Today (May 29, 2020): May 2020 luxury travel news.
Every last Friday of the month, you can read my news round-up of what’s happening in the world of luxury travel and aviation. In this issue:
- Air France retires its entire A380 fleet
- Delta retires its entire Boeing 777 fleet
- Qatar Airways introduces full body protective gear for cabin crew
- LATAM, Latin America’s largest airline, files for bankruptcy
- Avianca, Colombia’s flagship airline, files for bankruptcy
- Hong Kong Airport tests full-body disinfection booths
- Qantas takes a different approach on face mask policy
- Lufthansa board rejects EU conditions on $10 billion USD bailout
- Four Seasons launches a global health & safety program
- Six Senses announces a hotel in Rome
1. Air France retires its entire A380 fleet
In the context of the current COVID-19 crisis and its impact on anticipated activity levels, Air France announced the definitive end of its Airbus A380 operations. Initially scheduled by the end of 2022, the phase-out of Airbus A380 fleet fits in the Air France fleet simplification strategy of making the fleet more competitive, by continuing its transformation with more modern, high-performance aircraft with a significantly reduced environmental footprint. Five of the Airbus A380 aircraft in the current fleet are owned by Air France or on finance lease, while four are on operating lease. The global impact of the Airbus A380 phase-out write down is estimated at 500 million euros and will be booked in the second quarter of 2020 as a non-current cost/expenses. The Airbus A380 – which entered service with Air France in 2009 and had not been updated since then – will be replaced by new generation aircraft, including Airbus A350 and Boeing 787, whose deliveries are ongoing.
2. Delta retires its entire Boeing 777 fleet
Delta plans to retire its 18 widebody Boeing 777s by the end of 2020 as a result of the COVID-19 pandemic. The retirement will accelerate the airline’s strategy to simplify and modernize its fleet, while continuing to operate newer, more cost-efficient aircraft. Last month, Delta announced plans to accelerate the retirement of the MD-88 and MD-90 fleets to June. Since the onset of the COVID-19 situation, Delta has reacted quickly by parking aircraft and considering early aircraft retirements to reduce operational complexity and cost. The Boeing 777 first entered the fleet in 1999 and grew to 18 aircraft, including 10 of the long-range 777-200LR variant, which arrived in 2008. At the time, the aircraft was uniquely positioned to fly non-stop between Atlanta and Johannesburg, South Africa, Los Angeles to Sydney and other distant destinations. Delta will continue flying its fleet of long-haul next generation Airbus A350-900s, which burn 21% less fuel per seat than the 777s they will replace.
3. Qatar Airways introduces full body protective gear for cabin crew
Qatar Airways has further enhanced its onboard safety measures for passengers and cabin crew. The airline is implementing several changes, including the introduction of Personal Protective Equipment (PPE) suits for cabin crew while onboard, as well as a modified service that reduces interactions between the passengers and the crew inflight. Cabin crew have already been wearing PPE during flights for a number of weeks, including gloves and face masks. Cabin crew will now also wear a PPE suit over their uniforms in addition to safety goggles, gloves and a mask to provide even greater reassurance to customers in addition to enhanced hygienic measures already in place. Cabin crew have received training on how to minimize their chances of contracting or spreading the infection, are thermally screened before the departure of flights and after their arrival, and are quarantined and tested if any colleagues or passengers on a flight shows any symptoms of infection or test positive for the virus.
4. LATAM, Latin America’s largest airline, files for bancruptcy
LATAM Airlines, which has a fleet of 95 aircraft, initiated a voluntary reorganization and restructuring of their debt under Chapter 11 protection in the United States with the support of the Cueto and Amaro families and Qatar Airways, two of its largest shareholders. In light of the effects of COVID-19 on the worldwide aviation industry, this reorganization process provides LATAM with an opportunity to work with the group’s creditors and other stakeholders to reduce its debt, access new sources of financing and continue operating, while enabling the group to transform its business to this new reality. The Chapter 11 financial reorganization process is a proven legal framework under which LATAM and said affiliates will have the opportunity to resize their operations to the new demand environment and reorganize their balance sheets, enabling them to emerge more agile, resilient and sustainable. LATAM and its affiliates will continue flying as conditions permit throughout the process.
5. Avianca, Colombia’s flagship airline, files for bankruptcy
Another Latin American airline has filed voluntary petitions under Chapter 11 of the United States Bankruptcy Code. Avianca, which has a fleet of 158 aircraft and serves 76 destinations in 27 countries within the Americas and Europe, is one of the world’s oldest airlines. The filing was necessitated by the unforeseeable impact of the COVID-19 pandemic, which has resulted in a 90% decline in global passenger traffic and is expected to reduce industry revenues worldwide by $314 billion, according to the International Air Transport Association. Avianca’s scheduled passenger operations have been grounded since mid-March, reducing its consolidated revenue by over 80% and placing significant pressure on its cash reserves. LifeMiles™, Avianca’s loyalty program, is administered by a separate company and is not part of the Chapter 11 filing. Avianca already underwent a Chapter 11 process in 2003 that allowed it to position itself for expansion in Latin America.
6. Hong Kong Airport tests full-body disinfection booths
Hong Kong International Airport is applying the latest disinfection technologies, including disinfection channels, antimicrobial coating and autonomous cleaning robots, to protect passengers and airport staff from COVID-19 infection. It’s the world’s first airport where “CLeanTech”, a full-body disinfection channel facility, is trialled in live operation. Persons using the facility will have a temperature check before entering an enclosed channel for the 40-second disinfection and sanitizing procedures. The interior surface of the channel is equipped with antimicrobial coating which can remotely kill virus and bacteria on human bodies and clothing by using the technologies of photocatalyst and “nano needles”. Sanitizing spray is also applied for instant disinfection. The channel is kept under negative pressure to prevent cross-contamination between the outside and inside environment. Currently, the facility is designated for use by staff who take part in public health and quarantine duties at the airport in relation to arriving passengers.
7. Qantas takes a different approach on face mask policy
Australia’s flagship carrier Qantas has announced the details of their “Fly Well” program, which includes a series of measures that will roll out as of June 12, 2020 to ensure a safe travel environment and give extra peace of mind. The most surprising measure is that masks will be provided to all passengers on each flight, but contrary to most other airlines, Qantas does not make wearing a face mask mandatory. The airline states that “while face masks are not mandatory from a safety point of view, they are recommended to be worn in the interests of everyone’s peace-of-mind.” In addition, the airline is rolling out a series of other initiatives, such as:
- Enhanced cleaning of aircraft with a disinfectant effective against Coronaviruses, with a focus on high contact areas (e.g. seats, seatbelts, overhead lockers, air vents and toilets).
- Sanitising wipes will be given to all passengers to wipe down seat belts, trays and armrests themselves, if preferred.
- Simplified service and catering to minimize touchpoints for crew and passengers.
- Passengers will be asked to limit movement around cabin, once seated.
- Sequenced boarding and disembarkation will minimize crowding.
8. Lufthansa board rejects EU conditions on $10 billion USD bailout
Last Monday, Lufthansa reached a bailout deal which would see the German government take a 20% stake in the carrier in return for a 6 billion euro injection of new capital, most of it non-voting, combined with 3 billion in state-backed loans. However, according to Reuters, the government bailout is now thrown into doubt after the German airline’s supervisory board refused to accept the deal. The board, which had been expected to sign off on the aid, instead refused EU requirements that Lufthansa permanently give up take-off and landing slots at Frankfurt and Munich airports, where it commands a two-thirds market share. The bailout plan nevertheless remains “the only viable alternative” to insolvency, Lufthansa said, and negotiations will continue over EU demands that would “lead to a weakening” of its airport hubs as well as its ability to repay loans. Airlines including Air France-KLM and the main U.S. carriers have all sought government aid to ride out the coronavirus crisis.
9. Four Seasons launches a global health & safety program
Four Seasons, one the world’s leading luxury hospitality company, has entered into a collaboration with Johns Hopkins Medicine International, the global division of health care and research leader Johns Hopkins Medicine, to validate its new global health and safety program – ‘Lead With Care‘ – and provide ongoing, real-time guidance on the evolving COVID-19 situation. Grounded in the principles of care, trust and service, the Lead With Care program will be reviewed and validated by Johns Hopkins Medicine experts and implemented by dedicated teams at Four Seasons properties around the world. This builds upon the early experience of Four Seasons Hotel New York, as well as Four Seasons hotels in Riyadh and Mumbai, in providing accommodation to high-risk medical personnel fighting on the frontlines of the COVID-19 pandemic. As I previously explained, Four Seasons Hotel New York was transformed into a safely zoned environment in a matter of days, implementing enhanced procedures to safely house guests, as well as properly train all employees.
10. Six Senses announces a hotel in Rome
The Six Senses brand is coming to Rome, a treasure trove of artistic, cultural and architectural wonders. Following the brand’s entry into Singapore, New York and London, Six Senses Rome will live by all of its values with a particular emphasis on wellness, delicious food, community and sustainable design. The hotel will be located inside a palazzo building in the center of ancient Rome, just blocks away from the Fontana di Trevi and Pantheon. The palazzo was built in the 18th century by Tomaso De Marchis, who adorned it with beautiful windows representing the epitome of Baroque motifs for Cardinal Mario Mellini. Over the centuries the palazzo has served as a residence for the São Marcelo cardinal-elders, Salviati, Cesi and Mellini (hence the long name) before it was passed to the Aldobrandini family and on to the Order of the Servants of Mary. This is the first Six Senses property to open in Italy. Highlights will include 95 distinct guest rooms and suites, a spa, restaurant, events terrace, outdoor courtyard garden and rooftop terrace with a 360° view of the city and monuments.