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Air CargoAmerican ShipperNews

Airlines chafe against UK quarantine as Europe opens travel

Lufthansa Group announces plan to slash 22,000 jobs

An Austrian Airlines flight departed from Vienna at 6:30 a.m. Monday for Munich, Germany, marking the company’s first scheduled passenger flight in almost three months and the lifting of travel restrictions between European Union states. 

It’s good news for airlines that have suffered for months with almost no revenue, but an announcement from Lufthansa Airlines about mass layoffs is a stark reminder that the industry’s road back to financial health will be long and challenging. And while the European aviation industry is celebrating the full reopening of regional travel business ahead of the summer travel season, airlines and airports in the U.K. are frustrated by strict coronavirus safeguards that went into effect June 8.

Heathrow International Airport complained that the UK government’s quarantine policy, which requires all arriving passengers to self-isolate for two weeks, is too restrictive and damaging economic activity. The airport authority said it has begun to reduce some frontline personnel after having already cut a third of management. It asked the government to establish “air bridges” to low risk countries that will help the economy get going and protect aviation jobs. 

Heathrow in May experienced a 40% drop in cargo tonnage despite an increase in cargo-only passenger aircraft and pure freighters because the majority of cargo moves in the lower hold of passenger planes. Cargo volume is down 31.3% year-to-date through May.

The concerns voiced by London’s primary international gateway followed the UK’s biggest airlines – British Airways parent IAG Group, easyJet and Ryanair – taking legal action to stop the government’s quarantine effort, which they say is ineffective, overly burdensome and will jeopardize their solvency. British Airways plans to terminate about 12,000 employees, including about a quarter of its pilots, and lower wages for others, raising an outcry from unions and politicians. A parliamentary committee on Saturday called the company’s move a “national disgrace,” but the company says it’s fighting for its survival. 

Wizz Air CEO József Váradi also said the UK’s quarantine runs counter to Europe’s easing of restrictions to help its tourism industry.

In Canada, too, airlines are upset with the government’s 14-day mandatory quarantine for all persons arriving in the country, regardless of symptoms. Air Canada’s boss, Calin Rovinescu, says the rules are “disproportionate” with most of the world and contributed to the company’s decision to sack 20,000 workers.

“Most national authorities are quite rightly taking a phased approach, but it’s vitally important that devices such as quarantine are risk-based and proportionate,” Olivier Jankovec, director general of the Airports Council International’s (ACI) European division. “If quarantine is used as a blunt instrument as it is in the UK, it is one which will deliver an economic and social blow from which we will all struggle to recover.”

Europe’s Phased Restart

Meanwhile, the EU will begin phasing out restrictions for travel with the rest of the world on July 1.

Air travel came to a near halt in Europe in May, with passenger traffic down 98% to 4.3 million passengers compared to last year. The expansion of passenger flights brings with it more opportunities for shippers to move cargo, and will help relieve the supply shortage for cargo.

Key to the airline industry’s recovery in Europe, and around the world, is the adoption of new hygiene and health safety protocols that give passengers and workers assurance they can slowly engage again in international air travel slowly with minimal risk of virus transmission. Industry officials also say the sanitary standards will give governments the confidence to open borders without quarantine measures

Aviation groups are urging members and EU nations to follow through on advice this month from the European Union Aviation Safety Agency’s (EASA) aviation health safety protocol, which spells out best practices on how airport operators, airlines and national aviation authorities can ensure the health and safety of passengers and transport workers. The multi-layered approach is designed to complement the advice of public health authorities. Early implementers of the biosafety charter include airport operators in Paris, Frankfurt, Brussels, Milan and Athens, as well as airlines such as Wizz Air, easyJet and Iberia. 

Austrian Airlines, which is relaunching service to 36 destinations within Europe  this week, is complying with the EASA safety recommendations too by requiring all employees and passengers to wear face coverings and encouraging passengers to check from home to avoid person-to-person contact at the airport through exchange of documents.

The EASA guidelines closely mirrors a new International Civil Aviation Organization’s (ICAO) roadmap for governments and the airline industry to implement common, mutually accepted health safety measures for the phased return of domestic and international air transport. 

The goal of both organizations is to have governments follow a common framework so airlines don’t face a patchwork of restrictions that complicate operations.

“We operate worldwide. Consistency is what we really need. We need to know what we’re up against all over the world, so it would really help if we had consistent regulations dealing with these issues,” said Steve Alterman, president of the Cargo Airline Association in Washington, D.C., in an interview. “None of this stuff in there is things we’re not doing already anyway. The question is can we get a worldwide order out of it so the things we’re doing are acceptable worldwide and vice versa?”

China, for example, has frustrated many airlines by imposing various restrictions on airline crews and often COVID-related restrictions are left to the various cities.

The ICAO report recommends risk-mitigation measures for all aspects of passenger and cargo air travel, while minimizing operational impacts. Coronavirus protections, which build on measures taken by many airlines and airports, include establishing baseline guidelines for cleaning and disinfecting aircraft and flight decks, personal protective equipment for flight crews, physical distancing, health screening, and contact tracing.

Last month, Heathrow began testing thermal screening technology to determine if it is effective in reducing the risk of spreading COVID-19. 

ACI Europe on Monday issued a 10-point commitment to deliver a safe, reliable and sustainable passenger experience, based on the EASA protocol. The document includes promises to encourage the use of touchless technology, biometrics and innovative solutions to reduce lines, crowded areas and cross-flows in passenger terminals and maintain efforts for net zero CO2 emissions for operations under their control by 2050.

The group also offered 10 recommendations for governments to support the industry’s own recovery efforts with policies to rebuild air connectivity and reignite tourism. The wish list includes allowing airports to defer security investments without compromising existing levels of aviation security, temporarily subsidizing the relaunch of routes to restore basic levels of air service, a targeted economic relief program for all parts of the aviation ecosystem, and authorities taking responsibility for costs related to public health measures. 

In the UK, the aviation industry is asking the government for a 12-month tax waiver, matching support given to Scottish and Northern Irish airports and the UK’s hospitality sector.

Last week, the International Air Transport Association introduced a free, online interactive world map to provide travelers with the latest COVID-19 entry regulations by country. The map is updated more than 200 times per day.

Lufthansa Job Cuts

Deutsche Lufthansa AG is also increasing flight operations in June, but announced Monday it will eliminate 22,000 employees across all business segments and group companies. Flagship carrier Lufthansa Airlines will cut about 5,000 jobs, including 600 pilots and 1,500 ground staff. Another 1,400 headquarters and administrative staff will be let go. Lufthansa Cargo is shedding 500 jobs and Lufthansa Technik, the company’s maintenance and repair arm, will lose 4,500 workers. 

“According to our current assumptions about the course of business over the next three years, we have no prospect of employing one in seven pilots and one in six flight attendants as well as numerous ground staff at Lufthansa alone,”. Michael Niggemann, the head of human resources and legal affairs, said in a statement. “This excess capacity could even increase if we do not find a way to get through the crisis with competitive personnel costs. We therefore want to reach the urgently needed crisis agreements with our collective bargaining partners quickly. Our objective remains unchanged: We want to keep as many colleagues on board as possible throughout the crisis and avoid layoffs for operational reasons.”

Although Lufthansa (FWB: LHA) is one of the world’s largest airlines it is facing an existential crisis and is reintroducing more passenger service, it recently accepted a $10 billion rescue package from the German government to help it stay competitive. 

Deutsche Lufthansa said it is shutting down Germanwings, while its Eurowings subsidiary will shed about 300 administrative jobs. Austrian Airlines has a surplus of 1,100 jobs after its fleet downsizing and Brussels Airlines will reduce 1,000 jobs. 

Staff overcapacity can be partially compensated for by employees accepting work-share unemployment insurance that involves reduced work time and pay, collective bargaining to reduce weekly working hours and other saving measures, but Lufthansa said a deal with labor representatives must be conducted by June 22 because of the urgent crisis. 

(Click here for more FreightWaves articles by Eric Kulisch)

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Eric Kulisch, Air Cargo Editor

Eric is the Air Cargo Market Editor at FreightWaves. An award-winning business journalist with extensive experience covering the logistics sector, Eric spent nearly two years as the Washington, D.C., correspondent for Automotive News, where he focused on regulatory and policy issues surrounding autonomous vehicles, mobility, fuel economy and safety. He has won two regional Gold Medals from the American Society of Business Publication Editors for government coverage and news analysis, and was voted best for feature writing and commentary in the Trade/Newsletter category by the D.C. Chapter of the Society of Professional Journalists. As associate editor at American Shipper Magazine for more than a decade, he wrote about trade, freight transportation and supply chains. Eric is based in Portland, Oregon. He can be reached for comments and tips at ekulisch@freightwaves.com
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