It is far too early to make assumptions about how the industry will shape up! We can all agree it will be a very bad year for Aviation, some weaker Airlines will fail and there will be mistrust between nations and some loss of consumer confidence. However, we are assuming science and technology don’t play their part! Some of the biggest brains on the planet are working tirelessly to find testing kits, trial medication and find technology solutions to allow life to prevail. These are the darkest days now, and it’s understandable to feel vulnerable..... But just like this nasty virus finds a way, humans will find a way. I recall 9/11 was the end of aviation, confidence gone, there will be no demand for air travel, it’s over!
I’m sure there will be many who say the issue is not the virus it’s the impending recession.... Fair comment. However, unlike 08-10 recession there will be a level playing field globally, there won’t be austerity like last time as the world is currently closed for business. Opening the cash taps will be the only way to jolt business and people back to life! I imagine we are only scratching the surface of the state aid that will be required this year. But, remember there are large numbers of people who won’t even notice a difference to daily life... Some even better off.
Also, consider the Government are well aware of the immense pressure on the Aviation sector at the moment. Like many other industries there will be benefits in the form of tax reliefs, APD etc. Plus Airports, foreign countries will be desperate to entice the British public through their gates and to their shores. There will be a period of reduced costs for Airlines. Now, the big one...... Oil.... tanked... through the floor! As this is the biggest single unit cost for most Airlines, we can likely see a period of reduced fuel prices, which could be immensely significant for many Airlines over the next few years in terms of recovery.
Now let’s look at UK Aviation in isolation. In the leisure market a significant player ( TCX ) went bust last year causing a natural contraction. Also, the demise of a Flybe has left a hole in domestic travel which the Government will be keen to see plugged. There is a possibility of a couple of high profile players becoming insolvent, and it is likely the long haul market will be suppressed for a few years to come. However, I recall in the wake of 9/11 a certain Irish Airline picking up large quantities of cheap Aircraft and embarking on a significant growth cycle... We can assume there will be cancelled orders and excess stock of Aircraft knocking around for the next few years.... This will be viewed as opportunity by the more bold/shrewd in the industry.
Ultimately no-one knows what will happen, Aviation is hurting and will hurt More over the next 6 month. The significant pain will be short term ( maybe 3 months more ). A key question I ask myself is the international relationships and trust. If country A is clear, but B has seen a flair up in cases... Will travel restrictions be imposed/remain It is conceivable trust in the market will disappear in the short term, but effective treatment and testing, followed by a vaccine with 12-18 months will see a sustained recovery. I guess we can largely write off this year in Aviation, but I would ask the doom merchants to provide data of demand, forward bookings for this winter or maybe next year. Until we see that sort of data, assumptions are based on people’s own fear and propaganda.
There is no doubt Aviation will bounce back, it may take time and it may change. However, unlike many other occasions there is motivation to get business working. I personally believe the package holiday will emerge even stronger. The benefits of ABTA/ATOL. Also, the concept of all inclusive... ‘ I pay my money and sit by a pool and be catered for...don’t need to leave my hotel and mix .’ It’s simple human nature. That, backed up by science and technology will facilitate the crazy Brits darkening the shores of Benidorm and Magaluf once again. We need to sit tight and ride a very nasty storm and hope our employers have the resources to see the light at the end of the tunnel. But more importantly focus on the bigger picture of thousands people loosing their life... and doing our bit!
Last edited by frozenpilot; 5th Apr 2020 at 14:19.