Norwegian, Boeing, Airbus, Aeromexico, RyanAir, Finnair, Brussels, Lufthansa

Norwegian cancels Boeing deal

Norwegian has given Boeing notice that it intends on cancelling 5 787-9’s and 97 737MAX aircraft currently on order.

Even more devastating is that the company is cancelling its Gold Service maintenance agreements on all of its aircraft.

The airline had also claimed the return of all of its long lead deposits for the 97 MAX aircraft and compensation for the failure of Boeing to deliver the ones it should have had by now, and for the ones that have been grounded over a year. Norwegian was launch customer for the type.

Back in 2012 Norwegian placed a 222 aircraft order with Boeing and now wants out. It had taken delivery of 18 MAX.

Boeing is almost certain to fight some of the claims and will be less likely to agree a deal if Norwegian walks away from the whole thing. Expect a compromise.


Boeing

Boeing is facing off with a number of leasing companies over their orders for the MAX.

Once a reliable even in a downturn source of income, leasing companies are turning on Boeing as their customers pull out of deals, or they just can’t find anyone to place aircraft they’d ordered with.

Many are asking for deposits on aircraft that haven’t even gone into production back, and are cancelling – or trying to cancel orders they no longer want.

Boeing seems to be trying to hold on to the orders and is readying itself to stave off any return of cash.

Extraordinary is the difference between Boeing and Airbus here. Most of the cancellations – 90% are for MAX which seems to be falling out of favour. The A320neo family seems concrete, with no major cancellations and relatively few long term deferments.

It seems, and analysts have long predicted this might happen, that the A320neo family is simply the better option for the new post Covid world.


Airbus

Airbus has successfully concluded its ATTOL project, which allows completely Automated Taxiing TakeOff and Landing.

The system uses optical sensors to operate a totally automated system, opening the way to emergency systems if pilots are incapacitated or, eventually, fully automated non-pilot flying, which is something cargo operators are especially keen on.

However the realities of Covid19 have forced the company to make 15,000 people redundant in Europe, including 1,700 in the U.K.


Aeromexico files for bankruptcy

Aeromexico despite insisting for over a week that it wasn’t about to file for bankruptcy protection (meaning it really was, it was just a matter of when), promptly did so yesterday. By entering Chapter 11 it allows itself a breather to fire staff, restructure the airline and protects itself from its creditors.

It plans on continuing to expand its route network to overcome the pandemic and related issues, but with Mexico City the epicentre of a massive outbreak, few countries are willing to accept passengers right now without compulsory 14 day quarantines.


RyanAir

RyanAir should be operating as many as 1,000 flights a day from today, all around Europe, though by all accounts load factors are barely 50%.

The RyanAir Group is launching a campaign and legal action against the EU, French, German and Dutch governments over the bailouts for their respective airlines – its EU case is based on the fact it sees the EU as having broken its own rules.

Competitor easyJet is looking to loose 700 pilots, and hopes to operate 900 flights a day by mid July.


Lufthansa

Lufthansa is reporting a sharp increase in late September and early Autumn bookings on short to mid-haul this year and is planning to bring another 200 aircraft back out of storage to meet the demand. Long haul is described as surprisingly healthy under the circumstances, but bringing more aircraft back is too soon.


Finnair & Brussels

Finnair is preparing to scale up its operations and get ready to offer a limited number of European flights and then onward flights to countries now approved on the EU travel list.

Brussels is preparing to return to another 15 destinations, including BHX from mid July, and is trying to expand to more destinations. It has its own worries beyond that, facing the possibility of being sold or even liquidated by Lufthansa.

EU & UK Quarantines

The UK is set to keep its 14 day quarantines for most countries – including the US, but will adopt a traffic light system of where it safe to travel to and from for many more. Full details are expected Friday. Its also agreed to open “air bridges” with a number of EU countries, believed to include France, Spain, Germany, Belgium, Holland, & Portugal, where flights to and from will require no quarantine either end.

Meanwhile the EU has agreed to allow Chinese travellers a return to Europe, provided the Chinese reciprocate, which they are wary about doing, not wanting to import the far more contagious G version mutation of the virus from outside. The original D version which started in China was far less contagious and yet still killed thousands. The G version is now the most widespread by some 90% of cases world wide, though no more lethal it spreads more easily.

Cases in the US soar, and forecasts are it may reach 100,000 a day, only this time amongst a much younger age group, mostly 18-39 year olds who won’t distance or wear masks. New or resumed/partial lockdowns from New Jersey to Georgia and the southern sun belt from Florida to California are all struggling with huge new case loads bigger than the original outbreak. As a result the US is not on the EU accepted travel list. the world looks on at America, staggered at the ineptitude of the Trump administration.

Quite what the UK is going to do with US travellers is difficult to comprehend. Virgin Atlantic and BA are both planning on major service resumptions from mid July. Tui has said it will not fly to Florida from the UK or Europe, as the area is so risky that any holiday experience, especially at Disney, would be greatly compromised.