In a letter to Boeing employees, CEO David Calhoun announced the measures the company will take to reduce their workforce in an effort to meet the current demand. The voluntary layoff program has been concluded and the company says they will notify the first of 6,770 U. S. employees of their (involuntary) layoff.
The announcement says severance pay, COBRA health care coverage for U.S. employees and career transition services will be provided to those who are laid off. International locations will also experience workforce reductions using “timelines in accordance with local laws and benefit terms.”
“We have done our very best to project the needs of our commercial airline customers over the next several years as they begin their path to recovery,” Calhoun said in the letter. “I wish there were some other way.”
Calhoun said, “enormous challenges remain” and the company will adjust their business ;plans constantly until the pandemic stops “whipsawing our markets in ways that are still hard to predict.” He stressed that through it all, “The safety of our products and services will remain priority No. 1.” He added that Boeing’s defense business will continue to hire as needed to meet their commitments. “And our Global Services team is changing its organization to ensure it is lean and focused on the post-COVID needs of its customers,” Calhoun said. The company is working to restart 737 MAX production in Renton, Wash. as well.
“Our industry will come back, but it will take some years to return to what it was just two months ago,” Calhoun said.
In response to previously reported COVID-19 F-35 supplier delays, Lockheed Martin says it is taking measures to mitigate impacts and position the program for the fastest possible recovery by adjusting work schedules, maintaining specialized employee skillsets, and accelerating payments to small and vulnerable suppliers, to continue meeting customer commitments.
Lockheed Martin and the International Association of Machinists and Aerospace Workers (IAM) agreed to a temporary alternate work schedule for F-35 production line employees in Fort Worth to maintain their skilled workforce.
The new schedule, which will begin May 23, divides each shift into three groups. On a rotation, each group will work for two weeks and then will have a week off. During the adjusted three-week work schedule, employees who work 96 hours or more will be compensated an additional 24 hours for their off week while receiving full pay and benefits.
The alternate schedule allows Lockheed Martin to staff the production line to meet a slower workflow resulting from supplier delays. In addition, it provides a work rhythm that retains the expertise of the talented workforce and provides opportunities to adjust work to better support production.
“These are challenging times, but managing tough challenges is when the F-35 program performs at its best. The alternate work schedule maintains the specialized skillset of the employees and provides opportunities to for us to adjust our workflow to account for supplier delays due to COVID-19,” says Michele Evans, Aeronautics EVP. “Our F-35 workforce is the best in the world at what they do, and we will continue to deliver on our customer’s mission.”
The temporary alternate work schedule agreement will continue for its first three-week cycle. The company will then evaluate business needs and can alter the schedule as needed with the option to discontinue as warranted or continue until Sept. 4. Lockheed Martin and the IAM have also agreed to allow employees to volunteer to be furloughed for 30 days where they maintain their benefits but forgo pay during this period.
Rolls-Royce says they have already taken action to strengthen the financial resilience of their business and reduce cash expenditures in 2020. However, they say it became increasingly clear that activity in the commercial aerospace market will take several years to return to the levels seen just a few months ago. As demand from customers is reduced for the civil aerospace engines and aftermarket services, they are now addressing these changes,.
“This is not a crisis of our making. But it is the crisis that we face and we must deal with it. Our airline customers and airframe partners are having to adapt and so must we,” says Warren East, Rolls-Royce, CEO. “Being told that there is no longer a job for you is a terrible prospect and it is especially hard when all of us take so much pride in working for Rolls-Royce. But we must take difficult decisions to see our business through these unprecedented times. Governments across the world are doing what they can to assist businesses in the short-term, but we must respond to market conditions for the medium-term until the world of aviation is flying again at scale, and governments cannot replace sustainable customer demand that is simply not there. We have to do this right, which means we will work closely with our employee and trade union representatives as appropriate, look at any viable alternatives to mitigate the impact, consult with everyone affected and treat our people with dignity and respect.”
Rolls-Royce is proposing a major reorganization. The company expect the loss of at least 9,000 positions from their workforce of 52,000. They say they will also “cut expenditure across plant and property, capital and other indirect cost areas.” The proposed reorganization is expected to generate annualized savings of more than £1.3bn ($1.59bn).
They say the proposed reorganization will predominantly affect their Civil Aerospace business. They say their Defense business, based in the UK and US, “has been robust during the pandemic, with an unchanged outlook, and does not need to reduce headcount.”
“The strategic choices that we have made over the last few years have helped us to respond rapidly to COVID-19 and the synergies between our divisions leave us well placed to capitalise on the long-term potential of our markets. The world on the other side of this pandemic will need the power that we generate to fuel economic recovery,” East added. “I absolutely believe the call for that power to be more sustainable will be stronger than ever. This plays to our strengths. We must ensure that we are able to continue to innovate and play our leading role in enabling the vital sectors in which we operate achieve net zero carbon emissions. We have emerged from troubled times before, to achieve incredible things. We will do so again.”
The European Union Aviation Safety Agency (EASA) and European Centre for Disease Prevention and Control (ECDC) issued a joint document defining measures to assure the health safety of air travelers and aviation personnel once airlines resume regular flight schedules following the severe disruption caused by COVID-19.
The guidelines place paramount importance on health safety at every stage of the end-to-end passenger journey. Recognizing that airports, airlines and aircraft are different, it takes a pragmatic approach in implementation – highlighting and giving guidance on the ways in which individual locations and situations can best be re-engineered to meet the new health safety standards.
Some overarching principles apply throughout:
observe physical distancing wherever possible
wear a medical face mask to protect other passengers
practice scrupulous and frequent hand hygiene
Air passengers and general population have to be assured that filtered air on airplanes is safer and cleaner than many of us breathe on the ground.
EASA and ECDC were charged by the European Commission with drawing up the guidelines, as part of a wider package of measures to prompt the safe restoration of transport services and connectivity following the outbreak of COVID-19.
“The safety of passengers and crews has always been paramount in aviation,” European Commissioner for Transport Adina Valean said. “Passengers have to have confidence that taking to the skies again in a confined space with other people poses the minimum possible risk to their health. We relied on our specialists from EASA and ECDC to define a set of concrete measures for the safe resumption of air travel within the EU. The protocol released today will reassure passengers that it is safe for them to fly and so help the industry recover from the effects of this pandemic.”
The International Air Transport Association (IATA) released updated analysis showing that the COVID-19 crisis will see airline passenger revenues drop by $314 billion in 2020, a 55% decline compared to 2019.
On 24 March IATA estimated $252 billion in lost revenues (-44% vs. 2019) in a scenario with severe travel restrictions lasting three months.
The updated figures reflect a significant deepening of the crisis since then, and reflect the following parameters:
· Severe domestic restrictions lasting three months
· Some restrictions on international travel extending beyond the initial three months
· Worldwide severe impact, including Africa and Latin America (which had a small presence of the disease and were expected to be less impacted in the March analysis).
Full-year passenger demand (domestic and international) is expected to be down 48% compared to 2019.The two main elements driving this are:
Overall Economic Developments
The world is heading for recession. The economic shock of the COVID-19 crisis is expected to be at its most severe in Q2 when GDP is expected to shrink by 6% (by comparison, GDP shrank by 2% at the height of the Global Financial Crisis). Passenger demand closely follows GDP progression. The impact of reduced economic activity in Q2 alone would result in an 8% fall in passenger demand in the third quarter.
Travel restrictions will deepen the impact of recession on demand for travel. The most severe impact is expected to be in Q2. As of early April, the number of flights globally was down 80% compared to 2019 in large part owing to severe travel restrictions imposed by governments to fight the spread of the virus. Domestic markets could still see the start of an upturn in demand beginning in the third quarter in a first stage of lifting travel restrictions. International markets, however, will be slower to resume as it appears likely that governments will retain these travel restrictions longer.
“The industry’s outlook grows darker by the day. The scale of the crisis makes a sharp V-shaped recovery unlikely. Realistically, it will be a U-shaped recovery with domestic travel coming back faster than the international market. We could see more than half of passenger revenues disappear. That would be a $314 billion hit. Several governments have stepped up with new or expanded financial relief measures but the situation remains critical. Airlines could burn through $61 billion of cash reserves in the second quarter alone. That puts at risk 25 million jobs dependent on aviation. And without urgent relief, many airlines will not survive to lead the economic recovery,” said Alexandre de Juniac, IATA’s Director General and CEO.
Governments must include aviation in stabilization packages. Airlines are at the core of a value chain that supports some 65.5 million jobs worldwide. Each of the 2.7 million airline jobs supports 24 more jobs in the economy.
“Financial relief for airlines today should be a critical policy measure for governments. Supporting airlines will keep vital supply chains working through the crisis. Every airline job saved will keep 24 more people employed. And it will give airlines a fighting chance of being viable businesses that are ready to lead the recovery by connecting economies when the pandemic is contained. If airlines are not ready, the economic pain of COVID-19 will be unnecessarily prolonged,” said de Juniac.
IATA proposes a number of relief options for governments to consider, including:
Direct financial support to passenger and cargo carriers to compensate for reduced revenues and liquidity attributable to travel restrictions imposed as a result of COVID-19;
Loans, loan guarantees and support for the corporate bond market by governments or central banks. The corporate bond market is a vital source of finance for airlines, but the eligibility of corporate bonds for central bank support needs to be extended and guaranteed by governments to provide access for a wider range of companies.
Tax relief: Rebates on payroll taxes paid to date in 2020 and/or an extension of payment terms for the rest of 2020, along with a temporary waiver of ticket taxes and other government-imposed levies.
A British Airways aircraft loaded with vital medical supplies from China is on its way back to London Heathrow.
The British Airways Boeing 777 is loaded with ventilators as well as personal protective equipment (PPE) including goggles, face guards and gowns.
The flight was operated in partnership with the UK Government and IAG Cargo. The British Embassy is working with the Department of Health to procure medical equipment from China and deliver it to NHS hospitals all over the UK.
The flight departed from Shanghai at 11am local UK time on 9 April and is due to touch down at Heathrow later this afternoon.
This flight was the first of several British Airways flights containing medical equipment and supplies coming in to the UK from China. Over the coming days, 55 tonnes of hand sanitiser – equivalent to around 62,000 large bottles – will arrive in the UK on a similar flight from Shanghai.
Minister of State for Asia, Nigel Adams said: “I am delighted that we have been able to reopen the British Airways route from Shanghai to deliver lifesaving equipment that we have bought for the NHS.
“We have been working round the clock to bolster the NHS supplies and save lives and we are seeking further deliveries as a matter of urgency.”
“We are doing all we can to support the global response to Covid-19, whether it’s flying important medical supplies in to the UK or helping to bring Britons home,” Alex Cruz, British Airways’ chairman and chief executive, said. “We will continue to use all available resources to support the Government, the NHS and communities all over the world who might be in need of our help.”
VistaJet is helping to ensure that those with critical travel requirements during this time of uncertainty are able to keep moving. Understanding the global community’s needs as the world works to respond to the evolving situation on COVID-19, VistaJet continues to identify new ways to be of help through its global network and infrastructure.
The Company is working directly with Governments and Consulates around the world, helping them to repatriate citizens by providing complimentary empty leg flights. To further ensure that officials are able to keep their response plans as prompt as possible, the Company is assisting with the complex logistics of the necessary permits and paperwork. As cargo flights drastically fall owing to the cancellation of major global commercial routes, and inspired by the incredible gesture of humanity seen around the world, VistaJet is also in talks with medical organizations, health experts and regulators to identify other solutions to help, including the transportation of key medical supplies.
Additionally, empty leg flights are being offered complimentary for critical flights to transport medical experts to necessary locations as they help to fight the global pandemic. “Everyone at VistaJet continues to assess how we can better serve our customers and the greater global community during these difficult times. Listening to expert advice, whether that be security, safety or medical, we are here to ensure that they are fully supported with their flying needs,” says Thomas Flohr, VistaJet founder and chairman. “This is an unusual time and one that we must all work together where possible to do whatever we can to help. We know we don’t normally offer repatriation flights or the transportation of medical equipment, but ultimately, we are a logistics company and we are here to help the global community as much as we can. We are in this fight together.”
The Company has created a dedicated web page to channel all requests from Governments and medical organizations to ensure prioritization, address the most critical cases and manage the relevant safety screening. Additionally, with heightened market insecurity, many customers have been in contact to evaluate alternative options to meet their flying needs. Listening to their concerns, VistaJet has introduced its Dynamic Jet Lease — a short-term lease over one, two or three months, offering a dedicated aircraft and crew positioned at the nearest possible airport to you. It is a unique monthly lease providing the highest flexibility whenever needed, and especially when quick decisions are required. The Dynamic Jet Lease increases safety, releases customers’ core business resources and ensures peace of mind during a constantly-changing global landscape.
For more information on VistaJet’s heightened efforts to help stop the spread of COVID-19, visit: vistajet.com/coronavirus-updates
First, for those of you joining us, welcome to Toulouse, France for Aerospace Tech Week. We are ready for some incredible presentations, workshops, training, networking and fun. This is our first event in Toulouse and we look forward to exploring the area, including an avgeek’s dream – taking a tour of the Airbus facilities here. I hope you are excited as we are for this week.
Next I want to, once again, welcome you to the pages of Aerospace Tech Review, the second issue of our event’s companion publication. Within these pages you will find stories on topics covering the same areas as the conference. Additionally, the show guide is located inside this issue and that begins on page 43. You will find schedules, the floorplan, exhibitor listings – everything you will need to follow the events of Aerospace Tech Week. Please use our app as well. Scan the QR code on the cover to get it.
Now let’s talk about the future by first looking at the past. During the Roaring Twenties, a decade in beginning in 1920 the world experienced a period of economic prosperity. The economy has certainly been roaring along these past few years. Will it continue or will economic conditions take a radical turn with Brexit, pandemics and black swan events we can’t even imagine yet? If anyone has an accurate crystal ball, please do tell. In the meantime, businesses must prepare for anything and look for opportunities for growth no matter what the economic conditions are. To that end, we are gathering in Toulouse, in spite of the COVID-19 outbreak, because business must go on.
As we look to the future and what is coming next in our industry, let’s start with Industry 4.0 a much talked about initiative about all things digital. According to Deloitte, “Industry 4.0 combines and connects digital and physical technologies—artificial intelligence, the Internet of Things, additive manufacturing, robotics, cloud computing, and others—to drive more flexible, responsive, and interconnected enterprises capable of making more informed decisions.” These are areas that are crucial to aerospace and in many cases aerospace is leading the way.
Deloitte also says that supply chain is “a top area for both current and prospective digital transformation investments, indicating that supply chain initiatives are a top priority.” Please read our column from David Grasso and Chris Brumitt from Maine Pointe Aviation’s aerospace and defense practice about the digital supply chain. Grasso and Brummit say there is a need for “widespread cultural change throughout the aerospace and defense industry and acceptance of the need for new supply chain digitization efforts.” You can see their recommendations starting on page 120.
Next, we have to stress the environment and the sea change taking place in our society as we face global climate change. Climate change impacts aviation and may cause some to re-evaluate their travel needs, even though the aviation industry accounts for only 2% of global carbon dioxide emissions. In February, Delta Air Lines committed $1 billion over the next 10 years to mitigate emissions from its global business. The airline says it will “invest in driving innovation, advancing clean air travel technologies, accelerating the reduction of carbon emissions and waste, and establishing new projects to mitigate the balance of emissions.” A billion dollars.
In our inaugural issue, ICF’s Martin Harrison discussed the climate change issue and how it may impact aerospace. “Public awareness is increasing, especially among the younger generations. They may not have made up their minds to fly or not yet, but maybe younger generations will select the most environmentally-friendly carrier in the years ahead. Consequently, the bottom line is that aircraft will need to be even more efficient.” You can read that commentary in our digital issue at www.aerospacetechreview.com.
It seems incredible to throw the term sea change around but there is another movement underway and it’s happening faster than we can imagine. Urban air mobility and drone usage is coming, ready or not. This is a classic case of lead or be left behind. But what will this mean for the current airline flight deck? Consultants at Deloitte feel that “although commercial aircraft manufacturers are increasingly relying on automated flight controls, including automated cockpits, the commercial aerospace sector is aiming to transition to fully automated flight decks.” Futuristic -yes. But with the current lack of trained and experienced pilots, this seems more realistic than ever.
There is also a clearer path forward to hybrid electric and electric flight propulsion. Rolls-Royce invested by acquiring the electric and hybrid-electric aerospace propulsion activities of Siemens last year. “We are at the dawn of the ‘third era’ of aviation, which will bring a new class of quieter and cleaner air transport to the skies,” said Rob Watson, director – Rolls-Royce Electrical.
While China’s aviation infrastructure is still young, the predicted boom there is slower than anticipated and COVID-19 will surely slow things even more. “The formerly expected boom in China-U.S. air travel is going to deflate in 2020, big time,” is a prediction made by Jeremy Bogaisky from Forbes Aerospace & Defense.
In spite of the 737 MAX problems, Boeing will not only survive, but will thrive again. The Boeing/Airbus duopoly isn’t going anywhere.
Bogaisky also predicts that by 2025, U. S. transatlantic flights from midsize airports will be routine. “New aircraft such as the Airbus A321XLR will make nonstop flights economically possible from points such as Albany, Grand Rapids, Louisville and Columbus,” he predicts. You can read more about new and emerging aircraft platforms in Thom Patterson’s update on page 112.
We also have stories including Navigating the Darkness of Cybersecurity Risk with advice on protecting systems from unauthorized access on page 20; flight needs created by FANS equipage on page 28; updates on predictive maintenance on page 34; the GADSS initiative for flight tracking on page 102; and a cool look at the structural testing needed before an aircraft can be certified starting on page 94.
Etihad Airways (Etihad) will temporarily suspend all flights to, from, and via Abu Dhabi following a decision by the National Emergency Crisis and Disaster Management Authority, and the General Civil Aviation Authority (GCAA), to suspend all inbound, outbound, and transit passenger flights in the UAE. This decision has been made to limit the spread of the COVID-19 novel coronavirus and to protect citizens, residents, and international travellers.
The suspension of flights to and from Abu Dhabi International Airport will commence at 23:59 (UAE local time) on Wednesday 25 March, and will last for an initial 14 days, subject to further directives by the relevant authorities. Cargo and emergency evacuation flights are exempt and will continue.
“These are unprecedented times and unprecedented decisions are being made by governments, authorities and companies, including Etihad, to contain the spread of the coronavirus and to help minimise its effects around the world,” said Tony Douglas, group CEO, Etihad Aviation Group. “We stand with our loyal customers, who are having to endure disruption and inconvenience to their travel and their daily lives, and we dedicate all our efforts and resources to ensuring we do all we can to assist them with their travel planning during this challenging period. As the national airline, we stand in full support of the UAE government’s decision, and are confident that we’re well prepared to weather the commercial and operational impact this suspension will have on our services.”
Passengers were left stranded at airports today, March 5, 2020, as air carrier,
Flybe, has ceased operation having gone into Administration.According to a
statement on the airline’s website, “All flights have been grounded and the UK
business has ceased trading with immediate effect.”
In the UK, “administration” is a law and procedure for
insolvency/bankruptcy, when a company is unable to pay its debts. The company is
taken over by an insolvency practice who will work to rescue the company, save
the business, or get the best result possible.
It is unclear at this time what the outcome of the Flybe
Aviation Services division, the company’s MRO, will be.
statement on the Flybe website advises passengers not to go to the airport if
you are scheduled to fly today, unless you have already arranged for another
flight on a different airline and says “Flybe is unfortunately not able to
arrange alternative flights for passengers.” It also advises their customer to
monitor the Civil Aviation Authority website for further information (www.caa.co.uk/news).