demise arguably had the potential of having the most signifi cant
overall impact of all the recent failures, probably making the
headlines for many weeks. Then along came COVID-19;
the cynics may say that it was an excellent time to bury the
bad news. However, as we now know, what happened soon
after effectively dwarfed, absorbed and masked the issues
that the Flybe failure had started to create. It is strange how fate
intervenes.
What do we already know about the future?
When I think about the future, an analogy related to emerging
from a nuclear bunker springs to mind; it’s not knowing quite
what to expect but equally knowing that life will be different
from now on. The stark reality is that our industry will be a
shadow of its former self for years to come.
Some of the fi gures that we are already hearing are frightening.
In the UK, a 35% drop in GDP and 2m unemployed are just some
of the forecasted headlines. These are unprecedented times, and,
realistically, we can only guess what may happen at this point.
What we do know is that the onset of the virus has repatriated
much of the world’s travelling population. With a gloomy global
new world?
With airlines
and airports
burning through
cash at an
alarming rate,
things have to
change, and
quickly
Simon Miles, Managing Director,
Miles Aviation
We are starting to see some
early indicators of the near
future and what it may look
like. Although some airlines
have been planning June
restarts just in time for the
northern summer season, how
many people will actually
want to travel? Will COVID-19
change our future travelling
habits? Both Wizz Air and
easyJet have indicated that
they won’t sell their aircraft
to capacity, to allow for
continued social distancing.
They may have anticipated the
public mood quite well on that
point; however Ryanair has
called the move idiotic.
Have we seen the end of
ultra-low fares? In reality, the
catastrophic debts that the
surviving airlines have recently
incurred, coupled with their
decisions not to sell to full
capacity, even for a limited
time, can only really mean one
thing: higher fares. With much
less disposable income, it may
only exacerbate the ability of
the industry to rebuild quickly
to pre-virus levels.
The reliance factor
The simple truth is that
the industry supply chain
is almost totally reliant on
airlines operating aircraft;
they, in turn, are reliant on
the travelling public and
commerce to fi ll their capacity.
Without this, the industry
doesn’t exist. To paraphrase:
“When the world sneezes, the
industry catches a cold” has
never been more appropriate.
Very quickly, after
lockdown, there were reports
that many of the UK ground
service providers were in
trouble. Not surprisingly, in
early March, the BBC reported
that in the UK, Menzies,
Swissport, WFS and dnata were
economic outlook, we don’t know who may travel in future, how
many and when. Lufthansa recently predicted that it would take
years for global demand for air travel to return to pre-crisis levels.
With much of the world’s fl eet of commercial aircraft now
grounded and stored, strangely adding to and dwarfi ng the
already signifi cant amounts of also grounded Boeing 737 MAX,
the question is when, or will, these aircraft fl y again?
With airlines and airports burning through cash at an
alarming rate, things have to change, and quickly. During mid-
April, IATA forecasted a US$314bn or a 55% decline in passenger
revenues in 2020 compared with 2019. In addition, Ryanair’s
Michael O’Leary, referring to the upcoming, normally busiest
period for the industry, announced that the summer had already
gone.
IAG, Lufthansa Group and American Airlines are just some of
the airlines announcing the accelerated retirement of signifi cant
amounts of some older aircraft. Many of the world’s Airbus A380
operators have already grounded the entirety of their relatively
young fl eets. And Flight International recently stated that the
post-coronavirus fate of the type was still uncertain.
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