U.S. grants tentative OK for 15 air carriers to suspend service to 75 airports By Reuters


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© Reuters. FILE PHOTO: Delta Air Lines passenger planes parked in Birmingham

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By David Shepardson

WASHINGTON (Reuters) – The U.S. Transportation Department said late on Friday it had granted tentative approval to 15 airlines to temporarily halt service to 75 U.S. airports because of the coronavirus pandemic.

Airlines must maintain minimum service levels in order to receive government assistance but many have petitioned to stop service to airports with low passenger demand.

Both United Airlines (O:) and Delta Air Lines (N:) won tentative approval to halt flights to 11 airports, while JetBlue Airways Corp (O:), Alaska Airlines (N:) and Frontier Airlines were approved to stop flights to five airports each. The department said all airports would continue to be served by at least one air carrier.

The Transportation Department said objections to the order can be filed until May 28.

U.S. air carriers are collectively burning through more than $10 billion in cash a month as travel demand remains a fraction of prior levels, even though it has rebounded slightly in recent weeks. They have parked more than half of their planes and cut thousands of flights.

The department has previously granted airlines waivers to cancel some additional flights and denied others. On May 12, the department said it would allow carriers to halt flights to up to 5% of required destinations.

Under the tentative order, Delta can halt service to Aspen, Colorado; Bangor, Maine; Flint, Michigan; Santa Barbara, California; and Lincoln, Nebraska, among other cities, while United can halt service to airports including Chattanooga, Tennessee; Hilton Head and Myrtle Beach, South Carolina; Key West, Florida; and Lansing and Kalamazoo, Michigan.

JetBlue can halt flights to Albuquerque, New Mexico;

Palm Springs and Sacramento, California; Sarasota, Florida; and Worcester, Massachusetts.

Alaska can suspend flights to Charleston, South Carolina;

Columbus, Ohio; El Paso and San Antonio, Texas; and New Orleans.

Only half of eligible carriers have applied to cut more flights.

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Air cargo carriers say China demand weak despite drastic freight capacity cuts on passenger planes By Reuters


© Reuters. Air cargo carriers say China demand weak despite drastic freight capacity cuts on passenger planes

By Ilona Wissenbach and Joyce Lee

FRANKFURT/SEOUL (Reuters) – Major air cargo carriers said they have no immediate plans to add China flights to replace the capacity lost amid steep cuts to passenger travel due to the coronavirus, as many factories have remained shut down after the Lunar New Year.

Aviation data firm OAG said there would be more than 25,000 fewer flights operated to, from and within China this week compared with two weeks ago, with 30 airlines halting services.

About half of the air cargo carried globally is in the belly of passenger jets rather than in dedicated freighters, and the flight cuts have made the Chinese market more dependent on freight haulers.

But a spokesman for Germany’s Lufthansa Cargo (DE:) said it had reduced its flying schedule, in part to allow pilots to spend the night in Novosibirsk, Russia, rather than in China. Demand from China to Germany fell because of the production shutdown, the spokesman said.

The Lunar New Year holiday has been effectively extended by 10 days in many parts of China, including powerhouse regions such as Shandong province and the cities of Suzhou and Shanghai.

The shutdown represents a fresh challenge to an air freight market that was already weak before the coronavirus epidemic. Global demand fell year-on-year for 13 consecutive months through November 2019 amid slowing economic growth and the U.S.-China trade war, according to the International Air Transport Association (IATA).

“If you’re ordering people to stay in their houses it’s difficult to keep factories running,” Bernstein analyst Daniel Roeska said. “Many supply chains are essentially halted, so there’s nothing to transport.”

Air cargo represents less than 1% of global trade by tonnage. But that amounts to about $6 trillion worth of goods every year – more than 35% of global trade by value, according to data from Boeing Co (N:), the biggest manufacturer of freighters.

Korean Air Lines Co Ltd (KS:) said a fall in Chinese events and meetings due to the coronavirus and related storage and transportation shortages had led to a decline in fresh food shipments, such as lobster and salmon.

“On the other hand, Chinese transport and request of medical supplies such as masks and cleaning agents is increasing,” the airline said in a statement.

A spokeswoman at Japanese airline ANA Holdings Inc (T:) also reported rising demand for medical supplies such as surgical masks although shipments of other goods had been delayed.

Once most Chinese factories resume production, dedicated cargo carriers like United Parcel Service Inc (N:), FedEx Corp (N:) and DHL are likely to be the biggest beneficiaries of any surge in demand, said Helane Becker, an analyst at Cowen.

“Obviously the lack of belly space means everything goes on main deck,” she said, in reference to how cargo is carried in passenger planes compared with freighter aircraft.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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