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.

Precisely.
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.

World habit changing event? I don't agree with this. As soon as the virus is out the way. Peeps will be back to their normal ways. Why should things be any different?

Because businesses and people will come out of this much poorer so it will take years to get back to where it was.

True story...... maybe it's not a bad thing though. Aviation industry was becoming to big for its boots. Maybe this is natures way of restoring some balance.

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.

Who do they owe all this money too? Really though?

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 ?

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.

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.

Because of the CoVID-19 outbreak, Air Tahiti Nui are operating the world's longest domestic route from PPT-CDG without their normal stop at LAX. 15715km at 15h30m with the jetstream.

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

UK govt now advising all Brits not to travel abroad for next 30 days
Guess it's only a matter of time until commercial flights (almost) shut down in the UK

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.

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.

Shareholders in airlines (and remember, they are the people who own the airline) might take a different view....

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.

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

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.

Thats a very obtuse way of looking at it. What about the bigger picture of 10s of thousands of people not being able to pay their mortgages or pay the billions in tax a year to hmrc.

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.

and 'the worlds favourite airline' are the ones boasting this week about how they have 9bn in the bank and are the first to come out with compulsory redundancies. Classy.

If it's help with paying the mortgage and the food bills, then that's a separate aim - achieving this and this alone would likely be achieved far more simply and at a much lower cost than UK plc buying up hundreds of aircraft. Buying up aircraft has the additional concern of wondering when air transport demand will substantially return and when airlines would be strong enough to buy aircraft from the Govt (instead of trying to lease them from a 3rd party !). Fundamentally, buying up used aircraft would end up as an indirect subsidy to Airbus/Boeing by preventing a flood of 2nd hand aircraft on the leasing market - not a Govt function.

Is it best use of tax payers money putting billions into saving airlines and their assets or saving substantially more jobs from small and medium sized businesses?

One thing is for sure, it will take years for aviation to get back to where it was.

Granted. So surely the simplest way is to assist companies to get through this?. Not bail out. That's a whole different kettle of fish.

Who knows. Everyone is affected. Who picks who dies and who lives? But aviation has some relatively high contributors to hmrc coffers. A lot of money to lose. I would say the company has to prove it was profitable pre-covid to prove its worth saving.

Not decisions I would like to be making.

It's too big to loose to the economy both direct and indirect employment that stems for the aviation industry and wider travel industry.

I personally say this - scrap HS2 now. Waste of money. Use that to prop the aviation industry up, and the remainder money use too elsewhere. Every business in the UK should be saved.

...and indeed
Source: ansa.it

Brussels Airlines will now suspend ALL operations...
https://aeronewsglobal.com/brussels-...st-april-19th/

Austrian Airlines will ground its entire fleet tomorrow.

One of the key problems is that money is needed more urgently at the 'bottom' of the ladder, for the people with mortgages and bills to pay. Govts are only used to giving money to the 'top' of the ladder to corporates and their own works.

Putting money in at the top is not great as so little will reach the bottom. This needs a complete rethink by Govt and central banks. Neither of which are renowned for being able to change their entire way of thinking. Leave alone in the space of two weeks.

Three words: Universal Basic Income.

Don’t bail out businesses: bail out (unemployed) individuals.

Yes, indeed ara01jbb In emergency times a good thing to do. The UK has zero experience of this and govt that ignores most people, favouring the City and corporates.

CAPA predict most "world airlines" will be bankrupt by May.

https://centreforaviation.com/analys...nkrupt-517512/

Yup nationalise the airlines............... remind me how good the Govt is at running businesses.

In Gatwick airport today and was told that North Terminal is to be shuttered in next couple of days, 2 piers shut in South terminal and potentially they looking at 10 flights a day by end of month.

Which is why I suggested that the government should purchase the assets but leave it to airlines to operate them.

A country like China can eliminate the virus with time and draconian measures. They then relax their containment measures but open borders lets the virus back in so it all kicks off again. This is why borders could remain closed for an open ended period with aircraft and airlines grounded far longer than any 737 Max ban.

This could also kill off the Max order book. As Boeing has failed to deliver the airlines will have the right to cancel.

They do an excellent job with LNER

It’s roughly the model they used to stop Lloyds and RBS going bust....

Good news.....

UK daily increase in cases 10% - lowest since records began....
Ireland 30%
Italy 13%
Spain 18%
France 22%
Netherlands 24%
USA 20+%

We might get over it as a country quicker but that depends on the numbers later today to see if it is just a spot day or trend...

Trouble is even if we get sorted super quick - the high street will come back quicker but not the airlines....
Fingers crossed we are still at 10% or lower tomorrow!

Can't help but think you're clutching at straws here dude.