Covid-19; Impact on the aviation industry

Spanish Eyes

I think Willie Walsh is retiring imminently, but seems to have deferred it due to Covid. AIG is not just Aer Lingus.

I think Luis Gallego of Iberia is his successor. So the last links with Ireland will be gone when WW goes. Not that it makes any difference. AerLingus is just an arm of a huge (well heretofore) aviation group.

Noxegon

Blut2 wrote: »

"Whats people's obsession with national carriers?" - its the fact they provide key connectivity in times of crisis. Rather relevantly for this topic Aer Lingus flew 259 flights from Dublin-Beijing earlier this year to rapidly supply the state with emergency PPE supplies[1].

A service operated by a private company on a commercial basis, and I'm quite sure it was profitable or they would not have done it.

Given the number of aircraft out of service right now I don't think the government would have had too much trouble finding a different operator to do those flights if EI had not been willing.

Sheep Shagger

Spanish Eyes wrote: »

I think Willie Walsh is retiring imminently, but seems to have deferred it due to Covid. AIG is not just Aer Lingus.

I think Luis Gallego of Iberia is his successor. So the last links with Ireland will be gone when WW goes. Not that it makes any difference. AerLingus is just an arm of a huge (well heretofore) aviation group.

Thought WW was staying on longer to ridevpitvthr covid mess.

Re AL, whilst just a division of IAG it does provide valuable traffic feeding their network in Europe from North America (well normally anyway).

Blut2

Noxegon wrote: »

A service operated by a private company on a commercial basis, and I'm quite sure it was profitable or they would not have done it.

Given the number of aircraft out of service right now I don't think the government would have had too much trouble finding a different operator to do those flights if EI had not been willing.

You're assuming that in the next national crisis there would be an international surplus of available air frames, theres absolutely no guarantee of that. The whole point of having a national carrier based in your own country is to ensure a strategic reserve of local air capacity for emergencies.

AnRothar

Blut2 wrote: »

You're assuming that in the next national crisis there would be an international surplus of available air frames, theres absolutely no guarantee of that. The whole point of having a national carrier based in your own country is to ensure a strategic reserve of local air capacity for emergencies.

Irish shipping anyone?

MontgomeryClift

NH2013 wrote: »

Is this the same Ryanair that has availed of £600m bailout in state support from the UK government? All airlines are being bailed out, if none were there would literally be none left at the end of all this.




The question isn’t whether you should invest €1bn in Aer Lingus right now, if people thought that was the case and worth investing they wouldn’t have to ask for help.

The question for the state is if they don’t invest €1bn in Aer Lingus now, will it end up costing the state more in the long run.

Eg, of the 4,500 PAYE employees, living and working in Ireland last year were paid a total of €405m (including employers PRSI) that all went into the Irish economy, so within 2.5 years thy €1bn would have been paid back into the economy, and every year after that a further €405m would be lost directly from the Irish economy just in direct employees alone.

Add in other businesses that supply Aer Lingus, and business dependent on the connections provided by the airline and soon you can see €1bn isn’t a bad investment at all.

It looks like we have a graduate of the Ceaușescu School of Economics.

duskyjoe

The next 6 months will tell everything re if Covid comes back like a tsunami and who survives and who goes to the wall. No airline business imo without intervention can survive If we get a double whammy.

Lapmo_Dancer

duskyjoe wrote: »

The next 6 months will tell everything re if Covid comes back like a tsunami and who survives and who goes to the wall. No airline business imo without intervention can survive If we get a double whammy.

Ireland is already an outlier by having no intervention thus far? Are we the only country on the planet not to have some form of govt intervention in our airline industry at this stage? Maybe Australia is the only other? Certainly in Europe, Swiss, Belgian and Austrian govts have intervened with their Lufthansa owned airlines. Portugal, Spain, France, Netherlands, Germany, Italy, Denmark, Norway, Sweden, Finland and even the UK have all “invested” in their airlines in some form or another. US has made billions available to EI’s competition on the atlantic.

I think the irony was lost on the contributor above who claimed we could rely on AA/DL and the Middle East 3 for our connectivity.

trellheim

It is not just the "airline" business. Aviation leasing which is huge in Ireland must be in some pickle atm as it will be difficult to get airlines to pay for grounded airplanes

And all of the support jobs too who aren't big enough to get a custom payout like a large airline

Jack1985

Icepick wrote: »

you mean if it wasn't for Ryanair's customers

Such a dim view, Ryanair is a goliath in Europe - Airport's rely on them to such an extent (many regional airports throughout Europe) that thousands of jobs are affected by the shutdown that happened in March.

Ryanair has customers because of the vast network it offers, customers pay for a service because of the needs they have owing to the choice they are offered.

Look at the YoY change on passenger levels 90's on. Ryanair has been critical to European aviation growth it isn't fobbed off with ''If it wasn't for their customers.''

Lapmo_Dancer wrote: »

Ireland is already an outlier by having no intervention thus far? Are we the only country on the planet not to have some form of govt intervention in our airline industry at this stage? Maybe Australia is the only other? Certainly in Europe, Swiss, Belgian and Austrian govts have intervened with their Lufthansa owned airlines. Portugal, Spain, France, Netherlands, Germany, Italy, Denmark, Norway, Sweden, Finland and even the UK have all “invested” in their airlines in some form or another. US has made billions available to EI’s competition on the atlantic.

I think the irony was lost on the contributor above who claimed we could rely on AA/DL and the Middle East 3 for our connectivity.

Exactly, we continue to demonstrate as a country our incapability of taking Business seriously and the consequences of failure comparisons to the banking crisis of 2008 are so off the wall, they don't need more relevance highlighted to them.

trellheim wrote: »

It is not just the "airline" business. Aviation leasing which is huge in Ireland must be in some pickle atm as it will be difficult to get airlines to pay for grounded airplanes

And all of the support jobs too who aren't big enough to get a custom payout like a large airline

I believe you will see the effects of this as months progress but also particularly in Aircraft Maintenance firms as aircraft are flying less or grounded altogether (and typically those jobs are paid out well in advance) there will be another Tsunami about to hit that part of the Aviation sector for the first time.

Nijmegen

I'm not 100% for or against a state bailout of EI, but I think there's a number of questions not being addressed fully in considering one.

First of all, if EI is burning €1.5m per day with a lot of for example lease costs, and the lessors etc aren't willing to negotiate these costs, would a bankruptcy protection and reorganization of the airline not also be a feasible route versus a bailout. I say this, as we do not know when the market will return and the government in offering a bailout could be throwing good money after bad.

I think the Germans got it right with Lufthansa when they offered a pretty significant and multi-layered bailout that should see off any eventuality, hopefully.

However that brings you then to the second point... Can the Irish government afford (a) a bailout for EI that is (b) large enough to see off any eventuality rather than bridging from one crisis to the next and (c) that will set a precedent?

We're obviously here in the AV forum discussing bailout out a very important AV firm in Ireland, but if the Irish government breaks the proverbial seal with EI where will it end?

Then the bailout has to be considered particularly in a pandemic situation that seems to be fundamentally changing the paradigm of the global economy short, medium and potentially long term. We don't even know what shape the AV industry will be in 5 years time post covid, if for example business travel was to permanently decline per capita thanks to a move to remote working and acceptance of remote conferencing for example.

Government could end up putting a firm on life support that has no future in its current form.

Then I guess the final musing is about EI as the vital air bridge to an island. It's completely accurate that Ireland relies on a thriving aviation sector for all manner of economic health. But so too one might remark that this has been held up as a blanket reason to do (or not do) various things with regards to EI in particular down through the years. It was much discussed when EI was being privatised and then sold to IAG, both events that were actually followed by growth in the Irish aviation sector and for EI itself, notwithstanding various industry wide downturns.

We know that Dublin airport has been having great success, driven by EI, as a transit hub from the US to Europe. This is good for the airport, the aviation sector and EI but is perhaps not all that strategic for Ireland by and of itself. Apart from that and ex-Covid, Ireland has been very well served by the big 3 in the US. If we don't bail out EI and it goes through a restructuring, and the aviation industry slowly returns, what's the strategic harm to Ireland? A smaller EI, not bloated by government bailout cash that is trying to predict how the aviation market will develop, and service from the likes of the big 3 and then EK etc going east (where EI doesn't play anyway)?

On balance at the moment I think that there's a host of good reasons for the government to keep its powder dry generally and specifically with regards to the aviation sector. We could see a lot of quasi nationalisations around the place if we start down the road of bailing out companies and trying to pick winners in the post-covid economy.

LawBoy2018

Nijmegen wrote: »

I'm not 100% for or against a state bailout of EI, but I think there's a number of questions not being addressed fully in considering one.

First of all, if EI is burning €1.5m per day with a lot of for example lease costs, and the lessors etc aren't willing to negotiate these costs, would a bankruptcy protection and reorganization of the airline not also be a feasible route versus a bailout. I say this, as we do not know when the market will return and the government in offering a bailout could be throwing good money after bad.

I think the Germans got it right with Lufthansa when they offered a pretty significant and multi-layered bailout that should see off any eventuality, hopefully.

However that brings you then to the second point... Can the Irish government afford (a) a bailout for EI that is (b) large enough to see off any eventuality rather than bridging from one crisis to the next and (c) that will set a precedent?

We're obviously here in the AV forum discussing bailout out a very important AV firm in Ireland, but if the Irish government breaks the proverbial seal with EI where will it end?

Then the bailout has to be considered particularly in a pandemic situation that seems to be fundamentally changing the paradigm of the global economy short, medium and potentially long term. We don't even know what shape the AV industry will be in 5 years time post covid, if for example business travel was to permanently decline per capita thanks to a move to remote working and acceptance of remote conferencing for example.

Government could end up putting a firm on life support that has no future in its current form.

Then I guess the final musing is about EI as the vital air bridge to an island. It's completely accurate that Ireland relies on a thriving aviation sector for all manner of economic health. But so too one might remark that this has been held up as a blanket reason to do (or not do) various things with regards to EI in particular down through the years. It was much discussed when EI was being privatised and then sold to IAG, both events that were actually followed by growth in the Irish aviation sector and for EI itself, notwithstanding various industry wide downturns.

We know that Dublin airport has been having great success, driven by EI, as a transit hub from the US to Europe. This is good for the airport, the aviation sector and EI but is perhaps not all that strategic for Ireland by and of itself. Apart from that and ex-Covid, Ireland has been very well served by the big 3 in the US. If we don't bail out EI and it goes through a restructuring, and the aviation industry slowly returns, what's the strategic harm to Ireland? A smaller EI, not bloated by government bailout cash that is trying to predict how the aviation market will develop, and service from the likes of the big 3 and then EK etc going east (where EI doesn't play anyway)?

On balance at the moment I think that there's a host of good reasons for the government to keep its powder dry generally and specifically with regards to the aviation sector. We could see a lot of quasi nationalisations around the place if we start down the road of bailing out companies and trying to pick winners in the post-covid economy.

Hook it to my veins. Finally, someone who knows what they're talking about.

Acosta

Icepick wrote: »

you mean if it wasn't for Ryanair's customers

No, I meant Ryanair. They could have decided to cancel most of their flights and taken the hit.

LawBoy2018 wrote: »

And why do you think they're back to work? So that Ryanair can avoid refunding passengers for their flights. If the flight operates = no refund.

How can people be so naive?

I am actually aware of that and have stated it in other threads.

I'm not praising Ryanair, just stating a fact. The vast majority of flights operating from Irish airports are from Ryanair. If they had decided not to operate most of these flights as other airlines have, then there would be no need for most of the airport related staff that have been back at work over the past several weeks.

trellheim

How can you bail out EI without effectively propping up IAG ( a spanish company with a strong whiff of UK ) as well ? what does that look like in terms of stuff that the irish Government can cash in later on when things recover , is it grants and "it'll sort itself out" , or is it allow free lease extensions and staff on Covid payments ... neither super-attractive

Captain_Crash

trellheim wrote: »

How can you bail out EI without effectively propping up IAG ( a spanish company with a strong whiff of UK ) as well ? what does that look like in terms of stuff that the irish Government can cash in later on when things recover , is it grants and "it'll sort itself out" , or is it allow free lease extensions and staff on Covid payments ... neither super-attractive

Iberia, also owned by IAG got support from the Spanish government. I don't know the terms of it but its already happened within the same group so is clearly possible.

Jack1985

trellheim wrote: »

How can you bail out EI without effectively propping up IAG ( a spanish company with a strong whiff of UK ) as well ? what does that look like in terms of stuff that the irish Government can cash in later on when things recover , is it grants and "it'll sort itself out" , or is it allow free lease extensions and staff on Covid payments ... neither super-attractive

As above Iberia/Vueling have access to over €1bn in Government loans to secure employment, British Airways recived a £300m loan from the British Government - All airlines in the group recieved a form of state support the ones that didn't so far are Aer Lingus, Level Europe (placed into Liquidation), OpenSkies (being shutdown).

LawBoy2018

Jack1985 wrote: »

As above Iberia/Vueling have access to over €1bn in Government loans to secure employment, British Airways recived a £300m loan from the British Government - All airlines in the group recieved a form of state support the ones that didn't so far are Aer Lingus, Level Europe (placed into Liquidation), OpenSkies (being shutdown).

This lady sums up the Aer Lingus situation adequately:

https://www.irishexaminer.com/opinion/yourview/arid-31006558.html

Nijmegen

LawBoy2018 wrote: »

This lady sums up the Aer Lingus situation adequately:

https://www.irishexaminer.com/opinion/yourview/arid-31006558.html

Danger here, in terms of providing a bailout: What if it transpires in a years time, or two, that actually airlines need to be smaller because post-covid travel patterns change permanently. Now the union is running to the minister for transport just like in the good old days to keep propping up losses.

It's the unions job to fight the corner of the staff but given that this could become a 3-way dance between union, employer and state as bailout provider I'd be wary of sending cash while they're actively talking about strikes.

kona

LawBoy2018 wrote: »

This lady sums up the Aer Lingus situation adequately:

https://www.irishexaminer.com/opinion/yourview/arid-31006558.html

Any credibility went after the 3rd paragraph, that nonsnese has no part to play in the way aer lingus have acted.

Jack1985

LawBoy2018 wrote: »

This lady sums up the Aer Lingus situation adequately:

https://www.irishexaminer.com/opinion/yourview/arid-31006558.html

Why are you qouting an opinion piece from some woman in Mallow?

Mentioned references are fairly well established here pages back.

Nijmegen wrote: »

talking about strikes.

Where'd you work that out? There has been no discussion on such.

Nijmegen

Jack1985 wrote: »

Where'd you work that out? There has been no discussion on such.

I was commenting on the article. It's right as you intimate that there has been no talk of industrial action since the EI proposal to keep it off the table till 2022, which I don't think was agreed to.

Kcormahs

“ The Department of Transport and Aer Lingus will also be among the groups to appear before the committee tomorrow.”

https://www.google.ie/amp/s/www.irishexaminer.com/news/arid-40022888.html%3ftype=amp

Does anyone have any information on this? Normal dáil tomorrow or special room? And what time?
It will be interesting to see whats discussed and if Michael Oleary and Sean Doyle and dept of transport reps will be there

Jack1985

Nijmegen wrote: »

I was commenting on the article. It's right as you intimate that there has been no talk of industrial action since the EI proposal to keep it off the table till 2022, which I don't think was agreed to.

EI removed it from final draft proposal which nobody outside of cockpit crew (different negotiations) accepted regardless.

Jack1985

Kcormahs wrote: »

“ The Department of Transport and Aer Lingus will also be among the groups to appear before the committee tomorrow.”

https://www.google.ie/amp/s/www.irishexaminer.com/news/arid-40022888.html%3ftype=amp

Does anyone have any information on this? Normal dáil tomorrow or special room? And what time?
It will be interesting to see whats discussed and if Michael Oleary and Sean Doyle and dept of transport reps will be there

https://www.oireachtas.ie/en/committees/schedule/

California Dreamer

13 on todays CFN-DUB!

Busier than i thought it was going to be!

Kcormahs

Jack1985 wrote: »

https://www.oireachtas.ie/en/committees/schedule/

Thanks a mill Jack1985 didn’t know it shows the agenda on the Oireachtas website!

lintdrummer

Kcormahs wrote: »

“ The Department of Transport and Aer Lingus will also be among the groups to appear before the committee tomorrow.”

https://www.google.ie/amp/s/www.irishexaminer.com/news/arid-40022888.html%3ftype=amp

Does anyone have any information on this? Normal dáil tomorrow or special room? And what time?
It will be interesting to see whats discussed and if Michael Oleary and Sean Doyle and dept of transport reps will be there

According to this link the proceedings start at 9am in the Seanad chamber. The airline reps will be speaking at 11.30. Should be able to watch on Oireacthas Tv on the same website.

VG31

California Dreamer wrote: »

13 on todays CFN-DUB!

Busier than i thought it was going to be!

I presume you didn't have to fill out the locator form in Dublin?

Jack1985

Kcormahs wrote: »

Thanks a mill Jack1985 didn’t know it shows the agenda on the Oireachtas website!

Just be prepared for some moronic TD questions :cool:

Kcormahs

Jack1985 wrote: »

Just be prepared for some moronic TD questions :cool:

100%


Also it says Aer Lingus reps will be there through video link? Suppose it will be a zoom call for them instead of being there in person