airlines - Modern Airliners

When will airlines start flying again?

Covid19 aircraft cabin

When can I go and visit family? When can I have a much needed holiday that I so surely deserve after this lock-down?

These are questions most people must be asking after the craziness of the last few months. Being locked inside for weeks on end, people are desperate for some semblance of what they remember as “normality” to return. Often the only thing that keeps us going is the vision of that overseas holiday we are working so hard for. Warm sunny days on some exotic beach to recharge us for the next onslaught of domestic bliss.

Unsurprisingly, the airlines are every bit as keen as their customers to get full planes back in the air. That is those airlines that have been able to survive the Covid19 suspension of travel. When we restart airline schedules, I’m sure we will not be seeing all players return to the table, and some that do will somehow be different from the way they started the year.

So many things need to line up before travel can start again, and different parts of the world will treat it differently. For example, here in Australia, we still have travel restrictions between the states. So we can go and holiday now within our own state, but no further. There has been talk of a travel bubble between New Zealand and Australia, two countries which have been very successful in their dealing with Covid19. The travel bubble basically acknowledges that both country’s approach to Covid19 is similar enough to forge a trust between the two to enable free travel back and forth. The hold up for this bubble to start is the fact that Australia’s states are still not open to each other, much less another country.

Let’s face it, how long can you bleed money?

So with many countries now getting on top of Covid19, what can we expect? Well, many airlines are seeing this as a sign that things may be ready to start swinging back into action. Let’s face it, how long can you bleed money before you need to get back to business? Not that it is up to the airlines. Countries need to agree with each other as to the terms of letting flights commence between them and within their own borders. Nobody wants to start a second wave of the pandemic when we have come so far.

Covid19 airport temperature check
A Covid19 airport temperature check. Checking before you board to ensure you don’t bring the virus onto the plane to being checked on arrival at the destination to ensure you don’t bring the virus into the country will be the new normal. We though post 9/11 travel was bad! I can see us having health passports in addition to our normal passport in the future.

QANTAS, here in Australia, are anticipating they will reach 40 capacity compared to pre-pandemic activity for domestic travel by the end of July 2020. In the U.S., American Airlines anticipates flying 55% of its domestic schedule compared to the same period in 2019. In May, American only flew 20% of that schedule. Bear in mind that this is the Northern Hemisphere summer, so demand is high. In both cases, the announcements have helped the share price of these airlines as confidence in that market starts to turn around. This trend is fairly common across the board.

So is all this activity a sign that things are going back to normal? To be honest, no. Covid19 is still out there and is by no means a lesser threat than it was a few months ago. We don’t have a vaccination yet, so it could rear its ugly head again at any time. The enablement of travel to restart again depends very much on us being able to manage things like social distancing and minimising contact with others as much as possible during the whole process. This includes the airport and inside the aircraft cabin, taking all the usual precautions we employ on the ground.

This outlines how aircraft cabin air is different

Some airlines have been controlling which seats are allocated so as to create spaces between passengers. Whether it be not allocating the middle seat in a set of three, or putting a single passenger in each row, other than families which can sit together. Whilst the aircraft cabin is an enclosed space like any other form of transport like a bus or train, IATA has released a Briefing Paper which is worth looking at if you are indenting to fly. This outlines how aircraft cabin air is different from those trains and buses. In short, aircraft cabins use HEPA(High-Efficiency Particulate Air) filters to ensure the air you breath is free from better than 99% of airborne bacteria and viruses. The airflow is a 50/50 mix between outside air and recycled internal air which gives on average 15 to 20 cubic feet of air per minute per passenger. The personal air from above can also ensure you are only getting that clean air.

Delta Air Lines focuses on cleaning procedures for their fleet in response to the COVID-19 virus at the Delta TechOps facility in Atlanta, Ga..
Delta Air Lines focuses on cleaning procedures for their fleet in response to the COVID-19 virus at the Delta TechOps facility in Atlanta, Ga..

Akbar Al Baker, has reportedly told Boeing and Airbus….

It is great to see that our favourite airlines may survive to take us back into the wild blue yonder at some future time. Starting some services as described above will surely help, but we’re not out of the woods by a long shot. Airlines still have many aircraft sitting on the ground, not earning money, in fact costing money. In many cases, no doubt, the income from the start-up of the limited services will come nowhere near covering the costs, but simply slow down the money bleed. As a flow-on effect, those airlines have orders for new aircraft from the likes of Boeing, Airbus and others, which are coming due for delivery and payment. This presents a bit of a balancing act in the relationship between the airlines and manufacturers. Many, if not all, airlines are seeking a delay to their aircraft deliveries and payments as obviously cash is tight. Also, schedules don’t actually require any new aircraft to be added right now and there is certainly no market for used older aircraft either. For their part, Boeing and Airbus also need cash flow to keep their businesses going, so it is a fine line between holding airlines to their commitments and giving leniency and time extensions until the market improves. Outspoken CEO of Qatar Airways, Akbar Al Baker, has reportedly told Boeing and Airbus if they don’t come to the party and give time extensions, his airline will no longer buy aircraft from them.

So interesting times ahead. How do you feel about travel beginning again, or have you already travelled in a Covid19 world? We’d love to hear your thoughts and experiences in the comments section below. So many are still living in their isolation bubble, so news of what really happens out in the real world is a nice departure from what might be fake news. Fly safe everyone.

Coronavirus (COVID19) and Modern Airliners.

Grounded Aircraft

If there is one thing there is an abundance of at the moment, it is ever-changing information about COVID19 and how it is affecting our lives. The situation merits all the superlatives being thrown at it at the moment and literally changes by the hour. So what has this got to do with Modern Airliners or any airliners for that matter?

You would have to have arrived from Mars to not know the extreme measures that are being taken by governments to try and reduce the effect of COVID19. Obviously, the priority is to reduce the number of people that are infected and thereby reduce the death toll from this pandemic. The second concern, and perhaps nearly as important as the first, is the economy. I hate saying that as it sounds like life isn’t worth very much. The economy, however, is what makes people’s lives what they are today. It provides jobs, it keeps people fed, clothed and under shelter. Ensuring this continues will prevent the loss of life through on flowing effects of the pandemic.

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… if I travel will I be able to get home again….

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We have seen border closures in many countries around the world in the last few days. Even if the borders aren’t closed, there are travel restrictions and simply the fear of, “if I travel will I be able to get home again?” In living memory for most people today, this is not a concept that they have ever experienced and it may take a few who ignore the warnings to get caught out before others see the seriousness of the issue.

Ok, what has this got to do with Modern Airliners?

I thought you’d never ask. All around the world airlines have felt the impact of the above border closures and travel restrictions. Most have severely trimmed back their services to try and stem back the money bleed. Flying empty aircraft is a very costly business and is to be avoided at all costs. Initially, Australian flag carrier QANTAS grounded 10 out of its 12 Airbus A380s as these aircraft require a high occupancy rate to break even, financially. This grounding has been quickly followed by many other of its aircraft for the same reason, as further route capacity reductions or cancellations take place. This is just one example of what is happening to carriers all over the world. The immediate result has been that many travellers who have been urged to and have chosen to, repatriate themselves are finding that they are part of a very large group that is being affected by the reduction of airline capacity.

So what of the airlines themselves? Airlines are a very important part of the world economy. They are the catalyst that enables world economies to work at all. For this reason, it is of paramount importance for a country to ensure their national or other carriers remain in business. I know here in Australia, the government has given an economic stimulus to the airlines to enable them to survive this major upheaval. Oil prices falling off a cliff earlier this month has not been enough to make up for the drop in customers for the airlines. Even though it is estimated this could save airlines in the order of B$28 (US) over 2020. We have to face the fact that we are going to see a mass extinction event of smaller airlines.

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… revenue losses for passenger transport would run at B$63 – B$113 (US)…

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Depending on how quickly the COVID19 pandemic can be contained, IATA estimates that revenue losses for passenger transport would run at B$63 – B$113 (US). Impact by market according to IATA looks something like this.

RegionPer cent ChangeUS Dollar Change
Australia, China, Japan, Malaysia, Singapore, South Korea, Thailand, Vietnam.-23%-49.7 Billion
Rest of Asia Pacific.-09%-7.6 Billion
Austria, France, Italy, Germany, Netherlands, Norway, Spain, Switzerland, Sweden, United Kingdom.-24%-37.3 Billion
Rest of Europe.-09%-6.6 Billion
Bahrain, Iraq, Iran, Kuwait, Lebanon, United Arab Emirates.-23%-4.9 Billion
Rest of Middle East.-09%-2.3 Billion
Canada and US-10%-21.1 Billion

It doesn’t make for good reading, does it?

So what will happen to the grounded aircraft? It is hard to know what to plan for. How long will the pandemic last, what will the world look like when it is all over? Will we need the same capacity as before? One thing we can be sure of is that things will eventually bounce back. They may be different in some ways, but the economy will pick up again as people come back from isolation. We may find, however, that the need for people to work from their home during the pandemic, will lead to more technology being thrown into the online world to make things possible that currently are not. People’s perception of travel may change. If you go back to 9/11, people became fearful of flying. Not to mention the added hassles of extra security whenever you did so. Cruising became a much more attractive alternative for holidaymakers, as there was a much lower likelihood of terrorist attacks, or at least so it was sold. I fear that many people are losing their appetite for being on a cruise ship after what has happened to several ships since COVID19. So maybe air travel will regain its popularity again.

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.. So maybe air travel will regain its popularity again.

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So, about those aircraft. Airlines like British Airways(BA) and Lufthansa(LH) have the biggest remaining fleets of Boeing 747s. If you discount the age of Luftahnasa’s Boeing 747-8s which are around 6 years old now, the average age of the BA and LH 747s is around 21 years. Will they consider retiring them early. An older aircraft becomes a lot more expensive to maintain and if there is no income being generated from this aircraft, its financial burden becomes too heavy.

So with all these aircraft grounded, what about new aircraft orders? That is the on flow effect that will hurt plane makers like Boeing and Airbus. There will be the airlines that disappear and their orders cancelled. Then there are airlines like Cathay Pacific, for example, that have approached Boeing and Airbus about delaying their orders.

Boeing for its part has approached the US government for a B$60 stimulus package. The aviation industry must survive and it is worth noting that Boeing estimates that 70% of its revenue flows on to its 17,000 suppliers. The aviation industry is a huge employer and its demise can not be allowed to happen. Similarly, Airbus and its many suppliers are in the same boat.

Apparently the story is not all doom and gloom. Dr. Steve Wright of the University of the West of England, Bristol(UWE Bristol) believes that the aviation industry will survive. Jobs will be lost, mainly at the customer-facing level, and of course those smaller airlines. Aviation seems to go through an 11 to 12-year cycle. Events such as 9-11 and the global recession of 2008 knocked the industry about, but it recovered. It will again. Meanwhile, Dr Wright says, development of new aircraft still goes on. In 5 ye4ars time, we will still see the fruits of technology research that is going on right now.

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