Coronavirus Impact on Air Travel
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Airlines are taking the nuclear option on this. There is no other card to play.
I started a thread on rebooting the industry after this, likely Govt APD will need to cease to exist for a while.
I started a thread on rebooting the industry after this, likely Govt APD will need to cease to exist for a while.
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Can't understand why people think airlines/airports should be supported by Govt. ALL industries are affected and many companies will go bust - hotels, restaurants, transport companies, taxi drivers etc for sure
This isn't a single industry issue - a global meltdown is more like it
I'd expect EVERY airline in the world to go into administration and it may be a couple of years before we see (much reduced) restoration of air travel to any thing lie decent levels.
We have to face it - this is going to be "transformational" and a lot of what has taken years to build up is going on the scrap heap in a few weeks.
This isn't a single industry issue - a global meltdown is more like it
I'd expect EVERY airline in the world to go into administration and it may be a couple of years before we see (much reduced) restoration of air travel to any thing lie decent levels.
We have to face it - this is going to be "transformational" and a lot of what has taken years to build up is going on the scrap heap in a few weeks.
Tinkering with APD or taxes will make no difference, this has the potential to be a World habit changing event and I am afraid as far as the airline and travel businesses are concerned the results may well be catastrophic.
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The reason that it will NOT all spring back as after other recessions is the high liklihood that what we are now facing is a Depression. One that, given the 21st, will out gun the 1930s by some margin.
Of course, this is only a possibility but those who have looked at history and looked at the financial state of the world across the last ten years, consider a Depression will arrive at some point. If not now, then in the future.
The reasons that I think it will be now are many but can be illustrated by the fact that, after the 2008 problem, no substantive changes were made to the financial system. The Banks promised their friends in Govt that it would all be fine and Govts printed money. Again.
Soverign Debt is now HUGE, not just corporate debt.
Of course, this is only a possibility but those who have looked at history and looked at the financial state of the world across the last ten years, consider a Depression will arrive at some point. If not now, then in the future.
The reasons that I think it will be now are many but can be illustrated by the fact that, after the 2008 problem, no substantive changes were made to the financial system. The Banks promised their friends in Govt that it would all be fine and Govts printed money. Again.
Soverign Debt is now HUGE, not just corporate debt.
I'm tempted to respond about Soveriegn Debt and who owns it.... but wondering if this is maybe a little offtopic for a thread about Coronavirus' impact on aviation. Would somebody like to start a thread about this on JetBlast ?
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Was a naughty boy so got banned forever from there.
On a side note the manager of local Waitrose said to me that for all the media about "Veganism" the shelves stocked with Vegan products are er still stocked with them and there is no big run on them. He viewed it as while things are desperate there are not that desperate where it becomes necessary to resort to eating Vegan food.
On a side note the manager of local Waitrose said to me that for all the media about "Veganism" the shelves stocked with Vegan products are er still stocked with them and there is no big run on them. He viewed it as while things are desperate there are not that desperate where it becomes necessary to resort to eating Vegan food.
Paxing All Over The World
Well, to continue the side track (but an integral part of what is going to happen in the next months) Thus far in the world's modern history, only small countries default on their payments and obligations. They have sold Bonds to companies and large investors (pension funds etc.) promising to pay the Loan + n Interest at a fixed date in the future. Typically five or more years and these are considered safe investments because countries don't go bust.
However if, in order to meet payment, the country has to print yet more money? They devalue their currency. If the Corporate investors do not get the full amount that they are expecting? They cannot meet their obligations and the Dominoes start to fall. If a company has debts that are more than the value of it's assets and income, it goes bust. What happens when a country cannot pay it's debts?
Of course, it may not happen...
What matters is that - when considering the next months and years, this may not be a Recession of the kind that we have seen in the last 50 years. We have already seen that the US Fed dropped interest rates very quickly and it had almost zero impact on the market. Which is no surprise, although the fed might be. So, in the first few weeks of the crisis they have fired off their big guns - and the markets still continue to fall.
However if, in order to meet payment, the country has to print yet more money? They devalue their currency. If the Corporate investors do not get the full amount that they are expecting? They cannot meet their obligations and the Dominoes start to fall. If a company has debts that are more than the value of it's assets and income, it goes bust. What happens when a country cannot pay it's debts?
Of course, it may not happen...
What matters is that - when considering the next months and years, this may not be a Recession of the kind that we have seen in the last 50 years. We have already seen that the US Fed dropped interest rates very quickly and it had almost zero impact on the market. Which is no surprise, although the fed might be. So, in the first few weeks of the crisis they have fired off their big guns - and the markets still continue to fall.
Well they're not a bad airline if you're in Business - and TBH I was on a +14 Hour SQ flight to London at the weekend so it's not all bad
Note you need a doctors Certificate issued in the last 5 days to enter Tahiti and they have closed down almost all journeys to the outer islands except freight
Note you need a doctors Certificate issued in the last 5 days to enter Tahiti and they have closed down almost all journeys to the outer islands except freight
I'm sick of the privatisation of profits and the socialism of losses. Didn't some of these airlines spend most of their reserves buying their own shares?
I think if an industry is 'too big to fail' it should be nationalised.
I think if an industry is 'too big to fail' it should be nationalised.
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Yes, the industry wide practice of buying back shares to inflate their own share price needs controls around it. Share price is often the only metric in determining bonuses for execs and these people get greedy. Those profits should be placed into a rainy day fund or used to fund RPI linked pay rises. Personally, I think the govt should just pay every aviation sector employee their salary for the next year and screw the cancer that is airline management of today. A new demand will create supply and give us the opportunity to fix a lot of things that are wrong with this sector in the process.
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Since the government can borrow money at 0%, can I suggest that it buys all the aircraft from EZY, Tui etc. As flying gradually restarts the frames can be dry-leased back until they are in a position to buy them back.
I would have two conditions. The airlines must pay the airports the fees they would have paid per their original timetable, to ensure that the airports survive.
And since these companies will have little or no turnover, the senior management should be paid on the same basis as their employees until they have a job to do.
I would have two conditions. The airlines must pay the airports the fees they would have paid per their original timetable, to ensure that the airports survive.
And since these companies will have little or no turnover, the senior management should be paid on the same basis as their employees until they have a job to do.
inOban - the problem with buying up hundreds of aircraft, is that the UK Govt then ends up incurring large amounts of debt - and pretty soon people decide that the UK is just like Greece - i.e. incapable of ever paying back its debt so thte economy crashes. The UK Govt already owes well over £1,800 billion (yes, almost 2 with twelve zeroes). During the credit crunch between 2007 and 2012, the amount of debt roughly doubled
There will plenty of people calling on the UK Govt for a bailout of this or that during this year - the Chancellor will have to be a stingy b*st*rd if the UK is not to become a huge debt mountain. Ensuring people have a right to spend a week on the beach in Mallorca and a city break in Milan every year will not be a Govt priority
There will plenty of people calling on the UK Govt for a bailout of this or that during this year - the Chancellor will have to be a stingy b*st*rd if the UK is not to become a huge debt mountain. Ensuring people have a right to spend a week on the beach in Mallorca and a city break in Milan every year will not be a Govt priority
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Cannot see any mention of it yet but BA this morning informed all staff that compulsory redundancies will commence in all areas immediately. I guess that means by end of month if not sooner. Perhaps someone can publish the message. Either way it was inevitable, i spoke to a former colleague on Sunday and he seemed upbeat, how quickly things change for the worse!
I cannot imagine the stress that much of the workforce in aviation and all walks of life must be going through, just hope for the best outcome.
I cannot imagine the stress that much of the workforce in aviation and all walks of life must be going through, just hope for the best outcome.
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you could say we don't really need to eat or drink out or take the kids to the cinema as well as not go on holiday. Where would it stop?
The fact is the government is going to have to help out countless industries not just aviation. Injecting billions now will save billions in welfare payments and mean billions in tax revenue will come flowing back once this is over.