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What United’s CEO Means When He Says It’s the End of the Beginning

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United Airlines says it is poised “to lead the recovery,” despite reporting a staggering adjusted net loss of $2.4 billion on revenues that were down 78 percent for the quarter ending September 30. The airline’s executives say it is taking a realistic approach to the recovery, even as United expects its core business travel to remain severely depressed for the next several years.

“Emotions like pessimism, hope, and fear have no place when you’re making decisions that involve the lives of tens of thousands of employees and the future of a great airline,” CEO Scott Kirby told analysts on Thursday during the company’s third-quarter earnings call. “You just have to be objective and realistic.”

The company’s executives were, however, much more upbeat than they were in the last quarter, which Kirby called its most difficult in almost a century.

United began furloughing 13,000 employees on October 1, when federal payroll support for airlines expired, a day Kirby called “my toughest day as a CEO.” Should travel demand rebound, Kirby said United will begin recalling those employees.

Business Travel Will be depressed until 2024

Before the pandemic, business travel was United’s strength. With hubs in New York, San Francisco, Washington, D.C., and Chicago, United had been well positioned to capture a large share of premium business traffic, particularly to and from the U.S. But this market is not expected to return to 2019 levels until 2024, Kirby said. “We’re anxiously watching … the occupancy rate of New York City skyscrapers, and when that number starts to go up, I think you’re going to see business travel start to rebound,” added Chief Commercial Officer Andrew Nocella.

Kirby is optimistic that business travel will rebound, even if it the nature of the market changes: Instead of yesterday’s road warriors, flying across the world for conferences and meetings, tomorrow’s business travelers could be remote employees returning to the head office frequently. And there always will be a need for business travel. “I’ve been fond of saying the first time someone loses a sale to a competitor who showed up in person is the last time they try to make a sales call on Zoom,” he said.

Leisure travel becomes more important

Faith that the business-travel market will return in several years is cold comfort to United now, however. The airline is retooling its network to focus on leisure travel, the segment of the market that is showing signs of recovery. Unusually for the hub-and-spoke airline, it is offering direct flights between non-hub cities to leisure destinations like Florida, and it expects to add more in the fourth quarter. It is moving flights away from its coastal hubs to its hubs in Houston and Denver.

It is also focusing on Hawaii, where United has long had a large presence. The airline is offering rapid-result coronavirus tests to passengers leaving for the islands from San Francisco, allowing them to avoid Hawaii’s 14-day quarantine. Now, the tests cost $250 if taken on the day of departure at the airport, but United thinks that eventually will fall as low as $15 as more tests are developed, President Brett Hart said. This program eventually could be expanded to more departure airports. Routes to Hawaii, before the pandemic, comprised just 4 percent of United’s domestic total, but in the fourth quarter, Nocella expects that to rise to 9 percent of its domestic flights.

Travel has entered a steady state, United believes. In June and July, bookings corresponded inversely with the pandemic: As cases spiked, bookings fell. Now, United sees bookings are not correlated with coronavirus outbreaks around the country.

Scott Kirby speaking at Skift Forum Asia in Singapore in May, 2019.

The company believes that a vaccine will be available and widely distributed by the end of next year, and until then, the road to its recovery will be fraught with “twists and turns,” Kirby said. Quoting Winston Churchill, he added, “This is the end of the beginning.”

Fleet and the numbers

United reported third-quarter revenues of $2.5 billion, down 78 percent from last year. Passenger revenues fell by 84 percent to $1.6 billion. Cargo revenues, however, rose 50 percent to $422 million. United, like many of its competitors, has broken with its long standing practice and has operated several cargo-only flights since the onset of the pandemic. Its daily cash burn in the quarter was $21 million, a figure it hopes to reduce to $15-20 million in the next quarter. United operated 65 percent of the capacity it planned to operate in the quarter. It expects capacity to plateau at about 50 percent of 2019 levels until the widespread adoption of a Covid-19 vaccine.

United’s international network took a particularly big hit in the quarter, as travel restrictions around the world have destroyed demand. The airline’s international capacity was down 77 percent from 2019. Those routes remain valuable, though. United secured a $5.2 billion government-backed loan from the Treasury Department, using its international routes as collateral. The carrier plans to take another such loan — through a facility provided in the CARES Act — for $2.3 billion.

United does not expect to add the Boeing 737 Max back into its fleet until next year, even if the Federal Aviation Administration approves the grounded jet’s return to service by the end of this year. The carrier has returned 150 temporarily grounded aircraft to service, but it still has 450 aircraft parked in the desert.

“We’ve got 12 to 15 months of pain, sacrifice, and difficulty ahead,” Kirby said. “But we have done what it takes in the initial phases to have confidence.”

Photo Credit: United Airlines is taking a super cautious and realistic approach to the recovery. Skift

Source: https://skift.com/2020/10/15/what-uniteds-ceo-means-when-he-says-its-the-end-of-the-beginning/

Aviation

Photos: RAAF Globemaster flies just 300 feet above Brisbane River

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RAAF C-17 Globemaster III performing a flyover of Brisbane CBD and river (Craig Murray)

Australian Aviation photographer Craig Murray captured these incredible shots of a RAAF C-17 Globemaster III performing its planned flyover of the Brisbane CBD.

The display formed part of the Sunsuper Riverfire event, which wrapped up the Brisbane Festival on Saturday evening.

The aircraft flew “not below 300 feet” for its planned flypast of the Brisbane river during the event, according to the RAAF, which saw audiences watch the C-17 dip well below the skyscrapers of Brisbane’s CBD and traipse along the river.

RAAF C-17 Globemaster III performing a flyover of Brisbane CBD and river (Craig Murray)

As planned, the Globemaster flew over Mt Coot-tha and Suncorp Stadium, then headed south along the river at South Bank to the Goodwill Bridge, before repositioning to fly east along the Kangaroo Point cliffs toward the Storey Bridge.

Along with the C-17 flypast, Riverfire attendees also enjoyed a display of Army ARH and MRH-90 helicopters, with this aerial display returning for the first time since 2017.

Onlookers at the 2021 event were also treated to an Army Aviation display of ARH and MRH-90 helicopters (Craig Murray)

Videos of the 2018 Riverfire Globemaster display went viral earlier this year, after they were posted to Reddit.

Viewers were fascinated – and some horrified – as the angle of the imagery made the mighty aircraft appear as if it were weaving in and out of the skyscrapers themselves, as opposed to simply tracking along the river.

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The Boeing C-17A Globemaster III is a four-engine heavy transport aircraft that can accommodate huge payloads and land on runways just one-kilometre long.

That flexibility comes from its design, which mixes both high-lift wings and controls requiring just three onboard (pilot, co-pilot and loadmaster).

Cargo is loaded onto the C-17 through a ramp system at the back, while its floor has rollers that flip from flat to handle wheeled vehicles or pallets. RAAF owns eight, all operated by No. 36 Squadron and based at RAAF Base Amberley.

RAAF C-17 Globemaster III performing a flyover of Brisbane CBD and river (Craig Murray)
Onlookers at the 2021 event were also treated to an Army Aviation display of ARH and MRH-90 helicopters (Craig Murray)

PlatoAi. Web3 Reimagined. Data Intelligence Amplified.
Click here to access.

Source: https://australianaviation.com.au/2021/09/photos-raaf-globemaster-flies-just-300-feet-above-brisbane-river/

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Aviation

Photos: RAAF Globemaster flies just 300 feet above Brisbane River

Published

on

RAAF C-17 Globemaster III performing a flyover of Brisbane CBD and river (Craig Murray)

Australian Aviation photographer Craig Murray captured these incredible shots of a RAAF C-17 Globemaster III performing its planned flyover of the Brisbane CBD.

The display formed part of the Sunsuper Riverfire event, which wrapped up the Brisbane Festival on Saturday evening.

The aircraft flew “not below 300 feet” for its planned flypast of the Brisbane river during the event, according to the RAAF, which saw audiences watch the C-17 dip well below the skyscrapers of Brisbane’s CBD and traipse along the river.

RAAF C-17 Globemaster III performing a flyover of Brisbane CBD and river (Craig Murray)

As planned, the Globemaster flew over Mt Coot-tha and Suncorp Stadium, then headed south along the river at South Bank to the Goodwill Bridge, before repositioning to fly east along the Kangaroo Point cliffs toward the Storey Bridge.

Along with the C-17 flypast, Riverfire attendees also enjoyed a display of Army ARH and MRH-90 helicopters, with this aerial display returning for the first time since 2017.

Onlookers at the 2021 event were also treated to an Army Aviation display of ARH and MRH-90 helicopters (Craig Murray)

Videos of the 2018 Riverfire Globemaster display went viral earlier this year, after they were posted to Reddit.

Viewers were fascinated – and some horrified – as the angle of the imagery made the mighty aircraft appear as if it were weaving in and out of the skyscrapers themselves, as opposed to simply tracking along the river.

PROMOTED CONTENT

The Boeing C-17A Globemaster III is a four-engine heavy transport aircraft that can accommodate huge payloads and land on runways just one-kilometre long.

That flexibility comes from its design, which mixes both high-lift wings and controls requiring just three onboard (pilot, co-pilot and loadmaster).

Cargo is loaded onto the C-17 through a ramp system at the back, while its floor has rollers that flip from flat to handle wheeled vehicles or pallets. RAAF owns eight, all operated by No. 36 Squadron and based at RAAF Base Amberley.

RAAF C-17 Globemaster III performing a flyover of Brisbane CBD and river (Craig Murray)
Onlookers at the 2021 event were also treated to an Army Aviation display of ARH and MRH-90 helicopters (Craig Murray)

PlatoAi. Web3 Reimagined. Data Intelligence Amplified.
Click here to access.

Source: https://australianaviation.com.au/2021/09/photos-raaf-globemaster-flies-just-300-feet-above-brisbane-river/

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Aviation

QantasLink pilots accept backdated 2-year wage freeze

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Pilots at QantasLink have become the first major unionised cohort within the Qantas Group to accept a two-year wage freeze in light of the effect of the COVID pandemic on the industry.

According to the Australian Federation of Air Pilots, which negotiated the new enterprise agreement, the paperwork has been backdated to 2019, meaning the wage freeze period has now already passed.

As such, the 450 pilots involved will see as 2 per cent wage increase both in 2021 and 2022.

According to the union, over 90 per cent of participating QLink pilots at both Eastern Australia Airlines and Sunstate Australia Airlines voted in favour of the new enterprise agreement.

AFAP is also currently in negotiations with Qantas budget subsidiary Jetstar over its enterprise agreement with its pilots.

“The AFAP worked collaboratively with the company to conclude the enterprise bargaining discussions,” a spokesperson for the union said of the QantasLink agreement.

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“We are pleased to have arrived at a pragmatic outcome for the QantasLink pilot groups.

“The AFAP’s Eastern and Sunstate pilot councils look forward to resuming negotiations towards the second half of next year in what we anticipate will be a better negotiating environment.”

The company will now lodge the necessary paperwork with the Fair Work Commission to seek agreement certification, at which point back payments should then be processed, the union said.

This process could take up to eight weeks.

It makes QantasLink pilots the first major group to negotiate and accept the wage freeze deal, since Qantas announced in May this year that it would introduce a two-year wage freeze on all new enterprise agreements across the Qantas Group, as it seeks to reduce its annual costs by $1 billion by FY23.

At that time, the flag carrier confirmed that its next round of enterprise agreements will include the two-year wage freeze, and stipulate a 2 per cent annual increase thereafter, down from 3 per cent before the COVID-19 pandemic.

“Managing costs remains a critical part of our recovery, especially given the revenue we’ve lost and the intensely competitive market we’re in,” chief executive Alan Joyce said in the ASX announcement.

At the time, trade union TWU’s national secretary Michael Kaine criticised Qantas’ decision to freeze wages and stunt future wage growth, in light of the fact that the airline welcomed over $2 billion in government bailouts since the beginning of the pandemic.

Kaine said that Qantas’ latest management decision sees the airline “acting like a dictator”, by “using public resources to shore up its position, cut jobs and impose unilateral decisions on its workforce”.

The TWU pointed out that in 2014, Qantas posted a $2.8 billion loss and imposed a similar two-year wage freeze on its workforce, from which the union believes Qantas workers’ earnings never recovered.

“There is a system of enterprise bargaining in place so that both sides can sit down and compromise,” Kaine said, adding that the wage freeze announcement “flies in the face of enterprise bargaining”.

“This year Qantas will have received $2 billion in federal government funding. On top of that the airline has wrung more public funding from state governments following recent announcements,” he said.

“We cannot see the benefit of this funding for the public when it continually results in job losses, outsourced workers and lower wages.”

It comes one month after Qantas announced it posted an underlying loss before tax of $1.83 billion, due to “diabolical” operating conditions and sudden border closures in the second half of the financial year.

This was despite the airline receiving over $1.1 billion in government aid through multiple financial aid programs, including $558 million in JobKeeper wage subsidies.

Qantas saw a staggering statutory loss before tax, which includes one-off costs such as redundancy payouts and aircraft writedowns, of $2.35 billion.

“This loss shows the impact that a full year of closed international borders and more than 330 days of domestic travel restrictions had on the national carrier,” Joyce said, adding that operating conditions have “frankly been diabolical”.

“It comes on top of the significant loss we reported last year and the travel restrictions we’ve seen in the past few months. By the end of this calendar year, it’s likely COVID will cost us more than $20 billion in revenue,” Joyce said.

The flag carrier introduced $650 million in permanent long-term cost reductions over the year, with the aim of reaching $1 billion in permanent annual savings by FY23.

Over 9,400 people have permanently left Qantas since the beginning of the pandemic, more than the 8,500 previously forecast by the airline.

According to Qantas, the additional staff losses were driven by offshore job losses at airports and sale offices, the introduction of some automation, and an increase in voluntary redundancies.

Over 8,500 employees currently remain stood down from their duties, 6,000 of which are tied to Qantas’ international operations.

“We have had to make a lot of big and difficult structural changes to deal with this crisis, and that phase is mostly behind us,” Joyce said.

PlatoAi. Web3 Reimagined. Data Intelligence Amplified.
Click here to access.

Source: https://australianaviation.com.au/2021/09/qantaslink-pilots-accept-backdated-2-year-wage-freeze/

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Aviation

QantasLink pilots accept backdated 2-year wage freeze

Published

on

Pilots at QantasLink have become the first major unionised cohort within the Qantas Group to accept a two-year wage freeze in light of the effect of the COVID pandemic on the industry.

According to the Australian Federation of Air Pilots, which negotiated the new enterprise agreement, the paperwork has been backdated to 2019, meaning the wage freeze period has now already passed.

As such, the 450 pilots involved will see as 2 per cent wage increase both in 2021 and 2022.

According to the union, over 90 per cent of participating QLink pilots at both Eastern Australia Airlines and Sunstate Australia Airlines voted in favour of the new enterprise agreement.

AFAP is also currently in negotiations with Qantas budget subsidiary Jetstar over its enterprise agreement with its pilots.

“The AFAP worked collaboratively with the company to conclude the enterprise bargaining discussions,” a spokesperson for the union said of the QantasLink agreement.

PROMOTED CONTENT

“We are pleased to have arrived at a pragmatic outcome for the QantasLink pilot groups.

“The AFAP’s Eastern and Sunstate pilot councils look forward to resuming negotiations towards the second half of next year in what we anticipate will be a better negotiating environment.”

The company will now lodge the necessary paperwork with the Fair Work Commission to seek agreement certification, at which point back payments should then be processed, the union said.

This process could take up to eight weeks.

It makes QantasLink pilots the first major group to negotiate and accept the wage freeze deal, since Qantas announced in May this year that it would introduce a two-year wage freeze on all new enterprise agreements across the Qantas Group, as it seeks to reduce its annual costs by $1 billion by FY23.

At that time, the flag carrier confirmed that its next round of enterprise agreements will include the two-year wage freeze, and stipulate a 2 per cent annual increase thereafter, down from 3 per cent before the COVID-19 pandemic.

“Managing costs remains a critical part of our recovery, especially given the revenue we’ve lost and the intensely competitive market we’re in,” chief executive Alan Joyce said in the ASX announcement.

At the time, trade union TWU’s national secretary Michael Kaine criticised Qantas’ decision to freeze wages and stunt future wage growth, in light of the fact that the airline welcomed over $2 billion in government bailouts since the beginning of the pandemic.

Kaine said that Qantas’ latest management decision sees the airline “acting like a dictator”, by “using public resources to shore up its position, cut jobs and impose unilateral decisions on its workforce”.

The TWU pointed out that in 2014, Qantas posted a $2.8 billion loss and imposed a similar two-year wage freeze on its workforce, from which the union believes Qantas workers’ earnings never recovered.

“There is a system of enterprise bargaining in place so that both sides can sit down and compromise,” Kaine said, adding that the wage freeze announcement “flies in the face of enterprise bargaining”.

“This year Qantas will have received $2 billion in federal government funding. On top of that the airline has wrung more public funding from state governments following recent announcements,” he said.

“We cannot see the benefit of this funding for the public when it continually results in job losses, outsourced workers and lower wages.”

It comes one month after Qantas announced it posted an underlying loss before tax of $1.83 billion, due to “diabolical” operating conditions and sudden border closures in the second half of the financial year.

This was despite the airline receiving over $1.1 billion in government aid through multiple financial aid programs, including $558 million in JobKeeper wage subsidies.

Qantas saw a staggering statutory loss before tax, which includes one-off costs such as redundancy payouts and aircraft writedowns, of $2.35 billion.

“This loss shows the impact that a full year of closed international borders and more than 330 days of domestic travel restrictions had on the national carrier,” Joyce said, adding that operating conditions have “frankly been diabolical”.

“It comes on top of the significant loss we reported last year and the travel restrictions we’ve seen in the past few months. By the end of this calendar year, it’s likely COVID will cost us more than $20 billion in revenue,” Joyce said.

The flag carrier introduced $650 million in permanent long-term cost reductions over the year, with the aim of reaching $1 billion in permanent annual savings by FY23.

Over 9,400 people have permanently left Qantas since the beginning of the pandemic, more than the 8,500 previously forecast by the airline.

According to Qantas, the additional staff losses were driven by offshore job losses at airports and sale offices, the introduction of some automation, and an increase in voluntary redundancies.

Over 8,500 employees currently remain stood down from their duties, 6,000 of which are tied to Qantas’ international operations.

“We have had to make a lot of big and difficult structural changes to deal with this crisis, and that phase is mostly behind us,” Joyce said.

PlatoAi. Web3 Reimagined. Data Intelligence Amplified.
Click here to access.

Source: https://australianaviation.com.au/2021/09/qantaslink-pilots-accept-backdated-2-year-wage-freeze/

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