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Hundreds of flights were cancelled yesterday as the omicron variant creates havoc both for travelers and for airlines that are having to cobble together flight crews as pilots, flight attendants and ground crews become infected or are exposed to others who have been, the Associated Press reported. More than 850 flights were cancelled by midday yesterday and that number has ticked higher throughout the day, according to data from the flight-tracking website FlightAware. There were nearly 1,300 cancellations for flights entering, leaving or inside the U.S. Tuesday, and about 1,500 on Monday. Cancellations began to spike the day before Christmas during what is already a buzzing pace for airlines this time of year. Delta, United and JetBlue have all said that the omicron variant was causing enough staffing issues that flights were cancelled. SkyWest led U.S. carriers with 195 cancellations, followed by United with 158 and Delta with 103. SkyWest, a regional airline based in Utah, has suffered an elevated level of cancellations after severe weather hit several of its hubs, but it’s reporting the same staffing issues due to COVID-19.

Flight cancellations marred Christmas weekend for many travelers, as COVID-19 left carriers short-staffed to operate busy schedules over the holiday, the Wall Street Journal reported. In the U.S., canceled flights mounted through the weekend and involved many airlines. The disruptions came suddenly as a ramp-up in employee absences caught carriers off guard. The industry for months had been adjusting to labor shortages amid high customer demand, and because of measures such as incentive pay and scaled-back schedules had gotten through Thanksgiving largely without problems. It was over Thanksgiving weekend that the Omicron variant of COVID-19 emerged as a new global public health foe. Its rapid spread pushed the airlines’ staffing limits this weekend, they said. It was unclear Sunday whether the worst of the canceling was over or if there would be more in the days ahead. “Our current pilot COVID-19 case count is on the rise. Pilots who have developed symptoms are also in quarantine and we have a high number of pilots on the sick list,” Bryan Quigley, senior vice president of flight operations at United Airlines Holdings Inc., on Sunday wrote to pilots. He asked them to take precautions. Delta Air Lines Inc., which pointed to the new variant as well as winter weather as problematic, said midday that it had canceled about 161 of the 4,155 flights it had planned to operate Sunday, with around 40 more cancellations forecast for the day, a smaller number than it had initially expected to scrap. Delta canceled 375 flights on Christmas Day and more than 200 on Christmas Eve, the airline said. (Subscription required.)

An Aeromexico creditor on Monday objected to the Mexican airline's restructuring plan to emerge from chapter 11 bankruptcy, saying the proposal would unfairly benefit majority shareholder Delta Air Lines Inc., Reuters reported. Invictus Global Management said in a public letter to Delta's board of directors that it opposed the plan put forward by Aeromexico. Aeromexico last week said that an unnamed third party would make a tender offer valuing its outstanding shares at a fraction of their previous market price as part of its efforts to emerge from bankruptcy. Delta's stake would be diluted to 20%, while Apollo Global Management, a fund that often invests in bankrupt companies, would become Aeromexico's biggest shareholder. "Daylight needs to shine on the actions and decisions that could position you to make hundreds of millions of dollars at the expense of other stakeholders, including the many who stand to be economically crushed under the plan preferred by Delta and Apollo," said the letter, signed by Invictus partner Cindy Chen Delano. It added that the proposal included "seemingly egregious financial terms that defy decades of bankruptcy precedent." Invictus is a Delta shareholder as well as a sizeable creditor of Aeromexico, it said.

Philippine Airlines Inc. won court approval for its reorganisation plan, paving the way for the carrier to exit bankruptcy, cut $2 billion in debt and revive its fortunes after a slump in international travel due to the pandemic, Bloomberg News reported. Bankruptcy Judge Shelley Chapman in Manhattan said on Friday that she would approve the chapter 11 plan after unsecured creditors voted to back the proposal. The reorganization didn’t face any major opposition from debt holders. "This case is a model for what can be accomplished in chapter 11,” Chapman said. "You’ve achieved overwhelming consensus.” The company will try implement the plan and exit bankruptcy by the end of the year, if it is able to get approval from securities regulators in the Philippines, a lawyer for the airline said during the court hearing on Friday. The flagship carrier, majority owned by billionaire Lucio Tan, is one of several to enter debt restructuring in the U.S., which companies often consider a preferred location. Aeromexico and Colombia’s Avianca Holdings sought court protection in New York last year. Philippine Airlines already got a green light to access $505 million worth of equity and debt financing to help it meet its obligations. As part of the turnaround, it plans to reduce the size of its fleet.

One of the world’s largest aircraft leasing company filed for chapter 11 as it seeks to restructure its finances for the second time since the beginning of the pandemic. Denmark-based Nordic Aviation Capital A/S sought bankruptcy protection to overhaul about $6 billion of debt, Bloomberg News reported. On Sept. 24, the company reached an agreement in principle with creditors to fix its balance sheet. The company listed both assets and debt of between $1 billion and $10 billion, according to court papers filed in U.S. Bankruptcy Court in Richmond, Virginia. The restructuring framework includes the conversion of “a substantial amount of the group’s debt into equity,” a $300 million equity rights offering and a $200 million revolving credit facility, the company said. Silver Point Capital and Sculptor Capital Management are set to take control of the company as part of the deal, people familiar with the matter said on Sept. 30.

Latam Airlines Group SA’s official low-ranking creditor group is unhappy with the Chilean carrier’s bankruptcy exit proposal, arguing a sale to rival Azul SA could leave its members much better off, Bloomberg News reported. In court papers filed on Wednesday, Santiago-based Latam’s unsecured creditor committee said the airline’s current reorganization plan is so unfair that it can’t win court approval. It flouts U.S. bankruptcy rules by favoring some evenly-ranked creditors over others and giving value to shareholders that don’t deserve it, lawyers for the group wrote. “Rather than use the past eighteen months to negotiate and prepare a value-maximizing plan that treats all constituents fairly and in accordance with the Bankruptcy Code, the Debtors have used their exclusive opportunity to negotiate an unconfirmable insider deal at the expense of non-preferred creditors,” lawyers from the Dechert firm wrote on behalf of unsecured creditors. Under the current proposal, Latam locked arms with key shareholders — Delta Air Lines Inc., Qatar Airways and Chile’s Cueto family — and a major creditor group on a deal that would raise about $5 billion and slash its debt load. Sixth Street Partners, Sculptor Capital and SVPGlobal are leading the creditor group that has agreed to backstop the plan. The plan would result in creditors taking control of the company, while existing shareholders could retain a sizable ownership stake. That’s unusual in U.S. bankruptcy — stockholders are last in line to be repaid — but Latam’s deal would smooth over potentially thorny Chilean securities law issues.

The bailout of U.S. airlines under Presidents Donald Trump and Biden was meant to stave off economic calamity and keep the nation’s aviation system alive through the coronavirus pandemic. It included provisions, inspired by investing giant Warren Buffett, that supporters said could give Uncle Sam a piece of the upside when the ailing stocks of airline companies rebounded, the Washington Post reported. Buoyed by federal aid, planes kept flying as air travel plummeted by more than 90 percent. But after handing airlines tens of billions of dollars in grants, the value of stock deals struck on taxpayers’ behalf is not in Buffett’s league. Those stock agreements, similar to options, this week are worth about $260 million, or less than 1 percent of the $37 billion the U.S. government gave 10 major passenger airlines last year to help pay their workers, according to a Washington Post analysis of Treasury Department data. Subsequent agreements taxpayers received as airlines got another $13 billion this year are, as of now, useless, although their value would rise if stock prices climb. There are several ways to calculate what the federal government bought with its billions in pandemic-era aid to airlines. The nation’s aviation system remains intact, supporting jobs in the sector and outside it, while enabling economic growth and freedom of movement across the country. But nearly two years after the pandemic was declared, questions have emerged about what worked well, and what did not, after one of Washington’s most powerful industries was propped up by a vast U.S. bailout. “It wasn’t the most carefully crafted deal out there, but in a time-is-of-the-essence sense, it was the deal that could get done,” said aviation analyst Robert Mann. Without the federal money, “there surely would have been bankruptcies, because there simply would have been no revenue coming in."

Delta Air Lines Inc. will invest $1.2 billion in partner carriers Virgin Atlantic, Aeromexico and Latam Airlines as the U.S. airline positions itself to capitalize on a rebound in international travel, Bloomberg News reported. Delta aims to build a 20% equity stake in Grupo Aeromexico SAB and a 10% position in Latam Airlines Group SA, according to a statement Monday. The U.S. company will provide fresh financing to Virgin Atlantic Airways Ltd. and maintain its 49% equity stake. "As international travel demand returns, the connectivity, relevance and breadth of Delta’s global network with its partners remains critical,” the carrier said in the statement. “With new widebody aircraft on the way, record hiring, and significant investments in international readiness, Delta is positioned to lead the industry through the ongoing recovery.” The investment underscores the importance of international travel after the industry struggled through a sharp slowdown during the pandemic. Delta recently expanded its marketing partnership with Latam and has supported the bankruptcy reorganization of Aeromexico following a cooperation agreement signed in 2017. Atlanta-based Delta said its investments in Air France-KLM, Korean Air and China Eastern won’t change. Shares of the carrier fell as much as 4.3% in New York.

Nordic Aviation Capital AS is planning to file for chapter 11 bankruptcy this month to carry out its restructuring plan, Bloomberg News reported. The aircraft lessor has reportedly shored up support from its largest creditors to implement the plan. Major creditors have also agreed to provide financing to help fund Nordic Aviation’s operations through bankruptcy. Under a previous agreement with its biggest creditor groups, Nordic Aviation said it would convert “a substantial amount” of the group’s debt into equity and raise a $300 million equity rights offering and a $200 million revolver. Debt-holders, led by Silver Point Capital and Sculptor Capital Management, are set to take control of the aircraft lessor, Bloomberg reported. The company remains on track to raise $500 million of new money. Founded in Denmark in 1990, Nordic Aviation leases almost 500 aircraft to about 70 airline customers around the world. As of June 2020, it had around $5.7 billion of debt. Like many of its peers, the company has struggled to contend with the slowdown in air travel amid the pandemic. Nordic Aviation lost $2.36 billion in the fiscal year that ended June 30 after it wrote down the value of aircraft and other assets. Its lease revenue slumped 15% year-over-year to $642 million.