Coronavirus: Future of airlines and airports

[nidave]

Could this be the first of many business sectors who are desperate for government money told to take a running jump. To be fair pretty much every business sector is asking for help.. something is going to have to give.

I suspect this is going to have long consequences.

British airlines and airports have been told they will not receive an industry-wide bailout, despite an initial pledge of support from the chancellor last week.

The news emerged as the International Air Transport Association (Iata) called for urgent government assistance and warned that airlines would lose $252bn (£215bn) in revenues in 2020 – more than double its “worst-case” forecast two weeks ago.

https://www.theguardian.com/uk-news...-not-to-expect-industry-wide-covid-19-bailout

 

[hwl]

Could this be the first of many business sectors who are desperate for government money told to take a running jump. To be fair pretty much every business sector is asking for help.. something is going to have to give.

I suspect this is going to have long consequences.

https://www.theguardian.com/uk-news...-not-to-expect-industry-wide-covid-19-bailout

The problems is that IAG/BA is in pretty good health with a huge cash pile, very different from most of the rest of the UK airlines. Hence it can't be industry wide and BA will win in court.

 

[nidave]

The problems is that IAG/BA is in pretty good health with a huge cash pile, very different from most of the rest of the UK airlines. Hence it can't be industry wide and BA will win in court.

Good point, plus if other operators go bust they will be able to increase market share. I didn't realise IAG was as well off.

 

[hwl]

Good point, plus if other operators go bust they will be able to increase market share. I didn't realise IAG was as well off.

I was shocked at the size of the IAG cash pile, several of their big US competitors just spent their even bigger cash piles on share buy back instead. Oops....

 

[Bald Rick]

I was shocked at the size of the IAG cash pile, several of their big US competitors just spent their even bigger cash piles on share buy back instead. Oops....

£9bn IIRC. Enough to keep them afloat for well over a year with the immediate measures they have put in place.

Easyjet / Ryanair should also be ok.

 

[Deepgreen]

With the prospect of the most severe economic depression in modern times ensuing after the actual virus subsides, I suspect vastly fewer people will be able to afford flying anyway. I imagine a much more insular period to come for many years which will require/allow far fewer airlines to operate.

 

[HSTEd]

Will be interesting to see if we see regional consolidation of airports.

I imagine this will put the final nail in the coffin for a lot of borderline airports, including the much talked about but seldom used Tees Valley.

 

[PG]

With the prospect of the most severe economic depression in modern times ensuing after the actual virus subsides, I suspect vastly fewer people will be able to afford flying anyway. I imagine a much more insular period to come for many years which will require/allow far fewer airlines to operate.

While I'm sorry for those whose livelihoods are at stake, I think that is the direction we are going to take, which will benefit our environment in the future.

Hopefully those employees can find alternative employment in the future but yes things are going to be tough in the meantime.

 

[Bletchleyite]

While I'm sorry for those whose livelihoods are at stake, I think that is the direction we are going to take, which will benefit our environment in the future.

Hopefully those employees can find alternative employment in the future but yes things are going to be tough in the meantime.

I would agree. If there is one thing that should emphatically not go back to normal it is air travel. A return to 1990s-ish sanity would be very sensible and very welcome.

This is, I agree, sad for those who will lose jobs, but as long as we properly provide for them the loss of chunks of the industry is no disaster at all.

 

[Bald Rick]

With the prospect of the most severe economic depression in modern times ensuing after the actual virus subsides, I suspect vastly fewer people will be able to afford flying anyway. I imagine a much more insular period to come for many years which will require/allow far fewer airlines to operate.

With fuel prices very cheap, and a whole load of modern aircraft sitting around costing their owners money doing nothing, and a load of cheap labour swillin around, you can expect a lot of very cheap flights when the virus subsides. Affordability won’t be the issue.

 

[Bletchleyite]

With fuel prices very cheap, and a whole load of modern aircraft sitting around costing their owners money doing nothing, and a load of cheap labour swillin around, you can expect a lot of very cheap flights when the virus subsides. Affordability won’t be the issue.

I suspect, though, that international travel will take a VERY long time to return to normal. Borders will remain closed as countries don't want to bring it back in again if they have themselves managed to stop it. At best everyone returning will need to quarantine for 14 days, most likely in some form of detention centre, and that means nobody will choose to go on holiday.

They could whack on cheap domestic flights, but why bother?

 

[Bald Rick]

I suspect, though, that international travel will take a VERY long time to return to normal. Borders will remain closed as countries don't want to bring it back in again if they have themselves managed to stop it. At best everyone returning will need to quarantine for 14 days, most likely in some form of detention centre, and that means nobody will choose to go on holiday.

They could whack on cheap domestic flights, but why bother?

That depends on your definition of normal. I agree the whole industry will take a hit, but I expect it to be running at something like 90% of pre-virus activity within weeks of travel restrictions being lifted.

 

[Bletchleyite]

That depends on your definition of normal. I agree the whole industry will take a hit, but I expect it to be running at something like 90% of pre-virus activity within weeks of travel restrictions being lifted.

Probably so, but as I said I think international travel restrictions could be in place for 2 or more years because to restart it properly requires the virus to be gone (or just "going around" evolved into a less harmful version) from everywhere. Domestic life will be back to something-like-normal long before that.

 

[SamYeager]

I would agree. If there is one thing that should emphatically not go back to normal it is air travel.

Good to hear you are forsaking international air travel to Europe for the next couple of years, if not longer.

 

[Bletchleyite]

Good to hear you are forsaking international air travel to Europe for the next couple of years, if not longer.

I suspect everyone will be. International travel will need to be reduced for much longer else it'll just come back in.

One holiday by air a year is about the 1990s level and is sensible in my book by the way.

 

[lyndhurst25]

Commercial aviation isn't going away any time soon. How else are "they" going to secretly continue with their chemtrail programme?

 

[Peregrine 4903]

I'm not sure this is in the right thread or whether I need to make a new one?

What airlines do people expect to next go bankrupt?

 

[Mag_seven]

I'm not sure this is in the right thread or whether I need to make a new one?

What airlines do people expect to next go bankrupt?

This thread is perfectly suitable. I've amended the thread title to accommodate.

Thanks

 

[Meerkat]

It’s absolutely gorgeous out there without the planes - quieter and no contrails clouding over the big blue sky.
Do we really need air travel to come back?
Holiday traffic will take years to get near back to normal. Until there is real control of the virus extreme restrictions could return at very short notice - who is going to risk a holiday under those conditions?
And hopefully the government won’t let flights restart without a compulsory insurance scheme to avoid the taxpayer having to pay to repatriate people.

 

[LNW-GW Joint]

£9bn IIRC. Enough to keep them afloat for well over a year with the immediate measures they have put in place.
Easyjet / Ryanair should also be ok.

One problem for the airlines is their share ownership, and how you could restrict taxpayer support to "British" ones.
BA is part of IAG which has Aer Lingus, Iberia and Vueling in it.
Virgin Atlantic is 49% owned by Delta, Ryanair is Irish.
Both Ryanair and Easyjet have large operations on the continent entirely separate from the UK.
If we were still part of the EU I could see support possibly coming from the EU budget, but that's not going to happen now.

The money has been on Norwegian to fail for some time, as they were heavily exposed regardless of Covid-19, but they seem to be hunkering down so far.
Alitalia has been on life support for several years while they try and find a formula that keeps them flying, but now they seem to have been nationalised!
There seem to be tensions in the cross-border airlines as cutbacks bite - eg at AF/KLM and the Lufthansa Group.
The junior partners in these airlines don't want to be damaged to keep the senior partner going.
Continuing freight could well be the salvation of some airlines.

Interesting to see that there are still regular Airbus Beluga flights from Chester to Toulouse, Hamburg and Bremen carrying UK-built wings, so Airbus is till trying to build and deliver new planes to an industry that has parked many hundreds of them in the past few weeks.

 

[RichJF]

Airlines I reckon will go bust before the end of 2020 -
Norwegian
Eithad
Alitalia
South African

I think Virgin, Ryanair & Easyjet will have a significant downsizing. I also think BA's short haul business will be massively simplified.

It will be interesting to see if airlines really want to invest in the 737 Max/777x or the A330neo family now. They might be able to pick up low hours previous generation aircraft cheaply rather than buy a brand new fleet of aircraft, especially if lots of aircraft are parked!

 

[Bletchleyite]

Alitalia is safe, it's been nationalised.
No way will Etihad be allowed to fold, the country it's from (I forget which) will save it for national pride.

I think Norwegian is the most likely one to fold.

 

[OneOffDave]

Do we really need air travel to come back?

And hopefully the government won’t let flights restart without a compulsory insurance scheme to avoid the taxpayer having to pay to repatriate people.

Delivering some of my team's work would become incredibly difficult without air travel. Just the time taken to get to the US or far East would have a massive impact.

Apart from the cruise liner passengers, everyone repatriated by the government had lived overseas for a number of years. An insurance scheme to cover a risk that might not materialise for years and the cost is unknown at the point of starting the scheme is never going to be supported by the insurance industry. The big issue with the passengers is that most of them were sent ashore at points other than where their travel arrangements were from. They never chose to end up in the country they did

 

[Peregrine 4903]

What about Jet2?

Are they at risk?

 

[Meerkat]

An insurance scheme to cover a risk that might not materialise for years and the cost is unknown at the point of starting the scheme is never going to be supported by the insurance industry

Sounds like what insurance is intended for!

 

[Peregrine 4903]

Alitalia is safe, it's been nationalised.
No way will Etihad be allowed to fold, the country it's from (I forget which) will save it for national pride.

I think Norwegian is the most likely one to fold.

Etihad is from the UAU and is the Abu Dhabi airline. However its arguable that Emirates is the UAE's flagship airline so I guess its possible that Emirates would be prioritised in any bail out.

Why is Norwegian most likely to fold?

Forgive me for my questions but I don't know much about aviation.

 

[Islineclear3_1]

Commercial aviation isn't going away any time soon. How else are "they" going to secretly continue with their chemtrail programme?

Isn't that being done by the military...?

 

[Meerkat]

Etihad is from the UAU and is the Abu Dhabi airline. However its arguable that Emirates is the UAE's flagship airline so I guess its possible that Emirates would be prioritised in any bail out

They are from different Emirates - I don’t reckon either would accept the loss of face from losing their airline. Not like they are short of cash to prop them up

 

[Bald Rick]

I think Virgin, Ryanair & Easyjet will have a significant downsizing. I also think BA's short haul business will be massively simplified.

It will be interesting to see if airlines really want to invest in the 737 Max/777x or the A330neo family now. They might be able to pick up low hours previous generation aircraft cheaply rather than buy a brand new fleet of aircraft, especially if lots of aircraft are parked!

Virgin Atlantic will almost certainly downsaize, potentially to nothing. Easyjet and Ryanair will, if anything, expand. As the most efficient large airlines in Europe they will be picking up where other airlines fail (eg Norwegian or Jet 2, both of whom will be at risk). So will BA.

The Airbus delivery schedule for A32x neos runs to around an 8 year waiting list, and whilst many of those orders will be cancelled, many won’t.

 

[Bletchleyite]

Why is Norwegian most likely to fold?

Because I recall that it's already admitted to being in a relatively difficult financial position.