Airline industry braces for prolonged recovery from coronavirus crisis

[webfact]

Airline industry braces for prolonged recovery from coronavirus crisis

By Jamie Freed

 

FILE PHOTO: A British Airways plane taxis past tail fins of parked aircraft to the runway near Terminal 5 at Heathrow Airport in London, Britain March 14, 2020. REUTERS/Simon Dawson/File Photo

 

SYDNEY (Reuters) - A full airline industry recovery from the coronavirus looks prolonged at best, analysts said, as new data showed international seat capacity had fallen to 23% of last year's levels and around half the world's airplane fleet is in storage.

 

Carriers including United Airlines Holdings Inc <UAL.O> and Air New Zealand Ltd <AIR.NZ> have warned they are likely to emerge from the crisis smaller, and there are fears others may not survive.

 

"It is likely that when we get across to the other side of the pandemic, things won't return to the vibrant market conditions we had at the start of the year," said Olivier Ponti, vice president at data firm ForwardKeys.

 

"It's also possible that a number of airlines will have gone bust and uneconomic discounts will be necessary to attract demand back," he said in a statement.

 

ForwardKeys said the number of international airline seats had fallen to 10 million in the week of March 30 to April 5, down from 44.2 million a year ago.

 

Data firm OAG said several years of industry growth had been lost and it could take until 2022 or 2023 before the volume of flyers returns to the levels that had been expected for 2020.

 

Cirium, another aviation data provider, said around half of the world's airplane fleet was now in storage.

 

"While many of these will be temporary storage, many of these aircraft will never resume service," Cowen analyst Helane Becker said in a note to clients. "We believe the airline industry will look very different when we get to the other side of this."

 

Planemakers are looking at drastic cuts in wide-body production amid a slump in demand for the industry's largest jetliners, manufacturing and supplier sources said.

 

Deliveries of long-range jets like the Boeing Co <BA.N> 777 or 787 and Airbus SE <AIR.PA> A350 or A330 have been particularly badly hit as airlines seek deferrals and many withhold progress payments.

 

British Airways said on Thursday it has struck a deal with its unions to suspend more than 30,000 cabin crew and ground staff in one of the airline industry's most dramatic moves yet to survive the coronavirus pandemic.

 

With global travel in turmoil as the virus takes hold around the world, BA's owner, IAG <ICAG.L>, said it would also cut capacity by 90% in April and May, and scrap its dividend, in a desperate bid to survive the worst crisis in its history.

 

Southwest Airlines Co <LUV.N> said on Thursday it intends to apply for U.S. government aid to help it ride out the sharp drop in travel demand.

 

"We still don't know the severity of this situation. We still don't know how long it will last," Southwest Chief Executive Gary Kelly said in a video message.

 

Vietnam Airlines <HVN.HM> will lose 50 trillion dong ($2.12 billion) in revenue this year as most of its 106-strong fleet have been grounded due to the coronavirus, state media reported on Thursday.

 

Up to 10,000 employees, or half the company's staff, will have to stop working while others' salaries have been cut, Tuoi Tre newspaper cited the Chief Executive Officer Duong Chi Thanh as saying.

 

(Reporting by Jamie Freed; additional reporting by Tracy Rucinski in Chicago, David Shepardson in Washington, Tim Hepher in Paris, Kate Holton in London and Khanh Vu in Hanoi; Editing by Lisa Shumaker)

 

-- © Copyright Reuters 2020-04-03

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[Cryingdick]

The government should help the airlines with domestic travel, give incentives to provide cheaper tickets, enhance medical screening at all international airports permanently, levy a tax to do this all flights from abroad and require fully, comprehensive insurance for ALL visitors from a foreign location.

 

In this way you get a spike in domestic tourism, preserve your internal routes, and let the airlines overseas fight to get a jetway in an airport. The virus proves you don't need to fly across the world to hold meetings and in many cases you don't even need to drive a car to get to work.

 

While we are at it, do not bail out cruise liners such as Norwegian. They aren't American companies. Let them go bankrupt and then buy their assets for much less than their book value and turn them into housing for the homeless in expensive areas permanently moored. I understand the allure of a cruise and would love to do a 3 day cruise of Glacier Bay.

 

However I can't imagine ever going on a cruise with in my lifetime.

 

Subsidize internal flights and pass the cost on to international flights. 

 

 

Edited April 3, 2020 by Cryingdick

[Chomper Higgot]

3 hours ago, Cryingdick said:

The government should help the airlines with domestic travel, give incentives to provide cheaper tickets, enhance medical screening at all international airports permanently, levy a tax to do this all flights from abroad and require fully, comprehensive insurance for ALL visitors from a foreign location.

 

In this way you get a spike in domestic tourism, preserve your internal routes, and let the airlines overseas fight to get a jetway in an airport. The virus proves you don't need to fly across the world to hold meetings and in many cases you don't even need to drive a car to get to work.

 

While we are at it, do not bail out cruise liners such as Norwegian. They aren't American companies. Let them go bankrupt and then buy their assets for much less than their book value and turn them into housing for the homeless in expensive areas permanently moored. I understand the allure of a cruise and would love to do a 3 day cruise of Glacier Bay.

 

However I can't imagine ever going on a cruise with in my lifetime.

 

Subsidize internal flights and pass the cost on to international flights. 

 

 

Market intervention your thing these days.

[thaibeachlovers]

On 4/3/2020 at 3:38 PM, Cryingdick said:

The government should help the airlines with domestic travel, give incentives to provide cheaper tickets, enhance medical screening at all international airports permanently, levy a tax to do this all flights from abroad and require fully, comprehensive insurance for ALL visitors from a foreign location.

I disagree 100% with ANY taxpayer assistance to airlines. They've been ripping us off for decades.

Spend the money on building a decent domestic rail service instead. With high speed rail possible now, they are almost as fast as air travel, can carry far more passengers, far less polluting and way more comfortable than economy air.

Frankly, I'd be happy to see all domestic air travel end, as long as rail is available to all the same destinations.