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US plane manufacturer Boeing has recommended that all of its 777 aircraft carrying the same engine that failed over Denver on Saturday be grounded until inspections are carried out.

128 jets will be suspended from flying if Boeing’s recommendations are heeded. 69 of these planes are currently in service globally, while 59 are in storage.

The recommendation follows after one of its 777 planes, bound for Hawaii, had its right engine catch fire and shower debris across a Denver suburb. Nobody was injured during the incident, and the plane landed safely back in Denver.

Fleets of 777s were grounded in both the US and Japan following the fire, with the Federal Aviation Administration (FAA) issuing an emergency airworthiness directive calling for inspections of the aircraft. Two separate incidents involving engine faults also occurred over the weekend.

The 777 involved in the Saturday incident was powered by Pratt & Whitney PW4000-112 engines. Pratt & Whitney said in a statement that it had dispatched a team to work with FAA investigators.

Boeing’s latest crisis comes shortly after its 737 Max jets were cleared to fly again by global aviation authorities. The 737 MAX was previously grounded in 2019 after flaws in its design caused two fatal crashes that left 346 dead.

Boeing lost more than £20 billion in direct costs after regulators grounded the 737 Max. The subsequent impact of the COVID-19 pandemic and a global reduction in demand for air travel further exacerbated the company’s losses.

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This new crisis is likely to have a significant impact on Boeing stock, which has seen its 4% gains on Friday already erased during Monday morning trading.

International Airlines Group (IAG) began to issue billions of heavily discounted new stocks on Thursday in an effort to mitigate the cost of its anti-COVID-19 measures.

The airline holding company announced that it will issue 2.97 billion new shares at €0.92, having applied a 36% discount to its Wednesday closing price.

The rights issue coincided with IAG’s confirmation that over 8,200 British Airways employees had been laid off by the end of August. The layoffs come as part of a company restructuring process brought about by the COVID-19 pandemic, which aims to reduce overall headcount by as much as 13,000. Most of the 8,236 employees who departed did so via a voluntary redundancy process.

IAG also stated that its capacity will be lower than previously anticipated, but that it remained optimistic about breaking even in the fourth quarter.

“This is as a result of mitigating actions taken to reduce operating expenses further and enhance working capital,” an IAG spokesperson said.

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The COVID-19 pandemic has drastically impacted international travel, with lockdown measures and consumer fears creating an unprecedented lack of consumer demand for air travel. Airlines have been compelled to furlough or lay off thousands of employees in order to mitigate losses, while others have shuttered altogether.

Virgin Atlantic announced last week that it would cut a further 1,150 jobs on top of its 3,500 summer layoffs, and Ryanair drastically cut its annual passenger target on Wednesday amid resurgent COVID-19 infections internationally.

The CARES Act, passed in March, offered $25 billion in aid to help airlines pay employees’ salaries amid the COVID-19 pandemic provided that they refrained from laying off staff. However, with these conditions set to expire at the end of September and air travel still vastly reduced, airlines have raised concerns that they will need to cut tens of thousands of jobs in October if nothing is done.

For these reasons, we support a clean extension of payroll support for passenger air carrier employees included in the CARES Act to avoid furloughs and further support those workers,” the senators wrote in a letter to Senate majority leader Mitch McConnell and minority leader Chuck Schumer.

Aside from being a victory for labour unions, the announcement also had a curative effect on airline stocks. Shares in American Airlines traded as much as 12% higher on Wednesday before closing at 9.5%, while United Airlines and Delta Air Lines respectively rose by 4% and 3%.

Also affected were Boeing, whose shares rose by 5.6%, and its key supplier Spirit Aerosystems, whose shares rose by almost 9%.

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The Senate letter also called for further congressional support to prop up other aspects of the air travel industry: “With air travel anticipated to remain low in the near future, Congress should also consider provisions to support and provide flexibility for businesses across the aviation industry similarly impacted, such as airport concessionaires and aviation manufacturing.”

Sara Nelson, international president of the Association of Flight Attendants-CWA, hailed the letter as a demonstration of “overwhelming bipartisan majority support” for a six-month extension of the payroll aid programme.

The US Treasury confirmed on Thursday that it had agreed on terms for federal loans with five major US air carriers, intended to lessen the impact of the COVID-19 pandemic on their finances.

The organisations who have signed letters of intent are American Airlines, SkyWest Airlines, Spirit Airlines, Hawaiian Airlines and the privately-owned Frontier Airlines.

Other airlines have also expressed interest in the loans, but have not yet signed letters of intent, according to a Treasury department spokesperson. In a statement, Treasury Secretary Steven Mnuchin said that “conversations with other airlines continue, and we look forward to finalizing agreements as soon as possible.”

The $25 billion pool was set aside as part of the Cares Act, the $2.2 trillion stimulus package passed by Congress in March. An additional $25 billion in federal aid has also been issued to major air carriers to pay workers through to September, intended to stave off mass layoffs. Most of this payroll aid comes in the form of grants.

The exact terms of the loans that have been finalised are unknown, though the Treasury has said that recipient organisations will need to provide warrants, equity or senior debt instruments. Last month, American Airlines CEO Doug Parker told shareholders that AA expected to be eligible to borrow up to $4.75 billion from the pool.

Airlines have until 30 September to close on the loan.

EasyJet has announced plans to cut as much as 4,500 members of its 15,000-strong staff in order to save costs as air travel demand continues to slump.

In a statement released on Thursday, the airline stated that it will soon launch an employee consultation process and outlined its measures for reducing its capacity. It also confirmed that it will restart domestic flights in the UK and France on 15 June, though it does not expect to resume operations at full strength until 2023.

EasyJet chief executive John Lundgren said: “We realise these are very difficult times and we are having to consider very difficult decisions which will impact our people – but we want to protect as many jobs as we can for the long term”. He added that the airline was focusing on “what is right for the company and its long-term health and success”.

The British Airline Pilots Association (BALPA) criticised easyJet for not discussing the measures with the union ahead of the time, and described the move as “ill-considered”.

BALPA general secretary Brian Strutton said in a statement: “EasyJet staff will be shocked at the scale of this announcement and only two days ago staff got a ‘good news’ message from their boss with no mention of job losses, so this is a real kick in the teeth. Those staff have taken pay cuts to keep the airline afloat and this is the treatment they get in return.

London-based airline EasyJet revealed on Tuesday that nine million customers’ personal information was stolen in what it called a “highly sophisticated” cyber-attack.

In addition to email addresses and travel details being accessed, 2,208 of those customers affected also had their credit card information stolen. EasyJet clarified that no passport details were uncovered in the breach, and that it would contact those affected.

It is not yet known how the historically large data breach occurred, but EasyJet said that it had “closed off this unauthorised access” and reported details of the incident to the Information Commissioner’s Office (ICO) and the National Cyber Security Centre.

The size of the breach raises the possibility of EasyJet being forced to pay significant compensation, as was the case for British Airways after the personal information of 500,000 customers was stolen. In that case, the ICO fined the airline £183 million.

A similarly sized fine would likely be a significant blow to EasyJet, which has already said it expects to make a loss of around £275 million this year as the COVID-19 pandemic continues to drive demand for air travel through the floor.

Reacting to the news, Tony Pepper, CEO of Egress, called the breach “another stark reminder that airlines must take a comprehensive risk-based approach towards protecting customer data”.

“For organisations, it remains crucial they continue to prioritise data security at all times, but especially when there’s widespread introductions of new systems as there has been in response to sustained remote working during the COVID-19 pandemic.

In a surprise announcement, Virgin Atlantic has announced that it will cut upwards of 3,000 jobs in the UK, citing the effects of the ongoing coronavirus pandemic and its impact on travel as the cause.

Virgin Atlantic chief executive Shai Weiss said in a statement that “now is the time for further action to reduce our costs, preserve cash and to protect as many jobs as possible.

In addition to cutting jobs, the airline will also discontinue its operations at Gatwick Airport, focusing exclusively on its Heathrow flights.

Virgin Atlantic, majority owned by Virgin Group tycoon Sir Richard Branson, has been seeking a government-backed loan for several weeks. This latest move follows warnings of massive redundancies by rival companies Ryanair and British Airways, with BA indicating that upwards of 12,000 jobs could be lost – and that it, too, may soon end its services at Gatwick.

Virgin’s latest announcement has been met with shock, particularly among the British Airline Pilots Association (Balpa), whose general secretary, Brian Strutton, described it as “devastating”.

Our members and all staff in Virgin Atlantic will be shocked by the scale of this bombshell. We will be challenging Virgin very hard to justify this,” Strutton said.

The cutbacks by Virgin Atlantic come less than a fortnight after the collapse of its sister airline, Virgin Australia, which employed 15,000 people.

Virgin Australia confirmed on Tuesday that it has entered voluntary administration, putting 15,000 jobs at risk.

In a statement, the company pledged to continue its scheduled flights that are “helping to transport essential workers, maintain important freight corridors, and transport Australians home.” Travel credits will also remain valid, the statement continued.

The airline’s board of directors has appointed Deloitte’s Vaughan Strawbridge, Sal Algeri, John Greig and Richard Hughes as voluntary administrators.

With 80% of its workforce already stood down, Strawbridge said that there were “no plans to make any redundancies.

Virgin Australia’s slump marks the first major airline in the Australasia region to enter administration as a result of the COVID-19 pandemic and the ensuing quarantine measures across many countries.

The news has come only days after Virgin Group founder Sir Richard Branson published an open letter to Virgin’s 70,000 employees in which he warned of the consequences of the airline’s potential collapse.

If Virgin Australia disappears, Qantas would effectively have a monopoly of the Australian skies,” the tycoon wrote. “We all know what that would lead to.”

Despite its requests to the Australian government, Virgin Australia was not issued the $1.4 billion emergency loan that it sought.

Virgin Australia’s difficulties mirror those faced by other major airlines around the globe, which are struggling to cope with increased travel restrictions and a dramatic fall in demand amid the COVID-19 crisis. UK-based airline Flybe also went into administration early in March as the pandemic exacerbated its existing financial concerns.

US Treasury Secretary Steve Mnuchin said on Tuesday that he supports “sending cheques to Americans immediately” as part of a $250 billion relief effort.

This effort is itself part of a $1 trillion aid plan intended to shore up the US economy as businesses and public events close in response to the spread of COVID-19. This aid package also includes a bailout for airlines and hotels, two industries that have been hardest hit by the pandemic.

Also on Tuesday, UK chancellor Rishi Sunak unveiled further stimulus measures for UK businesses that included £330 billion of guaranteed business loans and £20 billion in other aid. Additional measures included grants for retailers and pubs, and a business rates holiday.

Never in peacetime have we faced an economic fight like this one,” the chancellor said in a statement, adding that help for airlines was also being considered.

In France, Finance Minister Bruno Le Maire outlined plans for a €45 billion aid package for small businesses, and pledged to “guarantee bank loans up to €300 billion”.

Elsewhere, the Australian government is reportedly weighing a second rollout of stimulus measures to combat continued stock market losses, and Japanese Prime Minister Shinzo Abe intends to form a panel of key ministers and the governor of the Bank of Japan to help the Japanese economy weather the pandemic.

After Flybe’s Wednesday talks with the government failed to secure a deal for a rescue package, the company has declared that it will cease trading with immediate effect. The Civil Aviation Authority has announced that all Flybe flights and those operated by its franchise partners Stobart Air, Eastern Airways and Blue Islands, have been cancelled, and advised customers to make their own alternative travel arrangements.

Flybe’s collapse follows several months of financial troubles related to rising fuel costs and competition from larger airlines, compounded by a downturn in demand for flights due to the ongoing spread of novel coronavirus.

Flybe chief executive Mark Anderson said in a statement that the company had been “unable to overcome significant funding challenges”.

The UK has lost one of its greatest regional assets,” he added, thanking Flybe employees for “their incredible commitment and dedication.

Transport Secretary Grant Shapps tweeted his disappointment in seeing Flybe go out of business after four decades of service. He assured his followers that the government is "urgently working with industry to identify how key routes can be re-established by other airlines as soon as possible", and will also be working to help Flybe staff find new jobs.

Flybe is the second major British airline to face bankruptcy in six months, following the collapse of Thomas Cook last September that saw the loss of around 11,000 jobs.

Below Rebecca O’Keeffe, Head of Investment at interactive investor, comments on the latest global market updates offering insight into the recent Ryanair strike debacle and Brexit progress.

Global markets continue their malaise, as trade tensions weigh on sentiment amid fears that global growth will slow. With no major catalysts to drive the market higher, the risks are on the downside and the danger is that equity markets will drift lower. Earnings will allow individual stocks or even sectors to out or underperform, but the broader indices are likely to find it more difficult to gain traction.

What a difference a week makes. Just last week, Theresa May appeared to have come up with a revised vision of Brexit that offered a middle ground and might have delivered a softer Brexit. However, resignations, rebellions, concessions and amendments now mean that it is difficult to be sure what the UK’s position actually is.  With May’s government somewhere between a hard Brexit and no deal, it will be very difficult for Europe to sign off on any deal based on the current UK confusion. The summer recess may provide some respite, but as the weeks ticks by the prospect of no deal is rising rapidly and the impact on sterling could become more severe than it already is, and international companies may once again begin to rachet up the rhetoric regarding the very real risks of a bad deal.

Ryanair are suffering multiple threats, all of which are weighing on the bottom line. Sustained higher oil prices, air traffic control strikes in Europe, bigger wage costs and increased competition are all problems for the low-cost airline. Ryanair has historically been reasonably good at hedging their oil exposure, but prolonged higher prices have increased their costs. Strikes by European air traffic controllers, in particular in Marseilles, have wreaked havoc for many European airlines, causing significant cancellations and disruption. Further strikes by Ryanair pilots are adding to their woes, alongside additional staff wage costs for pilots. The prospect of further competition in the low-cost sector from IAG is another headache that Ryanair could do without. Some of these headwinds are generic and some are self-made, but it is difficult to see much upside for Ryanair in the short term.

Ryanair Holdings Plc Chief Financial Officer Neil Sorahan discusses the company's earnings and performance and the possible implications of a "hard" Brexit. He speaks on "Bloomberg Daybreak: Europe" as the discount airline posted a 20 percent drop in first-quarter profit and warned that sporadic walkouts by trade unions, along with regional traffic-control strikes, are starting to make customers hesitant to book flights.

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