Airlines Will Rely on Travel Advisor Insights to Aid Recovery

Top-level sales executives at Delta and American Airlines spoke candidly with Travel Weekly about airlines’ anticipated reliance on travel agencies for guidance when the time comes to truly revitalize passenger air travel.

“We’ve invested a lot of energy into these partnerships,” said Jim Carter, American’s Eastern Division Vice President for Global Sales. “It’s these kinds of times when you get to test these partnerships. It’s natural now that we lean on them. The conversations we are having with them are more critical, to make sure we’re listening to where their clients are thinking about traveling.”

Bob Somers, Delta’s Senior Vice President of Global Sales, had thoughts along similar lines. He said, “Having good visibility on what customers want from us, where they are going to travel, when they are ready to travel, those are questions that are being looked at now.”

Within agency channels, in particular, airline tickets sales have lately seen some modest improvement, though those numbers remain at lows that would’ve been unfathomable pre-pandemic.

According to the Airlines Reporting Corporation (ARC), sales transactions were down by almost 89 percent and, by volume, had plummeted nearly 94 percent for the week that ended on May 10, 2020. Dismal though these figures may initially appear, they actually demonstrate a slight uptick in demand relative to the month of April and the start of May.

At this point, all predictions are forecasting a slow recovery for the passenger air travel industry. A recent Harris survey (conducted May 1 through May 3) found that almost half of Americans won’t feel comfortable taking to the skies again until the COVID-19 pandemic has passed.

Peter Vlitas, Travel Leaders’ Senior Vice President of Airlines told Travel Weekly that airlines are aware that there are key insights that will be uniquely available from travel agencies during the restart period, as they seek to gauge consumer sentiment and rebuild their schedules, which have been reduced during the crisis by as much as 90 percent.

Vlitas foresees that travel advisors will observe notable increases in their share of airline ticket sales with consumer confidence being at an all-time low and travelers feeling the need for more insider assistance.

“The airlines are realizing that we’re going to have a bigger role, and they want to have a conversation with us about when we think the customers are going to want to travel and where we think they want to travel,” Vlitas said.

Carter and Somers both said that leisure travel advisors aren’t the only partners they’d be looking to for insight on areas where demand is returning. Carter revealed that American Airlines is also counting on the corporate agency community and its partners in such corporate verticals as technology, entertainment and pharmaceuticals.

While airlines also have their own internal data sources to mine, including flight searches and current bookings, Somers said agents will play a crucial role in guiding the trajectory of air travel recovery. He disclosed that Delta’s sales team follows a mantra of “listen, act, listen” in working with its partners. “It’s especially critical when you have times of rapid change,” he said.

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Uber launches 'UberMedics' in UAE

The initiative will provide healthcare workers with discounted trips to and from work during the Covid-19 pandemic

Uber has launched the ‘UberMedics’ initiative in the UAE, which will provide healthcare workers with discounted trips to and from their workplaces in both Dubai and Abu Dhabi.

The initiative forms part of a larger effort from the company to support healthcare workers and communities amid the Covid-19 pandemic.

In the UAE, UberMedics has partnered with a number of entities, including Amana Healthcare, part of Mubadala’s healthcare network.

The company will use UberMedics through an Uber for Business solution to transport caregivers to and from patient’s homes.

Other UberMedics partners include Saudi German Hospital and Zulekha Hospital.

“These are challenging times. The spread of coronavirus has brought a lot of change to the way we live and work, and at Uber we have been looking at how we can support and bring a positive impact to our communities,” said Rifad Mahasneh, Uber’s General Manager for the UAE.

“We want to do our part and support those who have played a key role in protecting us during this pandemic,” Mahasneh added.

Uber has taken a number of other steps to help employees amid the covid-19 pandemic, including providing financial assistance for up to 14 days for any driver or courier who is diagnosed with the virus or asked to self-isolate.

Arabian Business magazine: Read the latest edition online

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ATPCO automates coronavirus waivers for travel agents

ATPCO has developed an automated solution enabling airlines
to override existing fare rules and waive change fees in the GDSs.

The solution will go live in the Sabre, Amadeus and
Travelport GDSs for American Airlines tickets on June 7. Other airlines are
also expected to use the technology. 

As a result, travel agencies won’t have to manually process
the voluminous fee waivers and ticket validity extensions that airlines have implemented due to the Covid-19 crisis.

“It is incredibly time-consuming for each airline and agency
to manually process changes to tickets,” Eloise Rorke, ATPCO’s lead for product
development, wrote in a recent blog. “Each airline was trying to come up with their
own solution and nothing was working the same way across all channels. ATPCO
saw this happening and, as a service organization to the industry, started
looking for ways to help.”

In an email, American spokeswoman Rachel Warner said the
carrier helped champion development of the new solution alongside ATPCO and
other technology partners. She said that when it goes live, the solution will
restore a sense of normalcy for agencies. 

Following the launch, the GDSs will be able to automatically
price American’s free change fee for impacted tickets, meaning agencies won’t
have to manually review policies against each ticket. 

At present, American is allowing one free change for all
tickets purchased by May 31 for travel between March and September. Validity on
such tickets has also been extended through 2021, In addition, ticket validity
has been extended through 2021 for all unused ticket that were slated to expire
between this March and this September.

Airline-owned ATPCO uploads fare data into the GDSs. American,
Delta and United are part of the ownership group.

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DOT to Allow Airlines to Pause Flights to Five Percent of Destinations

The U.S. Department of Transportation (DOT) issued two air service notices today, which are destined to impact both airlines and customers. One addresses airlines’ problematic policies regarding ticket refunds, and the other lessens the number of points that airlines are currently required to serve.

A new Notice of Adjustments to Service Obligations provides for incremental adjustments to begin being made to the service obligations originally imposed on airlines on April 7, 2020, as a condition of their eligibility to receive money under the CARES Act.

Fox News reported on the announcement that the DOT will now permit airlines to cease flying to as much as five percent of the destinations that they had previously served. It’s a move that’s intended to help provide some relief for commercial aviation companies that continue to hemorrhage capital while the detrimental effects of the COVID-19 pandemic persist. Through the CARES Act, $10 billion was made available to bolster the airline industry in the month of April alone.

Airlines will need to make their applications to the DOT by submitting a list of airports that they wish to remove from their service rosters no later than May 18, 2020. In reviewing these requests, the DOT said it will ensure every U.S. community that was served by one of these airlines prior to March 1, 2020, will still be served by at least one covered air carrier.

The other part of today’s DOT announcement represented a second Enforcement Notice to airlines concerning the agency’s order to provide customer ticket refunds for flights that were forced to cancel due to the pandemic. The document is intended to ensure that ticket agents and air carriers are complying with previously-issued consumer protection requirements. It also offers answers to some common questions customers have regarding refunds and can help them to understand their rights.

“The Department has received an unprecedented volume of complaints from passengers, and is examining this issue closely to ensure that airlines’ policies and practices conform to DOT’s refund rules,” said U.S. Secretary of Transportation, Elaine L. Chao. “The Department is asking all airlines to revisit their customer service policies and ensure they are as flexible and considerate as possible to the needs of passengers who face financial hardship during this time.”

While the DOT typically handles around 1,500 air travel complaints and inquiries in a single month, March and April 2020 produced over 25,000 air travel service complaints and inquiries, with a major percentage concerning refunds.

For more information, visit transportation.gov.

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IATA opposes mandatory blocking of middle seats

IATA will oppose any government proposals to require airlines
to keep middle seats empty during the Covid-19 pandemic.  

“Evidence suggests that the risk of transmission on board aircraft
is low,” the trade group said in a statement. “Mask-wearing by passengers and
crew will reduce the already low risk, while avoiding the dramatic cost
increases to air travel that onboard social distancing measures would bring.”

IATA said an informal survey of medical contacts at 18
airlines (representing 14% of global traffic) revealed just three instances of
suspected passenger-to-crew Covid-19 transmission from January through March,
four instances of pilot-to-pilot transmission and zero passenger-to-passenger
transmissions. 

The airline lobby also said that an examination of contact
tracing of 1,100 passengers who were confirmed to have the virus after air
travel revealed no transmission among the more than 100,000 passengers on the
same flights. Two possible cases were found among crew members. 

IATA argued that there are several potential reasons that
flying could be safer than other forms of transport. For one, passengers face
forward with limited face-to-face interactions. In addition, seats could
provide a barrier to transmission. Also, air flow rates are high and not
conducive to droplet spread like other indoor environments, IATA said. It added
that high efficiency particulate air (HEPA) filters on modern aircraft clean
cabin air to hospital quality.

Despite IATA’s assertion, not everyone agrees. 

The World Health Organization says infected flyers can
transmit a virus to people within two rows on either side of them. 

Meanwhile, a 2003 study in the New England Journal of
Medicine detailed a Hong Kong-Beijing flight during which the authors believe a
lone passenger transmitted the coronavirus SARS to 22 people onboard. The
Washington Post provided a summary of that study in a recent story. 

Along with mask requirements, IATA recommended several other
temporary health safety measures, including:

• Temperature screening of passengers, airport workers and
travelers. 

• Boarding and deplaning processes that reduce contact with
other passengers or crew. 

• Limiting movement within the cabin during flight. 

• More frequent and deeper cabin cleaning. 

• Simplified catering procedures that lower crew movement
and interaction with passengers.

The trade group said the average fare for North American
flights in 2019 was $202, which made the average break-even load factor 75%. If
maximum load factors were reduced via a mandate on blocking middle seats,
average tickets prices would have to increase to $289 to reach the break-even
level. 

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Boeing’s 747 Still Has Life

Commercial airlines have all but abandoned the Boeing 747, along with similar jumbo jets, as carriers continue to downsize their respective fleets due to the overwhelming domino effect of the global coronavirus pandemic.

The idea of needing a supersize aircraft when a lack of demand for travel has decreased by more than 90 percent has suddenly become a moot point in the last two months, with routes trimmed or “circled” and nearly 17,000 of planes sitting parked and unused across the country.

But the beloved 747 hasn’t gone away and is actually finding new life—as a cargo transport.

In a story prepared by CNN Travel, the 747F—as in freighter—is up and running and transporting goods around the world.

“When it comes to this pandemic, seeing a 747 Freighter land at an airport is like in an old western, when the cavalry rides in to help the people in distress,” said Henry Harteveldt, travel industry analyst and founder of Atmosphere Research Group. “The 747 is definitely playing a hero’s role in moving essential cargo around the world in this crisis.”

Older versions of the four-engine 747 were already facing replacement by more efficient, smaller and newer two-engine wide-bodies from Boeing and Airbus. Airlines including Lufthansa and KLM have accelerated the retirement of their vintage 747s, a couple of years sooner than originally planned.

Just two passenger 747s were found to be roaming the skies during the third week in April, CNN found, out of a small group of 16 planes. Now, instead of a few thousand pounds of cargo underneath a few hundred passenger seats, the 747 is flying no people and about 300,000 pounds of goods and supplies.

“Air cargo solutions have never been more important than they are now to global health services. Currently, our international teams dispatch multiple flights daily to ensure that vital medical supplies protect those in need,” Tatyana Arslanova, executive operating officer for AirBridgeCargo, told CNN. “[The 747-8F’s] three compartments can have different temperature settings from 4 degrees Celsius to 29 degrees (39 F to 84 F), giving us extra opportunities to transport perishable cargo, such as temperature-sensitive pharmaceuticals and life-saving medical equipment. It’s a gift that I can give back”

There are 286 747 Freighters of different models in service, making up about a quarter of the 1,152-aircraft fleet of wide-body, main-deck cargo planes, according to Cirium.

“You know that you’re carrying lifesaving equipment down below, and you know it’s going to make a difference to those who need it on the front lines. It’s very humbling, and it’s not something that I thought about when I started my aviation career 30 years ago. But now, I feel that it’s a gift that I can give back, in a time of crisis,” said Captain Kelly Lepley in an interview with CNN Travel.

“We knew it would play a role in connecting the world 50 years later. We wouldn’t have known that we would have this epic pandemic that would ground so much of the world, and affect almost every country,” said Harteveldt. “I’m sure there are people who worked on the project at Boeing who are not at all surprised that the 747 is a knight in shining armor. The plane has shown repeatedly in its history that, when the chips are down, the 747 can be counted on to come to the rescue.”

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Emirates SkyCargo announces flights to 67 destinations across six continents

Dubai-based carrier has launched services to 11 destinations in the Middle East, seven in Africa, 22 in Asia, six in Australasia, 15 in Europe and six cities in the Americas

Emirates SkyCargo operated over 2,500 dedicated cargo flights in April, transporting essential supplies such as protective equipment, medical devices, pharmaceuticals and food.

Emirates SkyCargo has begun flights to 67 destinations across six continents.

The Dubai-based carrier has launched services to 11 destinations in the Middle East, seven in Africa, 22 in Asia, six in Australasia, 15 in Europe and six cities in the Americas.

Out of the 67 destinations, 58 are served by Emirates’ Boeing 777-300ER passenger aircraft with a cargo capacity of around 40 tonnes and 24 cities are served by the Emirates SkyCargo Boeing 777-F aircraft with the ability to uplift 100 tonnes of cargo per flight.

Emirates SkyCargo operated over 2,500 dedicated cargo flights in April, transporting essential supplies such as protective equipment, medical devices, pharmaceuticals and food.

The air cargo carrier flew more than 1,650 flights on its Boeing 777-300ER passenger freighters and over 850 flights on its Boeing 777 freighters to over 80 destinations on scheduled and special charter services.

“Over the last six to eight weeks, we have had to work innovatively and around the clock to move essential cargo to destinations where they were most needed. We started with just about a dozen cities served by our Boeing 777-300ER passenger freighters at the end of March but within the space of a month we have scaled our operations to a point where we now have more than 65 destinations as part of our network and about 85 daily cargo flights,” said Nabil Sultan, Emirates divisional senior vice president, cargo.

In total, the carrier transported an estimated 10,000 tonnes of personal protective equipment, medical equipment, devices and pharmaceuticals in the month of April on its scheduled and charter flights.

In addition to medical supplies, Emirates SkyCargo is also facilitating the transport of other items including perishables and fresh produce – between January and April, the company flew more than 85,000 tonnes of food around the world.

“Our cargo operations continue to grow, as we see strong demand and every day we work to connect more points with our flights. Our operations support not just the immediate relief efforts, but in a distributed global economy, they also help keep businesses and trade running,” said Sultan, who added that passengers would also be allowed to travel on cargo flights, should approvals be received from respective national authorities.

Arabian Business magazine: Read the latest edition online

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Some airlines rankle employees by cutting hours

Some airlines are cutting employee hours in what critics are
calling a workaround of commitments they have made in accepting federal
stimulus funds. 

Under the Cares Act, the Treasury Department is providing
carriers with a combined $25 billion in payroll grants and low-interest loans,
but under the stipulation that airlines not lay off, furlough or reduce pay for
employees through Sept 30. 

Some airlines, however, have interpreted hour cuts to not be
the equivalent of pay cuts.

United has implemented hour reductions for tens of thousands
of employees, president Scott Kirby said during the carrier’s earnings call on
May 1. 

The carrier will receive $3.5 billion in Cares Act grants
plus $1.5 billion in 10-year loans at 2% interest.

Kirby said the federal aid doesn’t cover the $6.5 billion in
payroll expenses United could incur through September. He characterized the cut
in working hours as compliant with the bill. 

“We made a promise to our people and to American taxpayers
to avoid involuntary furloughs or cuts to pay rates for U.S. employees until
the end of September, and that’s a promise we’ll keep,” Kirby said. 

Delta, which will receive $5.4 billion through the Cares
Act, had reduced all ground employees to three or four days through June. 

“Consistent with the requirements of the Cares Act, Delta
employees continue to be paid at the same rate of pay,” the carrier said in an
email. 

JetBlue is having employees in the corporate office as well
as specified operational managers and supervisors take 24 days of unpaid time
through September. The program doesn’t apply to pilots, cabin crew, the
maintenance team or airport ground workers such as gate agents and ramp
personnel. JetBlue said the $936 million it is to receive in federal payroll
support only covers 76% of its payroll cost though September, based upon 2019
costs. 

“We are taking actions now that will help us preserve jobs
when the payroll support funding ends,” the carrier said. 

The maneuvers of United, Delta and JetBlue have drawn the
ire of the carriers International Association of Machinists and Aerospace
Workers. 

The union says all three carriers have “ignored or
circumvented the employment protections contained in the Cares Act.”

Some in Congress agree.

In a letter Friday to United CEO Oscar Munoz, Sen. Josh
Hawley (R-Mo.) said that cut in hours is a pay cut. 

“Decisions by major employers like United Airlines can
reverberate widely across the labor market, affecting communities and working
families alike,” Hawley wrote. “The taxpayers of this country have offered a
generous bailout to your company and you should, in turn, honor this trust by
keeping the promises you made to those you employ.”

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Southwest alters boarding procedure for social distancing

Southwest has modified its boarding process to better
maintain social distancing during the Covid-19 pandemic.

Passengers are being called to board 10 at a time sequentially by
their boarding position. 

The process replaces the carrier’s usual boarding procedure,
in which 30 passengers are called to board at once while another 30 passengers
are asked to line up just on the other side of the carrier’s boarding columns. 

Also, Southwest has begun limiting the number of seats it
will make available on any given flight. The measure is temporary as result of
the Covid-19 pandemic. The carrier said it is blocking about one-third of the
seats.

Southwest traditionally has a capacity of 143 on its Boeing
737-700 aircraft and 175 on its 737-800 planes. 

Other U.S. airlines have reduced flight capacity by blocking
middle seats. Southwest said it won’t take that step. Passengers can choose to
sit in any open seat, as always.

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Airport concession parking companies seeking Covid relief

DENVER — On a recent Monday, a simple sign greeted would-be customers at the shuttered Cantina restaurant in Denver Airport’s eerily empty main terminal.

“In order to keep our employees and guests safe, we have temporarily suspended operations at this location,” it read in part. “We encourage you to enjoy and support any of the great offerings throughout the concourse.”

Meanwhile, a few miles from the airport, the scene was similarly forlorn at the off-airport parking facility the Parking Spot. There, just a smattering of cars occupied the expansive lot.

With air traffic down approximately 95%, scenes like these are playing out throughout the country. As of April 28, the Airport Restaurant and Retail Association (ARRA) was estimating that in-airport concessionaires would do just $38 million in sales in April, compared with $825 million in April 2019. The ARRA also estimates that of the approximately 125,000 people the industry employed nationwide prior to the Covid-19 pandemic, 5% are currently working.

Similarly, the Near Airport Parking Industry Trade Association (Napita) estimates that 90% of the approximately 12,000 people its industry employed prior to the pandemic have been laid off, said Sarah Fisher, a Napita board member who is general counsel for the Parking Spot.

But while airlines are eligible for up to $50 billion in grants and loans through the Cares Act stimulus bill and airports will receive $10 billion in grants, neither the concession businesses nor off-airport parking facilities received such carve-outs. Both industries are now calling for more consideration from Congress as well as for accommodation in the form of rent or fees concessions from airports.

According to a June 2019 survey by the Airports Council International-North America (ACI-NA) trade group, airport concession businesses are split fairly evenly between large national brands, smaller regional brands and boutique businesses. Many of those smaller entities would be eligible for a portion of the $660 billion in small-business Payroll Protection Program funding that Congress has authorized.

ARRA executive director Rob Wigington, though, argues that airport concessionaires should get designated federal funding, just like airlines and airports. The trade group is asking for $3 billion to $5 billion in grants and loans.

“Clearly, Congress felt that aviation had a special need as they set up the original Cares Act,” Wigington said.

“Airport concessionaires are captive to air travel. The airlines aren’t flying, the planes aren’t being filled, then you don’t have passengers coming through.”

The ARRA has also turned its attention toward airports, arguing that they need to do more to assist concessionaires, especially since they have received federal grants.

Under the stipulations of those grants, airports can’t make direct payments to retail and restaurant tenants. But they can provide rent relief, including reductions, deferrals and outright abatements.

Some airports have, in fact, reduced rents.

Under standard industry lease conditions, concessionaires pay airports a designated percentage of their monthly sales subject to a minimum guarantee that is derived from past performance and airport traffic.

With the Covid-19 crisis having rendered those inputs useless, major airports, including Denver, Miami and Atlanta, have temporarily eliminated minimum guarantees.

LAX, meanwhile, is allowing concessionaires to defer payments of percentage rent through Dec. 31, but with the stipulations that they extend health care for laid-off employees for two months and that as business recovers, they bring back laid-off workers in proportion to increases in sales.

Wigington, though, said that without rent abatements, many airport storefronts won’t survive. He has called for a 12-month rent reprieve.

“Our member companies and employees only want to be a part of the recovery of American aviation,” Wigington wrote in an April 28 letter. “In order to achieve that goal, we ask for our airport partners to support rent abatement and engage in a meaningful conversation designed to collaboratively create a new future for our industry.”

Neither the ACI-NA nor the American Association of Airport Executives trade group responded to interview requests.

But Alan Gluck, aviation planning manager for the consulting firm ICF, said that airports have their own financial concerns and commitments, including paying debt service, pensions and salary. In an April 1 analysis, he argued that a workable compromise could be for airports to grant rent deferrals during the crisis and to couple those deferrals with lease extensions when necessary to provide concessionaires with payback horizons measured in years rather than months.

Like the ARRA, Napita is also frustrated with the posture being taken by airports. Off-airport parking facilities aren’t airport tenants, but they pay airports for access to drop-off and pickup locations outside the terminals. Such fees are typically assessed either as a percentage of gross revenue or on a per-trip basis, like a toll.

Board member Rob Chavez, who is an ownership partner of Fast Park, said that he reached out to 13 of the 15 airports where the company operates to discuss fee relief, and all 13 declined to help.

He noted that although airports need the parking access that off-airport facilities provide during busy times, they have a competitive incentive not to help, since off-site parking also competes against airport-owned lots.

Napita is asking the federal government for a simple tweak in the Cares Act. Under the bill, hotels that are part of a chain can apply for Payroll Protection Program grants as long as there are no more than 500 employees at a particular hotel location. Napita would like the same rule to apply to off-airport parking facilities.

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