IATA estimates airlines to lose $84.3bn in 2020
The International Air Transport Association (IATA) estimated that the airlines could lose $84.3bn this year.
The loss is estimated for a net profit margin of -20.1% as the coronavirus (Covid-19) continues to affect operations, according to the association’s financial outlook for the global air transport industry.
IATA also expected the revenues to drop by 50% to $419bn in 2020 compared with $838bn last year. Meanwhile, losses are expected to reduce to $15.8bn in 2021 with revenues increasing to $598bn.
France prepares €10bn aerospace emergency fund
The French Government planned to unveil an emergency fund worth up to €10bn for the aerospace industry.
Reuters cited French financial daily newspaper Les Echos as reporting that the government was expected to unveil the fund, which included an expected €1bn investment fund.
Commenting on whether the €1bn fund was being conceived as part of the crisis package, French Transport Minister Jean-Baptiste Djebbari said: “For one of the funds, that is more or less the target.”
Covid-19: German airline Lufthansa may cut 26,000 jobs
German carrier Lufthansa warned that as many as 26,000 jobs may be cut amid the Covid-19 pandemic.
The announcement followed even after the carrier received a €9bn bailout from the German Government on 25 May. The airline is currently undergoing a restructuring process.
The pandemic severely impacted the passenger air travel demand worldwide.
American Airlines plans to secure $3.5bn in new financing
US carrier American Airlines planned to secure $3.5bn in new financing as it addresses the impact inflicted by the Covid-19 pandemic restrictions.
The carrier planned to raise $1.5bn by selling shares and convertible senior notes due 2025 and an additional $1.5bn will be offered in senior secured notes.
It also planned to secure a new $500m Term Loan B Facility due 2024 concurrently with the closing of the offering of the notes.
Qantas plans to cut at least 6,000 jobs amid pandemic
Australian flag carrier Qantas Group revealed plans to reduce its workforce by at least 6,000 employees across all parts of the business due to the Covid-19 pandemic.
The announcement is part of Qantas’ three-year plan to accelerate its recovery from the Covid-19 crisis by reducing costs to $15bn during these years.
As part of the move, the company will continue to furlough 15,000 more workers until it resumes operation. It will affect those engaged in international operations.
Brazil’s Embraer obtains $600m loan in new liquidity
Brazilian aircraft manufacturer Embraer obtained a $600m loan in new liquidity as Covid-19 continues to disrupt the global aviation industry.
With partial backing from the Brazilian Government, the loan will be provided by state bank BNDES and private banks on a 50:50 basis, Reuters reported citing Embraer. The company was engaged in negotiations since late April.
The announcement follows after Embraer terminated the $4.2bn master transaction agreement (MTA) with aerospace and defence company Boeing in April.
Bain Capital agrees to acquire Virgin Australia
Virgin Australia’s administrator Deloitte selected US private investment firm Bain Capital to acquire the struggling airline.
Bain Capital, along with Cyrus Capital Partners, made their final bid for the acquisition of the airline in June.
Virgin Australia was struggling with long-term debt of A$5bn ($3.17bn) even before the Covid-19 pandemic paralysed global airline operations.
Norwegian Air terminates purchase agreements for 97 Boeing aircraft
Oslo-based low-cost carrier Norwegian Air issued a notice of termination to Boeing, relating to orders for 97 aircraft.
The purchase agreements were signed for 92 737 MAX jets and five 787 Dreamliners. The orders also included the GoldCare service agreements for both aircraft.
Additionally, the airline planned to seek payment from Boeing for the company’s losses due to the grounding of the 737 MAX and problems with the 787’s engine.
