July 31, 2020
At Crane Worldwide Logistics, we continue to provide services to our clients and communities in need through the COVID-19 pandemic. As companies start to reopen and businesses return to their normal operations, we want you to know we support the transition. The supply chain is considered an essential service and critical to supporting the infrastructure for our communities. Guidelines are in place, and we are following all recommendations set forth by government agencies and health organizations at all of our facilities.
We have warehouse space available, ground transportation options globally and are continuing to book air charters and fill space on ocean carriers.
Find below updates regarding COVID-19 impacts for July 2020. To see our previous updates, please visit our Coronavirus COVID-19 Resource Center on our website.
Week 31 (July 27 - 31)
IATA released an information page listing the status of airlines globally, which is free for all to access. Visit the page here
Boeing - Reported a $2.4 billion loss for the second quarter of 2020. The manufacturer announced it would slow down production further due to the impact of Covid-19 on air transport. The first delivery of the 777X is officially postponed to 2022. Revenues for the Commercial Aircraft division were impacted the most, as they slumped by 65% to $1.63 billion. Deliveries fell from 90 aircraft in the second quarter of 2019 to 20 this quarter. The Defense, Space and Security division barely grew in revenue, generating $6.59 billion, up from $6.58 a year before. To alleviate its losses, the manufacturer, which already announced plans to cut 16,000 jobs, warned that it would have to “further assess the size of [its] workforce,” without giving further details. The production rate of the 777 has been revised downwards, from 3 to 2 per month, and that of 787 to 6 per month against 7 previously. Rumors regarding the postponement of the 777X were confirmed, with the first delivery set to happen a year later than expected, in 2022. The ramp-up of the Boeing 737 MAX production, which resumed in May 2020, will be “slower than expected”, with the goal output of 31 aircraft to be reached in early-2022 instead of 2021. Production rates for the 767 and 747 programs will remain unchanged. "We are taking the right action to ensure we're well-positioned for the future by strengthening our culture, improving transparency, rebuilding trust and transforming our business to become a better, more sustainable Boeing,” commented Boeing President and Chief Executive Officer Dave Calhoun. “Air travel has always proven to be resilient - and so has Boeing."
British Airways - Trade union Unite sent a letter with a strike warning British Airways (BA) over its plan to institute significant pay cuts and change employment terms and conditions. Union’s letter, obtained by BBC, was addressed to BA chief executive Alex Cruz. It accused the company of arrogance and claimed the union will take “industrial action” to prevent BA from enacting the plan. The main subject of the disagreement is BA’s employment of “fire and rehire” policy. Unite claims the airline has already planned to fire thousands of employees and then rehire them on worse conditions, effectively forcing all workers into accepting pay cuts and furloughs. BA responded with a statement saying it is “doing everything it can to save jobs” and that union’s criticism is “disappointing” in the context of the crisis, when jobs are being lost in every industry. IAG, BA’s parent company, announced its plans to cut 12,000 jobs back in April. Unite, which represents thousands of BA’s employees, mostly maintenance staff, engineers and cabin crew, has been battling with the company ever since.
Cathay Pacific - As Cathay Pacific Airways is trying to preserve cash by delaying some aircraft deliveries, a new health policy unveiled by the government of Hong Kong towards U.S. citizens could add to its troubles. When Hong Kong authorities imposed tighter testing restrictions on flight crews incoming form the United States, both United Airlines and American Airlines temporarily halted flights to the city, fearing that one positive test could ground the whole crew for fourteen days. Now, the city’s very own carrier, Cathay Pacific Airways, could also see its operations being disrupted by the increasingly strict safety measures. Hong Kong Secretary for Food and Health Sophia Chan Siu-Chee announced on July 22, 2020, that all passengers incoming from the United States as well as Kazakhstan would be labeled as “high-risk”. Thus, they will have to self-isolate for a period of fourteen days in a hotel and the evidence that they actively booked a room for this amount of time will be needed to enter the city. Additionally, they will need to prove they tested negative to a COVID-19 test as recently as three days before their flight. That specific measure may dissuade potential flyers from the United States, where testing services are submerged and getting test results on such short notice could prove impossible. Waiting times are currently much closer to a week, according to Bloomberg. Deterring customers is hardly welcome by Cathay Pacific. Facing record-low demand (a drop of 99% in passengers in June 2020 compared to the previous year), the airline whose core business was transpacific routes reported that it expected losses amounting to $1.27 billion for the second quarter. Prior to the coronavirus COVID-19 pandemic, the carrier had already been affected by months of unrest in the city, with a 46% drop in incoming traffic to Hong Kong in November 2019. In an attempt to preserve cash, the Hong-Kongese carrier announced that it had reached a deal with Airbus to delay deliveries of its upcoming A350 and A321neo, on July 21, 2020. The delivery of planes, expected between 2020 and 2021, would be spread all the way to 2023. Meanwhile, negotiations continue with Boeing, particularly surrounding the 21 upcoming 777X it has on order. As it announced the approval by the Hong Kong authorities of a recapitalization plan amounting to $5 billion dollars, the carrier warned of the effect of governmental policies on its activities. “Travel restrictions imposed by various governments have led to significantly reduced inbound and outbound passenger traffic for the Cathay Pacific Group and uncertainty over the Cathay Pacific Group’s future prospects and operations,” the airline wrote in a stock prospectus. In addition to the $3.5 billion in loans provided by the government, Cathay initiated a rights issue of $1.5 billion.
KLM - Dutch national carrier KLM announces a plan to expand its current lockdown-impacted network to 91 European and 61 intercontinental destinations in October 2020, just shy of the 92 and 69 routes it had before the pandemic struck. According to the company’s press release, its network in Europe is already “virtually at its pre-COVID-19 level” and is expected to grow even more in the coming months. One third of intercontinental flights still only carry cargo as local rules do not allow passenger travel, but those regulations are likely to change soon too.Not all served destinations will be pre-crisis though, as the ones KLM is not able to service are to be supplanted with new ones. Cork (ORK), Southampton (SOU) and Riyadh (RUH) are the new additions to the carrier’s network and will be visited by its Embraer 175s and Airbus A330s from August 3, 31 and September 28 respectively.Coverage is the only parameter to be returning at pre-COVID levels. A number of flights and passenger capacity lag behind, confirming that the industry will likely need years to return to normality. Compared to over 52500 KLM’s flights conducted in August, September and October of 2019, only 34000 are planned for the same period of 2020.The passengers will feel the impact as well, with face masks mandatory during both boarding and flight, and extra hygiene equipment (presumably, omnipresent bottles of hand disinfectant) provided. The return is possible in part due to Air France-KLM being a receiver of one of larger packages of aid, as French state, together with banks, provided it with €7 billion loan and Dutch government and banks supplied another €3.4 billion.
Lufthansa - The Lufthansa Group announced on August 27 to be continuing its five weekly flights to New York (JFK) from Frankfurt (Germany), offering PCR corona tests to arrivals at the Frankfurt Airport.As the industry continues to face global stagnation, progressively more airlines are coming up with measures to provide safe and approachable traveling. Regulations in the European Union require travelers from certain countries to undergo a 14 day self-quarantine regime to minimize the potential spread of the virus. However, Lufthansa has reportedly partnered with a certified biotech group, Centogene, to offer fast PCR Corona tests in the Frankfurt airport for new arrivals, allowing travelers to avoid the quarantine period. According to the company, these tests take anywhere within 3-6 hours to complete. All travelers arriving to the Frankfurt airport can schedule a standard (€59) or an express test (€139) from Centogene prior to their journey. If the test results come up as negative, the arrivals are officially permitted to enter Germany under the EU criteria without having to self-quarantine afterward. “As the world gradually begins to open up, the desire to travel has increased and there is an ever-growing necessity to see family and friends, as well as conduct important business trips. Lufthansa is continually evaluating additional connections globally,” Larry Ryan, senior director of sales for Lufthansa Group in the USA, commented on reopening flights to JFK. With the new strategy in mind, The Lufthansa Group expects to open over 70 percent of their long-haul and 90 percent of their short-to-medium-haul destination flights by the end of October. The company views this as an opportunity to make a swift recovery and to potentially even grow further.
United - As the COVID-19 situation remains clouded in a shroud of uncertainty, the airlines across the world continue to expand their strategies against the virus in hopes to keep their services both low-risk and available. Initiative and dedicated execution are required to steer a damaged boat through the rough waters, and as United and Delta Airlines continue to improve their policies, other airlines seem to have taken an easier road by looking at their competitors for a course of action. United Airlines released a statement at 11 AM on July 22, informing the public that, starting July 24, failure to comply with their new masks policy in operating airports would result in a refusal or, in more extreme cases, a ban from the carrier’s services. The changes to the requirements also extend to the exemption policy, only allowing ‘no-masks’ for children under the age of two. Hours later, 7 PM July 22 and 1:22 AM July 23 respectively, American and Southwest Airlines released virtually identical statements regarding the expanded face covering requirements: customers would be required to wear facemasks at all times when entering and before leaving the airport. Only exceptions would be made to children below the age of two and very brief exceptions to eating, drinking and taking medicine. Customers are encouraged to bring their own masks, but in the case that they do not, airlines would provide them with new ones.The carrier company would not transport individuals failing to comply with the regulations. In their statements, both the Southwest and American quoted the Center for Disease Control and Prevention (CDC), but public health guidance for international and cruise travel was not updated since May 3, 2020. However, even as the COVID-19 cases in the US are on a continuous rise, there remains considerable interest in the re-opening of international flights. Such an opportunity could potentially soften the financial mayhem that is rampant in the industry and airlines must be ready and up to health standards if they wish to navigate the ongoing crisis successfully.
United States
Australia: New South Wales, Victoria states tighten restrictions amid COVID-19 outbreak.
Belgium: Antwerp, Belgium's most populous province, announced a curfew and other strict new regulations Monday as Belgium works to halt a dramatic rise in local coronavirus cases. The new measures will come into effect on July 29 and are set to be around for at least four weeks.
Brazil: Government reopens international air travel to foreign tourists.
Kuwait: Government to allow citizens and residents to travel to, from country from 1 August.
United States: Flights from California's Ontario International Airport to Chicago and Houston to resume in August.
Week 30 (July 20 - 26)
Air India - Opens bookings for international flights to the U.S. from 22 July.
Etihad Airways - Expected to lay off hundreds of pilots Etihad Airways is reportedly planning to carry out further downsizing and lay off up to 400 pilots, media reports suggest. The Gulf airline was unable to sustain the number of employees it had, the company’s VP of flight operations wrote in a message to staff, as reported by the Arabian Aerospace on July 15, 2020. The layoffs were the direct consequence of the COVID-19 crisis, the message also said. Like other carriers in the Middle East and much of the world, Etihad Airways grounded scheduled passenger flights in March 2020, keeping only a small amount of rescue and cargo operations. After the UAE and Abu Dhabi began easing travel restrictions, the air carrier began gradual passenger flights resumption only in July 2020. Etihad Airways tried to cut staff-related costs by temporarily reducing the employees’ salaries. The measure, officially announced in April, was initially supposed to be in force until July, but was later prolonged until September 2020. Nevertheless, jobs remained at stake. By late April 2020, the company already laid off many employees, according to the airline’s chief executive Tony Douglas, who called the redundancies “quite sizable”. At the time, media reports suggested the layoffs would not be the last. As of August 2019, Etihad Airways had 20,520 employees. It is not immediately clear how many people the airline has fired since the beginning of the crisis.
Finnair - China, Finland: Finnair will resume flights between Helsinki and Shanghai July 23.
Qatar - The International Court of Justice, the highest court of the United Nations, ruled in favor of Qatar in a quarrel opposing the country to Bahrain, Saudi Arabia, the United Arab Emirates, and Egypt. The neighboring countries that imposed a full blockade on Qatar since 2017 will now be judged by the International Civil Aviation Authority Council. The ICJ judges unanimously rejected the appeal from Saudi Arabia, Bahrain, the United Arab Emirates, and Egypt against a decision of the ICAO on the matter in 2018. Back then, most ICAO Member States voted in favor of addressing Qatar’s complaints. The blockading countries submitted an objection, stating that the ICAO had no jurisdiction in the matter. The Qatari Minister of Transport and Communications Jassim Saif Ahmed al-Soulaiti welcomed the decision of the ICJ in a press release. “We are confident that the ICAO will ultimately find these actions unlawful,” Al Sulaiti said, adding "this is the latest in a series of rulings that expose the Blockading Countries’ continued disregard for international law and due process. Step by step their arguments are being dismantled, and Qatar’s position vindicated. “In June 2017, Qatar was accused by four other Gulf countries as well as Egypt of supporting terrorism. Consequently, its national airline Qatar Airways was blocked from 18 airports in Saudi Arabia, UAE, Bahrain, and Egypt, and the planes of the company were forbidden to use the airspace of those countries. Commercial and maritime routes were cut, and land borders were also closed. The blockade has put a strain on the flag carrier. Qatar Airways lost many profitable routes as it was forced to avoid the airspace of the neighboring countries. In 2019, it reported a net loss of $639 million. Now that the jurisdiction of the ICAO has been established and that the complaints of Qatar have been considered, both parties will be able to defend their case. The United Arab Emirates already commented on the news, saying they would "now present their legal action to ICAO to defend their right to close their airspace to Qatari planes.”
South African - South African finance minister Tito Mboweni says the government has not committed to fund the new South African Airways (SAA) rescue plan. A court paper obtained by Reuters contains Mr. Mboweni’s statement that no definitive decisions on the sourcing of funds for SAA have been taken. It also details several options for acquiring the money, including investments of pension funds, obtaining it from interested private equity partners or other strategic partners. Rescue plan was approved by creditors on July 14, 2020. It included a requirement of at least 10 billion rand ($596 million) needed to restructure the national carrier which has not made profit since 2011 and has been put under bankruptcy protection in December 2019. On July 16, South African Department of Public Enterprises proclaimed that the National Treasury had committed the necessary amount of money, a move contradicted by the Mr. Mboweni’s statement.It is not the first time SAA’s restructuring plan fails, as the last time its implementation was stopped by company-wide strikes.
Virgin Atlantic - Virgin Atlantic secured with private refinancing deal Recapitalisation of airline will deliver a refinancing package worth around £1.2bn over the next 18 months in addition to more than £1.2bn self-help measures already taken, with passenger flying restarting next week.
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United States
Europe
Severe backlog in Europe-bound trains at Chinese border, as coronavirus increases rail freight volume.
Ireland: Government to drop 14-day COVID-19 quarantine requirement for travelers arriving from 15 countries.
Qatar: Government allows citizens, permanent residents to travel, return anytime from 1 August.
South Africa: Three additional domestic airports reopen from 21 July.
Week 29 (July 13 - 19)
Rapidly declining air freight rates and increasing passenger flights – with belly capacity – are set to see many of the new ‘passenger-freighter’ operators leave the market. Both Cathay Pacific and Lufthansa Cargo have already acknowledged that the ‘freighter’ peak was in May and that June would see far lower levels. And with the TAC Index reporting that air freight rates have fallen again, the economic viability of passenger freighters is looking unsustainable. However, carriers, including IAG and Air Canada are continuing with scheduled services (LoadStar, June 23).
Cathay Pacific - In response to recent developments in the market, the Cathay Pacific Group has reinstated some passenger flights in July, increasing our cargo capacity and the number of destinations we service. From 12 July until 31 July, Cathay Pacific and Cathay Dragon will operate cargo-bookable passenger flights according to the flight schedule below. This schedule includes both regular passenger services and passenger flights operated for cargo only.
Emirates - Has announced it will resume flights to Geneva (from 15 July), Los Angeles (from 22 July), Dar es Salaam (from 1 August), Prague and Sao Paulo (from 2 August), and Boston (from 15 August), This will take the airline’s network to 58 cities by mid-August, including 20 points in Europe and 24 points in the Asia Pacific. (Transport & Logistics July 9).
Lufthansa - Lufthansa Cargo will shed just over 10% of its workforce by 2023 as part of a restructuring at the overall airline group. A spokesperson for the cargo division confirmed that around 500 of the cargo division’s workforce of 4,500 people would leave the company over the next two-and-a-half years. Part of the rationale for the reduction is that the airline group has slashed its passenger operations in light of the coronavirus outbreak. The airline has also announced plans to reduce its 700 plus fleet by 100 aircraft as part of the restructuring plan. “Lufthansa Cargo will support the restructuring of Lufthansa Group and continue to optimize its cost position,” the spokesperson said. “In particular, as a result of the changes in the offering of belly cargo routes in the wake of the corona pandemic. Concrete measures are currently being elaborated. If any changes should arise for our customers as a result, we will of course inform them as early as possible.” The cargo division also recently announced the outsourcing of part of its handling business to logistics company Fiege. “The decision regarding parts of the handling in our Cargo Center in Frankfurt was taken at an earlier stage, irrespective of the current situation, and essentially re-organizes our internal service provider structure,” the spokesperson added. Lufthansa Cargo had also already reduced the size of the executive board by one position — from four to three — in April, when the former chief financial officer Martin Schmitt changed his role within Lufthansa Group. Following the move, chairman of the executive board and chief executive of Lufthansa Cargo, Peter Gerber took over the finance and human resources department on an interim basis. Gerber also assumed the role of the labor director. In mid-June, the airline announced its Renew restructuring program, which included plans to cut the equivalent of 22,000 full-time jobs, half of which will be in Germany, and reduce its fleet in response to the COVID-19 outbreak.
Pakistan Airlines - The United States banned Pakistan International Airlines (PIA) flights from its airspace. The decision follows the recent investigation that found 40% of Pakistani pilots to hold dubious licenses. the U.S. Department of Transportation revoked the permission for PIA to conduct charter flights to the United States, effective immediately, after "serious concern to aviation safety" were identified. A PIA spokesperson confirmed the information to local media Dawn. In April 2020, PIA was authorized to carry out twelve repatriation flights a month between the United States in Pakistan. Since 2017, the airline had not flown any direct flights to the country over safety concerns. In June 2020, the Pakistan Civil Aviation Authority (PCAA) revealed that 262 out of 860 active Pakistani pilots had not sat the pilot exams themselves. In total, 40% of pilots, including inactive ones, held “fake” licenses, the authority found. PIA immediately grounded 150 of its 426 pilots. Shortly after, the European Union Air Safety Agency (EASA) suspended the country’s flag carrier, from operating to and from the European Union. The ban came into force on July 1, 2020, for a period of six months. In Vietnam, 27 Pakistani pilots (11 with Vietjet Air and 1 with Jetstar Pacific) were grounded by the Civil Aviation Authority of Vietnam, pending further investigation.
Virgin Atlantic - Richard Branson’s Virgin Atlantic, which has balanced on the verge of collapse since the inception of the new Coronavirus pandemic, is set to be rescued by a new yet-to-be-announced £1.2 billion deal. An agreement is about to be signed with three financial services ventures: Fiserv subsidiary First Data, American Express, and Lloyds Bank’s Cardnet. It ensures that passenger payments will be released to the wavering airline, as well as pave the way for financial injections from its owners Virgin Group and Delta Airlines, and a loan of up to £200 million from the Wall Street hedge fund Davidson Kempner Capital Management. The total rescue plan should amount to more than £1.2 billion. A substantial restructuring is also set to take place, with hopes that the company will return to profit by 2022. It will include leaving London Gatwick airport and laying off over 3000 staff deemed redundant due to the pandemic. For the last several months Virgin Atlantic was caught in the struggle for survival. Back in April Richard Branson appealed to both Delta and the UK government for a bailout, stating that should the group collapse, it will take hundreds of thousands of jobs with it, as well as deal a blow to many other companies it works with. Although the bail was rejected, Virgin Atlantic restarted resuming its operations in July, albeit on a substantially smaller scale than ever before.
United States
Europe
UK | FRANCE - Eurotunnel transported more than 108,000 trucks in June 2020 via Le Shuttle Freight driven by the progressive economic recovery following the successive lifting of lockdown measures. Daily traffic reached a high for the period since 19 March, with 4,885 trucks transported on 24 June 2020. Since 1 January, more than 665,000 trucks have crossed onboard the Shuttles. The anticipation of quarantine measures being relaxed in the UK for tourists led to an all-time record for bookings on the weekend of 27-28 June. The publication of July’s traffic figures will be on 6 August 2020 before markets open.
United Kingdom: Government lifts quarantine measures for travelers from some 70 countries and overseas territories.
Week 28 (July 06 - 12)
Air New Zealand - Puts on hold new bookings of international flights into the country on the government's request.
American Airlines - Will discontinue 19 long-haul international routes amid COVID-19 pandemic.
American Airlines & United Airlines - Hong Kong authorities imposed tighter coronavirus testing of incoming airline crews. Following the enforcement of new measures, both United Airlines and American Airlines have temporarily halted flights to the city. Hong Kong’s Centre for Health Protection announced that “all crew members entering Hong Kong via HKIA [Hong Kong International Airport] [would] be subject to mandatory COVID-19 testing” from July 8, 2020. If they refuse to submit their “deep throat saliva specimens,” crew members risk a fine or even imprisonment. Tighter measures follow eleven “imported cases” of coronavirus detected on July 4, 2020, including at least one pilot. On the day the new rules were enforced, United flight UA877 from San Francisco to Hong Kong was canceled. “United flights to and from HKG are suspended through July 10 westbound and their corresponding returns,” the airline explained. “We are currently assessing how this impacts our future operations.” The carrier had resumed operating five weekly flights between San Francisco and Hong Kong and was planning to start flights between Chicago and Hong Kong from September 2020. On July 9, 2020, American Airlines also decided to suspend flights to and from Hong Kong until August 5, 2020, the South China Morning Post reports. Airlines are understood to be in fear that one positive test could ground the whole crew for fourteen days ‒ a risk that neither management nor staff is willing to take. Additionally, the testing would add hours to the operating schedule. As an alternative to the testing in Hong Kong, they offer to carry out the testing before departure.
Emirates SkyCargo - Has enhanced its bellyhold operations with the resumption of Airbus A380 passenger services to and from London Heathrow and Paris from July 15. The move follows the recovery of Emirates’ Boeing B777 300ER flights to and from Manchester and London Heathrow. Emirates SkyCargo’s bellyhold network currently serves 48 cities between its flagship Dubai hub and the Asia Pacific, the Gulf, Europe, and the Americas. (Air Cargo News, June 24).
Lufthansa - Is to ax 500 jobs globally, as its parent group restructures to cut costs and re-size the business in expectation of lower passenger numbers. This week, the group announced it was implementing the second stage of measures. While it has now secured sufficient financing from governments in Germany, Austria, and Switzerland, it noted that “the complete repayment of government loans and investments, including interest payments, will place an additional burden on the company in the coming years, making sustainable cost reductions inevitable for this reason as well.” A spokesperson for Lufthansa Cargo said the division would “support the restructuring and continue to optimize its cost position.” Overall, the Lufthansa Group is cutting the number of executive positions by 20%, while 1,000 jobs in administration are set to go. There will still be, said the carrier, a surplus of staff, numbering some 22,000 full-time positions, “even in the period following the crisis.” But it said, “in contrast to many of its competitors, Lufthansa will continue to avoid lay-offs, wherever possible,” and is in talks with unions. Lufthansa has already cut 22 aircraft: six A380s, 11 A320s, and five 747-400s. A maximum of 80 will join the fleet up to 2023 – reducing the expected investment in new aircraft by half.
United Airlines - Announced the addition of nearly 25,000 domestic and international flights in August.
United States
Europe
Severe backlog in Europe-bound trains at the Chinese border, as coronavirus increases rail freight volume.
Chengdu International Railway Service said it cut the number of its trains leaving Alashan in Xinjiang for central Europe to two from six between June 27 and 30, with the timetable for July to be adjusted depending on rail traffic conditions. The company said that its decision followed an announcement from state-owned railroad operator China Railway of severe congestion at the freight terminals in Alashan and Khorgos, cities on China’s western border with Kazakhstan. (South China Morning Post July 6).
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