credits/refunds as soon as possible although it might take up to two billing cycles. And, according to the Huffington Post, carriers are facing mounting pressure to give customers cash refunds for canceled flights after Congress approved a $50 billion bailout package for the airlines.

On Wednesday, nine senators sent letters to the chief executives of 11 major airlines arguing that each company “has a moral responsibility to provide real refunds, not travel vouchers, to consumers, and to support State Department efforts to repatriate any American citizens trying to come home. It would be unacceptable to us for your company to hold onto travelers’ payments for canceled flights instead of refunding them, especially in light of the $25 billion bailout that the airline industry just received from Congress. We urge you to offer cash refunds for flight cancellations so that Americans can better weather this crisis.”

The letters were signed by Sens. Ed Markey (D-Mass.), Elizabeth Warren (D-Mass.), Richard Blumenthal (D-Conn.), Chris Murphy (D-Conn.) Sheldon Whitehouse (D-R.I.), Bernie Sanders (I-Vt.), Kamala Harris (D-Calif.), Robert Casey (D-Penn.) and Amy Klobuchar (D-Minn.)

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Trump Considers Cutting Flights Between Cities Hard-Hit by Coronavirus

Little more than a week after saying it has no plans to shut down domestic airline travel, the White House is apparently considering an alternative, limited option to that plan as the coronavirus continues to spread.

President Trump said Wednesday during his daily press briefing that he is reluctant to shut down the airlines and issue a national stay-at-home order, but did acknowledge that asking carriers to cut back on flights between cities hardest hit by the coronavirus is an option.

“You have them going, in some cases, from hot spot to hot spot,” Trump said about airlines, but quickly added that “Once you do that you are clamping down on an industry that is desperately needed.”

Already, some have questioned why the airlines won’t stop flights between so-called ‘hot cities,’ particularly those that have been overwhelmed by the growing number of positive COVID-19 cases in New York, New Jersey and Connecticut.

But USA Today noted that even health experts say that the airlines are an essential service for both people and cargo. And, in Trump’s $2 trillion stimulus package signed last week that provides some $58 billion for the airline industry, one of the provisos was that airlines must maintain a minimum level of service until at least September.

However, some officials have implemented their own airline-related conditions. Florida Gov. Ron DeSantis ordered anyone flying to Florida from New York, New Jersey or Connecticut to self-isolate for 14 days. Alaska and Hawaii are also requiring anyone arriving from other states to self-quarantine.

The airlines themselves have already reduced their schedules as the number of people flying has dramatically reduced – up to 90 percent on some days compared to the same date last year.

Trump also said on Fox News that he would not close airports, because “when you close them and reopen them, it’s a tremendous deal. It’s a tremendous deal. In addition, you need them for emergencies, you have emergency flights.”

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Great time to buy airline tickets

Now is a great time to purchase airline tickets for travel
in the second half of 2020. 

Domestic budget fares through September averaged just $139
roundtrip on March 31, said Hayley Berg, an economist for booking platform
Hopper. That’s a drop of 47% since the Covid-19 crisis caused prices to begin
plummeting in early March. Hopper defines budget fares as the lowest 10% of the
fare quotes it tracks.

“Our expectation is that prices will stay low for probably a
few months at least,” Berg said. “It will probably take until well after this
year for prices to recover to where they were, if they ever recover.”

The sharp economic decline — along with uncertainty about
how long social-distancing measures, stay-at-home orders and travel
restrictions will continue — looms over booking decisions even for the second
half of this year. But right now, airlines are offering an antidote to
uncertainty in the form of change-fee waivers. United and American, for
example, are waiving change fees for 12 months from the time of booking for all
flights purchased by April 30. Delta has the same offer in place for bookings
through April 15. Southwest never charges change fees. 

A March 20 Hopper analysis found that the destinations with
the best domestic deals for June through August were Miami, Fort Lauderdale, Daytona
Beach, Chicago and Flagstaff, Ariz. Budget tickets to Miami were down 45% from
a year earlier. 

For domestic travel in September, October and the first half
of November, flights to Chicago, Miami, Phoenix, Philadelphia, Denver and
Charlotte were down the most compared with a year earlier. Budget ticket prices
to Chicago were off the most at 29%. 

Outside the U.S., budget ticket prices for the summer are
down the most to Santiago and Santo Domingo, Dominican Republic; Barcelona;
Athens; and Paris.

For the fall, budget airfares are down the most by percentage
on flights to Medellin, Colombia; Lima, Peru; Bogota, Colombia; and Santo Domingo
and Santiago, D.R.

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Transport

Germany Prepares to Nationalize Condor Airlines

The German government is reportedly preparing to take over Frankfurt-based Condor Airlines, since a previous plan for Polish Aviation Group (PGL)—parent company of LOT Polish Airlines—to purchase the carrier appears likely to fall through.

Condor was formerly part of the Thomas Cook Group, prior to that company’s collapse in September 2019, and was rescued at that time by a €380 million (USD $415 million) state bridging loan.

In January 2020, LOT agreed to buy Condor for about €300 million (USD $328 million), combining the leading carriers to create a European aviation group capable of flying over 20 million passengers per year.

However, the unanticipated, unprecedented effects of the current COVID-19 pandemic on the global aviation industry may make the planned takeover impossible. Inside sources told Reuters that PGL has made the completion of this transaction contingent upon certain guarantees to which the German government will not agree.

With most fleets grounded, yoked by strict travel restrictions aimed at containing the coronavirus’ spread, and consumer fears fueling a steep decline in demand, airlines around the world are struggling to stay afloat unless they receive financial aid from their respective governments.

The International Air Transport Association (IATA) lately released a report, which estimates that airlines will lose $252 billion in overall revenue this year as a result of the global health crisis. IATA Director General and CEO Alexandre de Juniac posited that most air carriers will soon go bankrupt without swift government bailouts and has urged the provision of state-funded assistance to prevent the total collapse of the air travel industry.

Just last week, Condor reportedly applied for an extra €200 million (USD $220 million) in state aid in order to maintain operations. At present, no final determination has been reached regarding the imperiled carrier’s immediate future, although sources said that the government’s decision could come sometime this week.

Should Germany end up nationalizing Condor, sources said that its ownership of the airline would only last for a limited time and that Germany would want to restart the sales process as soon as the travel industry rebounds from the coronavirus crisis.

For more information, visit condor.com.

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Airlines Expected to Burn $61 Billion in Cash During Second Quarter 2020

A new report from the International Air Transport Association (IATA)—which represents some 290 airlines or 82 percent of the world’s total air traffic—forecasts that major airlines will burn through $61 billion of their cash reserves by the close of 2020’s second quarter.

IATA is urging global governments to slacken rules which require currently airlines to provide cash refunds to customers for canceled trips, which look to total $35 billion during this period.

The results of an impact assessment, based on a scenario in which severe today’s COVID-19-related travel restrictions lasted for three months, show the airlines’ overall revenue plummeting by 68 percent during the anticipated height of the coronavirus pandemic.

IATA is predicting the global aviation industry to post net losses of up to $39 billion in the second quarter and as much as $252 billion in overall revenue this year.

While the COVID-19 crisis continues to make travel almost impossible, airlines are making cuts where they can—canceling routes, grounding fleets and laying off employees. But, as IATA’s Director General and CEO, Alexandre de Juniac, said during a March 31 media briefing, “When 70 percent of your business vanishes overnight, there is no amount of cost-cutting that can adequately fill the gap.”

The IATA estimated that airlines typically had cash balances at the start of this year sufficient to support two months’ worth of operations. Based upon information from the CAPA Centre for Aviation, Bloomberg reported that most carriers will be bankrupted by May if they can’t secure support.

Several world governments have stepped up so far, providing financial aid or relief measures in answer to the airline industry’s pleas, including Australia, China, Colombia, New Zealand, Norway, Singapore and the U.S.

#Airlines are facing rapid cash burn despite severe capacity cuts – latest IATA estimates shows to what extent, in Q2 alone. #COVID19

See more: https://t.co/zXL4CtaOKf pic.twitter.com/6bttcnhdWx

While consumers are expressing frustration with airlines’ reluctance to issue cash refunds for tickets, de Juniac argued that aviation needs to retain this capital in order to survive the current volatility. He’s in favor of governments allowing airlines to issue vouchers in lieu of refunds, as Canada, Colombia and the Netherlands have recently done.

This would serve as a vital buffer, said de Juniac, “so that the sector can continue to function. In turn, that will help preserve the sector’s ability to deliver the cargo shipments that are vital today and the long-term connectivity that travelers and economies will depend on in the recovery phase.”

For more information, visit iata.org.

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