Coronavirus: Future of airlines and airports

Jozhua · 4 Apr 2020

Chester1 said:
I would book stuff if I knew whether my two holidays for this year will be going ahead, because that determines whether I will or won't have enough time to take off work early next year. Easyjet's decision to make all fares exchangable shows that the market is already adapting. Its not a big deal to have to cancel a trip next year if you get credit with an airline that covers most of Europe. I already only booked hotels with free cancellation.

Howardh said:
What I'll be doing is leaving booking flights and hotels to the latest possible moment so I can be reasonably sure both will be safe.

I was watching a video by Wendover productions looking at the airline industry during COVID-19 and its fight for survival.

He says the airline industry will obviously survive to an extent, but will likely emerge differently to the one we knew just a couple of months ago.

I wonder whether (likely because more passengers will do it), booking closer to your trip will become cheaper. Typically, the cheapest flights are available 6 weeks from the given date, but I wonder if this will shrink to perhaps 3/4 weeks. Likely see the emergence of better cancellation policies and more flexible ticketing. If the 2010's was the era of dirt cheap, inflexible flying, I think the 2020's will be the era of flexible, slightly less dirt cheap flying. (But quite reasonable still, if not because demand is likely to fall off a cliff.)

As for hotels and travel companies, I think offering good cancellation policies will be important too. AirBnB has offered free cancellation to guests, at the dismay of the landlords. Heard a story of someone who'd been renting 10 apartments round San-Francisco and re-letting them on AirBnB illegally. Now everyone has cancelled and they have to explain to the landlords above why they can't make this weeks rent on 10 apartments... :lol:

The travel/tourism will almost certainly take a massive hit and shrink as a result of this. I doubt the amount of supply available last year will be around next summer. Demand may drop even more, I think it might recover to about 60/70% by next year, with maybe 20% of airline, hotel and tourism capacity disappearing into thin air.

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plugwash · 4 Apr 2020

An interesting question is will the credit card industry cut the airline industry off? In the UK credit card companies have "joint an several liability" when services are not provided. So when an airline folds they take a big hit. How many airlines have to fold before the credit card companies decide that working with airlines on a "pay in advance" basis is too risky?

Bletchleyite · 4 Apr 2020

Chester1 said:
Easyjet's decision to make all fares exchangable shows that the market is already adapting.

For the record, all easyJet fares have been exchangeable since not far off day one, I guess though they have temporarily suspended the fee for doing so?

Bald Rick · 4 Apr 2020

Bletchleyite said:
For the record, all easyJet fares have been exchangeable since not far off day one, I guess though they have temporarily suspended the fee for doing so?

Correct.

SamYeager · 4 Apr 2020

plugwash said:
An interesting question is will the credit card industry cut the airline industry off? In the UK credit card companies have "joint an several liability" when services are not provided. So when an airline folds they take a big hit. How many airlines have to fold before the credit card companies decide that working with airlines on a "pay in advance" basis is too risky?

When there are question marks about a business the credit card industry tends to hold back a variable amount of payments for flights/holidays until they have taken place for just this very reason. Of course this hits cashflow so it's a moot point whether this can result in self fulfilling prophecy.

FQTV · 4 Apr 2020

plugwash said:
An interesting question is will the credit card industry cut the airline industry off? In the UK credit card companies have "joint an several liability" when services are not provided. So when an airline folds they take a big hit. How many airlines have to fold before the credit card companies decide that working with airlines on a "pay in advance" basis is too risky?

This is reportedly the issue that’s pushing Virgin Atlantic closer to the edge. From the card companies’ points of view, there’s little sense in continuing to settle new funds into the merchant’s account if they judge that they’re going to be on the hook for other amounts if the airline does fail.

So yes, it can be a self-fulfilling prophecy, but much of our economic system depends on ‘confidence’ and nothing more.

Obliquely, I had an email from easyJet yesterday in which they, for the first time, expressly mentioned reimbursement for cancelled flights, as well as rebooking or credit. This is a big development, despite the underlying legal position never having changed.

It’s possible that the development has come about as a result of parties behind the scenes applying pressure, and one of those parties could well have been the card companies. It’s reported that issuers are approving Section 75 claims because the airlines (specifically including easyJet) aren’t even picking up the ‘phones to them when the issuer calls to query the situation. That’s a breach of the merchant agreement and the issuer by default finds in favour of the cardholder.

It’s therefore quite likely that there has been a high level intervention from VISA, MasterCard and American Express, on behalf of their issuers, to say that they’ll delay settlement or, in extremis, remove the ability for customers to pay by card, unless the airline fulfils its obligations to cardholders.

Chester1 · 4 Apr 2020

Bletchleyite said:
For the record, all easyJet fares have been exchangeable since not far off day one, I guess though they have temporarily suspended the fee for doing so?

Bald Rick said:
Correct.

For cheap flights having no fee makes a huge difference, in some cases it's the entire cost of the flight. They seem to be suspended for the foreseeable future.

FQTV said:
This is reportedly the issue that’s pushing Virgin Atlantic closer to the edge. From the card companies’ points of view, there’s little sense in continuing to settle new funds into the merchant’s account if they judge that they’re going to be on the hook for other amounts if the airline does fail.

So yes, it can be a self-fulfilling prophecy, but much of our economic system depends on ‘confidence’ and nothing more.

Obliquely, I had an email from easyJet yesterday in which they, for the first time, expressly mentioned reimbursement for cancelled flights, as well as rebooking or credit. This is a big development, despite the underlying legal position never having changed.

It’s possible that the development has come about as a result of parties behind the scenes applying pressure, and one of those parties could well have been the card companies. It’s reported that issuers are approving Section 75 claims because the airlines (specifically including easyJet) aren’t even picking up the ‘phones to them when the issuer calls to query the situation. That’s a breach of the merchant agreement and the issuer by default finds in favour of the cardholder.

It’s therefore quite likely that there has been a high level intervention from VISA, MasterCard and American Express, on behalf of their issuers, to say that they’ll delay settlement or, in extremis, remove the ability for customers to pay by card, unless the airline fulfils its obligations to cardholders.

It's certainly made me think about taking out a credit card. I have a long haul flight booked with Singapore Airlines on a debit card. They should be fine and I have travel insurance. Section 75 never made much of a difference to me so once my interest free period on my last card expired I closed my account and didn't bother to look for a new one. I think next time I book a long haul flight I will, to provide an extra layer of protection.

Virgin Atlantic will probably be bailed out by its shareholders. Both the Virgin group and Delta can afford to bail it out and it's probably well placed to benefit from a market with fewer business travelers. If Norwegian goes bankrupt then it's ideally placed to step into it's most profitable UK routes. Slots at Heathrow will still be worth a lot of money if it really needs cash. Gatwick will have some spare slots because of this crisis. If they want to focus on driving down costs then switching from Heathrow + Gatwick to Gatwick + Luton might be worth considering. Luton will be a more desirable airport when DART (Direct Air-Rail Transit) opens and the first long haul carrier with a significant presence will probably get an extremely good deal from the owners.

Bald Rick · 4 Apr 2020

The trouble with Luton is that the runway isn’t long enough for long haul with widebodies, and there is no prospect of it being lengthened. It’s 440m short for an A350 at MTOW, 640m short for Dreamliners 9/10 at MTOW, and over a kilometre short for a 747 at MTOW.

Of course they can operate at lower weight, and regularly do. There’s an cargo A300 in daily, but that comes from Leipzig and is never at full weight. There also an occasional 777-200 in from Tel Aviv, but again never at full weight. A good friend of mine has been on a 747 from Luton, but it was short fuelled for a ‘pleasure flight’ with not many on board. Apparently the take off was ‘lively’.

The only chance Luton has for long haul is with the long range versions of the A321neo; I think it is possible that there will be one or two airlines who try this from Luton for NYC, Orlando, and possibly Toronto, Atlanta and India.

FQTV · 4 Apr 2020

Chester1 said:
Virgin Atlantic will probably be bailed out by its shareholders. Both the Virgin group and Delta can afford to bail it out and it's probably well placed to benefit from a market with fewer business travelers. If Norwegian goes bankrupt then it's ideally placed to step into it's most profitable UK routes.

Unfortunately, neither is true.

There’s little to no value (‘goodwill’ in commercial terms) in the Virgin brand; only the Heathrow slots. Having observed Alaska and Virgin America, Delta should know that a strategy that retains the slots and dumps the liabilities with the Virgin tail will be a winning one for them.

Bald Rick said:
Apparently the take off was ‘lively’.

The official industry term is, in fact, ‘sporty’!

Bald Rick · 5 Apr 2020

FQTV said:
The official industry term is, in fact, ‘sporty’!

My apologies. I thought ‘Sporty’ was the official industry term for a certain type of air stewardess.

Bletchleyite · 5 Apr 2020

Bald Rick said:
Of course they can operate at lower weight, and regularly do. There’s an cargo A300 in daily, but that comes from Leipzig and is never at full weight. There also an occasional 777-200 in from Tel Aviv, but again never at full weight. A good friend of mine has been on a 747 from Luton, but it was short fuelled for a ‘pleasure flight’ with not many on board. Apparently the take off was ‘lively’.

I've been on a 777 with about 20 people on it at most on a Thai domestic flight of about 30 minutes (so hardly any fuel either). To say it went like stink is an understatement.

Chester1 · 5 Apr 2020

Bald Rick said:
The trouble with Luton is that the runway isn’t long enough for long haul with widebodies, and there is no prospect of it being lengthened. It’s 440m short for an A350 at MTOW, 640m short for Dreamliners 9/10 at MTOW, and over a kilometre short for a 747 at MTOW.

Of course they can operate at lower weight, and regularly do. There’s an cargo A300 in daily, but that comes from Leipzig and is never at full weight. There also an occasional 777-200 in from Tel Aviv, but again never at full weight. A good friend of mine has been on a 747 from Luton, but it was short fuelled for a ‘pleasure flight’ with not many on board. Apparently the take off was ‘lively’.

The only chance Luton has for long haul is with the long range versions of the A321neo; I think it is possible that there will be one or two airlines who try this from Luton for NYC, Orlando, and possibly Toronto, Atlanta and India.

Wow, That is a huge limitation for an airport with big plans for expansion! The A321XLR seems an even better idea by Airbus, now that the industry is being damaged by Coronavirus. Its got the bottom end of the middle of the market covered and the top end will probably shrink. I think the range is sufficient to do UK to LA and Vancouver too but would that be possible if fully loaded? The planned long range version of the A220 could do London to Toronto, New York, Philadelphia and DC but not further. I am not sure what the market for the aircraft would be. A321XLR seems very suitable for growing the budget long haul market, but anything with significantly less than 200 seats probably doesn't add up.

FQTV said:
Unfortunately, neither is true.

There’s little to no value (‘goodwill’ in commercial terms) in the Virgin brand; only the Heathrow slots. Having observed Alaska and Virgin America, Delta should know that a strategy that retains the slots and dumps the liabilities with the Virgin tail will be a winning one for them.

I might be wrong but doesn't an airline need to be operating (or at least not in administration or liquidation) to be able to sell its airport slots? If Virgin Atlantic went bankrupt then Heathrow could reallocate the slots, therefore if Delta want them then they need to buy them off Virgin Atlantic. This would likely fund a consolidation of London services at Gatwick. That might just be delaying the inevitable though.

Do you think Norwegian will survive this? They have been in trouble for a long time.

071 · 5 Apr 2020

Chester1 said:
It's certainly made me think about taking out a credit card. I have a long haul flight booked with Singapore Airlines on a debit card. They should be fine and I have travel insurance. Section 75 never made much of a difference to me so once my interest free period on my last card expired I closed my account and didn't bother to look for a new one. I think next time I book a long haul flight I will, to provide an extra layer of protection.

Aside from the S.75 protection, the big advantage of using a credit card over a debit card is that if something - anything - goes wrong, on a credit card it's going wrong with the Bank's money, not yours. I had about £1000 of fraud on a credit card a few years ago. Although easy to resolve, my money was never at risk. I never use my debit card unless I have absolutely no other choice, so mainly just getting cash out of an ATM.

Jozhua · 5 Apr 2020

From my FlightRadar24 count, four flights departed from Manchester airport yesterday.

How are airports responding? Assuming Manchester is probably consolidating terminals.

scotrail158713 · 5 Apr 2020

Jozhua said:
How are airports responding? Assuming Manchester is probably consolidating terminals.

I think it is

Bald Rick · 5 Apr 2020

Chester1 said:
Wow, That is a huge limitation for an airport with big plans for expansion! The A321XLR seems an even better idea by Airbus, now that the industry is being damaged by Coronavirus. Its got the bottom end of the middle of the market covered and the top end will probably shrink. I think the range is sufficient to do UK to LA and Vancouver too but would that be possible if fully loaded? The planned long range version of the A220 could do London to Toronto, New York, Philadelphia and DC but not further. I am not sure what the market for the aircraft would be. A321XLR seems very suitable for growing the budget long haul market, but anything with significantly less than 200 seats probably doesn't add up.

The A321XLR won’t make London - LA even with a limited passenger load. It might, just, make Vancouver but would need to have skinny people with hand luggage only.

Luton’s plans for expansion are all around better use of the existing runway. Up until ‘current issues’ it was seeing 18m passengers a year, a very significant majority of whom are on A320s and A319s. As Easyjet and Wizz buy more A320/1s, the average aircraft capacity will rise by around 20% in the next 5 years - ie it can get to around 22m without any more flights. And there’s loads of spare runway capacity; it could easily add 50% more flights (ie get to 33m passengers) without breaking sweat. Added to this there is a significant amount of General Aviation at Luton, much more than any of the other major London airports, and it’s not beyond the realms of possibility that much of this could be priced out.

My prediction is that Heathrow R3 will be delayed significantly, and when the Luton DART opens it will see a significant switch of european passengers from Gatwick (particularly from Easyjet), which will free up slots at LGW for more long haul that would otherwise have been using the new capacity at LHR (albeit not the new runway itself).

squizzler · 5 Apr 2020

Bald Rick said:
My prediction is that Heathrow R3 will be delayed significantly, and when the Luton DART opens it will see a significant switch of european passengers from Gatwick (particularly from Easyjet), which will free up slots at LGW for more long haul that would otherwise have been using the new capacity at LHR (albeit not the new runway itself).

I think you will find that the approval for Heathrow's third runway was quashed by the courts, to the relief of the prime minister who had opposed it but lacked the guts to make any such hard decision himself.

Ianno87 · 5 Apr 2020

squizzler said:
I think you will find that Heathrow's third runway was cancelled, to the relief of the prime minister who had opposed it but lacked the guts to make any such hard decision himself.

Hasn't been cancelled. A judicial review just blocked the previous decision on environmental grounds. Not the same thing.

squizzler · 5 Apr 2020

I immediately amended the post prior to your response, but the outcome is the same. It missed its chance for the rest of this parliament and the climate emergency makes such eco-lunacy untenable now, let alone five years hence.

Bald Rick · 5 Apr 2020

squizzler said:
I immediately amended the post prior to your response, but the outcome is the same. It missed its chance for the rest of this parliament and the climate emergency makes such eco-lunacy untenable now, let alone five years hence.

Heathrow R3 has got nothing to do with Parliamentary sessions. It is still entirely conceivable that Heathrow submit a Development Consent Order, and with much discussion, debate, evidence, and recourse to m’learned friends, gain consent. Nevertheless I think it’s unlikely.

Chester1 · 6 Apr 2020

Bald Rick said:
The A321XLR won’t make London - LA even with a limited passenger load. It might, just, make Vancouver but would need to have skinny people with hand luggage only.

Luton’s plans for expansion are all around better use of the existing runway. Up until ‘current issues’ it was seeing 18m passengers a year, a very significant majority of whom are on A320s and A319s. As Easyjet and Wizz buy more A320/1s, the average aircraft capacity will rise by around 20% in the next 5 years - ie it can get to around 22m without any more flights. And there’s loads of spare runway capacity; it could easily add 50% more flights (ie get to 33m passengers) without breaking sweat. Added to this there is a significant amount of General Aviation at Luton, much more than any of the other major London airports, and it’s not beyond the realms of possibility that much of this could be priced out.

My prediction is that Heathrow R3 will be delayed significantly, and when the Luton DART opens it will see a significant switch of european passengers from Gatwick (particularly from Easyjet), which will free up slots at LGW for more long haul that would otherwise have been using the new capacity at LHR (albeit not the new runway itself).

That sort of switch does make sense in the event of Heathrow's third runway being delayed or cancelled.

Just checked and the A321xlr range is supposed to be 4700nm. Luton to LA is 4728nm and to Vancouver 4087nm. What do you think its range is fully loaded? It will be interesting to see how the A321xlr gets used once this crisis has passed. The single aisle vs wide body suitability debate does seem to be the aviation sectors version of mid door train snobbery. Vast majority of passengers just care about price first and seat pitch second, how many aisles the plane has is of no interest. If the market shrinks a little then it might see more orders.

SamYeager · 6 Apr 2020

Chester1 said:
Just checked and the A321xlr range is supposed to be 4700nm. Luton to LA is 4728nm and to Vancouver 4087nm.

Normally at least 500nm needs to be deducted from the range figures to account for adverse winds as the range figures are based on still air.

edwin_m · 6 Apr 2020

Plus the reserve fuel for an alternate if the destination airport is unavailable?

Bald Rick · 6 Apr 2020

Chester1 said:
That sort of switch does make sense in the event of Heathrow's third runway being delayed or cancelled.

Just checked and the A321xlr range is supposed to be 4700nm. Luton to LA is 4728nm and to Vancouver 4087nm. What do you think its range is fully loaded? It will be interesting to see how the A321xlr gets used once this crisis has passed. The single aisle vs wide body suitability debate does seem to be the aviation sectors version of mid door train snobbery. Vast majority of passengers just care about price first and seat pitch second, how many aisles the plane has is of no interest. If the market shrinks a little then it might see more orders.

I *may* have had a statute miles / nautical miles brain fade. Nevertheless as others have said you need to add a contingency to deal with adverse winds / diversions / ATC holds etc.

Domh245 · 6 Apr 2020

Chester1 said:
The single aisle vs wide body suitability debate does seem to be the aviation sectors version of mid door train snobbery. Vast majority of passengers just care about price first and seat pitch second, how many aisles the plane has is of no interest. If the market shrinks a little then it might see more orders.

Difference being that a single aisle will seat far fewer people than a wide body in an equivalent setup, whilst with the mid v end doors you still have near enough the same capacity. This makes the difference as suddenly you can run a direct flight with a good load factor on a route with less demand and stand more of a chance of turning a profit than doing the same flight with a half empty wide body jet.

gnolife · 6 Apr 2020

scotrail158713 said:
I think it is

My sister, who works in Duty Free in T3 has been furloughed as a result of all flights going from another terminal, although she didnt specify wheter it was 1 or 2

cactustwirly · 6 Apr 2020

Bald Rick said:
The A321XLR won’t make London - LA even with a limited passenger load. It might, just, make Vancouver but would need to have skinny people with hand luggage only.

Luton’s plans for expansion are all around better use of the existing runway. Up until ‘current issues’ it was seeing 18m passengers a year, a very significant majority of whom are on A320s and A319s. As Easyjet and Wizz buy more A320/1s, the average aircraft capacity will rise by around 20% in the next 5 years - ie it can get to around 22m without any more flights. And there’s loads of spare runway capacity; it could easily add 50% more flights (ie get to 33m passengers) without breaking sweat. Added to this there is a significant amount of General Aviation at Luton, much more than any of the other major London airports, and it’s not beyond the realms of possibility that much of this could be priced out.

My prediction is that Heathrow R3 will be delayed significantly, and when the Luton DART opens it will see a significant switch of european passengers from Gatwick (particularly from Easyjet), which will free up slots at LGW for more long haul that would otherwise have been using the new capacity at LHR (albeit not the new runway itself).

I don't see easyJet leaving Gatwick, it's by far their biggest base, and is in a better location than Luton.
I can see them adding capacity to Luton though

Bald Rick · 6 Apr 2020

cactustwirly said:
I don't see easyJet leaving Gatwick, it's by far their biggest base, and is in a better location than Luton.
I can see them adding capacity to Luton though

Oh they won’t leave Gatwick, far from it. However passengers will be more tempted to use Luton from London when it’s effectively 15 minutes quicker than it is today, and much easier as well. Indeed for many London ‘start’ points, Luton will in future be the quickest and easiest airport to get to; not least anywhere that’s walking distance to a Thameslink station from Farringdon northwards, which by extension will include many Elizabeth line stations. Another factor is that the Luton DART will open righ tin the middle of the construction works for the Gatwick station rebuild, with Gatwick Express services begin reduced, so there will be a further incentive to try Luton, particularly for regular travellers. Therefore, the equilibrium of choice between Luton and Gatwick, where that exists, will shift slightly more towards Luton than currently.

What this could mean is that for the most popular Easyjet routes from Gatwick (Amsterdam, Geneva, Berlin, Rome, Nice, Milan, Madrid, Malaga, Barcelona, Palma, UK domestic - all of which have at least 4 flights a day from Gatwick) there may be a slight reduction in frequency, with a corresponding increase at Luton. Even if it means just 10-12 Gatwick flights daily swapping to Luton, (3-4 aircraft being relocated) that is worth a lot in slot value at Gatwick.

Of course it might just be that growth at Gatwick flattens, and increases rapidly at Luton instead.

jfollows · 6 Apr 2020

Jozhua said:
From my FlightRadar24 count, four flights departed from Manchester airport yesterday.

How are airports responding? Assuming Manchester is probably consolidating terminals.

Terminal 1 only - the one built around the original terminal which I remember using in 1967, which had the lovely Murano glass and airline murals, all gone now of course.

https://www.manchesterairport.co.uk/coronavirus/

Q. Is Manchester Airport still operating?
A. Yes, Manchester Airport is open for business. Many flights are not operating however, so for detailed information about your flight please contact your airline.

From 25th March, all flights that were due to depart from Terminal 2 and Terminal 3 will now depart from Terminal 1. Passengers due to travel on or after this date should check-in and pass through security in Terminal 1. See more information about terminal changes.

westv · 6 Apr 2020

jfollows said:
Terminal 1 only - the one built around the original terminal which I remember using in 1967, which had the lovely Murano glass and airline murals, all gone now of course.

Now they all seem to be shopping centres that you just happen to get a flight from.

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