Airlines Renegotiate and Postpone Plane PurchasesBy Alessa Flores | Thu, 07/16/2020 - 17:22
Volaris, Interjet and Viva Aerobus renegotiated with lessors and manufacturers to delay the arrival of aircraft they had ordered in previous years due to the impact of COVID-19 on the industry, according to a note from El Financiero. Aeroméxico, currently under the protection of Chapter 11 of the US Bankruptcy Law and in the middle of a financial restructuring process, asked to cancel leases and even return 19 aircraft to lessors. In the case of Viva Aerobus, the deliveries of five aircrafts will be postponed this year until 2021. The airline estimates that it has 40 pending deliveries in the following decade. In an interview with El Financiero, Volaris pointed out that in the next three years, the airline will maintain its fleet without growth in net terms.
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The association warned that airlines in Latin America would close 2020 in the red, forecasting losses of US$4 billion for airlines in the region due to wage and tax payments, among other obligations. Moreover, the region’s reliance on tourism and other activities related to the aviation industry would translate to significant losses in other economic sectors. According to the World Travel & Tourism Council, the COVID-19 outbreak was on its way to cost the world’s travel and tourism industries US$2.7 trillion. Mexico, warned IATA, would see US$8.13 billion in potential revenue evaporate due to the outbreak, a 57 percent reduction in comparison to 2019. This situation would put 148,500 jobs at risk.
Aeroméxico, LATAM Bankruptcy Protection Filings Hurt Delta
Due to the interconnection of the sector, the losses of an airline reflect in its partners’ results. The Chapter 11 filings of Aeroméxico and LATAM Airlines costed billions to its partner Delta Air Lines. “During the June quarter, (Delta Air Lines) recorded a write-down of US$1.1 billion in its investment in LATAM Airlines and a US$770 million write-down in its investment in Aeroméxico following their financial losses and separate Chapter 11 bankruptcy filings,” said Delta Air Lines. The airline also had to write-down a US$200 million investment in Virgin Atlantic, which just signed a US$1.51 billion rescue package.
ICAO’s guidelines were designed following the organization’s Take-off: Guidance for Air Travel Through the COVID-19 Public Health Crisis document, which provides a comprehensive series of steps designed to minimize exposure risks for travelers and crews. In addition, the newly introduced iPACKs compile standardized guidance material and tools, including public health and risk management measures for civil aviation authorities, aviation service providers and other stakeholders to support ICAO’s member states in their recovery efforts. “ICAO is looking forward to working closely with states, partners and donors to deploy these important new resources for states and industry. We are confident that the iPACKs will provide significant support to the response, recovery and resilience efforts now ongoing and will help re-establish the needed capacity to reconnect the world,” said Fang Liu, Secretary General of ICAO.