I am less worried about Easyjet / Ryanair and Wizz than I am about IAG / LH / AFKLM, Virgin is finding no great love from anybody based on its founder. IAG / LH AFKLM have significant cost bases which they will find not easy to escape from.

IAG, LH and KLM/AF will have the backing of their various governments if they need it as they are the flag carriers across Europe. The UK government would never let BA fall and neither would the German with Lufthansa or the Dutch with KLM.

'British Airways, the UK flag carrier, has extended its dollar revolving credit facility, as the coronavirus-ravaged airline industry continues to reinforce its finances. The facility will now mature in June 2021, after the borrower invoked the first one-year extension option on the loan signed in 2015. BA's owner International Airlines Group said there is $1.38bn available under the extended facility'

Why are all these airlines extending their revolving credit lines when they have no idea how long this is going to last? Surely that is just sinking deeper into someone else's pit of ownership that they will never get out of? Still, no need now to call on UK PLC for support now!

Let's assume that some time in the next 12 months (ie by late March 2021), the lockdown ends and people are able to fly freely
Let's assume also that businesses, having seen what can be achieved with the likes of Zoom, decide to cut back significantly on business travel
Let's assume also that some measure of confidence returns and people decide they want to fly again for leisure in summer 2021
In effect, business travel demand is reduced long term, while leisure travel demand eventually recovers

What impact would this have on route networks and frequencies, particularly in Europe ? Clearly demand and frequencies on early morning and early evening on weekdays on routes between major cities may decline, with fleets being trimmed. Furthermore, airlines may get pushed more towards a LCC style business model, instead of an all-inclusive fare structure. What will likely happen to other routes and frequencies ?

DJ6,

A plausible scenario, and some interesting questions. My feeling is that the answers will depend on which airlines survive, and in what form.

Some answers
 

if you have an hour to spare, some very good insight here: https://www.flightglobal.com/on-dema...137617.article

DJ6
Do not get too hung up on tele conferencing as I have been doing this for years (and got quite good at it I am told) but still I clocked up more than 400,000 Air miles last year, and that was just LH, never mind the flights / high speed rail trip in Europe. People will do video conferencing when no other option available, which is the current status, but that will most probably change when other options available. Interestingly I do find that many of the younger people I deal with, also have been more prone to request face to face meetings, rather more than those more senior in years, which flies in the face of what you would expect, and what the IT industry sells in their advertising. We will see who is correct later this year, but my own schedule is already filling,

When I worked in Telecommunications (1977~2003) I was involved in audio and video conferencing from the mid 1980s. Despite the fact that quality is now remarkable and cheap - there is NO substitute for face-to-face. Humans are geared to it.

In my current work I often have to audio and video conference with clients (certainly during the current crisis) and, again, this is always the secondary option.

Yes, some will use the new service BUT there is nothing to replace, visiting the people in their office, seeing their working environment and going to their favourite place for lunch. In the process, you pick up untold clues and minor details. Critically, you build a relationship with them that can ONLY happen this way. This is even more important when the people are in a different culture to you. I can readily understand someone 600 miles away in my own country but not 600 miles away on the continent speaking a different language.

Cross my palm with silver and I’ll let you know the euromillions numbers for tonight also 👍😎

So how and when does air travel to foreign countries resume if there are still cases around the world? The UK had its first cases from China then from Italy and then I think Iran. For the first few weeks the UK traced the contacts and then found it was in the community. Will it be a case of daju vu?

I think we'll cross that bridge when we come to it, which looks a long way off.

Headline in today's South China Morning Post Coronavirus: Cathay Pacific to cut more flights after carrying just 582 people in a day
This really illustrates the depth of the problem facing airlines worldwide. They have now reduced their HKG/LHR from multiple flights per day to just two per week, whilst BA have discontinued this route which they served double daily.

EASA in their wisdom have issued guidelines regarding Recirculation fans and that they now ought to be switched "Off". As around 50% of the air in aircraft cabins is recirculated using these fans, obviously it is not difficult to work out future problems for both passengers/crew health and the servicing of the cabin air conditioning ducting (disinfecting etc.) Good luck to people when flying starts again.

Why? When the virus has only been proven to be viable on certain surfaces for up to a max of 72hrs?

The assumption is that going forward things stay as they always were. The last month tell us that is not the case.

Nor will it be the case in the future as airlines will be retrofitting to ensure increased quality of air and recirculation of air fits standards the passengers ask about not what the airlines want.

Afraid that is way far from the truth. Stockpiling hasn't been happening in food industry because most food producers barely make money and cannot afford to have millions tied up in stock.

On previous discussions on JB I indicated supply chain to supermarkets had 3-4 days maximum supply on chilled, a bit more on frozen and 10 days on ambient. Tesco (as an example) order on 2nd Jan on say a monday morning and it is in store by Wednesday, sold by Friday and the manufacturer will be paid at end of March after the retailer has taken lots of debit notes and discounts decided by it from the invoices. Manufacturer would have got the stock in during November / December and in many cases paid for it by mid January. Tesco will give you 13 weeks (often less) notice of delisting products or range refreshes as they call it.

I figured it would be 2 weeks before retailers had lots of stock in, it was pretty much bang on, supply chain is fuller, shelves are full a couple of times a day and manufacturers are working flat out with retailers putting in mega orders but will accept whatever is sent.

The scummy screwing of suppliers has changed because they now realise suppliers are just surviving, Aldi pay day delivered, they and Lidl are the best to deal with even before this, the others have changed their terms massively.

One supplier to a major supermarket, still awaiting payment of a massive amount from October (big 6 figures) where retailer queried every invoice claiming 1 case missing per delivery to not pay any invoices. Supplier told the retailer that all production was focusing on a competitor because of massive non payment, retailer said you will never deal with us again and got told ok that is fine. 2 hours board director of retailer called and asked how much was outstanding, 1 hour later all outstanding cash was in the suppliers bank with all queries no longer an issue.

The "Key workers" on production line are 80% migrant labour, predominantely on minimum wage or just above and a bit like what is in the media about how farmers will struggle because nobody is around to pick the crops.

Food shortages haven't yet happened but when you think summer produce comes from Italy and Spain, Chicken from Thailand and Vegetables etc from East Africa then have a look at what is happening there.

Racedo - your understanding is similar to mine, but think your 80% might be a bit low mind. Also, my understanding is that because of the difficulty in recruiting staff in recent years, many are making more than minimum wage (and some a lot more) - but that might just be what I was being told.... :E This years harvest could be a real struggle

From the people I speak to, Aldi and Lidl have by far the best reputation and not just for payments, but straightforward dealing as well and M&S and Waitrose the worst :yuk:.

Going off topic, I'm surprised the climate change brigade haven't piled in on the 'miles' of some of our fadish products - would your life be any poorer if you never saw a kumquat again?

In terms of possible shortages, the service sector shuitting up shop has helped, although it's also been pretty disruptive.

From the BBC website -

Where will be the last place to catch Covid-19?

Oh I am conservative on this but it does depend on sector of industry and location as well. Many places are paying National living wage rather than minimun wage. One place I know which has surplus underweight stock is handing a bag of it to the staff every Friday.

Aldi / Lidl agree price for 6 months and you supply, no visit needed or hospitality required. If commodity prices go up then you eat it, if commodity prices go down then you benefit it. Tesco used to demand price decrease immediately but price increase was 13 weeks from agreement and that could take 3 months.

The climate change brigade enjoy their stuff to much and it is easier to lecture.

Had to travel to West Midlands this week and motorways were unbelieveable.

Before this has fully played out, I expect there to be civil unrest with Food being the number one category. No one can say where or when but do not be surprised when it happens.

I expect you to be wrong, but only time (and date / timestamps on posts) will tell :)

With poor souls in the Sub Continent already dying of hunger, sadly PaxBoy will be correct. Crime and civil unrest is inevitable in the developing world and possibly even in the (so called) developed world too.

Somewhat easier to self isolate when one has a roof and a full larder I would suggest.

As you say, time will tell!

I was watching a news item where Americans were queuing around the corner to buy even more guns as though they didn’t have enough already

It seems that they are more frightened of their neighbours than the virus but then there was more than 15,000 gun deaths last year excluding suicide. The virus death toll stands at 8500 as of today.

I note that even the American government is stealing other countries supplies so the country has form when it comes down to looking after number one.

Don't underestimate the amount of planning that has gone into maintaining the food supply chain and distribution network.

I think we are coming from same place on this.

I buying Alaskan pollock fish frozen in Lidl that was caught in 2017 and this was before crisis started.

I know we diverging from the air travel bit but chickens from hatch to plate is 30 days minimum but reality closer to 40 so anything hatched on 1st March is ready.
Beef is a lot longer but there is massive amount there plus add in sheep / pork then there will not be a lack of protein.

Wheat crops worldwide will be high, Russia is massive producer with huge exports that outstripping US.

Fruit and Veg will be an issue due to the floods last winter in Lincolnshire / Norfolk / Suffolk, add in the issues across Europe and there will be issues come summer because countrys will want to hold for safety stock rather than export.

There likely enough apples for a couple of years, mainly in sheds where CO2 is reduced to prolong life plus reduce cider crop in Herefordshire to human consumption.

Issue is picking and logistics.

8 weeks ago with my lad built up food stock well before the panic craze, had been working away so there was little in house anyway and he living elsewhere. Once we had stocked up we split it and put large container of food away into the attic in a bugger to get to place. If we get to needing to go there then a different plan comes into play which involves exiting place of abode.

The events have played out as I saw it to now but final stage is the one below.

When supemarkets have no longer any food, supply chain is exhausted and people are hungry then I view the civil unrest because of food likely to occur. However allied with attacks on food stores which will be defended by police, will be attacks on homes which are then stripped of food. I think we are a way way off that yet but will revise that in 3 months.

Friends keep reminding me that Transit van to Ireland full of food is still an excellent option as ferrys still running, hell they said just take the transit and don't worry about the food if TSHTF. I am hopeful that will not be the case ever.

This is Jet Blast stuff and now well off topic.

Indeed. I'm just glad I'm not a resident in the racedo house at present. Life is depressing enough right now without spending time thinking like that.:rolleyes:

Same thinking has gone on in Govt and Police, hence pressure on food manufacturers / retailers to keep food supply going. We shown not to far away from it either.

But back to Aviation.

I see another Aer Lingus A330 heading across the UK now en route from Dublin to Beijing. Presumably to pick up more PPE like the flight three days ago.

Dublin v Beijing is Dublins busiest international air route with 5 flights per day.

Total schdeuled flights are 60 over a period of weeks.

BRA in Sweden seem to be in deep trouble

RR have cancelled their dividend and withdrawn their financial forecast because much of their income is per hour in use, which has obviously collapsed. On the other hand, issues with the Trent 1000 seem to be easing.

I've been wondering. Various airlines must have been looking for compensation for the unavailability of Trent-powered a/c. Since the planes now wouldn't be flying anyway, presumably their claim is reduced?

BTW won't the same apply, even more, to the MAX? Can't claim for the grounding of planes now grounded by COVID 19

I’m sure Boeing would like your thinking bit it seems a bit unlikely to me.

Airlines or leasing companies would own the aircraft. They will decide how often, where and when to fly it. Airlines are not flying because there are very few customers around due the countries closing their borders but it is the airlines choice (albeit the only obvious one)
If I was an airline or leasing company I would probably argue that I was deprived the used of the aircraft notwithstanding Coronavirus.

If I follow how I think you are thinking, what’s to stop me heading down to my local Ford dealership when it reopens and asking for some money back on my car? I am currently working from home, can get my groceries delivered, so as we are all technically under lockdown, I can’t really drive my car at the moment. I suspect I would be told that it is my choice not to drive (after they stopped laughing and before asking me to go away!)

As for “power by the hour” engine deals, you might have a stronger case there.
...no doubt a lot of lawyers will make a few pounds, euros and dollars arguing about it in due course...

https://www.bbc.co.uk/news/business-52190502

Not a huge surprise to see this story - my only real surprise is that it took this long to appear.
My question is will pro-aviation or pro-environment have the loudest voice or deepest pockets to win the day?

All thoughts welcome - the situation feels so fluid at the moment I’m still not sure anyone knows how this will pan out.

It will be interesting to see who can withstand and model a return to scheduled services in possibly 10% incremental capacity steps on certain routes as the world begins to slowly try and get back to a new normal.

I am still struggling to see how large fleet operators will be able to keep the company alive whilst re-introducing reduced capacity in a competitive environment - if you only reactivate 30% of your fleet - can you still afford the fixed costs of the other 70%? I'm not sure many can for potentially 2-5 years.

Two views of the future on Blue Swan today:

https://blueswandaily.com/iag-negoti...contracts-ceo/

https://blueswandaily.com/easyjet-wi...ifted-founder/

Entirely predictable that the BBC should report on the demands of a lunatic fringe group (above) instead of reporting in a balanced manner.

Hmmm.

The article ends with

"IATA has been approached for a comment".

Presumably no response was received that might have provided aforesaid balance.