General News

Below are links to stories of general interest in relation to aviation and airports.

 

Covid-19: Virgin Atlantic to cut 3,000 jobs and shut down Gatwick operations

Virgin Atlantic has announced it is to cut more than 3,000 jobs in the UK and end its operation at Gatwick airport, due to the collapse in air travel demand because of the Covid-19 pandemic. This comes soon after rival British Airways said it could not rule out closing its Gatwick operation. Virgin was Gatwick's 9th largest airline, while British Airways was the 2nd largest, after EasyJet, which is largest - Norwegian is 3rd largest. Virgin Atlantic said it will move its flying programme from Gatwick to Heathrow, but it intends to keep its slots at Gatwick "so it can return in line with customer demand".  The job losses amount to about 30% of the total (the job losses at BA are 28%). Virgin Atlantic also plans to reduce the size of its aircraft fleet from 45 to 35 by the summer of 2022. Even the lobby group, Airlines UK admits that "Airlines are having to adapt to a sector that will be smaller and leaner in future, with no guarantees as to when we will return to pre-crisis levels."  When lockdown restrictions ease and flight schedules are increased again, there will be fewer passengers, fewer and probably more expensive flights and thousands of  job losses. The area around Gatwick was too dependent on the airport for jobs etc.

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Covid-19: UK Government ‘actively looking at’ quarantining UK airport arrivals

The UK Government is “actively looking at” quarantining, for Covid-19, people arriving from abroad - due to criticism about the UK dragging its feet on this, compared to other parts of the world.  Currently, there are no health checks on passengers arriving into the UK. Many other countries have banned all but their own citizens and residents from incoming flights - while other nations have regional restrictions. There are reports the UK Government is considering forcing all arrivals to undergo two weeks of quarantine as they arrive in the country, to prevent the arrival of new Covid cases.  Grant Shapps has said that we need to ensure the sacrifices, of lockdown and social distancing, that the Government has asked the British people to make are matched by anybody who comes to the country. The Scottish Health Secretary has said she thinks air passengers should have to quarantine themselves. Airlines, of courses, are not keen as they say a compulsory period fo quarantine would kill air travel. Lobby group, Airlines UK,  said a quarantine would "completely shut off the UK from the rest of the world when other countries are opening up their economies" - ignoring the fact that most air travel (over 80%) is for leisure.

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Warren Buffett’s company Berkshire Hathaway sells all its shares in the 4 largest US airlines

Billionaire investor Warren Buffett has said his company, Berkshire Hathaway, has sold all its stakes in the 4 largest US airlines, because of the coronavirus crisis. According to the company's financial records, it had an 11% stake in Delta Air Lines, 10% of American Airlines Co, 10% of Southwest Airlines Co and 9% of United Airlines at the end of 2019. Speaking at the company's (virtual) AGM, the business tycoon said "the world has changed" for the aviation industry due to Covid. He said he had made the wrong decision in investing billions of dollars in the aviation industry, since 2016. He thinks it is unclear if as many people will fly in the coming years as in 2019. He said if airline demand comes back 70-80%, that means airlines will have too many planes.  The company was one of the largest individual holders in the four airlines. Berkshire Hathaway has lost money on airlines, and is worth less today because of the decision to invest in airlines. Elsewhere, there is speculation that the aviation sector will have to invest more in environmental initiatives, and there will be a decline in investment in the construction of new airport terminals, new airports and new aircraft orders.

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Campaign groups write to Sec of State for Transport, asking for a far-reaching review of the aviation industry – with any bail-out funding conditional on proper review

In the current, unprecedented situation for aviation, created by the Covid-19 pandemic, the sector is lobbying hard to be given government bail-out money. Now campaign groups have written to Grant Shapps, asking that a far-reaching review of the aviation industry and the regulatory mechanisms through which it is overseen should be carried out urgently.  This is necessary in the light of the series of failures, which have had very significant environmental, health and financial costs.  The aviation industry is routinely excused from taking adequate responsibility for its adverse impacts on society and environment, while it enjoys immense legal, fiscal, public funding and other privileges. But its core low-margin high-volume business model - for which it now demands subsidies and bailouts - is unsustainable and no longer credible.  The relationship between government and the industry has become too cosy, with policy-makers and officials appearing to believe and act as though their main role is to advance the industry’s interests rather than to regulate it effectively.  The letter says systemic failure of the aviation industry, and its regulators is over-due.  The intention to carry out such a review should be a condition of, and announced in parallel with, any “bail-out” of UK aviation businesses. 

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Some possible changes to flying, when and if people want to start flying again

There is much speculation about what the aviation sector will be like in the later part of this year, and in the next few years, due to the Covid pandemic. It is very uncertain, not only whether - or how much - governments will bail out airlines, but also whether air travel demand will stay low, for years. It is likely unprofitable airlines will go out of business, and others will become smaller. They will probably abandon unprofitable routes and reduce capacity - which will mean air travel will be come more expensive.  People are rightly very nervous about subjecting themselves to crowds of people at airports, and in planes - even if there is some measure of social distancing, and if wearing masks is compulsory.  Enhanced cleaning regimens and modified boarding practices will raise operational costs.  Will people over 50 or 60 be discouraged, for their health risk, from flying abroad?  Will travel insurance become prohibitively expensive?  Will some countries not want incomers, potentially bringing infection? Will the concept of a "bucket list" of travel destinations now be binned? Will travel again become something special, with a "holiday of a lifetime" becoming just that?  Fewer short trips, with longer and more meaningful trips instead?

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Mixed mode at Heathrow should be opposed; it means expansion through the back door, with more noise hell for thousands

Since 6th April, Heathrow has been operating using only one runway, in mixed mode, as a result of significantly reduced flight numbers during the COVID-19 pandemic. Mixed mode means landings and take-offs can take place on the same runway. At the moment this will be alternated each week, starting on a Monday.  It is looking increasingly unlikely Heathrow will get a 3rd runway, due to the judgement of the Appeal Court, and now Covid. But if it does not get its 3rd runway, it is likely they will be looking to be allowed some form of expansion in its “two-runway strategy” that it is expected to launch in due course. This could take the form of increasing the annual cap on flight numbers from its current threshold of 480,000, to a new figure, over 550,000. That is 70,000 more flights per year, or about 190 more per day, using mixed mode.  That means a lot more noise nuisance for thousands.The change would need a public inquiry, and would be politically toxic in areas affected negatively by Heathrow.  It  could bring misery to the 725,000 people already blighted by aircraft noise. Mixed mode means Heathrow expansion through the back door and it should be opposed.

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Ryanair getting rid of 3,000 staff, imposing 20% pay cuts – knows air traffic recovery will be slow

Ryanair, which is Europe’s biggest budget airline, has said that it will not be running more than a skeleton service until July – and even then, only around half the expected passengers will travel till September. It will cut up to 3,000 jobs, mainly pilots and cabin crew, in response to the coronavirus pandemic. It will also impose unpaid leave and pay cuts of up to 20%, and close some bases, “until traffic recovers”. The airline is currently flying around 1,700 passengers a day on a much-reduced network of Irish Sea and Continental services. It knows it will take time for passenger volumes to return. It is irritated that Air France and Lufthansa have been given state aid, and also EasyJet. And it has not. Air fares will initially be very low, to try to attract passengers back. Mr O’Leary dismissed the notion of social distancing on board aircraft. “Taking out the middle seat in an aircraft achieves no social distancing. There’s less than two feet between the aisle and the window seats." (And between rows). He misguidedly hopes temperature checks will do the trick. He knows traffic will not return to pre-coronavirus levels for at least 2 years.

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BA to cut Gatwick operation and lay off 1,130 pilots – and might not return to Gatwick post-pandemic

British Airways plans, due to Covid, to lose more than 1,100 pilots and make heavy cuts to its Gatwick airport operation as part of 12,000 redundancies - which is up to 30% of its workforce.  Letters sent to union representatives for all sections of the airline set out the deep cuts, as well as drastic changes to terms and conditions across the company. BA plans to lay off almost 80% of crew managers at Gatwick and 60% of other cabin crew, more than 1,100 of almost 1,900 staff. The jobs of just over 400 ground staff will be outsourced to the airport and its contractors.  The airline knows “there is no certainty as to when services can return” to London City or Gatwick airports. So BA may not continue at Gatwick. And they had “not ruled out suspending the remainder of our Heathrow operation”. Ground staff at Heathrow are also likely to be forced to accept new contracts with significantly lower pay. All 4,346 BA pilots will be asked to sign new contracts changing their terms and conditions, and accept new rostering arrangements. BA will be seeking to lay off 1,130 pilots. Around 22,000 BA employees were furloughed in April and May.

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Grant Shapps told EasyJet it would not face environmental levy in a private meeting last year – now gives it a £600 million loan

The UK’s Transport Secretary, Grant Shapps, during a meeting in September 2019, assured easyJet that an environmental tax on flights is “not the way forward.” This has come to light in documents obtained by Greenpeace's Unearthed.  Shapps had agreed with easyJet that they did not want taxes aimed at reducing the aviation sector’s CO2 emissions. But now the UK government has given easyJet a £600 million loan, with no climate conditions attached, to help them during the Covid crisis. Meanwhile the EU is reportedly looking to make compliance with the Paris Agreement, and lower carbon emissions, a requirement for cash help. The French government has announced the terms of the €8 billion bailout for Air France, that will include deep (albeit non-binding) decarbonisation targets.  Across the world, the aviation sector is lobbying aggressively to get government funding, as demand for air travel has been drastically reduced.  It is deeply questionable whether scarce government funds should be spent on such an environmentally damaging sector, taking no account of its impact on climate breakdown.

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Coronavirus: Boeing to cut 15,000 jobs – 10% of its workforce as air travel demand collapses

Boeing plans to cut about 10% of its jobs as it continues to reel from the Coronavirus crisis and the fallout from its 737 Max safety crisis.  It will lost about 15,000 staff out of a global total of around 150,000, through a combination of buyouts, layoffs and the elimination of unfilled roles. At the end of 2019, the company had about 161,000 staff.  The company recorded a loss of $641 million in the first quarter, compared with a profit of $2.15 billion in the same period  in 2019.  The company's airline customers, which purchase Boeing planes to upgrade their fleets, have put purchases and maintenance on hold as they suffer from a global slowdown in travel. And Boeing continues to face losses due to the grounding of its 737 Max planes, which were blamed for two deadly crashes, in October 2018 and March 2019.  Boeing's chief executive Dave Calhoun said "The aviation industry will take years to return to the levels of traffic we saw just a few months ago."  Even that may be optimistic. 

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