(Reuters) – Air New Zealand <AIR.NZ> said on Tuesday nearly a third of its employees, about 3,500, will be laid off in the coming months, as it grapples with severe global travel curbs due to the coronavirus that has forced it to cancel nearly all flights.
The national carrier, which employs 12,500 people, said the announced number of layoffs was a “conservative” assumption, and that it could rise if the domestic lockdown and border restrictions were extended.
Large scale layoffs of its global staff will start this week, the company said.
“Unfortunately, COVID-19 has seen us go from having revenue of NZ$5.8 billion to what is shaping up to be less than NZ$500 million annually based on the current booking patterns we are seeing,” Chief Executive Officer Greg Foran said in an email to staff and customers.
“This has the potential to be catastrophic for our business unless we take some decisive action.”
Air New Zealand is an example of the dire situation facing airlines across the world due to curbs on travel to control the spread of the virus.
“We have had to cut more than 95 percent of our flights here in New Zealand and around the world. The only flights remaining are in place to keep supply lines open and transport options for essential services personnel,” Foran added.
Earlier in March, the New Zealand government offered the airline a NZ$900 million ($540.99 million) lifeline to keep it in the air.
The company also noted that “every dollar we use from this loan facility comes with interest (more than double current interest rates for a household mortgage) and must be re-paid.”
“Burdening our airline with massive debt would significantly lessen our ability to compete with airlines emerging from COVID-19,” said Foran.
He also said that in a year’s time he expects staffing levels to be 30% smaller than it is currently.
($1 = 1.6636 New Zealand dollars)
(Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by Shinjini Ganguli)
FILE PHOTO: An Air New Zealand Airbus A320 plane takes off from Kingsford Smith International Airport in Sydney
70% corresponds to a 90% reduction in international flights and 40% in domestic operations. All customers with affected international and national flights from today can reschedule their journeys until December 31, 2020, at no additional cost
Following new border closures of various countries and the subsequent drop in demand, LATAM Airlines Group S.A. and its subsidiaries will reduce their capacity by 70%, equivalent to a 90% decrease in international operations and 40% in national flights.
“We made this difficult decision following border closures that have made operating to a large part of our network impossible. If these unprecedented travel restrictions are extended over the next few days, we cannot rule out further reductions to our operation,” said Roberto Alvo, Chief Commercial Officer and CEO-elect of LATAM Airlines Group.
All passengers with affected national or international flights from today (March 16, 2020), will be able to reschedule their flights until December 31, 2020, at no additional cost.
LATAM’s customer service channels are currently receiving high numbers of enquiries, impeding the ability to attend customers. To be able to focus on passengers with the most pressing requirements, LATAM requests that customers do not call more than 72 hours prior to their flight.
WASHINGTON – Amtrak announced that it has named William J. Flynn as its next Chief Executive Officer and President. Flynn, a seasoned business leader with four decades of transportation and logistics experience, will begin his role on April 15, 2020. Flynn succeeds Richard Anderson, who joined Amtrak as CEO in July 2017. Anderson, who fulfills his three-year commitment to the company this year, will remain with Amtrak through the end of the year as a senior advisor to Flynn.
Flynn, 66, has been a successful leader across multiple modes of transportation, including rail, maritime and aviation. Most recently, he served 13 years with Atlas Air Worldwide Holdings, Inc., which serves the global air freight, military charter and passenger charter markets, as President and CEO and Board Chairman. He also held senior roles with CSX Transportation, Sea-Land Services, Inc., and GeoLogistics Corp.
“Bill is the right executive to lead us into the future,” said Amtrak Board Chairman Tony Coscia. “We’ve never been stronger as a company than we are today. We are modernizing the customer experience and delivering our service to more people. Bill has a consistent track record of growing and improving complex transportation businesses. We are confident he will build upon the strong foundation of record-setting growth and improvement set by the Board, Richard and the entire Amtrak team.”
In fiscal year 2019, Amtrak set new records in ridership, revenue and earnings. In 2020, Amtrak is on pace to achieve operational breakeven for the first time in the company’s 49-year history. Additionally, Amtrak is investing billions in capital assets and is undertaking the largest fleet renewal in company history, with new high-speed Acela trains entering service on the Northeast Corridor next year.
“Amtrak’s future is incredibly bright and I’m excited to join the team,” said Flynn. “Amtrak service is vital to millions of Americans across the nation and by improving the customer experience, driving safety, and strengthening our partnership with states and other stakeholders, we can do much more for the American people. Tony, Richard and Amtrak’s dedicated employees have done an amazing job modernizing the company for the 21st Century. It’s a privilege to join them in continuing this work and advancing something as important as Amtrak’s mission.”
“I congratulate the Board on selecting Bill to lead Amtrak into its 50th year and beyond,” said Anderson. “Bill brings deep expertise across all aspects of transportation and a true passion for the customer. As the company refleets our equipment, expands our services and advances key infrastructure projects like the Gateway Program, it will require the steady leadership and relentless drive for improvement that I know Bill can provide.”
DEARBORN, Mich. (Reuters) – Investors sent Ford Motor Co shares skidding on Tuesday after the company delivered a weaker-than-expected 2020 forecast, warning of higher warranty costs, lower profits at its credit arm and continued investments in future technology such as self-driving cars.
Shares in the No. 2 U.S. automaker plunged 9.4% in after-hours trading, shaving more than $3 billion off the company’s value. In comparison, electric carmaker Tesla closed up nearly 14%, pushing its market cap to $160 billion, more than four times the size of Ford’s $36.4 billion.
“The results were not OK in 2019,” Ford Chief Financial Officer Tim Stone told reporters at the company’s headquarters outside Detroit.
“As I look to 2020 and beyond, I’m very optimistic,” he said, while cautioning that Ford’s lower guidance does not yet account for the potential impact of the coronavirus outbreak in China.
In an after-hours call with financial analysts, Chief Executive Jim Hackett was more blunt about the challenge of balancing Ford’s protracted turnaround efforts with its continuing work on future technology, including electric and self-driving cars.
“I don’t think this company can keep straddling the old and new worlds forever … This company has to change,” Hackett said.
Ford said it expects 2020 operating earnings to be in the range of 94 cents to $1.20 a share. Analysts were expecting $1.26 a share.
Stone said Ford expects to continue its quarterly dividend of 15 cents, which could cost the company $2.4 billion in 2020. Asked about continuing the dividend after lowering its 2020 guidance, Hackett said, “We like to return value to shareholders.”
The disappointing 2020 forecast, coming after Ford previously trimmed its 2019 outlook, is a blow for Hackett, who took the helm in May 2017.
He has been asking investors to be patient with a restructuring that has seen the formation of a wide-ranging alliance on commercial, electric and autonomous vehicles with Volkswagen AG <VOWG_p.DE> and the sale of its money-losing operations in India to a venture controlled by India’s Mahindra & Mahindra.
But by Ford’s own accounting, the restructuring is far from complete. It has booked $3.7 billion of the projected $11 billion in charges it previously said it would take, and expects to book another $900 million to $1.4 billion this year.
For the fourth quarter of 2019, Ford reported a net loss of $1.7 billion, or 42 cents a share, compared with a loss of $100 million, or 3 cents a share, a year earlier.
The quarter included a loss of $2.2 billion due to higher contributions to its employee pension plans, something it disclosed last month.
Revenue in the quarter fell 5% to $39.7 billion, above the $36.5 billion Wall Street had expected.
Ford’s adjusted free cash flow fell 67% in the fourth quarter to $500 million, including the $600 million cost of bonuses related to a new labor deal with the United Auto Workers union. The UAW deal also played a role in driving North American automotive profit margins down to 2.8% in the fourth quarter.
Ford said its operating losses in China last year totaled $771 million, including a loss of $207 million in the fourth quarter. It lost $1.5 billion in 2018. Ford’s market share in China in the fourth quarter fell to 2% from 2.3% last year.
In December, Ford said it would halve its operating loss in 2019 and nearly halve it again in 2020, followed by further improvement in 2021.
However, that forecast was before the appearance of the fast-spreading coronavirus and its crippling effects on China’s economy.
Ford’s China sales fell about 15% in the fourth quarter and 26% for the year as it continued to lose ground in its second-biggest market. Ford has been struggling to revive sales in China since its business began slumping in late 2017.
Detroit rivals General Motors Co and Fiat Chrysler Automobiles are scheduled to report their results on Wednesday and Thursday, respectively.
(Reporting by Ben Klayman and Paul Lienert; Editing by Tom Brown)
DUBLIN (Reuters) – Brazilian low-cost carrier GOL, which has 130 of Boeing’s grounded 737 MAX jets on order, expects to be flying the jet by April and hopes to secure a compensation deal within months, chief financial officer Richard Lark said on Monday.
“We at GOL are planning April” for the jet’s return to service, Lark told journalists. He said he expected to finalize a deal with Boeing within months that would “make investors whole” for losses associated with the delivery delays.
(Reporting by Conor Humphries; editing by David Evans)
FILE PHOTO: An employee works near a Boeing 737 Max aircraft at Boeing’s 737 Max production facility in Renton
MONTREAL (Reuters) – Airbus <EADSY> sees enough demand for its wide-bodied A330neo passenger jet to keep production stable, Chief Commercial Officer Christian Scherer told Reuters on Wednesday.
With some airlines seen unlikely to take delivery of all the jets they have ordered, there has been speculation Airbus would have to trim production of the latest version of its most profitable long-range jet despite a recent flurry of new sales.
“Considering the demand I see on the A330neo I see no need to cut production levels,” Scherer told Reuters on the sidelines of an Air Canada <AC.TO> event in Montreal.
“Production is stable on the A330.”
Last year, Airbus secured 99 firm orders for the A330neo including 40 to an unidentified buyer in December.
Scherer said Airbus is also progressing toward reducing costs on its smallest jet, the A220. The company is targeting a double-digit percentage reduction in production costs.
(Reporting by Allison Lampert in Montreal; Editing by Matthew Lewis)
(Reuters) – JetBlue Airways Corp on Monday said it plans to become carbon neutral on all domestic flights by July 2020 and would use an alternative fuel source for flights leaving from San Francisco amid rising pressure to cut greenhouse emissions.
The aviation industry has been trying to combat climate change by trying to cut its greenhouse gas emissions in half by 2050 compared with 2005 levels and sees the emergence of lower-carbon biofuels as a vital step towards meeting this goal.
The industry’s plan rests on a mix of alternative fuel, improved operations such as direct flight paths, new planes and other technologies.
JetBlue in its attempt to reduce greenhouse gas emissions will favor renewable sources and will start using sustainable aviation fuel in mid-2020 on flights from San Francisco International Airport.
“By offsetting all of our domestic flying, we’re preparing our business for the lower-carbon economy that aviation – and all sectors – must plan for,” Chief Executive Officer Robin Hayes said in a statement.
JetBlue declined to give details about the cost of the exercise. It did not disclose if any other airports will be a part of the plan to reduce greenhouse gas emissions.
Sustainable-fuel, derived from sustainable oil crops or from wood and waste biomass, would have the single largest impact in reducing emissions from each flight by around 80%, but is in short supply, according to the International Air Transport Association (IATA).
(Reporting by Sanjana Shivdas in Bengaluru; Editing by Amy Caren Daniel and Aditya Soni)
A JetBlue aircraft comes in to land at Long Beach Airport in Long Beach
Aston Martin (ARGGY) just can’t help but outdo itself. From its entry in Le Mans, to building James Bond cars that actually work, to Aston Martin-themed motorcycles, and even embracing the manual gearbox after everyone else abandoned it—it seems that the British luxury marque is always looking to do the unexpected.
For its next trick, Aston Martin announced a team-up with airplane and helicopter maker Airbus to unveil the ACH130 Aston Martin Edition, a stylish helicopter embellished with four different interior and exterior designs provided by Aston Martin.
Exterior options include Stirling Green, Xenon Grey, Ultramarine Black, and a color simply dubbed Arizona. For the cabin, buyers get to choose between Oxford Tan, Cormorant, Ivory, and Pure Black. Matching leather and Pure Black ultra-suede makes up the rest of the interior. Aston Martin badging is embossed on the leather headrests to further distinguish this special edition for the standard ACH130.
Japanese regional operator starts fleet replacement with eco-responsible turboprop aircraft
World number one regional aircraft manufacturer ATR today delivered the first of two ATR 42-600 aircraft to Hokkaido Air System Co., Ltd (HAC), a JAL Group Company. This delivery marks the first step in HAC’s replacement of its Saab 340 fleet. The delivery of this aircraft will ensure that essential regional air connectivity in Hokkaido can continue.
The ATR 42-600 will offer HAC increased capacity for the same operating costs – generating opportunities for the airline to increase revenues. It will also provide HAC’s passengers with a modern, comfortable cabin featuring latest generation 18”-wide seats as well as more space for luggage in the overhead bins.
Tetsu Ohori, Chief Executive Officer of HAC said: “Today is a long-awaited day for us at Hokkaido Air System, and becomes a memorable day, marking a new chapter in our history. We have so many tourists who enjoy the fantastic ‘Mother Nature’ of Hokkaido. In winter, the great nature turns her face with severe cold and heavy snow. Even under such hard conditions, this ATR 42 will perform well and make our new business a success. I’m really looking forward to showing this wonderful aircraft to everyone in Hokkaido as soon as possible.”
ATR Chief Executive Officer Stefano Bortoli remarked: “Our aircraft makes perfect sense for the Japanese market. Japanese passengers, who are known to demand the very best in terms of comfort and eco-responsibility, will appreciate both the aircraft’s reduced emissions and modern comfortable cabin. This, plus the unbeatable economics and the need to maintain essential regional connectivity in Japan demonstrates why we are increasing our presence in the country.”
ATR’s market estimates forecast that around 900 30-50 seat aircraft will soon need to be replaced as older and inefficient aircraft come to the end of their lives. The ATR 42-600 is part of ATR’s unique family of regional aircraft, including the ATR 72-600, the ATR 42-600S (Short Take-Off and Landing) and the ATR 72-600F, the only brand new regional freighter. Together, they represent the ideal and modern solution to ensure that essential connectivity is maintained for local communities all over the world, while flying sustainably, emitting up to 40% less CO2 compared with regional jets.
About Hokkaido Air System Co., Ltd Established on 30 September, 1997, Hokkaido Air System began operations on 28 March.1998, with Japan Airlines (57.3%), Hokkaido government (19.5%), Sapporo city (13.5%) as major shareholders. Hokkaido Air System operates three aircraft (SAAB340B-WT) and 26 daily departures on five routes; between Sapporo-Okadama and Rishiri/Kushiro/Hakodate/Misawa, Hakodate and Okushiri, based in Sapporo-Okadama airport.
The Air France-KLM Group has decided to place a firm order for 10 additional widebody A350-900’s, which will take its total order for the type to 38 aircraft.
By acquiring the industry’s most efficient and technologically advanced widebody aircraft, the airline will benefit from a significant reduction in fuel burn and CO2 emissions. The A350 XWBs are intended to be operated by Air France.
“Rationalising and modernising the fleet is central to our effort to regain our leading position in Europe,” said Benjamin Smith, CEO of Air France-KLM Group. “It will strengthen our performance from both an economic and operational standpoint, and will help us deliver on our ambitious sustainability agenda. Offering a 25% reduction in fuel consumption compared to previous-generation aircraft, the Airbus A350-900 is a jewel of European expertise and a passenger favorite. We are excited to see it become a core asset of the Air France fleet.”
“Ben is leading an impressive transformation at Air France-KLM and we feel honoured that our A350 XWB aircraft have been selected as part of this endeavor,” said Guillaume Faury, Airbus Chief Executive Officer. “We sincerely thank Air France-KLM for the confidence placed in us.”
Air France-KLM currently operates a fleet of 159 Airbus aircraft.
The A350 XWB features the latest aerodynamic design, a carbon fibre fuselage and wings, plus new fuel-efficient Rolls-Royce engines. Together, these features translate into unrivalled levels of operational efficiency with a 25% reduction in fuel burn and emissions. The A350 XWB’s Airspace by Airbus cabin is the quietest of any twin-aisle and offers passengers and crews the most modern in-flight products for the most comfortable flying experience. By the end of November, the A350 XWB Family had received 959 firm orders from 51 customers worldwide, making it one of the most successful widebody aircraft ever.
