Covid-19; Impact on the aviation industry

Inquitus

Nijmegen wrote: »

Short term travel is done and dusted and when we return the long term prospects are for a slow multi-year recovery with a lot of washing out in the industry.

I agree, until the virus is properly contained you may see some people willing to take the risk and get a cheap holiday, but the overall numbers will be much much lower. Containment really means a vaccine or a highly effective therapeutic treatment, neither of which are here in the short to medium term.

You can see with China, Singapore etc. as soon as they opened their borders, cases started to rise, pretty much all imported.

California Dreamer

Wait till you see, package holidays on EI A330's double daily in October to the Canaries!

Inquitus

I suppose a realtime test administered from a fingerprick with 100% accuracy could also open things up, you get tested before you enter the airport. That's the only other thing that would make me consider flying and only between countries who could be relied upon e.g. EU, USA.

smurfjed

relied upon e.g. EU, USA.

This is actually one country that I shall try to avoid visiting in 2020, they are starting to reopen cities so the next couple of months will be interesting, hopefully in a good way.

Inquitus

smurfjed wrote: »

This is actually one country that I shall try to avoid visiting in 2020, they are starting to reopen cities so the next couple of months will be interesting, hopefully in a good way.

Aye that's a separate issue, and they are crazy, but I am pretty sure it will play out as we all expect. I travel extensively for work, and the US would be my main destination this year were it to become safe.

That said as you point out it seems things will have to get worse before they learn so they can then get better.

Tenger

In the news today that Trump wants to stop all immigration into the USA. While in theory this shouldnt affect work/tourism travel it will certainly add to uncertainty over making any travel plans to the US.

jonnny68

Deatr wrote: »

Nothing bizzare about it at all. The road infrastructure to Kerry and to Donegal isn’t the best so that’s why these are PSO routes. There are other routes around Europe that are funded in a similar fashion.

so what your saying is even if these flights are empty they wont lose out financially?

Cookiemunster

jonnny68 wrote: »

so what your saying is even if these flights are empty they wont lose out financially?

They're PSO routes. They're paid for by the government because it wouldn't be possible for a private company to run it profitably. Quite a lot of Bus Eireanns routes are run the same way. They're basically outsourced public tranport.

Gael23

Virgin Australia, an offshoot of Virgin Atlantic has called in the administrators

bk

jonnny68 wrote: »

so what your saying is even if these flights are empty they wont lose out financially?

It was reported in one of the papers on Sunday, that the NTA are paying 150 million extra to the public transport companies to keep services going.

I don't know if the PSO flights are included in that are not.

With public transport, there are in general two different types of contracts.

1) The contract that Transdev/Luas and GoAhead/Buses have. With this contract, these companies are contracted to operate the service for the NTA, they are paid in full to operate the service by the NTA and any ticket revenue raised goes directly to the NTA and the NTA then make up any difference.

If buses/Luas run's empty, then these companies are paid in full as they still operated the service.

Obviously there are various penalties, bonuses, etc. in the contract for running on time, etc.

2) The contract that Irish Rail, Dublin Bus and Bus Eireann have. They operate the service themselves and receive all the fare income. The NTA agrees to pay a subsidy to them on top of the fares.

With the first type of contract, it is pretty straightforward, the services are still running, so the companies still have to be paid. Yes, the NTA need to find more money to pay for these services from the government budgets, due to the drastic fall in ticket revenues.

The second type of contract that CIE have is more complicated. Strictly speaking the NTA could shrug their shoulders and CIE would go bankrupt and all these services would stop operating.

Obviously that doesn't help anyone, CIE is 100% owned by the government and these services are still needed by essential staff around the country, and we will still need them once we come out of this pandemic. So it seems that the NTA/government has agreed to massively ramp up the subsidy to these companies to keep them operating.

The surprising service that is still running is BE Expressway. It is NOT a PSO service, it is supposed to be purely commercial service. So it is a surprise it is still running and questions will likely be asked about it by others and possibly legal cases in future.

Either way it is extraordinary times and the government has stepped in to keep PSO transport services operating.

Nijmegen

California Dreamer wrote: »

Wait till you see, package holidays on EI A330's double daily in October to the Canaries!

"Wuhan’s 11 Million People Are Free to Dine Out. Yet They Aren’t"

Interesting piece out of China. And another interesting piece in The Economist, "Fumbling for the exit strategy" is worth reading.

I think this is about the best summary I've read of what's next:

And yet, however much exits are needed, they are also hard, because most of the world remains susceptible to a second wave of covid-19. Spain is the country with the highest number of recorded cases per head. Yet only a tiny share of the population has been infected. Even if the actual number of cases were 100 times higher than official numbers suggest, two-thirds of its population would still be vulnerable—more if immunity is short-lived. Lockdowns have been sold as a way to “beat” covid-19. In fact, they reset the clock. Having failed to stop the disease taking hold, countries have bought themselves a chance to try again. But unless they act differently the virus will surge once more.

Testing on a mass scale with results in minutes and a "smart lockdown" is, at this point, just about as credible as Brexiteers and frictionless borders with "technology" that can magically see inside of trucks. What we know right now is that testing either for the virus or for antibodies is not nearly as widespread as you'd need to track and kill outbreaks and will take many months to ramp up, there aren't proven effective fifteen minute (etc) tests certainly for the virus and probably also for antibodies (for people who've had it).

What we perhaps know less about is what is going to occur with consumer sentiment and the economy. Even if the economy comes back in a V shape, will folks be more aware of getting on planes? And how many flights would have been taken by people laid off, cut in hours or uncertain of their future? Even at large firms like Google, who are taking a hammering on their ad revenue for example. And then there's the woke businesses that can see the expenses they are cutting out in travel, giving them a green credential boost.

And that's before you get into the idea that bailouts for airlines will come with (potentially green) strings attached.

I dunno, of all the industries I just can't see a huge fixed cost industry like air travel coming back quick from the triple whammy of recession, long term virus-driven changes in behavior and ongoing 2nd-3rd etc waves of the virus itself.

cson

Delta have pulled the JFK-SNN route along with a number of other cuts.

I wonder if DHS CBP will recall their staff now it'll only at best be EI until this time next year.

BZ

cson wrote: »

Delta have pulled the JFK-SNN route along with a number of other cuts.

I wonder if DHS CBP will recall their staff now it'll only at best be EI until this time next year.

Hard to know however SNN does perform pre-clearance for GA and bizjet aircraft which are predicted to bounce back a lot quicker than commercial aviation so there will be that element to CBP decision also.

JohnC.

A gallery of parked planes in various locations

Marcusm

Gael23 wrote: »

Virgin Australia, an offshoot of Virgin Atlantic has called in the administrators

9.99% held by Virgin Group which holds 51% of Virgin Atlantic. Atlantic and Australia haven’t had much if anything to do with each operationally for a long time, IIRC.

bk

Marcusm wrote: »

9.99% held by Virgin Group which holds 51% of Virgin Atlantic. Atlantic and Australia haven’t had much if anything to do with each operationally for a long time, IIRC.

Yep, Richard Brandson and the Virgin name end up on lots of places where he actually has very little or no involvement.

Take Virgin Media, he and his company have zero ownership in it. VM are part of the second largest cable company in the world, Liberty Global and LGI just license the Virgin brand name from him to use and pay him to appear in ads.

You mar remember UPC, still the same company, still the same owners LGI, just different brand name.

basill

RB has always followed a similar strategy to Trump. License the brand and take a cut of the profits without the associated risk.

Blut2

I had no idea of that, thats fascinating.

California Dreamer

Virgin Cars, Virgin Brides, Virgin Cola.....just to name a few that went tits up!

Coil Kilcrea

basill wrote: »

RB has always followed a similar strategy to Trump. License the brand and take a cut of the profits without the associated risk.

True. And many if his endeavours have not delivered financially. That said, he made an art out of self-promotion, built and monetised a brand several times over and all the while attracted numerous external financial backers. An entrepreneur in the proper sense of the word.

Unlike Trump, he didn’t inherit a business portfolio or financial assistance from his father.

troyzer

California Dreamer wrote: »

Virgin Cars, Virgin Brides, Virgin Cola.....just to name a few that went tits up!

Virgin Brides is a bit of an unfortunate name. I thought you were taking the piss when you mentioned them.

Then I googled it.

Probably shouldn't have done that on a work computer.

Nijmegen

https://thepointsguy.com/news/united-pulls-transcon-lie-flats/

United are flying more fuel efficient 737s on their transcons in the US, pulling 757s and thus lie flat seats. The interesting thing is they haven’t altered their pricing one bit!

A lot of business class seats in the US are taken by status upgrades from corporate travellers. As that market has cratered I guess who cares what’s up front.

California Dreamer

This really makes me wish I had my own aircraft. Running down the runway at Newark. In a previous life I did manage to buzz Dublin in a Robin during the Ash Cloud.

This is really worth a watch:

https://www.youtube.com/watch?v=LgppNdSEAag

MJohnston

California Dreamer wrote: »

This really makes me wish I had my own aircraft. Running down the runway at Newark. In a previous life I did manage to buzz Dublin in a Robin during the Ash Cloud.

This is really worth a watch:

https://www.youtube.com/watch?v=LgppNdSEAag

This reminds me that I wish Microsoft would hurry up and release their new Flight Simulator already. Has there ever been a more perfect time for such a thing?

Jack1985

I've been keeping an eye on this thread, amongst others and it strikes me the reality hasn't been quite grasped by all of the enormity of this terrible situation which is on-going and dynamic and the consequences it will have on aviation in Ireland. The stark and unfortunate reality is, that the financial year of 2020 will be the worst in global economic terms in a century. It is a write off in terms of any potential demand and earnings for airlines. It is simply not realistic to think come Sept/Oct that borders will reopen and people will take to the beaches. Comments of ''double daily A330s to the Canaries..'' couldn't be further from reality.

With regard to ''pent up demand'' this is totally eradicated when compounded by loss of earnings and layoffs (of which many more will come) and what will become the inability of Governments to simply support everyone. Many airlines will fail and in terms of aviation we are at the start of a particular pandemic which is just beginning the collapse of many, many airlines. In what will be a fight for survival for all amongst even the fittest IAG, FR etc their only hope is that competition will be significantly reduced come a more realistic target of any tangible resumption of services from Jan-Apr 2021, based on a vaccine implementation program being available. In my own organisation layoffs will have to become a reality and it will take many years for most airlines to be where they stood at January 2020.

I read comments from FR's MOL today, and they had a serious ring of what is witnessed at 6pm ET in the White House each day. Money before health. The reality is, restrictions for the resumption of air travel have to be accepted. Accepting 189 people crammed into an aircraft is simply not acceptable at present and here is why;

Examples are referred to by Emirates testing passengers prior to boarding and upon arrival - As we know there are many, many factual cases of people testing negative being asymptomatic and spreading this disease through high viral load. The consequence of even one individual never mind more than one travelling on an aircraft from country x to y has already been shown and countries can no longer accept this as a risk they are willing to take.

By limiting loads per flight, you limit the total amount of people at airports making the situation more manageable from the Departures Door to Arrivals Door on the opposite end. Comments that 66% Load Factors from MOL are not sustainable are slightly opposite of the reality when economics dictate that lower levels of competition will translate to higher fares. Despite all his wisdom, MOL doesn't even know the level of demand there will be come any resumption in air travel.

Tenger

In fairness I took the “double daily A330” quip to be humorous.

I would agree that this situation is wholly unprecedented, in its relative suddenness, in its Global scale, it’s intensity and (as as yet to be determined) it’s longevity.

Globally this situation shall not be resolved within 12 months. Even if a successful vaccine or 3 are available for distribution by March 2021 it may well be too late for many airlines and associated companies.
Add to that the uncertainty so far over the capacity of SARS-CoV2 to mutate or reinfect.
We will see a seismic shift in public behaviour, from public transport, to work practises, to leisure travel and probably many others.
A 2nd wave following lifting of restrictions could be another hammer blow to the global economy.

It took 5 years for the global economy to recover from 2008. While the bones of the current global economy are still there the strength may be gone by late 2020.

donkey balls

California Dreamer wrote: »

This really makes me wish I had my own aircraft. Running down the runway at Newark. In a previous life I did manage to buzz Dublin in a Robin during the Ash Cloud.

This is really worth a watch:

https://www.youtube.com/watch?v=LgppNdSEAag

Nearest I got to flying into a major airport was SFB (Sanford intl) when over in Florida training, It was surreal, We were doing a touch and go the radio was hopping with chatter.
And here I was flying while there was a Bus/Boeing landing on the opposite RWY.
Also remember the Ash cloud 10 year ago hearing the noise of a SEP flying over the house when its normally jets and helps.

PinOnTheRight

Jack1985 wrote: »

With regard to ''pent up demand'' this is totally eradicated when compounded by loss of earnings and layoffs (of which many more will come) and what will become the inability of Governments to simply support everyone. Many airlines will fail and in terms of aviation we are at the start of a particular pandemic which is just beginning the collapse of many, many airlines. In what will be a fight for survival for all amongst even the fittest IAG, FR etc their only hope is that competition will be significantly reduced come a more realistic target of any tangible resumption of services from Jan-Apr 2021, based on a vaccine implementation program being available. In my own organisation layoffs will have to become a reality and it will take many years for most airlines to be where they stood at January 2020.

I think Jack and Tenger have both hit the nail on the head. The recovery in aviation will be long and slow, and there is little point in comparisons with the 2008 crash and 2010 ash cloud as this is global issue that is unprecedented in modern society.

I fear the immediate airline collapses in the next few months are just the beginning of a long road to a reshaped industry, and expect all of us working in aviation now face a prolonged period of uncertainty about the future of our careers while a new normal forms. I'll be feeling a bit better once things start moving again, but that gloomy nagging feeling in the back of my head looks like it will have a more prominent permanent residence than it did before

SouthWesterly

I just saw reported that virgin Australia has folded with the loss of 16000 jobs.
Might not effect us here but probably one of many to go.

Elaine762

Aer Lingus staff were told today between the lines to expect pay cuts/job losses as they down to 5% operation.
I'd reckon 20% to 60% of Crew/Pilots plus office staff ...

Also MOL from Ryanair warning of 10-20% job losses from winter onwards:

""I think that job reductions by 10-20% in winter are almost inevitable," he said. "Passengers will return, but it will take time." "

https://www.rte.ie/news/business/2020/0424/1134588-ryanair-winter-layoffs/