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Airlines Turn To Freight To Generate Revenue As US Senate Nears Industry Aid Vote

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SYDNEY / CHICAGO (Reuters) – Delta Air Lines Inc and Air New Zealand Ltd said they would offer cargo charter services on passenger aircraft to boost revenue as the US Senate neared a vote on a bill giving its carriers $ 58 billion in aid, including payroll support.

Delta Air Lines passenger aircraft are seen parked due to flight reductions made to slow the spread of coronavirus disease (COVID-19), at Birmingham-Shuttlesworth International Airport in Birmingham, Alabama, United States , March 25, 2020. REUTERS / Elijah Nouvelage

The passenger travel industry has been decimated by the coronavirus pandemic, Australia’s Flight Center Travel Group Ltd announcing on Thursday its intention to cut 6,000 travel agent positions worldwide, temporarily or permanently.

On Thursday, Singapore Airlines Ltd took a rare commercial break while awaiting an announcement, a few days after it announced that it would anchor almost its entire fleet and seek more funding as it battles the coronavirus pandemic.

Virgin Australia Holdings Ltd plans to permanently cut more than 1,000 jobs among the 8,000 workers who have been laid off due to reduced flight schedules, said general manager Paul Scurrah.

“It will be heartbreaking for these people. It’s not their fault, “Scurrah told the Australian Broadcasting Corp.” It is the worst airline crisis the industry has ever experienced. ”

Auckland International Airport Ltd in New Zealand said it had cut 90 contractors and was talking to staff about cutting hours and wages by 20% as demand crashes.

In the United States, United Airlines Holdings Inc. announced further reductions in domestic capacity, which means that its overall capacity, including international capacity, will decrease by about 68% in April.

Alaska Air Group Inc said it would cut its schedule by 70% in April and May and had suspended its dividend, withdrawn a $ 400 million line of credit and obtained an additional loan of $ 425 million to help overcome the crisis.

The US Senate is preparing to vote on an industry assistance program, half in the form of grants to cover 750,000 employee pay checks.

In a victory for work, companies that receive funds cannot fire employees before September 30 or change collective agreements.

The bill contains restrictions on share buybacks, dividends and executive compensation, and allows the government to take stock, warrants or other compensation as part of the bailout.

In an effort to increase much-needed revenue and keep certain planes in flight, Delta and Air New Zealand said they had joined the growing number of carriers offering cargo charters on passenger planes.

“We have shared these options with our global freight customers and are attracting great interest from customers wishing to ship to and from Shanghai, Hong Kong, San Francisco, Los Angeles, Sydney and Melbourne,” said Cargo Rick, general manager. from Air New Zealand. Said Nelson.

Almost half of the world’s air cargo normally travels in the belly of passenger planes rather than in dedicated freighters. The cancellation of passenger flights has therefore resulted in a significant reduction in freight capacity.

On Monday and Tuesday, around 1,800 aircraft were immobilized worldwide, according to the aeronautical research company Cirium.

Slideshow (4 Pictures)

The International Air Transport Association (IATA), which represents the air transport industry, said that the paperwork is blocking medical and other emergency supplies needed to fight the coronavirus crisis.

Examples include two shipments, each containing approximately five to 10 tonnes of medical supplies, to Latin America and currently blocked in Dubai and India.

Figures to be released next week will show that global air cargo traffic fell about 10% in February, which is expected to decrease it by 15% to 20% for the whole year, said l ‘IATA.

Jamie Freed reports in Sydney and Tracy Rucinski in Chicago; Additional reporting by David Shepardson in Washington and Tim Hepher in Paris; Editing by Stephen Coates

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