AirAsia is targeting April 29 as the date it plans to restart domestic flights in Malaysia, followed by Thailand and the Philippines on May 1. The airline then expects to resume services in India on May 4 and Indonesia on May 7, subject to government approvals.

“The resumption of services will initially be for key selected domestic routes, which will increase gradually to include international destinations around the network, once the situation improves and governments lift borders and travel restrictions,” AirAsia said in a statement.

The LCC grounded most of its fleet in late March amid “extensive and increasing border restrictions imposed by various countries” in response to the COVID-19 coronavirus pandemic. The decision affected its five short-haul carriers and two medium- and long-haul airlines.

While short-haul operations look set to resume over the coming weeks, the group is yet to determine when flights operated by AirAsia X Malaysia and AirAsia X Thailand will recommence.

“We are very pleased to be able to fly again and to serve our guests starting with domestic routes and hope to resume full operations as soon as possible,” AirAsia Group president Bo Lingam said.

“We have undertaken a thorough review of our guest handling procedures both on ground and onboard in light of the COVID-19 pandemic.

“We have been working closely with the airport authorities to ensure that all the relevant precautionary measures are in place to ensure a safe, pleasant and comfortable journey for everyone.”

According to schedules data filed with OAG in early January, AirAsia Group originally planned to operate more than 47,000 flights during April 2020 across the seven carriers, with 9 million available departure seats. Malaysia-based AirAsia intended to offer 3.3 million of those seats, with a further 2.1 million offered by Thai AirAsia.

Airfares have fallen as much as 30% since the start of the year in North America and Europe, according to the first of a new series of industry data, while stabilizing on a smaller decline in Asia where some coronavirus lockdowns are being eased.

The figures here from Skytra, an Airbus-owned airline hedging business, offer early clues to the difficult recovery awaiting airlines as they prepare for an eventual lifting of restrictions on what is likely to be a changing travel market.

After flatlining for weeks, forward bookings show small improvements for May travel between Asia and Europe or North America, and positive U.S. domestic reservations for the winter holidays. But they are still down more than 75% last year.

The data sends a more ominous signal on fares – days after Ryanair boss Michael O’Leary predicted that a traffic rebound would be driven by heavy discounting.

“That’s what we’re seeing now,” said Matthew Tringham, strategy and product chief at Skytra, which was launched last year to offer revenue-hedging services to airlines.

Skytra’s figures show Asia pricing in decline since February, followed by a slump in the United States and Europe last month that is steeper and ongoing, as airlines slash fares on the few flights still running.

The findings reflect a rolling average of economy fares on departed flights within each region that were booked over the preceding month, drawing on data for 83% of air travel by value.

“As the COVID-19 crisis took hold we saw prices soften in most markets, as any remaining capacity in service is being discounted,” Skytra said in a report.

“While the Asia-Pacific market seems to have bottomed out about 15% lower than could be expected for this period, we can see that the trend in North America and Europe continues with prices down 30% and 25%, respectively.”

As of April 8, average yields – a proxy for fares expressed in revenue per passenger kilometer – had dropped to 10.7 U.S. cents in North America from 15 cents a year earlier, and to 14 cents in Europe from 19.4 cents. In Asia-Pacific, they fell to 9.6 cents from 11.8.

Apart from the Asian intercontinental and U.S. holiday reservations, there is little sign of any revival in forwarding bookings, Skytra’s Tringham said in an interview. “Europe is not showing any green shoots right now.”

airline Norwegian is on the brink as its pilots were warned there was no money to pay them – or make them redundant.

The carrier is “mortgaging everything they own” to try and stay afloat. Norwegian pilots have been warned there isn’t enough may to pay them. Frantic bosses are converting debts into shares in a bid to stop flatlining, but the move is predicted to wipe out the value of existing shares.

The airline’s jets have left their slots at the UK’s second major hub Gatwick airport.

The firm has around £5billion of debt against a market value of £78million. Sources close to Norweigan told The Sun it was true to say there was a “last-ditch effort” to save the airline.

The carrier was afforded a ‘phase one’ £30million rescue package by the Norway government. But ‘phase two and three’ of a rescue deal – worth £280million and needed to see the carrier through the coronavirus crisis – won’t arrive unless the airline restructures and lowers its debt threshold.

This is the move that requires creditors to convert debt to equity – effectively becoming owners of Norweigan.

But such a move means existing shares becoming worthless – and has seen a mad rush to sell stakes in the last 24 hours while they are still worth something.

If bondholders don’t agree to a decision to switch debt to equity next month then the airline will be permanently grounded.

Norwegian Air is a low-cost airline, founded in 1993. It was initially founded to take over the regional airline services produced by Busy Bee for Braathens in Western Norway. However, it only started operating as a low-cost carrier with bigger Boeing 737 aircraft in 2002, operating a number of domestic routes in Norway. Its first European routes outside of Norway launched in 2006. Today, it has 11,000 members of staff and flies 500 routes to more than 150 destinations in Europe, North Africa, the Middle East, Asia, South America, the US, and Canada. The airline has a fleet of around 160 aircraft.

A source said: “There is no magic pot in the bank. Norweigan is in the same situation as Virgin Atlantic, Air France, and Lufthansa in needing bail-outs to survive.”

Pilots were last night warned they face a pay freeze – and will rely on the government’s job retention scheme plan for any salary.

The company’s entire fleet, across different subsidiaries, is believed to be hit – around 1,500 pilots and 3000 cabin crew.

A letter from cook pit crew union Balpa revealed discussions with OSM Aviation, whose parents firm is Norwegian.

It stated: “Norwegian have indicated to OSM that they will not be in a position to fund the April salary, and also OSM do not have sufficient funds to cover the salary or redundancies.”

The carrier’s subsidiary is “positive” the government’s furlough scheme will be implemented, but can’t guarantee when funds will be paid.

There are around 1,000 pilots and crew in the UK who fly for Norweigan and are employed through its OSM subsidiary.

Balpa and the Unite union negotiated with OSM a deal to reduce salaries – by 30 percent for pilots and 60 percent for crew in a battle to survive.

But staff have realized they would be better off under the government’s furlough scheme, in which they would receive 80 percent of salaries.

Norweigan does not have the cash-flow to pay this month’s salaries upfront and claim back furlough cash from the UK government later – a move taken by EasyJet.

So Norweigan staff face a month without pay until the furlough scheme kicks in.

With flights to and from the UK grounded, and bookings canceled, the firm has no money coming in here whatsoever.

The source said: “Norweigan is in the last chance saloon-like many other major airlines. But all hope is not yet quite gone.

“And UK crew face a month of no pay while the furlough scheme pays out wages. But hopefully, it is not going to be their last pay packet.”

A Norweigan spokesman told The Sun: “The crew employer, OSM, has been in constant dialogue with the relevant unions to reach the best possible agreement for our crew colleagues based in the UK.”

Shortly after the Oslo stock exchange reopened following the long Easter weekend, Norwegian’s share price was at one point down more than 60 percent compared with when the market closed on 8 April.

The carrier’s chief executive, Jacob Schram, said the proposed measures were necessary to secure “the next tranches of the Norwegian government state guarantee programme”.

Norway last month announced a £464million bailout for the aviation sector, half of which is earmarked for Norwegian.

Norwegian Air said it would hold a meeting with bondholders on April 30 to approve the terms of its rescue plan, Reuters reported.

If creditors approve the rescue plan, it will be put to a shareholders’ vote on May 4.

In a 14 April research note, Bernstein analyst Daniel Roeska describes Norwegian as being “at the end of the line”.

Mr Roeska believes there are two likely outcomes for the airline: “Either the bondholders agree a conversion price for their debt into equity, or they do not.

“If they agree, the firm continues to operate, but shareholders will be severely diluted.

“If they do not, then we expect operations to cease, bankruptcy proceedings to start, and shareholders to get nothing.”

Last month, The Sun told how Norwegian was feared to be days away from folding as its UK staff were told to choose between a 70 per cent pay cut or redundancy.

Last year they were teetering on the edge of collapse before receiving last-gasp financial backing to keep going.

The airline – the eight largest in Europe and third-biggest low-cost carrier after Ryanair and EasyJet – carried 30 million passengers in 2016.

The Sun was shown a shock ’emergency payment option’ sent to Norwegian UK employees.

They help run a fleet of 13 carriers from Gatwick airport.

Bosses at parent firm OSM Aviation said they had been “compelled to take immediate action in order to assure that operations will remain intact, once the commercial difficulties as caused by the present situation, cease to remain”.

The Nordic airline has already announced it would cancel 85 percent of flights and faces laying off 90 percent of its workforce, around 7,300 people.

Norwegian is struggling on, analysts said, thanks in part to a delay in delivery of their new 737 MAX aircraft.

In more airline news, British Airways pilots have been forced to take three months’ unpaid leave as the airline struggles to survive. www.thesun.co.uk

Ryanair is steeling for an airline price war that it expects to win once coronavirus restrictions are lifted and passengers flock back to tourist destinations, Chief Executive Michael O’Leary told Reuters.

Brushing off forecasts of a sluggish recovery, O’Leary predicted a swift traffic rebound, with the pain coming instead from “massive price-dumping” that traditional airlines now seeking bailouts would struggle to keep up with.

His bullish outlook puts the Ryanair boss at odds with peers such as Lufthansa and analysts who see a return to 2019 traffic only around 2023-4. Plane manufacturers and airline body IATA have also warned of a slow recovery from the pandemic.

O’Leary also voiced dismay at the multi-billion-euro aid packages sought by Lufthansa and Air France-KLM and said Ryanair was appealing against EU-approved French tax breaks that exclude airlines registered in other European states.

An Air France-KLM spokeswoman declined to comment.

Ryanair assumes European flights will stay grounded until a “limited” resumption in June, O’Leary said. After that, a resurgence of intra-European travel will be driven by steep discounts on last-minute holidays in July-August.

“Lots of people across northern Europe have been locked up in apartments,” he said. “They will all want to go on holiday before the kids go back to school as long as they can do so in reasonable safety.”

Ryanair backs anti-coronavirus measures including masks and temperature checks for passengers and crew while rejecting calls for planes to fly one-third empty.

Before too long, “volumes will be back on a normal footing but on lower pricing” O’Leary predicted. “The minute we’re about to start flying again we’ll start doing seat sales, and so will every other airline.”

But a low-cost model and robust balance sheet make Ryanair better prepared for a fare-slashing recovery, with pricing unlikely to improve before next year, he added.

Sounding another discordant note amid the coronavirus gloom, he said the summer of 2021 had huge potential as holidaymakers make up for the previous year’s thwarted plans.

O’Leary said he planned to hold onto all existing Boeing 737 MAX jet orders and even dangled the prospect of adding more of the currently grounded planes – and repeating a Ryanair habit of buying when demand and prices are low.

Japan’s major airlines are continuing to shrink their international networks, as they increase their cuts through late April and plan larger reductions extending into May.

Japan Airlines (JAL) has raised its international capacity cuts to 88% of its previously planned schedule from March 29-April 30—up from its previous estimate for this period of an 85% reduction.

Additional services have been reduced on several international routes, although the carrier will also operate cargo-only flights in some markets.

For the next schedule period, from May 1-31, JAL plans to cut 4,568 one-way flights or 94% of the planned total.

Meanwhile, All Nippon Airways (ANA) has slightly increased its international flight cuts for the period March 29-April 24. The carrier will cancel 4,097 flights on 72 routes, or 88% of its planned total.

For April 25-May 15, ANA will cancel 3,323 flights, representing 90.4% of its intended schedule for that period.

Many European airlines spent much of the past two decades asking governments to leave the airline industry. Now, many are begging for help, and most will get it, even if all may not deserve saving.

It is different than in the United States. The U.S. government is bailing out airlines because the country needs a robust transportation network, but if one carrier doesn’t make it, life will go on. Other airlines, perhaps even new ones, will fill gaps.

In Europe, bailout discussion is more fraught. In this crisis, governments are not always thinking about how many capacity markets need, but instead about national pride. Regardless of market conditions, lawmakers may not want to see national airlines go bust, for reasons of politics, nostalgia, and even national security.

In the coming weeks, politicians will leverage state aid rules that allow them to help national carriers in a crisis. Some airlines will get loans, while others may get the ultimate saving – re-nationalization.

Just as in the United States, many larger airline groups deserve aid. In recent years, International Airlines Group, owner of British Airways, and Lufthansa Group have shed bloated pasts, even if they still might operate more brands than necessary. Air France-KLM is behind, but is improving, and deserves help, as do Ryanair and EasyJet, two behemoths of pre-Covid 19 Europe that set standards for low-cost airlines everywhere.

What about the rest? Amid the chaos, some European countries may boost airlines that probably don’t need to exist. Italy’s Alitalia tops every list, but there are others. Does Scandinavia need two airlines? Does Austria need one? What about Belgium? How about Portugal?

Consider that the European Union is a single market, and an airline from one member state can fly any route from or within another. If policymakers seek air service, they can entice any EU-flagged airline to fly. Yet, that may not matter now, with many governments poised to rescue airlines that fly their flags.

“You are going to see significant state involvement,” said Samuel Engel, senior vice president and head of the aviation group at ICF, a consulting firm. “It is less likely to look like the national carriers of the pre-privatization era. But it will have many of the same effects. The governments may be on the hook for their debts, or may justify a level of service.”

It’s an interesting reversal of recent trends, said Engel, who has advised airlines on how to privatize to get away from government interference.

“We are in an extraordinary situation, aren’t we?” he said. “I don’t think anyone thought governments would have to go back in.”

With five strong airline groups, Europe probably would look like the United States, where six carriers control the vast majority of market share. Travelers may not love the arrangement – some complaint about lack of competition – but it served consumers well through much of the past decade.

That’s unlikely to happen, however.

Just look at Alitalia. It has been a mess for years, and each time it appears to be on the brink of liquidation, the Italian government, or an arm of the Italian government, steps in. The EU limits how much state aid airlines can receive, so insiders figured eventually the airline would disappear. But the Italian government decided not to let a good crisis go to waste, so it re-nationalized Alitalia.

“The funny thing is before the crisis there were lots of insolvencies in Europe and since the crisis, there is no insolvency,” said Martin Gauss, CEO of Air Baltic, a state-owned Latvian carrier.

Other airlines have similar situations. Norwegian Air was in trouble before the novel Coronavirus pandemic and might have failed in a typical recession. Now, the airline has appealed to Norway’s government, accepting about $290 million in guarantees last month, though it said it needs much more from private markets.

It’s an interesting juxtaposition for an airline that two years ago argued against government interference. After Norway sold its shares in its national airline, Scandinavian Airlines, Norwegian CEO Bjorn Kjos told Skift the government made the right decision.

“Some countries have gotten to their senses and they are trying to get out of these legacy airlines,” said Kjos, who retired last year. “You don’t need it. It’s just a waste. You should concentrate on totally different things.”

These days, Scandinavian Airlines, or SAS, is not in much better shape. As the national carrier of three countries – Norway, Sweden, and Denmark – its limited resources have been stretched across three hubs, rather than one strong one. SAS also lacks a strong transatlantic joint venture partner, so it underperforms on U.S. routes.

“You would not invent an airline owned by a government, never mind by two or three governments,” said John Strickland, a UK-based airline consultant.

Another airline in a similar predicament is TAP Air Portugal. It has built a decent franchise with flights to the United States and Brazil but lacks the breadth of larger groups. The government already owns half of TAP but could have to provide further assistance.

Will these airlines go away? Norwegian might, because it lacks the rich history of the others and already was struggling.

The others are more likely to survive, though Strickland asked if governments might give up if the climate worsens. In a worst-case scenario, more governments might be OK with running an airline – Poland, Romania, Finland, and Latvia already control their national carriers – but others may find it to be too much, considering how many other elements of their economies may need assistance.

“There is national pride, and if we put in the unquantifiable effect of populist governments, it makes it even more challenging,” Strickland said. “But we have never faced a crisis like this one. There are so many elements about how this will turn out.”

Broadly speaking, the five major European groups have major advantages over independent airlines. But some groups also have issues.

As the weakest among them, Air France-KLM was in some peril before the crisis, with CEO Ben Smith wrestling with how to compete on short-haul routes with low-cost-carriers and domestic routes with high-speed trains. Given the importance of the company for France and the Netherlands – both nations own part of Air France-KLM – the airlines should make it, but it could be expensive for each nation.

“It is now clearer than ever that support from our both Dutch and French governments is needed to meet our cash requirements and enable us to continue our operations once the crisis is over,” Smith said last week.

There are bigger questions about some Lufthansa Group brands. Lufthansa, the German airline, probably is continental Europe’s most successful carrier, and its government will help it. Swiss International Air Lines, a Lufthansa Group airline, also is a robust carrier with a successful hub in Zurich.

But Lufthansa Group also owns Brussels Airlines and Austrian Airlines, and each is in some danger.

To the Austrian people and politicians, the airline remains a patriotic symbol that carries the nation’s flag around the world and provides vital air links. But Austrian, founded in 1957, is no longer a “real” airline, as Ryanair, which has its own Austrian arm, made clear after the government signaled it might pump as much as 800 million euros into it.

“We do not believe that Lufthansa should receive state aid from Austrian taxpayers in exactly the same way we do not believe that Ryanair should receive state aid from Austrian taxpayers,” Andreas Gruber, a Ryanair Group executive, said, according to Reuters. In effect, Gruber said, Austrians would be assisting a German company.

Brussels Airlines has been a poor performer for Lufthansa Group could disappear without hurting consumers. Presumably, Lufthansa could take over the airline’s most profitable routes. But the Belgian government may provide assistance nonetheless.

If the goal is to get people from point A to point B, perhaps not every country needs an airline. If demand exists, some carriers will fill it, even if the airline is not based in that country.

Ryanair and Wizzair have made a fortune filling in gaps on short-haul routes, and someday, people in Austria might get used to flying Lufthansa to New York or Los Angeles rather than the national airline.

But even in 2020, some arguments remain for why a country needs a flag carrier. Over the past month, many flag airlines have been repurposed by governments, flying medical cargo, and repatriation flights. Governments could contract that flying to outside entities, but perhaps there is something comforting about sending the national airline abroad.

“We are seeing governments around the world take drastic and quick actions to sustain their people,” Engel said.

National airlines may also help in recovery. Eventually, the economic and public health climate will improve and airlines will benefit. But short term, governments may need airlines to fly money-losing routes to get people where they need to go. There are other ways to do this – the Italian government could offer subsidies to an outside carrier like Ryanair – but propping up the local airline may be a better move, politically.

Still, Air Baltic’s Gauss said he expects not every flag carrier will make it. He said his airline works as a government-owned enterprise because Latvia has limited connections with the rest of Europe. But other countries don’t have these limitations.

“There might be some states like Italy who say, OK, we now definitely need a state-controlled airline but the other countries may be OK with their air infrastructure being served by other carriers,” Gauss said. “I don’t think that we will see this coming back where every country has its own airline.” skift.com