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Air Canada halts all direct flights to China as virus fears spread – Business News – Castanet.net

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UPDATE: 2:10 p.m.

Air Canada is halting all direct flights to China following the federal government’s advisory to avoid non-essential travel to the country due to the coronavirus epidemic.

The abrupt suspension — effective Thursday and slated to last until Feb. 29 — threatens to dent revenues as the airline scrambles to regroup amid the disruption.

“It definitely will have a commercial impact. There’s no doubt about it. China is a major market for Air Canada,” said John Gradek, a lecturer at McGill University and head of its Global Aviation Leadership Program.

Canada’s largest airline, the carrier makes 33 flights a week to Beijing and Shanghai from Vancouver, Toronto and Montreal. The potential for longer-term harm looms if travel demand stays near ground level into the spring.

More than 50 million people in 17 cities are now under under lockdown as China rolls out quarantine measures unprecedented in modern history.

Air Canada said Wednesday it had begun to cancel select flights as customers delayed trips and called off travel plans due to fears of the spreading epidemic.

“Three or four hours later, everything shut down,” Gradek said. “It kind of shows you the degree to which this is a very, very fluid situation.”

Affected customers will be notified and offered options that include travel on other carriers where available, or a full refund, Air Canada said.

The carrier is also waiving rebooking fees for flights that go through a partner airline to the Chinese city of Wuhan, the epicentre of the virus, until March 29.

China Southern Airlines and China Eastern Airlines, which fly into Vancouver, Toronto and Montreal, have not announced plans to halt flights to Canada.


UPDATE: 6:50 a.m.

Air Canada is cancelling select flights to China as travellers shaken by the coronavirus epidemic delay or call off travel plans.

Canada’s largest airline runs 33 flights a week to China and says that the capacity reduction is relatively small.

Air Canada says affected customers will be notified and offered alternate travel options.

The cancellations come as the airline allows passengers to rebook direct flights to Beijing and Shanghai free of charge, if they’re scheduled for between late January and mid-February.

Air Canada is also waiving rebooking fees for flights that go through a partner airline to the Chinese city of Wuhan, the epicentre of the virus, until late March.


ORIGINAL: 6:40 a.m.

British Airways said Wednesday it is halting all flights to China, joining several Asian carriers that are either suspending or significantly cutting back service there as fears spread about a new virus that has killed more than 130 people.

Air India and South Korean budget carrier Seoul Air are also halting all flights to the country, and Indonesia’s Lion Air plans to do the same. Other carriers including Finnair, Hong Kong-based Cathay Pacific, and Singapore-based Jetstar Asia are slashing service.

Beyond disrupting travel, the move will heighten concerns about the broader economic impact of the virus outbreak. Hotels, airlines, casinos and cruise operators are among the industries suffering the most immediate repercussions, especially in countries close to China.

BA said it was immediately suspending all flights to and from mainland China after the U.K. government warned against unnecessary travel to the country amid a virus outbreak.

The airline operates daily flights from London’s Heathrow Airport to Shanghai and Beijing. It took the measure a day after Britain’s Foreign Office updated its travel advice on China, warning against “all but essential travel” to the mainland, not including Hong Kong and Macao.

China has cut off access to the central city of Wuhan, epicenter of the outbreak, and 16 other cities to prevent people from leaving and spreading the virus further. That has trapped more than 50 million people in the most far-reaching disease control measures ever imposed. The outbreak has infected more than 6,000 on the mainland and abroad.

Online flight notice boards for the Beijing and Shanghai airports showed numerous cancellations for both domestic and foreign airlines on Wednesday.

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Pre-owned business jet shortage drives sellers’ market, demand for new luxury planes

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A shortage of newer-model business jets is driving up prices of second-hand aircraft, a trend that is expected to deliver a windfall for luxury planemakers as new affluent buyers enter the market.

After a turbulent 2020 due to COVID-19, the rush toward private transport is so marked that some buyers are snapping up second-hand planes before fully inspecting the wares as the market shifts toward sellers, lawyers and brokers said.

That is expected to push up demand for new jets from planemakers like General Dynamics Corp‘s Gulfstream, Textron Inc and Bombardier Inc since buyers have fewer pre-owned options, and the price gap between old and new narrows.

“There are virtually no young pre-owned aircraft available – good news for would-be sellers and for (planemakers),” said aviation analyst Rolland Vincent.

He recalled one trucking company’s recent search for a pre-owned Gulfstream jet: “There was one aircraft in the world that fit their requirements.”

Traffic from business jets, which carry roughly a handful to 19 travelers, has rebounded to pre-pandemic levels in the United States, the world’s largest market for private aviation, according to FlightAware data.

“On the pre-owned side, inventory appears to be fairly low, and that’s always a benefit to new aircraft sales,” said Scott Neal, senior vice president worldwide sales, Gulfstream.

“We are seeing strong interest across the board from first-time buyers and high net worth individuals as well as corporate customers with a desire to grow their fleets.”

Textron in April raised its full-year profit forecast, propelled by a rebound in business jet demand.

The trend could encourage some planemakers to increase production rates, although any ramp-up would hinge on supply chain capabilities, Vincent said.

Planemakers do not disclose total number of orders.

Preowned aircraft for sale in May accounted for 6.6% of the worldwide fleet, the lowest level recorded in 25 years by JETNET data, Vincent said. He said 864 pre-owned business jets sold during the first four months of 2021, up 36% from the same period last year.

“There are multiple offers on planes,” said Florida-based aviation attorney Stewart Lapayowker, founder of Lapayowker Jet Counsel PA.

Amanda Applegate, a partner at Aerlex Law Group, said she handled more deals for new jets than usual in May, as buyers fail to secure popular pre-owned planes like the G650, raising prices.

Applegate said it’s a case of pent-up demand as some wealthy travelers previously avoided private jets due to concerns like “flight shaming” over the environment. Corporate planes burn more fuel per passenger than commercial.

But since COVID-19, buyers have been shifting to private aviation to avoid airport crowds and coronavirus variants.

Applegate said some deals are so competitive she’s seen buyers give up pre-purchase inspections to win them.

Don Dwyer, managing partner at Guardian Jet, which does aircraft brokerage, appraisals, and consulting, recalled one case where a client didn’t undertake a pre-purchase inspection, which can take more than a month to complete.

It was a particular case since the plane was highly coveted, in good shape based on a visual inspection, and the seller was reputable, Dwyer said.

“I don’t recommend it, but in certain situations it can work.”

 

(Reporting by Allison Lampert in Montreal; Editing by Denny Thomas and Steve Orlofsky)

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Ford starts shipping Bronco SUVs from Michigan assembly plant

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Ford Motor Co said on Tuesday it had started producing and shipping the new Bronco sport utility vehicles (SUVs) from its Michigan assembly plant, following a delay in the launch of the SUVs due to COVID-19-related issues with the automaker’s suppliers.

Customers have booked more than 125,000 sixth-generation Bronco SUVs since the beginning of the year, the company said. The SUVs are targeted at the Jeep Wrangler market segment.

Ford said it had made more than 190,000 reservations for the Bronco in the United States and Canada.

The company built the first generation of Broncos from 1966 to 1977, and withdrew the line in 1996 amid falling demand.

Ford said it had invested $750 million into and added about 2,700 jobs at the Michigan assembly plant to build the new Broncos.

 

(Reporting by Ankit Ajmera in Bengaluru; Editing by Vinay Dwivedi)

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Lufthansa sets 2024 goal, eyes capital increase

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Germany’s flagship carrier Deutsche Lufthansa said it aims to boost its return on capital employed (ROCE) and laid out plans for a capital increase as it prepares for a business recovery amid an easing coronavirus pandemic.

The largest German airline aims to have an adjusted EBIT margin of at least 8% and an adjusted ROCE of at least 10% in 2024, it said late on Monday.

Adjusted ROCE was –16.7% in 2020 and 6.6% in 2019.

The group added it had mandated banks to prepare a possible capital increase, though size and timing have not yet been determined and the German state, which has bailed out the airline during the pandemic, has not yet given its approval.

 

(Reporting by Ludwig Burger; editing by Jonathan Oatis)

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