Aviation News in Brief 23 November 2020

AirAsia Japan, AirAsia X, Pionair, Embraer, El Al, Etihad, Air Astana, Garuda

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(PHOTO: Shutterstock)

Use thisAirAsia Japan files for bankruptcy: AirAsia Japan filed for bankruptcy on 17 November listing about US$208 million in liabilities and becoming the first airline in Japan to fail due to the COVID-19 pandemic and the near-total shutdown of aviation in many places. The move comes after the budget carrier’s Malaysian parent, AirAsia, cut off aid to the Japanese joint venture. The filing was said to have left more than 23,000 customers without refunds for cancelled flights. AirAsia says it will provide credits that can be used for international flights on group airlines and said it plans to seek aid from shareholders. In addition to AirAsia, investors include Japanese e-commerce group Rakuten, health and beauty products maker Noevir Holdings, and sporting goods store operator Alpen. AirAsia Japan is the only airline in the country with its hub at the Nagoya area’s Chubu Centrair International Airport. Before halting flights, the airline operated domestic routes to Sapporo, Sendai and Fukuoka as well as an international route to the Taiwanese city of Taipei.

Australia’s Pionair buys E190: Pionair, a privately owned Sydney-based ACMI and charter airline, has purchased an E190-100LR. The nine year old aircraft with call sign VH-SEF and named ”Cinderella”, is due to arrive at Bankstown on 24 November 2020. It will be followed by additional aircraft during 2021. Pionair’s E190 has a maximum seat capacity of 112 seats in a single-class arrangement. Its double-bubble fuselage concept maximises personal space in Embraer’s signature two-by-two seating. The spaciousness of the cabin allows the installation of wider seats and a wider aisle compared to most larger jets, in addition to a two-metre high cabin. The E-Jets family of aircraft, which includes the E190, are flying in the fleet of more than 80 customers in some 50 countries. The E190 adds to the eight BAE 146 cargo and passenger aircraft currently owned and operated by Pionair.

AirAsia X loss widens: Long-haul carrier AirAsia X said on 19 November that its quarterly loss deepened as revenue was hit due to the rapid decline in international travel because of the COVID-19 pandemic. It said it was continuing to restructure the company and to raise new funding to survive. The company reported a net loss of RM308.5 million (US$74.73 million) for the quarter ended in September, up from a net loss of RM229.9 million a year earlier. Revenue dropped 94 per cent to RM59.9 million, it said in a bourse filing. The arm of AirAsia Group has taken a hit as air travel ground almost to a halt in the past few months, hit by border curbs to control the spread of COVID-19. In October, it proposed a major restructuring, seeking to reconstitute US$15.3 billion of unsecured debt into a principal amount of RM200 million and waive the rest, in order to avoid liquidation. AirAsia X is in talks with a financial institution to secure a government guaranteed loan of up to RM500 million, it said in its filing.

El Al, Etihad explore cooperation: EL AL Israel Airlines, the national airline of Israel, and Etihad Airways, the national airline of the United Arab Emirates, are set to explore deeper cooperation following the signing of a virtual Memorandum of Understanding (MOU). The wide-ranging MOU covers scope to introduce joint codeshare services between Abu Dhabi and Tel Aviv, as well as on the global flight networks beyond the two carriers’ hubs. The MOU also contains plans for greater commercial cooperation in the fields of cargo, engineering, loyalty, destination management and the optimal use of pilot and cabin crew training facilities. The MOU was signed ‘virtually’ by Tony Douglas, Group Chief Executive Officer of Etihad Aviation Group, and Gonen Usishkin, Chief Executive Officer of EL AL Israel Airlines. In addition to codeshare operations, the teams at Etihad Guest and EL AL Matmid loyalty programmes will explore reciprocal earn and burn opportunities for its members, as well as other benefits. The airlines’ destination management teams will also collaborate to encourage reciprocal inbound tourism to Abu Dhabi and Tel Aviv. Both carriers’ engineering and cargo divisions are also set to begin talks about greater cooperation. These discussions would look at optimising MRO (maintenance repair and overhaul) opportunities, as well as ways to increase volumes of freighter traffic flowing into and out of Abu Dhabi and Tel Aviv, and across the carriers’ combined networks.

Air Astana launches direct flights to the Maldives: Air Astana will begin operations to the Maldives twice a week on Wednesdays and Saturdays from 5 December and additionally on Mondays from 21 December. Flights will be operated by Airbus A321LR aircraft configured with 16 Business Class seats and 150 Economy Class seats. The lie-flat Business Class seats are equipped with 16-inch individual entertainment screens, with four of 16 seats offering additional personal space. In Economy Class, the Recaro seats provide increased comfort for long flights and are equipped with individual 10-inch screens. Due to the high demand during seasonal holidays, from 16 December to 16 January 2020, flights will be operated by a Boeing 767 aircraft, providing additional seat capacity. After online application, entrance visas to the Maldives are issued free of charge upon arrival at the airport and are valid for 30 days from the date of receipt. The entry requirements to the Republic of Maldives include mandatory PCR Test certificate in English with a negative result. Certificate should be valid for 96 hours from the moment of taking the test till the scheduled flight arrival time. Infants under the age of 12 months exempt from this test.

Garuda approves bond sale: Shareholders of Garuda Indonesia, the country’s flagship carrier, on 20 November approved the issuance up to 8.5 trillion rupiah (US$600 million) in bonds. The issuance is part of the government’s rescue plan for the airline. The bonds will be purchased by the Finance Ministry through Sarana Multi Infrastruktur, a state-owned investment firm for financing and preparing infrastructure projects. The bonds will be mandatory convertible bonds with a tenure of seven years, meaning that after that period, they will be converted to stocks. The proceeds “will be used to support the liquidity and solvency of the company,” CEO Irfan Setiaputra said at a news conference after the shareholders meeting, “with the aim of improving financial position because the company already has negative net working capital and has liabilities exceeding 80 percent of assets.” The CEO added that he hoped the bond issuance “can encourage faster recovery [in the aviation industry], which can help national economic recovery.” If all 8.5 trillion rupiah worth of bonds are converted to shares, the government will increase its holdings in the company to 76.99 percent from the current 60.54 percent.

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