BUSINESS NEWS


Virgin Atlantic hits milestone in ‘recapitalisation’


Virgin Atlantic hailed “a milestone” in its court-sanctioned restructuring following legal hearings in the UK and US last week. A UK court hearing on Tuesday


began the court-sanctioned process of restructuring, with the support of a majority of creditors, and a US hearing at the end of the week recognised the jurisdiction of the English court. The court hearings were


mistakenly reported in some quarters as moving Virgin Atlantic towards insolvency, but the airline went to court as part of a solvent recapitalisation process under the


UK Companies Act. A Virgin Atlantic spokesperson


described the latest hearing as “a standard procedural step to protect the airline’s assets while Virgin Atlantic’s recapitalisation is completed in the UK” and said: “Virgin Atlantic has reached another important milestone towards securing its future.” The £1.2 billion refinancing,


announced on July 14, is expected to come into effect in September.


Lufthansa reports €3.6bn loss and and return to 2019 levels in 2024


Lufthansa will operate no more than 50% of capacity by the end of the year and two-thirds of 2019’s level in 2021. Carsten Spohr, Lufthansa Group


chief executive, laid out cautious recovery plans as he reported a half- year loss of €3.6 billion to June. Spohr noted: “Customer demand


is only improving on a low base. We share the view of Iata that a return to the pre-pandemic level can’t be expected before 2024. Our whole industry needs to adapt.” He reported the return of


passenger traffic was so slow that “we have passenger routes where the passenger load is zero and we break even because of high cargo


revenues”, and warned: “Not even the best restart programme will restore passenger confidence. People are cautious. The main reason is the remaining travel restrictions.” However, Spohr insisted the crisis


“gives an opportunity to stop aiming for growth at any price”. He hailed a reduction in airport


charges across the group’s hubs, aside from Frankfurt, and said: “When we allocate traffic streams, we’ll take this into account.” And he warned the German airline could no longer avoid compulsory redundancies as it cuts 22,000 jobs. Lufthansa has paid €2 billion in cash refunds in the year to date.


‘Customers will be back in droves’ Ian Taylor


Norwegian Cruise Line Holdings chief executive Frank Del Rio reported “strong demand for future cruises” as the company recorded a half-year loss of $2.65 billion last week and said there could be a “limited” return in November and December. Del Rio insisted: “There


continues to be strong demand.” He dismissed a suggestion the Covid crisis could put many cruise-focused agencies out of business. Sailings of NCL Holdings lines


Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises are currently suspended to the end of October. But Del Rio forecast: “The last


two months of 2020 could see a return of sailing with limited capacity. We’ve taken important initial steps. We’re developing safe protocols


travelweekly.co.uk Things will be


different. We’ll be mindful of how measures impact the cruise experience


with the formation of the Heathy Sail Panel, which demonstrates our commitment to bringing back cruising sooner rather than later.” The panel of experts, set up with


Royal Caribbean International, is working to develop recommendations for a safe resumption. Del Rio said: “The panel will


submit its initial recommendations to the [US] government and Centers for Disease Control for evaluation.” He acknowledged: “Things will


be different. We’ll be mindful of how measures impact the cruise experience.”


NCL Holdings chief financial


officer Mark Kempa said: “We expect to launch with a handful of ships at first with low occupancy.” Asked whether the crisis could


transform cruise distribution, Del Rio said: “We’ve seen an uptick in direct business, [but] it might be exaggerated because of the partial closures of agencies. Agencies will survive. Long term you won’t see much change.” He insisted: “Between 15 and


20 million people have not been allowed to cruise – there will be a lot of pent-up demand. People are booking. We’ve not seen any major shifts in consumer behaviour. “My instinct is we’ll be [operating]


in the range of 75% of capacity for 2021. It might start at 50%-60%, with the limitation being about the spread of Covid. So long as we can ascertain cruising is safe we’ll have customers coming back in droves.”


Frank Del Rio 13 AUGUST 2020 33


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