U.S. airlines say vaccine cargo could help restart passenger flights

By Tracy Rucinski

CHICAGO (Reuters) – Major U.S. airlines are preparing for a massive airlift of COVID-19 vaccines that will not only boost their cargo business, but help bring back passenger flights that shut down during the pandemic, executives told Reuters.

Travel demand is hovering around 40% of 2019 levels and will not return to normal until vaccines are widely distributed. In the meantime, the vaccine transportation itself could help airlines bring back parked jets and start reopening routes.

“I think we’re going to reach a point fairly soon as multiple vaccines are approved that most of the planes that are operating are going to be carrying vaccines,” said Roger Samways, vice president of Cargo Sales at American Airlines.

“We’re really looking at what could end up being the largest single airlift in commercial aviation history,” he said.

The vaccine developed by Pfizer Inc. could receive U.S. approval as soon as this week and may soon be followed by another from Moderna Inc.

The size and range of airline fleets and networks are key, as well as the ability to manage vaccines that require ultra-cold storage and the ability to quickly load them onto aircraft and unload them onto trucks for final delivery.

Commercial planes normally carry around half the world’s air cargo in their bellies, with the remainder hauled in dedicated freighter planes. But a drastic reduction in passenger routes during the pandemic has slashed overall air capacity in the market.

Airlines began operating cargo-only charter flights with essential goods early in the pandemic that have become the main driver of an international business that has otherwise collapsed.

As American prepares to fly vaccines to some 150 locations across 46 countries where it already ships pharmaceuticals, it is hoping to put passengers on some of those flights too, Samways said.

American already turned cargo charters to places like Sao Paolo, Santiago and London into revenue passenger flights earlier this year that would not have been viable given the overall sharp downturn in demand.

United Airlines said cargo flights also helped expand its passenger network over the summer following weekly meetings between cargo and network planning teams to pinpoint demand.

“We continue to have those meetings on a weekly basis,” cargo chief Christopher Busch said.

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To shorten the run time for vaccines, United is now parking planes right behind its cargo facility in Chicago, rather than at passenger gates, Busch said, and has added refrigerated rooms to meet some of the vaccine requirements.

American said vaccines will be the last to load and the first to come off its planes, and the vaccines will not sit at an airport for more than two hours on either end. The airline has a 25,000-square-foot cargo facility with three temperature zones in Philadelphia, near 14 of the largest 20 pharmaceutical companies.

Delta Air Lines Inc has a 40,000-square-foot, temperature-controlled facility in Atlanta, where it is running a cargo control tower day and night to prepare for vaccine distribution support.

Traditionally, cargo contracts are a triangular arrangement in which manufacturers like Pfizer Inc pay forward freighters like FedEx Corp or United Parcel Service, which in turn pay airlines for any distribution they cannot handle.

For the vaccine rollout, airlines said they expect some direct shipper arrangements with the manufacturers themselves, and enough business for any airline with the capacity and infrastructure to handle it.

“In layman’s terms, there’s more than enough business to go around,” said Delta’s cargo chief, Robert Walpole.

Research firm Cowen is estimating $400 million in vaccine cargo revenue in 2021. While the share for airlines is unclear, it will be a welcome boost for a loss-making industry, though not enough to put it in the black without a recovery in passenger traffic.

“We’re still a long, long way away from reaching a financial situation as an industry that we’ll be comfortable with,” Samways said.

(Reporting by Tracy Rucinski in Chicago; Editing by Matthew Lewis)

U.S. airlines caution on winter challenges as COVID-19 cases rise

(Reuters) – Delta Air Lines and Southwest Airlines on Thursday cautioned that the recent surge in COVID-19 cases may have a negative impact on travel over the winter holidays, a period the sector had hoped would see improved bookings.

The United States on Wednesday reported new COVID-19 infections reached an all-time daily high for a second day in a row and the number of people hospitalized also surged to the highest ever during the pandemic.

“With the U.S. hitting a grim milestone of 10 million positive cases and outbreaks in Europe and other parts of the world, all signs point to a challenging winter ahead,” Delta Chief Executive Ed Bastian said in a memo to employees on Thursday.

Earlier, low-cost carrier Southwest said an improvement in revenues in the past few months was losing steam in recent weeks, prompting caution about December trends.

“While the company expected the election to impact trends, it is unclear whether the softness in booking trends is also a direct result of the recent rise in COVID-19 cases,” Southwest said.

“As such, the company remains cautious in this uncertain revenue environment.”

The COVID-19 pandemic brought travel to a near halt earlier in the year, forcing airlines to scale back operations and seek government aid.

(Reporting by Tracy Rucinski; Editing by Sonya Hepinstall)

U.S. airlines urge relief as White House signals possible piecemeal aid

By Tracy Rucinski

CHICAGO (Reuters) – U.S. airlines urged top lawmakers on Wednesday to advance a standalone bill that would extend $25 billion in payroll support through March, as the Trump administration signaled possible piecemeal legislation a day after walking away from broad COVID-19 relief talks.

“We are disappointed that negotiations between Congress and the Administration over additional COVID-19 relief were suddenly suspended yesterday,” Airlines for America, the main industry trade group, and a dozen airline unions wrote in a letter on Wednesday seen by Reuters.

“Now, in the absence of an overall COVID-19 relief package, we urge you to advance standalone legislation to extend the PSP (payroll support program),” it said.

The letter was sent to House Speaker Nancy Pelosi, Senate Majority Leader Mitch McConnell, House Minority Leader Kevin McCarthy and Senate Minority Leader Chuck Schumer.

Earlier, White House chief of staff, Mark Meadows, told reporters that stimulus talks were off but that negotiators were looking at standalone bills on 10 things that “we agree on.”

The idea of airline relief has so far enjoyed broad bipartisan support in Washington, though last week Representative Peter DeFazio, chair of the House Transportation and Infrastructure Committee, failed to win approval of a standalone bipartisan measure for airlines under unanimous consent after some Republicans objected.

Airline shares jumped on Wednesday after sinking suddenly a day earlier on remarks by President Donald Trump that his administration would abandon talks with congressional Democrats over proposals to spend at least $1.6 trillion in additional coronavirus relief funds.

(Reporting by Tracy Rucinski; Editing by Chizu Nomiyama and Bernadette Baum)

Top U.S. airlines starting 32,000 furloughs as bailout hopes fade

By Tracy Rucinski and David Shepardson

CHICAGO/WASHINGTON (Reuters) – American Airlines and United Airlines, two of the largest U.S. carriers, said they were beginning furloughs of over 32,000 workers on Thursday as hopes faded for a last-minute bailout from Washington.

Both airlines told employees, however, in memos seen by Reuters on Wednesday that they stood ready to reverse the furloughs, which affect about 13% of their workforces before the pandemic, if a deal was reached.

Tens of thousands of other employees at those airlines and others including Delta Air Lines and Southwest Airlines have accepted buyouts or leaves of absence aimed at reducing headcount as carriers battle a health crisis that has upended the global travel industry.

U.S. airlines have been pleading for another $25 billion in payroll support to protect jobs for a further six months once the current package, which banned furloughs, expires at midnight EDT.

Earlier, U.S. Treasury Secretary Steven Mnuchin said talks with House of Representatives Speaker Nancy Pelosi had made progress on a bipartisan aid plan, although no deal was reached and Senate Majority Leader Mitch McConnell called a $2.2 trillion coronavirus relief proposal “outlandish.”

In a memo to employees, American Chief Executive Doug Parker said Mnuchin told him that he and Pelosi were continuing to negotiate on a bipartisan COVID-19 relief package that would include an extension of aid for airlines and could reach an agreement in coming days.

“Unfortunately, there is no guarantee that any of these efforts will come to fruition,” Parker said.

American will furlough 19,000 employees, including some 1,600 pilots. More than 13,000 United employees will be on furlough, but not any pilots following an agreement reached this week.

“Tomorrow, tens of thousands of essential aviation workers will wake up without a job or healthcare and tens of thousands more will be without a paycheck,” Association of Flight Attendants-CWA President Sara Nelson said in a statement that urged lawmakers to reach a deal.

Nick Calio, who heads the airline trade group Airlines for America, said earlier that the industry was still pursuing all potential avenues for new assistance as time runs short.

“People keep talking, but we need results,” Calio told Reuters. “We are hopeful but not confident about them reaching a deal on a larger bill.”

U.S. airline shares ended flat on Wednesday.

Weeks of intense airline lobbying has won over many but not all Washington lawmakers, while drawing attention to the plight of other pandemic-hit industries as the crisis persists.

U.S. airlines are operating about half their 2019 flying schedules and suffering a 68% decline in passenger volumes.

The impact of the coronavirus on travel may cost as many as 46 million jobs globally, according to projections published on Wednesday by the Air Transport Action Group.

Airlines have argued they need trained employees to help drive an economic recovery as the pandemic subsides. American Airlines’ Parker told CNN he believed one more round of aid would be sufficient.

(Reporting by Tracy Rucinski and David Shepardson; Editing by Peter Henderson and Peter Cooney)

China eases flight curbs after United States targets its carriers

By Stella Qiu and Se Young Lee

BEIJING (Reuters) – China will ease coronavirus restrictions to allow more foreign carriers to fly to the mainland, shortly after Washington vowed to bar Chinese airlines from flying to the United States due to Beijing’s curbs on U.S. airlines.

Qualifying foreign carriers, about 95 of them currently barred from operating flights to China, will be allowed once-a-week flights into a city of their choosing starting on June 8, the Civil Aviation Administration of China (CAAC) said on Thursday.

But considering some countries are still banning international flights, it estimated the number of international flights would increase by 50 to 150 per week while the average of passengers arriving per day would rise to 4,700, up from around 3,000 now.

The CAAC said all airlines will be allowed to increase the number of international flights involving China to two per week if no passengers on their flights test positive for COVID-19, the disease caused by the novel coronavirus, for three consecutive weeks.

If five or more passengers on one flight test positive for COVID-19 upon arrival, the CAAC will bar the airline from services for a week. Airlines would be suspended for four weeks if 10 passengers or more test positive.

The CAAC has slashed international flights since late March to allay concerns over rising coronavirus infections brought by arriving passengers. Mainland carriers are limited to one flight a week on one route to any country and foreign airlines are allowed to operate just one flight a week to a city in China.

Carriers could also fly no more than the number of flights in a weekly schedule approved by the CAAC on March 12. U.S. passenger airlines already stopped all flights to China at that time, meaning they were unable to resume flights to China.

On Wednesday, the U.S. government said it would bar Chinese passenger carriers starting from June 16, pressuring Beijing to let U.S. airlines to resume flights.

The U.S. Department of Transportation could not be immediately reached for comment, though it has said it will reconsider the decision against Chinese airlines if the CAAC adjusts its policies affecting U.S. airlines.

Zhao Lijian, a Chinese foreign ministry spokesman, said at a daily briefing on Thursday the CAAC is lodging a complaint with the U.S. Department of Transportation for the ruling against Chinese air carriers. He said the CAAC is in close cooperation with its U.S. counterpart about passenger flights.

“We hope the U.S. side will not create obstacles for the resolution of this issue,” Zhao said.

China suspended the entry of most foreigners in late March, meaning only Chinese nationals can enter on commercial passenger flights.

(Reporting by Stella Qiu, Se Young Lee, Huizhong Wu, Lusha Zhang and Cate Cadell; Editing by Lincoln Feast, Christian Schmollinger and Emelia Sithole-Matarise)

Major U.S. airlines endorse temperature checks for passengers

By David Shepardson

WASHINGTON (Reuters) – A major U.S. airline trade group on Saturday said it backed the U.S. Transportation Security Administration (TSA) checking the temperatures of passengers and customer-facing employees during the coronavirus pandemic.

Airlines for America, which represents the largest U.S. airlines including American Airlines <AAL.O>, United Airlines <UAL.O>, Delta Air Lines <DAL.N> and Southwest Airlines <LUV.N>, said the checks “will add an extra layer of protection for passengers as well as airline and airport employees. Temperature checks also will provide additional public confidence that is critical to relaunching air travel and our nation’s economy.”

A U.S. official said Saturday no decision has been made on whether to mandate the checks, but said the issue is the subject of extensive talks among government agencies and with U.S. airlines and added a decision could potentially be made as early as next week.

One possible route would be for a pilot project or to initially begin temperature checks at the largest U.S. airports. Questions remain about what the government would do if someone had a high temperature and was turned away from a flight.

U.S. officials said the temperature checks would not eliminate the risk of coronavirus cases but could act as a deterrent to prevent people who were not feeling well from traveling.

TSA Administrator David Pekoske told employees during a town hall meeting Wednesday that no decision had been made regarding possible temperature checks of passengers at airports and that questions remained about where such checks might take place and which agency might perform them.

“It’s been a discussion that’s been ongoing for several weeks now,” he said.

A TSA spokesman did not immediately comment Saturday.

Frontier Airlines said on Thursday it would begin temperature screenings for all passengers and crew members on June 1 and bar anyone with a temperature at or exceeding 100.4 degrees Fahrenheit (38 C).

The move, the first among major U.S. airlines, followed the industry mandating facial coverings for all passengers and heightened cleaning procedures to address coronavirus concerns.

The airline group said having temperature checks performed by the TSA “will ensure that procedures are standardized.”

The endorsement comes amid signs of a modest travel rebound from historic lows. On Friday, TSA screened 215,444 people at airport checkpoints, the first time the number topped 200,000 since March 26. But that is still a fraction of the 2.6 million screened on the equivalent day last year.

(Reporting by David Shepardson; Editing by Chris Reese)

Hundreds of U.S. flights canceled after air traffic coronavirus cases

By David Shepardson

WASHINGTON (Reuters) – U.S. airlines have canceled hundreds of flights at three major U.S. airports this week after a series of coronavirus cases involving air traffic control personnel.

The U.S. Federal Aviation Administration (FAA) temporarily closed the air traffic control tower at John F. Kennedy Airport in New York early Friday before reopening it around 11:30 a.m. ET (1530 GMT). The FAA also shuttered part of the Indianapolis Air Route Traffic Control Center for cleaning after workers tested positive for the coronavirus.

The FAA said a technician at JFK had tested positive and air traffic controllers had been operating earlier from an alternate location on airport property.

American Airlines Group Inc <AAL.O> said it canceled 20 of its 68 scheduled departures from JFK on Friday due to a reduced incoming arrival rate after traffic control was shifted to the other location.

In Indiana, after an air traffic control supervisor tested positive, the FAA vacated work areas at the Indianapolis Air Route Traffic Control and flights through the airspace handled by those sectors were rerouted.

Air traffic control towers remain closed at Chicago Midway and Las Vegas airports after other coronavirus cases were reported earlier this week.

Airlines have canceled more than 700 flights on Thursday and Friday at Las Vegas and more than 800 over the last two days at Midway, according to flightaware.com.

Southwest Airlines <LUV.N> has resumed operations in Chicago after canceling more than 200 flights on Thursday. The airline said it had also canceled another 150 flights at Chicago and more than 165 flights at Las Vegas airport on Friday.

On Thursday, the FAA placed a temporary flight restriction over Midway to allow only commercial flights and other authorized flights after a number of local private pilots began using the airport for touch-and-go landing practice.

(Reporting by David Shepardson; Additional reporting by Tracy Rucinski; Editing by Bill Berkrot, Chris Reese and Richard Chang)