The air cargo sector is undergoing a demand slowdown due to global macroeconomic conditions. Post-Covid normalisation as well as global geopolitical crises, most notably in the form of military conflicts, have been the root cause.
Looking ahead, there is little confidence that this situation will improve drastically in the near term. This is partly due to rising interest rates and the termination of key government support programmes.
With customer demands getting more nuanced, a high level of flexibility seems to be the need of the hour. Air freight operators need to be nimble and provide solutions that lower operating costs and save time.
Here’s a quick fly-by of air cargo trends in 2024…
JetBlue (NASDAQ: JBLU) today announced that starting May 4 all customers will be required to wear a face covering during travel. The policy comes after the airline began requiring all crewmembers to wear face coverings while working. JetBlue has modeled its policy on the Centers for Disease Control (CDC) guidelines that indicate all individuals should wear a face covering in public to help slow the spread of the coronavirus (COVID-19).
“Wearing a face covering isn’t about protecting yourself it’s about protecting those around you,” said Joanna Geraghty, president and chief operating officer, JetBlue. “This is the new flying etiquette. Onboard, cabin air is well circulated and cleaned through filters every few minutes but this is a shared space where we have to be considerate of others. We are also asking our customers to follow these CDC guidelines in the airport as well.”
This new policy will require customers to wear a face covering over their nose and mouth throughout their journey, including during check-in, boarding, while in flight and deplaning. Customers will be reminded of this requirement before their flight via email and at the airport by both terminal signage and announcements. Small children who are not able to maintain a face covering are exempt from this requirement.
CDC guidance defines a suitable face covering as an item of cloth that should fit snugly against the side of the face, be secured with ties or ear loops, include multiple layers of fabric and allow for unrestricted breathing. The CDC recommends surgical masks and N-95 respirators be reserved for healthcare workers and other medical first responders.
Maintaining distance onboard whenever possible
Beyond face covering requirements for crewmembers and customers, since late March, JetBlue has limited the number of seats available for sale on most flights, allowing the airline to provide additional space between individuals who are not traveling together. Before each flight, JetBlue reviews seat assignments to ensure as much personal space as possible. In addition, rows near crewmember jump seats have been blocked off to create buffer zones for added crewmember and customer safety.
Safety enhancements throughout the journey
All of JetBlue’s aircraft are equipped with hospital grade high-efficiency air particulate (HEPA) filters. All recirculated air is passed through these HEPA filters before re-entering the cabin and being mixed with fresh air. All of the air in the cabin is, on average, completely changed every three minutes. HEPA filters are capable of removing 99.97 percent of particles, bacteria and viruses. To learn about how air circulates onboard JetBlue’s fleet, view this JetBlue video at https://youtu.be/Q2_C2iN-tEs.
Since the coronavirus began spreading in the United States, JetBlue has increased the rigor of its aircraft cleanings at night and between flights, using disinfectant approved to kill the coronavirus. Cleanings have been focused on the places customers and crewmembers touch the most, including seat covers, seatbelts, tray tables and armrests. Traditional food and beverage service have been adjusted onboard to limit touchpoints between crewmembers and customers. To learn about all the additional measures JetBlue has implemented visit http://blog.jetblue.com/coronavirus.
FILE PHOTO: EasyJet planes parked at Luton airport after the airline grounded its entire fleet
LONDON (Reuters) – EasyJet can survive a nine-month shutdown thanks to its measures to contend with the coronavirus crisis and is planning for a slow recovery, the British airline said on Thursday.
As airlines worldwide battle for survival after lockdowns and travel bans brought the sector to a virtual standstill, EasyJet announced a new fleet plan to manage its emergence from the enforced hibernation.
The UK-based company said it will start to shrink its fleet and the number of planes it operates will not reach pre-crisis levels until 2022, signalling that it does not expect a quick recovery for the industry.
“We’ve been able to adapt ourselves to reduced demand for the next couple of years, then have the flexibility to increase as demand picks up again,” Chief Executive Johan Lundgren told reporters.
The industry is split on how quickly the sector can recover. Lufthansa, plane manufacturers and airline body IATA have warned that it will be a slow process. EasyJet’s bigger low-cost rival Ryanair, meanwhile, has predicted a swift rebound in traffic.
Lundgren said that, while he does not expect the grounding of easyJet’s fleet to last nine months, the company would remain cash-positive even if that were the case and could survive for longer than that by seeking additional funding.
Among the steps it is taking, easyJet is in talks over the sale and leaseback of some planes to leasing companies, with expected proceeds of up to 550 million pounds ($687 million).
“Overall, the company has presented a very credible response to the crisis,” said Goodbody analyst Mark Simpson.
In addition to the deferral of new orders and non-renewal of leases, easyJet said it now plans to sell six aircraft.
The airline, however, has faced calls from its founder and biggest shareholder, Stelios Haji-Ioannou, to terminate its 4.5 billion pound order with Airbus for 107 new jets.
He escalated his row with management on Thursday, issuing a statement saying he planned to call for the removal of Lundgren as well as chairman John Barton at forthcoming meetings. He said Lundgren should not send money to Airbus for planes while running an “aircraft parking lot”.
CASH PILE
Through various funding initiatives, easyJet expects to generate total additional liquidity of about 1.85 billion to 1.95 billion pounds, leading to a notional cash balance of about 3.3 billion pounds.
Given the level of continued market uncertainty, the company said it is not possible to provide guidance for the remainder of the 2020 financial year.
However, it said winter bookings are well ahead of those at the same stage last year, with Lundgren adding that he expects there to be pent-up demand for holidays as people emerge from lockdown.
But travel restrictions are likely to ease slowly and easyJet will have to be flexible, the CEO said. “I don’t think this is going to be a case of let’s just open everything up,” he added.
Measures under consideration include disinfecting aircraft and steps to ensure social distancing on planes.
“We will clearly look to have the middle seat empty as we start,” Lundgren said. “I think that is actually what the customers would like to see.”
EasyJet shares were up 2.2% at 616 pence at 1207 GMT, having lost more than 50% year to date.
($1 = 0.8007 pounds)
(Reporting by Sarah Young; Editing by Kate Holton and David Goodman)
JetBlue (NASDAQ: JBLU) has issued the following message to its 23,000 crew members.
It has been a very tough few weeks. We are so proud to see once again how the JetBlue culture brings us together during times of crisis. Thank you for continuing to serve our Customers and deliver the JetBlue experience, particularly when your own lives are being disrupted in so many ways.
With safety our #1 value, we continue to take the measures necessary to protect your health. But as it relates to our business, we are not going to sugarcoat it. Demand continues to worsen, and the writing is on the wall that travel will not bounce back quickly.
We’d like to give you some color on what we are seeing. Last year on a typical day in March we took in about $22 million from bookings and ancillary fees. Throughout this March, our sales have fallen sharply and in the last several days we have taken in an average of less than $4 million per day while also issuing over $20 million per day of credits to Customers for canceled bookings. This is a stunning shift, which is being driven by fewer new bookings, much lower fares, and a Customer cancel rate more than 10 times the norm. If you do the math, $4 million per day does not come anywhere close to covering our daily expenses. It is hard to predict how long these conditions will last and how much more challenging the environment may become.
We are not alone. Virtually every major carrier is taking actions that were almost unthinkable a few weeks ago, making huge schedule reductions and parking significant portions of their fleets.
Even though we entered this from a position of strength with a strong balance sheet and cash in the bank, because of the dramatic fall-off in bookings, we need to reduce our spending immediately so that we can continue to fund JetBlue’s operations and ensure your jobs are protected. We have already announced an initial capacity reduction, pay cuts for our officers (VPs and above), voluntary time off programs, re-negotiated Business Partners agreements, and other spending reductions.
We’ve taken swift and decisive actions to protect you, but we must do more and do so quickly to weather this storm.
Reducing our flying to reflect demand We are reducing our capacity in the coming months, with a reduction of at least 40% in April and May. We also expect substantial cuts in June and July, and given the unpredictability of this event, we will ground some of our aircraft. We know this is not an easy move – it will impact hours for many frontline Crewmembers, but it is also essential that we reduce capacity in the face of dramatically falling demand.
We will be notifying Customers of their specific cancellations in a phased approach so that we do not overwhelm Customer Support as they continue to receive exponentially more calls than they ever have before.
Reviewing our fleet plan One of our most substantial capital expenses is the purchase of new airplanes. In collaboration with Airbus, we are looking at our order book for opportunities to slow deliveries and reduce aircraft pre-delivery payments (PDPs). We will also defer the four previously used airplanes that we announced earlier this year.
Cutting our capital and operational spending We will reduce spending wherever we can to preserve our cash, and both of us will be taking a 50% pay reduction during this crisis.
We entered the year with a list of major initiatives to invest in our infrastructure, technology and real estate. As of today, we have paused or stopped more than 75% of these projects and will continue to stand down work wherever we can.
Increasing our cash reserves The dramatic loss of revenue in recent days means we will have to start dipping into our cash savings. Although we came into this with about $1.2 billion, our expenses total millions of dollars each day. The good news is we have secured a new liquidity facility – an extra credit line – which allowed us to borrow $1 billion. This is not free money – it’s a band-aid solution that holds us over and we have to pay it back with interest. Even with these cash reserves we, like the rest of the industry, will need significant government support to help us through these losses.
Calling for government intervention The governmental warnings and actions taken to manage this health crisis have hit both domestic and international travel hard. We have been coordinating with Airlines for America (A4A) and other U.S. airlines to ensure government leaders understand the threat to our global economy if air travel is not supported. When this pandemic passes – and it will – air travel will play a major role in getting life back to normal and supporting economic recovery. We are going to need significant government help to do that. This is not a position we’d like to be in, but government assistance will help us protect our 23,000 Crewmembers who are our most important priority as we navigate these turbulent times.
From the beginning we have faced many challenges and, against all odds, we have thrived through some incredibly difficult events. Now we are faced with what is by far the biggest challenge our company and our industry has ever seen. While we know this is an incredibly difficult time for all of you as you work to juggle your own concerns around coronavirus, we have come through other challenges in our 20 year history and we can – and will – come through this together.
The next few months won’t be easy, but please know that all the steps we’re taking today are focused on protecting the health and safety of our Crewmembers and Customers and ensuring JetBlue remains a great place for you to work well into the future.
Alstom is delivering the very first 100% electric Aptis bus to Strasbourg transport operator Compagnie des Transports Strasbourgeois (CTS). This constitutes a major new step for Alstom, which aims to be the most innovative world actor for sustainable, smart mobility. Following the groundbreaking delivery, CTS will train 150 drivers in the operation of the new vehicles. During this initial training phase, the bus will run on the streets of Strasbourg with the livery that the Aptis fleet will adopt when in high-level service on the H line. With a length of 12 metres and equipped with 3 doors, Aptis buses were designed at the Hangenbieten Eurométropolis. They are the first electric buses to join CTS’s fleet of vehicles.
Thanks to its innovative design, Aptis offers an unparalleled passenger experience. Its berthing system for perfect alignment with the pavement, its low, completely flat floor and wide double doors allow easy movement and convenient boarding for people with reduced mobility and prams. Equipped with large bay windows along its entire length, Aptis offers 25% more glass surface area than a standard bus and a rear seating area with panoramic views of the city.
The vehicles requested by the city of Strasbourg are designed for slow charging at night at the depot. Aptis is also available for occasional recharging at the end of each line, using either ground-based charging solutions (SRS) or pantograph charging. Aptis was designed to have an optimised total cost. This is possible thanks to reduced maintenance and operating costs and a longer service life than that of standard buses. The aim for local authorities, therefore, is to have a total cost equivalent to that of existing standard diesel buses.
Aptis was also chosen by RATP and Île-de-France Mobilités, and by the areas of Greater Grenoble, Greater La Rochelle, and Greater Toulon, where commercial operations are due this year. As of September 2018, Aptis is also referenced by the CATP for public purchasing by local authorities. This referencing allows member authorities to order Aptis vehicles directly and simply from the CATP without having to embark on long and costly procedures.
Aptis also received the Origine France Garantie in January 2019. The certificate guarantees that at least 50% of Aptis’s value is French.
Design, production and testing will be carried out at Aptis Alstom’s site of Hangenbieten, in Alsace. Six other Alstom sites in France are involved in the design and manufacture of Aptis: Reichshoffen for the flanks, Saint-Ouen for the system integration, Tarbes for the traction, Ornans for the motors and Villeurbanne for the electronic components of the traction chain. Finally, Alstom’s site in Vitrolles is developing one of the charging solutions (SRS).
