Airlines Going Under

[Flex88]

It has begun.. Virgin Australia, Air Mauritius, SAA, FlyBe ++ either in administration or fully bankrupt. The Guardian (+ others) write that most "every" airline will be bankrupt by the end of May this year.
In any event, and likely looking at the bright side, the airline industry and it's dedicated satellites (e.g. catering, maintenance etc.) will, following a long and very slow ramp up, likely only revive 50% of its previous levels of activity...
This will NOT end well for many..

[Flying Clog]

I agree. About 50% I would say, in about a year or two. And maybe remain at 50% levels (of 2019) for another 10-15 years.

Maybe in 2030 we'll be back to the heady days of 2019 travelling numbers...

Absolutely devastating.

[YellowFever777]

I agree. About 50% I would say, in about a year or two. And maybe remain at 50% levels (of 2019) for another 10-15 years.

Maybe in 2030 we'll be back to the heady days of 2019 travelling numbers...

Absolutely devastating.

What on earth are you basing your numbers on? Post 2008 the markets went on the longest bull run in history. This pandemic has been a black swan event for the world economy because we were woefully underprepared for it, however just like the crash of 2008 this too will pass.

I certainly don't have the answers but I am certainly more optimistic of a medium term recovery, trying to predict 15 years out from now is insanity. The vacuum created by the airlines that have gone bust will be filled by new airlines or expanding surviving airlines.

The only thing that is certain is that the sh1t well and truly hit the fan this time, the next 2-5 years no one really knows.

[Flying Clog]

What am I basing my numbers on? Nothing, just spit balling.

You really see a post 2008 style bull run after this one? Great, if so, we should all be buying a few airline stock, particularly Cathay and Swire shares. And I honestly hope you're right, that there will be a huge, rapid recovery.

But having been around about 5 decades, and been in the business since the early 90s... come on, this is nothing like the relatively quick impact, closure, and recovery that we had a with the Asian crisis, 9/11, sars, gfc, etc. This is a whole other animal. In multitudes.

Just taking one thing in isolation - (no pun intended), people working from home, getting used to it, and companies realising the benefits, will have a massive impact on business air travel.

And then there's the fear of flying/travelling, and cruise holidays for the wary. And then the fact that we are ALL going to be broke for the next few years. What holiday? Screw that, save your money mate, for a rainy day. Like we should have all been doing, but none of us did. (present company included).

[Tommy Gavin]

Flying Clog, pessimism comes with age my friend..
Nobody can look 10-15 years in the future and people have very short memories. But 50 percent reduction is horse manure.

​​​​​​Survival of the fittest is what we will see.

[cannot]

SAA has had an incompetent corrupt management in place for years and was going to go under anyway
Air Mauritius couldn’t survive with no tourist industry , but with SAA having gone under there is no competition on the SA to Mauritius route so may rise from the ashes
Virgin Australia think that they will have a new buyer in place by end of June and virgin MK2 will be up and running soon thereafter
FlyBe really didn’t have a great route structure but was able to survive in the good times , the lockdown was the final straw that broke the camels back , very sad for all concerned

However for those that can ride this storm out there will be better times ahead

[Flex88]

It matters not about good or poor management, if there's NO fuc**ng passengers, they go tits up. Period.. And this is what's in store for the next few years being extremely optimistic.
Numbers; the top 4 biggest US airlines are losing 100 MILLION US$ per day - EACH !! Populate those figures to EVERY major airline in the world, get out your calculator and I doubt you can calculate the number unless your calculator can express scientific notation. Then take a wild guess at all the medium to small airlines ..
For those above basing their thoughts on 2008 & SARS.. You need to read more economic news as to what's going on !!! The US ALONE has already lost about 3 TRILLION $ in GDP (this not including lost income/salary).. that's in the US in just a 2 month period.. Get out that calculator again and just take a rough guess at the ROW numbers. Europe, Asia, Aus/NZ, South America +++.. This is money that has simply "vanished" never to be seen, spent or invested and VERY IMPORTANTLY, NOT Taxed (meaning, governments spending like drunken sailors with NO income)...
In the US "alone" already this coming week will see approximately 30 MILLION unemployed.
There is ZERO rosy pictures for the industry and adding to this, China (the CCP) has managed, in a 4 month long lying spree, to alienate nearly every country in the world so one might expect, over the next years, for those lucrative cargo shipments of rubber dog **** to collapse as well..



I'd personally stop those expensive Cable TV Sports channel subscriptions and cancel next years vacation reservations while you can.. This is just getting started..... B well.

[qwertyuiop]

The big difference with this disaster compared with 2008 is the fact the population has had the crap scared out of it. Going from social distancing to going through an airport and being crammed in a tube (already known to be unhealthy) is not something that will happen quickly. Without the cramming the airfares will be seen as very expensive.
For what it’s worth, I would get on a VS, DI, BA tomorrow given the choice. Many wouldn’t.

[Apple Tree Yard]

Flex, that nails it middle of the bulls eye. Anyone that thinks this will end well for the individual is deluded. Certainly airlines will come out with market advantage, but you can also certainly believe that they will have drastically reduced their cost base in the meantime (meaning salaries, benefits and pensions). CX is planning an all out assault on the T and C's of their pilots, in all bases including HK. I have already heard some of what's coming and it won't be pleasant. The meeting next week between the AOA and management is simply going through the motions; the company already has their strategy ready to go. The big problem is that the initial panic in this case is now being followed by even worse metrics for the long term (see the "fear factor" and distance conferencing realisation regarding pax returning to normal habits). The public is being conditioned to not want to fly, never mind need to fly. Anyone that thinks our cushy pay and benefits will survive intact....well, I have a few bridges to sell you. Best prepare for the inevitable.

[Flying Clog]

I agree with all the realists above. Sadly.

[Bindair Dundat]

I’m a glass half full kind of person but this gloomy forecast is one for the dust bin. Do not underestimate the pent up demand that is brewing in 100’s of millions of travellers as we wait this out. I haven’t talked to one person who has been put off flying by this and will get on a plane as soon as reasonable.
The outlook that suggests people will revert to online work at home forever is seriously unschooled in the nature of humans. The moment workers can kick their zoom meetings to the curb they will. Not suggesting the market wont shrink and take a few years to recover but 50% is too pessimistic and unrealistic to even consider seriously. Sitting around forecasting the demise of this industry is completely unproductive.

[vlieger]

Sadly, I’m with the realists, and the serious financial press seems to agree:

About that ‘V-shaped’ recovery (https://ftalphaville.ft.com/2020/04/22/1587541116000/About-that--V-shaped--recovery/)



"Whatever the outcome, this also spells out how unprecedented a time it is for the airlines, cruise ships and booking agents — online and offline — who have seen their businesses dismantled by the coronavirus. It seems like the pain is going to last far longer for these businesses than most have imagined."

[Flex88]

I’m a glass half full kind of person but this gloomy forecast is one for the dust bin. Do not underestimate the pent up demand that is brewing in 100’s of millions of travellers as we wait this out. I haven’t talked to one person who has been put off flying by this and will get on a plane as soon as reasonable.
The outlook that suggests people will revert to online work at home forever is seriously unschooled in the nature of humans. The moment workers can kick their zoom meetings to the curb they will. Not suggesting the market wont shrink and take a few years to recover but 50% is too pessimistic and unrealistic to even consider seriously. Sitting around forecasting the demise of this industry is completely unproductive.

I love this.. I don't think any of the 100's of millions of "UNEMPLOYED" workers in the world (or their families/dependants) are put off as well.. The small problem of having NO MONEY or JOB is that tiny little fact you forget..

[Flying Clog]

I'm all about optimism. And fully understand the HUGE pent up demand of travellers wanting to go on their holidays once this is all over. Indeed, there will be massive demand, particularly from the Brits, the Mainland Chinese, and Northern Europeans

However ... ticket prices will not only be double to triple (think paying biz class for a crappy eco ticket), due to social distancing requirements, but on top of that, your average punter is going to be BROKE AND ON HIS ASS financially for the next few years. So unless you're a complete idiot, you don't blow what little money you have on a weekend jolly to Ibiza at 2-3 inflated prices, but save it for a rainy day like we should have all been doing for years all along. But we were too greedy. The sensible would surely opt for a staycation particularly with a caravan. And avoid flying at all costs.

Has anyone thought of buying campers and caravans up en masse in the UK to satisfy the coming summer UK market? Another business idea.... you can have that one for free.

[Bindair Dundat]

I love this.. I don't think any of the 100's of millions of "UNEMPLOYED" workers in the world (or their families/dependants) are put off as well.. The small problem of having NO MONEY or JOB is that tiny little fact you forget..

Nope didn’t forget it. There’s this little thing called trillions of dollars being pumped into every nook and cranny of the economy. Lots of jobless for sure and businesses going bust and years to recover but my point still stands, 50% reduction is ridiculous. If you prefer the apocalypse have at her then. Your forecasts do nothing for anyone’s wellbeing or outlook
though.

[Lapon]

You really see a post 2008 style bull run after this one? Great, if so, we should all be buying a few airline stock, particularly Cathay and Swire shares. And I honestly hope you're right, that there will be a huge, rapid recovery.

My money is on this passing much like 9/11. That shook up the industry but it was a black swan event not a structural failing like the GFC.

Sure 9/11 claimed plenty of poorly run and capitalised airlines as will this virus. I dont think fear will keep people from travelling though, heck in this part of the world it is hard enough keeping people at home for thier own good during 'lockdown'.
I dont think the fear of travelling will be any different to the early post 9/11 days.

And then there is the potential of a vaccine already undergoing human trials.

[Fuel-Off]

People also forget that aviation actually prospered during the Great Depression of the 1930s. New airlines created with considerable amount of capital being spent on new aircraft orders while most of the rest of the world's economies walked a slow death march.

Countries where tourism is a major contributor to their GDPs have been apparently asking the major tour operators of their largest markets what the consumer confidence is like. Vast majority report healthy amount of enquiries as people wish to go from the homes they've been locked down in as far as possible.

It definately won't be a light switch recovery, especially with no vaccine or active treatment available in the immediate short term, but there will be recovery all the same.

Fuel-Off :ok:

[Apple Tree Yard]

I don't doubt that some airlines will survive and eventually regain some semblance of health. The problem is that nearly all managements (and especially ours) will use this situation to cynically advance their long held desire to strip away the pay and conditions that we currently operate under. The airline will probably survive (in fact, they will probably have less competition to worry about), but the employees will certainly pay the price. It will be interesting to hear what management proposes to the AOA this week. I am certain it will be difficult to accept and deal with. I seriously doubt we will be going back to the way things were.

[YellowFever777]

Capitalist societies go through boom and bust cycles. People over extend themselves during growth phases thinking the good times will last forever, and when the crash happens end up in the **** financially. They then believe the bad times are the new normal and here to stay. The smart people live below their means and save and invest sensibly during the boom, understanding the next crash is always just a few years away and when it comes it's just a buying opportunity and make a fortune from the recovery.

This is a particularly nasty correction due to the nature of the pandemic, however the economic path to recovery will be the same as always. Yes CX might be about to take a chainsaw to your current contract, but my point is that predicting destruction lasting 15 years is simply nonsense.

[exfocx]

What on earth are you basing your numbers on? Post 2008 the markets went on the longest bull run in history. This pandemic has been a black swan event for the world economy because we were woefully underprepared for it, however just like the crash of 2008 this too will pass.

I certainly don't have the answers but I am certainly more optimistic of a medium term recovery, trying to predict 15 years out from now is insanity. The vacuum created by the airlines that have gone bust will be filled by new airlines or expanding surviving airlines.

The only thing that is certain is that the sh1t well and truly hit the fan this time, the next 2-5 years no one really knows.

I don't know what he's basing his numbers on either, but I think your view of the economy is bloody naive. CV19 was just the straw that broke the camels back, debt hasn't gone down, but risen massively since the GFC, which was a rise from the late 80s to early 90s, and so on. If it wasn't CV19 it would have been something else, the economy has been stretched to buggery because of debt levels so there was no room to move.

That there will be a correction on the level of air travel, I think, is a no brainer.

Something to read: https://www.macrobusiness.com.au/2020/04/ray-dalio-on-credit-and-history/

[YellowFever777]

I don't know what he's basing his numbers on either, but I think your view of the economy is bloody naive. CV19 was just the straw that broke the camels back, debt hasn't gone down, but risen massively since the GFC, which was a rise from the late 80s to early 90s, and so on. If it wasn't CV19 it would have been something else, the economy has been stretched to buggery because of debt levels so there was no room to move.

That there will be a correction on the level of air travel, I think, is a no brainer.

Something to read: https://www.macrobusiness.com.au/2020/04/ray-dalio-on-credit-and-history/

I've read that before and I follow Dalio on social media. My point stands that trying to predict how aviation and the economy will look 15 years out is nonsensical.

[DropKnee]

Pilots and their predictions. If I had a dime for everyone that failed to come true. I would be a billionaire.

[Apple Tree Yard]

Billionaire? You'll be lucky to have a dime this time next year DropKnee. :hmm:

[Oasis]

Pilots and their predictions. If I had a dime for everyone that failed to come true. I would be a billionaire.

that’s a prediction as well, you just blew my mind.

[engineer29]

Pilots and their predictions. If I had a dime for everyone that failed to come true. I would be a billionaire.

Indeed you are right. Sometimes we need to realize we are not business developers , and although we are likely to be the victims of what is happening, pilots are not decision makers, nor policy makers for airlines.
Some other people get paid way more than the pilot payscale to take these decisions. I'm rather asking myself where are they now... and what's their prediction!
And i'd rather stay away from all what is reported over and over again on the media.

Be safe and stay strong.

[exfocx]

I've read that before and I follow Dalio on social media. My point stands that trying to predict how aviation and the economy will look 15 years out is nonsensical.

Then if you read that we are coming up for a reckoning, and obviously consumers spending will be smashed and as a result of that international flying (more so than domestic) will suffer.

[exfocx]

People also forget that aviation actually prospered during the Great Depression of the 1930s. New airlines created with considerable amount of capital being spent on new aircraft orders while most of the rest of the world's economies walked a slow death march..........................................Fuel-Off :ok:

Can you provide a link that will support that? I've googled various versions for airlines during that period and got very little.

Anyway, my take on your assertion without having any historical material to go off. What may be the reason for your "People also forget that aviation actually prospered during the Great Depression of the 1930s" claim, is because maybe your data skews the outlook to that rosy claim because that is the era when airline travel took off, so off a low base whereas today we're talking about a very mature market, such that an airline seat is now a commodity like a loaf of bread and very sensitive to price. Pax numbers (when reviewing airport numbers from around the world) have doubled in 8-10 yrs (8 for the M.E. 3) and more so if you look at the last 30 yrs, while in the west households are heavily indebted (Aust. #2 or 3 in the world) with wages stagnant for the past decade while house prices have boomed. Globalisation has been good for executive pay and extremely wealthy individuals, but for the west the result has been cheaper prices for consumer crap and the massive loss of jobs that started with manufacturing that's has progressively moved up the food chain. Ask anyone in IT what their real wages are like compared to a decade ago, noticed those tax kiosks around the EOFY time at shopping centres? Meanwhile Atlasssian are busy bringing visa workers (so called Skilled Workers on 50+k) into Australia for around high 50s with 5+ yrs experience, a pay level that would equate to a new grad here. Ask a nurse grad if she / he can find work.... yeah nah..... too many visa nurses from Asia already trained.

Imo I think we have seen the best of times and it's likely to be a downhill ride for the next decade. I have a few yrs to go before retirement, but in general I've been bloody lucky and don't believe I've worked any harder than anyone else, street sweeper or whatever and I worry about what is being left behind for those coming through, by this this I mean every field of work, not just aviation.

Good luck, because imo you're going to need it.

[ozbiggles]

My thoughts
Vaccine plus 12-18 months before countries start to open their borders properly for tourism as we saw it. I believe there is plenty of desire to go travelling, it’s the closed borders or restrictions that will stop it. That’s close to 3 years....
Internal domestic travel in countries where community transmission is controlled a lot sooner. But I really can’t see international getting to what....20-30% for years? I feel sick as I contemplate that but I can’t see it better than that. 15 years we will all have forgotten it ever happened, just in time for the next crisis.

[YellowFever777]

Then if you read that we are coming up for a reckoning, and obviously consumers spending will be smashed and as a result of that international flying (more so than domestic) will suffer.

I read alot of content and investment books from bulls and bears. Dalio is a legendary investor but the feds spending and US debt is uncharted territory. Who's to say it can't go alot higher than 24 trillion? I don't pretend to know and none of us have a crystal ball. What I do know is that predicting a downturn some 50% longer than the 1920s depression is at the bat**** crazy end of the pessimism spectrum.

[exfocx]

YF777,

"Who's to say it can't go alot higher than 24 trillion? " Well, I believe he answers that in the extract linked.

Edit: Btw, even if exaggerated it will still substantial damage.

[cxorcist]

The reality is that the debt stops growing when creditors stop buying US treasuries (bonds) and the fed’s printing stops creating capital liquidity due to (hyper-) inflation. That’s when the music stops and you better have a chair to sit on.

[Slasher1]

The reality is that the debt stops growing when creditors stop buying US treasuries (bonds) and the fed’s printing stops creating capital liquidity due to (hyper-) inflation. That’s when the music stops and you better have a chair to sit on.

Or a really good place to go. Perfect storm. The economic engine has been stopped by feckless governments, everyone is borrowing from everyone else, and everyone is printing. Don't even need a press anymore; just electronically add a couple of trailing zeroes. The Keynesian money tree concept has never worked.

[armchairpilot94116]

I think things will ramp up very quickly soon as the virus threat is handled.

The planes are there the pilots too .And I believe people will fly unless tickets become absurd and I think they won’t for long .

Being alive is about being optimistic.

[Flex88]

I think things will ramp up very quickly soon as the virus threat is handled.

The planes are there the pilots too .And I believe people will fly unless tickets become absurd and I think they won’t for long .

Being alive is about being optimistic.

All fine being either an optimist or a pessimist however when it comes to caring for and supporting your family or planing a career path, being a realist is a must !! Facts over feelings..

[highflyer40]

I'm all about optimism. And fully understand the HUGE pent up demand of travellers wanting to go on their holidays once this is all over. Indeed, there will be massive demand, particularly from the Brits, the Mainland Chinese, and Northern Europeans

However ... ticket prices will not only be double to triple (think paying biz class for a crappy eco ticket), due to social distancing requirements, but on top of that, your average punter is going to be BROKE AND ON HIS ASS financially for the next few years. So unless you're a complete idiot, you don't blow what little money you have on a weekend jolly to Ibiza at 2-3 inflated prices, but save it for a rainy day like we should have all been doing for years all along. But we were too greedy. The sensible would surely opt for a staycation particularly with a caravan. And avoid flying at all costs.

Has anyone thought of buying campers and caravans up en masse in the UK to satisfy the coming summer UK market? Another business idea.... you can have that one for free.

I would rather stay home than do a 2 week holiday in the U.K. with the same crap weather I would have at home.

[Icelanta]

People are craving for a change from quarantine and will absolutely start booking en masse vacations abroad. Nobody I speak to has any plans to reduce their spending on travel, on the contrary, they want to enjoy their life together with their family during a well earned vacation in a safe environment ( think EU).

[mngmt mole]

Icelanta. I admire your stubbornness, in spite of all evidence to the contrary :hmm:

[Icelanta]

What evidence?! The evidence is an increase in bookings for winter 2021 with travel agencies in Western Europe compared to same time last year

[DropKnee]

Billionaire? You'll be lucky to have a dime this time next year DropKnee. :hmm:

I will be just fine. Remember, I get a dime for every pilot prediction that fails to materialize 👍

[mngmt mole]

It really does get funnier the more times you say it. ;)

[EchoKilla]

pull up numbers - the global numbers of flyers in 2003 and even in 2008 were NOT close to the numbers that came into effect between 2012-2019. To recover to that level especially with global border closures, jobless rates beyond comprehension and tightening of other basic sources of income - the least of my bloody worries is to take a selfie in front of the Eiffel. Time to change jobs - and pronto

What on earth are you basing your numbers on? Post 2008 the markets went on the longest bull run in history. This pandemic has been a black swan event for the world economy because we were woefully underprepared for it, however just like the crash of 2008 this too will pass.

I certainly don't have the answers but I am certainly more optimistic of a medium term recovery, trying to predict 15 years out from now is insanity. The vacuum created by the airlines that have gone bust will be filled by new airlines or expanding surviving airlines.

The only thing that is certain is that the sh1t well and truly hit the fan this time, the next 2-5 years no one really knows.

[EchoKilla]

Apocalyptic but 100% spot on

It matters not about good or poor management, if there's NO fuc**ng passengers, they go tits up. Period.. And this is what's in store for the next few years being extremely optimistic.
Numbers; the top 4 biggest US airlines are losing 100 MILLION US$ per day - EACH !! Populate those figures to EVERY major airline in the world, get out your calculator and I doubt you can calculate the number unless your calculator can express scientific notation. Then take a wild guess at all the medium to small airlines ..
For those above basing their thoughts on 2008 & SARS.. You need to read more economic news as to what's going on !!! The US ALONE has already lost about 3 TRILLION $ in GDP (this not including lost income/salary).. that's in the US in just a 2 month period.. Get out that calculator again and just take a rough guess at the ROW numbers. Europe, Asia, Aus/NZ, South America +++.. This is money that has simply "vanished" never to be seen, spent or invested and VERY IMPORTANTLY, NOT Taxed (meaning, governments spending like drunken sailors with NO income)...
In the US "alone" already this coming week will see approximately 30 MILLION unemployed.
There is ZERO rosy pictures for the industry and adding to this, China (the CCP) has managed, in a 4 month long lying spree, to alienate nearly every country in the world so one might expect, over the next years, for those lucrative cargo shipments of rubber dog **** to collapse as well..



I'd personally stop those expensive Cable TV Sports channel subscriptions and cancel next years vacation reservations while you can.. This is just getting started..... B well.

[Sqwak7700]

What I do know is that predicting a downturn some 50% longer than the 1920s depression is at the bat**** crazy end of the pessimism spectrum.

There was no depression in the 20s. There was a short, sharp recession (about a year and a half long). This was followed by the “roaring 20s”, a period of massive growth and prosperity.

So how accurate and useful is your opinion when you don’t even know what you are talking about? Suggest you read up on what led to the great Depression in the 1930s and you will see a lot of parallels.

[YellowFever777]

There was no depression in the 20s. There was a short, sharp recession (about a year and a half long). This was followed by the “roaring 20s”, a period of massive growth and prosperity.

So how accurate and useful is your opinion when you don’t even know what you are talking about? Suggest you read up on what led to the great Depression in the 1930s and you will see a lot of parallels.

The Great Depression was a worldwide economic depression (https://www.thebalance.com/what-is-an-economic-depression-3306013) that lasted 10 years. It began on “Black Thursday (https://www.thebalance.com/black-thursday-1929-what-happened-and-what-caused-it-3305817)," Oct. 24, 1929.
The depression was caused by the stock market crash of 1929 and the Fed’s reluctance to increase the money supply
GDP during the Great Depression fell by half, limiting economic movement.
A combination of the New Deal and World War II lifted the U.S. out of the Depression.


​​​​​​Would you be happier if I edited my original post to read 'the depression which began in 1929 and lasted 10 years' sqwak?

[exfocx]

The Great Depression was a worldwide economic depression (https://www.thebalance.com/what-is-an-economic-depression-3306013) that lasted 10 years. It began on “Black Thursday (https://www.thebalance.com/black-thursday-1929-what-happened-and-what-caused-it-3305817)," Oct. 24, 1929.
The depression was caused by the stock market crash of 1929 and the Fed’s reluctance to increase the money supply
GDP during the Great Depression fell by half, limiting economic movement.
A combination of the New Deal and World War II lifted the U.S. out of the Depression.


​​​​​​Would you be happier if I edited my original post to read 'the depression which began in 1929 and lasted 10 years' sqwak?

Sorry but I think you've confused what's happening today as just part of the "business cycle".

From RD https://www.macrobusiness.com.au/2020/04/ray-dalio-on-credit-and-history/ :

Think of the central bank as having a bottle of stimulant that they can inject into the economy as needed with the amount of stimulant in the bottle being limited. When the markets and the economy sag they give them shots of the money and credit stimulant to pick them up, and when they’re too hot they give them less stimulant. These moves lead to cyclical rises and declines in the amounts and prices of money and credit, and goods, services, and financial assets. These moves typically come in the form of short-term debt cycles and long-term debt cycles. The short-term cycles of ups and downs typically last about eight years, give or take a few. The timing is determined by the amount of time it takes the stimulant to raise demand to the point that it reaches the limits of the real economy’s capacity to produce. Most people have seen enough of these short-term debt cycles to know what they are like—so much so that they mistakenly think that they will go on working this way forever. They’re most popularly called “the business cycle,” though I call them “the short-term debt cycle” to distinguish them from “the long-term debt cycle.”Over long periods of time these short-term debt cycles add up to long-term debt cycles that typically last about 50 to 75 years.[2] (http://applewebdata//3DA64C7F-EC01-438E-8B73-C1797A9C9BDD#_ftn2)Because they come along about once in a lifeti me most people aren’t aware of them; as a result they typically take people by surprise, which hurts a lot of people. The last big long-term debt cycle, which is the one that we are now in, was designed in 1944 in Bretton Woods, New Hampshire, and was put in place in 1945 when World War II ended and we began the dollar/US-dominated world order.

[YellowFever777]

Sorry but I think you've confused what's happening today as just part of the "business cycle".

From RD https://www.macrobusiness.com.au/2020/04/ray-dalio-on-credit-and-history/ :

Think of the central bank as having a bottle of stimulant that they can inject into the economy as needed with the amount of stimulant in the bottle being limited. When the markets and the economy sag they give them shots of the money and credit stimulant to pick them up, and when they’re too hot they give them less stimulant. These moves lead to cyclical rises and declines in the amounts and prices of money and credit, and goods, services, and financial assets. These moves typically come in the form of short-term debt cycles and long-term debt cycles. The short-term cycles of ups and downs typically last about eight years, give or take a few. The timing is determined by the amount of time it takes the stimulant to raise demand to the point that it reaches the limits of the real economy’s capacity to produce. Most people have seen enough of these short-term debt cycles to know what they are like—so much so that they mistakenly think that they will go on working this way forever. They’re most popularly called “the business cycle,” though I call them “the short-term debt cycle” to distinguish them from “the long-term debt cycle.”Over long periods of time these short-term debt cycles add up to long-term debt cycles that typically last about 50 to 75 years.[2] (http://applewebdata//3DA64C7F-EC01-438E-8B73-C1797A9C9BDD#_ftn2)Because they come along about once in a lifeti me most people aren’t aware of them; as a result they typically take people by surprise, which hurts a lot of people. The last big long-term debt cycle, which is the one that we are now in, was designed in 1944 in Bretton Woods, New Hampshire, and was put in place in 1945 when World War II ended and we began the dollar/US-dominated world order.

Yes my friend, as noted previously I am familiar with the article. Dalio also said recently that he expects a 3 to 5 year recovery period. He hasn't given a prediction about the airline industry as far as I'm aware. He is also just one man and not infallible - "He also thanked the Chinese for their work on coronavirus, noting that doing so was political: “The Chinese, in many ways, are helping with things that are needed to manage this crisis.”"

The point I've been trying to make is that no one knows for sure what the recovery will look like, especially not over a 15 year timescale.

[aviation_enthus]

I don’t agree with the OP’s 15 year timeline, nothing in history has resulted in a downturn that long. No disease outbreak in the last +300 years has lasted that long either.

But this won’t be a ‘quick V shaped recovery’ either. Anyone that is expecting that, eg loading up on debt to keep maintaining their lifestyle until it all recovers, is absolutely bonkers!!!

Even IATA predictions show a V shape recovery taking until 2022. Every other forecast they have is longer, 2024 and onwards.

9/11 resulted in a 30% drop in domestic USA traffic. It took 3 years to recover to the same point and by then the industry was more efficient.

SARS was isolated to SE Asia so can’t really be used as an example.

The Great Depression provides an economic example for what happens when governments don’t intervene like they do now (quantitative easing etc). Again the airline industry was tiny back then so comparisons are useless.

Another interesting statistic, there is a measurable link to household savings versus stock market returns. Basically as the stock market declines the household saving rate goes up. In the GFC with a 40% decline household savings increased from 2% -> 8/10% of income. What this tells us is that the average household may still go to Ibiza/Caribbean/Bali/etc but they aren’t going to go every year or may aim for a cheaper destination.

Travel restrictions on international travel will remain probably throughout 2020. China has had another outbreak in the city of Hubei, placing another 10 million people on lockdown. Individual countries may get it under control and allow domestic travel, but if ticket prices are higher, more people will drive instead of flying. Exactly like they used to when airfares were more expensive.

So given all the above I’ll add my 2 cents and make a prediction but only basing it on the above points.

- more airlines will go broke, even into 2021. This will be because demand won’t recover quickly and those airlines with plenty of cash but slow to react management will find themselves in dire straits when demand doesn’t come back soon enough.

- travel demand will reduce. I’m guessing the first full year of no restrictions will be in the order of 30-40% reduction on 2019 figures.

- I don’t think our first full year of no restrictions will start until mid 2021 at the earliest. So until then demand will be ‘must travel’ with mandatory quarantine at the other end for international.

- job losses will continue throughout the year in ALL industries. While companies may not go bankrupt they’ll be trimming the fat so to speak and making their operations more efficient.

- with all the uncertainty in the economy households will save more money and be careful where they spend it. This will continue through 2020 and will be a dampening effect on any economic recovery despite government intervention.

What would I do? No idea. Hang on to my job and hope for the best at this stage. But if I was made redundant I’d most likely change industries and go in a different direction.

History has pretty much all the answers you’ll ever need. It may not have happened exactly like this before, but there will always be enough examples (of many things) to put together your own jigsaw puzzle and guess at least the direction things might go.

Good luck to everyone!!

[YellowFever777]

I don’t agree with the OP’s 15 year timeline, nothing in history has resulted in a downturn that long. No disease outbreak in the last +300 years has lasted that long either.

But this won’t be a ‘quick V shaped recovery’ either. Anyone that is expecting that, eg loading up on debt to keep maintaining their lifestyle until it all recovers, is absolutely bonkers!!!

Even IATA predictions show a V shape recovery taking until 2022. Every other forecast they have is longer, 2024 and onwards.

9/11 resulted in a 30% drop in domestic USA traffic. It took 3 years to recover to the same point and by then the industry was more efficient.

SARS was isolated to SE Asia so can’t really be used as an example.

The Great Depression provides an economic example for what happens when governments don’t intervene like they do now (quantitative easing etc). Again the airline industry was tiny back then so comparisons are useless.

Another interesting statistic, there is a measurable link to household savings versus stock market returns. Basically as the stock market declines the household saving rate goes up. In the GFC with a 40% decline household savings increased from 2% -> 8/10% of income. What this tells us is that the average household may still go to Ibiza/Caribbean/Bali/etc but they aren’t going to go every year or may aim for a cheaper destination.

Travel restrictions on international travel will remain probably throughout 2020. China has had another outbreak in the city of Hubei, placing another 10 million people on lockdown. Individual countries may get it under control and allow domestic travel, but if ticket prices are higher, more people will drive instead of flying. Exactly like they used to when airfares were more expensive.

So given all the above I’ll add my 2 cents and make a prediction but only basing it on the above points.

- more airlines will go broke, even into 2021. This will be because demand won’t recover quickly and those airlines with plenty of cash but slow to react management will find themselves in dire straits when demand doesn’t come back soon enough.

- travel demand will reduce. I’m guessing the first full year of no restrictions will be in the order of 30-40% reduction on 2019 figures.

- I don’t think our first full year of no restrictions will start until mid 2021 at the earliest. So until then demand will be ‘must travel’ with mandatory quarantine at the other end for international.

- job losses will continue throughout the year in ALL industries. While companies may not go bankrupt they’ll be trimming the fat so to speak and making their operations more efficient.

- with all the uncertainty in the economy households will save more money and be careful where they spend it. This will continue through 2020 and will be a dampening effect on any economic recovery despite government intervention.

What would I do? No idea. Hang on to my job and hope for the best at this stage. But if I was made redundant I’d most likely change industries and go in a different direction.

History has pretty much all the answers you’ll ever need. It may not have happened exactly like this before, but there will always be enough examples (of many things) to put together your own jigsaw puzzle and guess at least the direction things might go.

Good luck to everyone!!

Here here.

[Slasher1]

I don’t agree with the OP’s 15 year timeline, nothing in history has resulted in a downturn that long. No disease outbreak in the last +300 years has lasted that long either.

But this won’t be a ‘quick V shaped recovery’ either. Anyone that is expecting that, eg loading up on debt to keep maintaining their lifestyle until it all recovers, is absolutely bonkers!!!

Even IATA predictions show a V shape recovery taking until 2022. Every other forecast they have is longer, 2024 and onwards.

9/11 resulted in a 30% drop in domestic USA traffic. It took 3 years to recover to the same point and by then the industry was more efficient.

SARS was isolated to SE Asia so can’t really be used as an example.

The Great Depression provides an economic example for what happens when governments don’t intervene like they do now (quantitative easing etc). Again the airline industry was tiny back then so comparisons are useless.

Another interesting statistic, there is a measurable link to household savings versus stock market returns. Basically as the stock market declines the household saving rate goes up. In the GFC with a 40% decline household savings increased from 2% -> 8/10% of income. What this tells us is that the average household may still go to Ibiza/Caribbean/Bali/etc but they aren’t going to go every year or may aim for a cheaper destination.

Travel restrictions on international travel will remain probably throughout 2020. China has had another outbreak in the city of Hubei, placing another 10 million people on lockdown. Individual countries may get it under control and allow domestic travel, but if ticket prices are higher, more people will drive instead of flying. Exactly like they used to when airfares were more expensive.

So given all the above I’ll add my 2 cents and make a prediction but only basing it on the above points.

- more airlines will go broke, even into 2021. This will be because demand won’t recover quickly and those airlines with plenty of cash but slow to react management will find themselves in dire straits when demand doesn’t come back soon enough.

- travel demand will reduce. I’m guessing the first full year of no restrictions will be in the order of 30-40% reduction on 2019 figures.

- I don’t think our first full year of no restrictions will start until mid 2021 at the earliest. So until then demand will be ‘must travel’ with mandatory quarantine at the other end for international.

- job losses will continue throughout the year in ALL industries. While companies may not go bankrupt they’ll be trimming the fat so to speak and making their operations more efficient.

- with all the uncertainty in the economy households will save more money and be careful where they spend it. This will continue through 2020 and will be a dampening effect on any economic recovery despite government intervention.

What would I do? No idea. Hang on to my job and hope for the best at this stage. But if I was made redundant I’d most likely change industries and go in a different direction.

History has pretty much all the answers you’ll ever need. It may not have happened exactly like this before, but there will always be enough examples (of many things) to put together your own jigsaw puzzle and guess at least the direction things might go.

Good luck to everyone!!

This is very good and I think alot of it correct. Not to get too much into the causes of the US Great Depression (which no one would agree on anyway) but overinflated stocks and margins (similar to the US's current intermediate vehicles like derivatives and CDOs, etc.) were the triggering event. In the current one, governments have chosen to do incoherent knee-jerk broadband shutdowns (which shakes out the hedges and CDOs and collapses the Jenga tree)--without regard to opportunity costs--rather than a targeted approach--which is completely bonkers and will have far reaching downline effects. Kinda like curing the disease by shooting the patient. At the same time chosen to take on massive amounts of debt (most governments in republics have little real money and have no choice but to tax, borrow, or print). It's "Atlas Shrugged" all over again. In a market economy, everyone is essential (except perhaps those who are trying to dictate who's essential and who's not).

Keynesian economics ('pump priming' -- done both by Hoover and Roosevelt) is really tricky and never has been done well (problem being the core assumption is you get something for nothing which is never true). In the case of the US, combined with an ill timed trade war (not dissimilar to the oil shenanigans) it had the net effect of pulling the US from a very bad recession into a very deep depression. While there is some argument for maintaining stability of a money supply (i.e. either liquidity via credit or real money value--in the incipient stages deflation is the biggest threat followed by hyperinflation depending on the currency authorities skill and luck. Not unlike pouring gasoline onto some smoldering embers and trying to control the fire when it relights) -- preserving its value from deflation as well as inflation. But the raw pork contained in most governments stimuli simply result in most of that money blown on hats and jets for corporate big wigs and pet projects. With a 'tip' making it down to the general population. It has been a path to ruin in the past with a government loosing control of a fiat monetary system. During the 2008 event it later resulted in controllable but significant loss of dollar value and real inflation over several years (which was eventually stabilized). In that case though the assets were backed by at least SOMETHING -- overvalued paper -- but something of value. In this case not so much. And for borrowing everyone owes everyone else so there's this rolling huge sea of debt. Which eventually finds its way to the backs of folks who do real work (i.e. the traveling public many of whom are unemployed and trying simply to eat).

There's really nowhere to hide. Cash savings gets devalued by downline inflation; investments are wholly unstable and unpredictable as are commodities and everything else. Real estate and tangibles can hold value but get eaten into due to loss of demand and increasing carrying costs (maintenance and taxes which are indexed to inflation). So (IMHO) it's not possible to try to outguess this. What to do ? Nothing -- and keep on keeping on; enjoying life in the process. The thing I would NOT do is hole up wasting the days of ones' life.

Given that governments are taking on massive debts, I can't see how individuals should be expected to behave any differently. But I can't see a boom in discretionary travel (especially given the virus hoo-haw and incoherent continuing quarantine procedures across borders) being a part of that. It wouldn't be on the top of my bucket list to get on either cruise ships or airplanes. Additionally, with all the BS accompanying 'restarting' economies that never should have been shut down from above in the first place (and politicians saving face for destroying their economy over a flu) lots of inefficiencies will be introduced into otherwise productive economies. So I don't see the 'relight with a vengeance' as happening and REALLY don't see the average Joe or Jane beating down the door for vacations somewhere exotic. Especially after spending some time in their own backyard and perhaps figuring out their own backyard (and some places not all that far from it) is a pretty nice place to be.

[Airbubba]

Here here. [sic]

Where where? ;)

[YellowFever777]

Where where? ;)

Hear! Hear!

Apologies for my shocking grammar.

[SilverCircle]

What on earth are you basing your numbers on? Post 2008 the markets went on the longest bull run in history. This pandemic has been a black swan event for the world economy because we were woefully underprepared for it, however just like the crash of 2008 this too will pass.
Because it's not an economy problem alone like in 2008. The economy disaster happens on top of a very natural one.

As long as there is no cure for the root of all this evilness, traveling around the world will remain a risk and thus limited. While the recovery potential is definitely there, many states won't allow unlimited global travel for a while, at least a year is a good guess, maybe even longer.
I certainly don't have the answers but I am certainly more optimistic of a medium term recovery, trying to predict 15 years out from now is insanity. The vacuum created by the airlines that have gone bust will be filled by new airlines or expanding surviving airlines.
15 years is indeed a bit pessimistic, with that I would agree. It could take 1-2 years until we have a working vaccine, after then it should be possible to resume more or less unlimited air travel, but it won't happen instantly. Up to 5 years from now is a good guess.

No matter how you view it, it's a major disaster and the airline industry is probably hurt much more than any other business branch except maybe general tourism.

[Flex88]

Aus Health director has indicated that International Travel restrictions "will" remain in place for another 3 - 4 months "at least" .... Some countries may leave these in place for "much" longer..
Up to and including Sept this year estimate is 1.2 BILLION less passengers, ⅔ LESS capacity (I believe this to be optimistic) and Europe/Asia to be hardest hit...

https://conservativebrief.com

Please note in these charts they do not speculate past the 3rd or 4th quarter..
Read the details. Some of the facts/charts DO NOT include "domestic" travel contraction ...

There is as well, no influence from economists re the expected wave of bankruptcies, home foreclosures that are 100% expected starting in about 2 > 3 months.

[V-Jet]

In the Depression people could spend money if they wanted to. Now they can't - they will hoard it. That means lack of demand. Lack of demand leads to lack of supply which leads to lack of jobs. The stock market hits and unemployment figures have more or less matched the Depression from 1929-1933. The differences now are that we've passed that in the last 4 weeks (not 5 years) and even in the Depression if I'd given you $10,000 you could have gone out and partied like it was 1999 - now you just cant do that.

Forgive the use of US figures, it's easier to use a single set we are all relatively familiar with. In 2008 US unemployment hit 15.3m, as of today there are likely 30-33m unemployed, which equates to something in excess of 25%.

30+ MILLION people effectively on welfare and not spending (forget about travelling!) in ONE economy is staggering. This is a catastrophe of unimaginable proportions - certainly at this stage I don't think anyone has a clue as to what is happening. Stock market players certainly don't - negative oil prices, bank collapses, there is no manual for this ultimate black swan event. If anyone had suggested 30% unemployment and oil at MINUS $40 even 4-5 weeks ago they would have been put away.

Airlines, travel and hospitality are the front lines. It's not going to be pretty for anyone, but even when people can travel again, they will likely be very cautious and that's even if they do actually have the money to do so....

[1200firm]

As the tide goes out we'll get to see who has been swimming naked.

[V-Jet]

In that case, I hope to christ there are enough to hide the (admittedly) diminutive but still horrific sight of Alan Joyce!!

[Sqwak7700]

A few facts from history
I don’t agree with the OP’s 15 year timeline, nothing in history has resulted in a downturn that long. No disease outbreak in the last +300 years has lasted that long either.

Japan’s stock market hit its peak in the late 80s. So did their property market. So going on 30+ years and they’ve had ups and downs, but have never recovered and the trend is only going one way (let me spoil the surprise, Japan in negative rates for several months now)

Of course the outbreak will go away. We are already seeing better data showing the massive overreaction. But the virus was just the trigger device on this nuclear debt bomb. The fact that the global economy exploded how it did has nothing to do with the virus and was years in the making.

Remember negative rates started way before the virus, and so did the repo market meltdown as well as the complete reversal on tapering by the Fed.

[Threethirty]

It’s galling that ordinary individuals and businesses are struggling whilst the pigs in the banking and hedge fund world roll around in free money from the Federal Reserve, meanwhile Joe six pack gets a 1200 dollar one off payment to keep him quite.
Welcome to the new feudal reality where banks and investment companies gorge themselves on free hand outs, leaving the plebs to claim a pitiful universal income from the state.

[V-Jet]

There is nothing to fear but fear itself. But it’s upon us and it’s real.

Pilots are technical, generally people aren’t. Politicians certainly aren’t. It occurred to me a while ago that it’s very difficult screwing up a sim/sector and reading about it. Politicians get that a million fold. It must hurt tremendously to do what you see as your best and be derided. Being written up as killing people is something most would do anything to avoid.

No winners in this, but tough love ain’t going to cut it in the popular press and (aside from the Wuhan/Auschwitz method of control) that’s what people will read about for generations to come....

No easy answers. It’s a catastrophe.

[cxorcist]

Did you know a corona virus has never had an effective vaccine? Think SARS, where’s the vaccine?

To the point, a vaccine is likely not forthcoming. So what to do? Well, there’s only one thing to do... Herd Immunity, unless you consider shutting the world economy down long term to protect the oldies and vulnerables is an option.

In my opinion, this shutdown has been overcooked. Have we flattened the curve? Yes. Have we kept the health care system from being overrun? For sure. Have we destroyed the economy? Indeed! Have we stunted herd immunity? I argue yes.

What does this mean? It means that a second wave, likely in the fall (and possibly third wave in 2021), could well be proportionally worse. It will be very interesting to see how Sweden and other locations with lesser restrictions do by comparison. I think the world is about to get a huge lesson in epidemiology.

This virus is going to take its toll. The only question is where and when? Sweden is paying the piper up front. Will it pay off in the future? I believe it will. I especially admire their political courage to do what they have done in the face of a global shutdown. They haven’t succumbed to peer pressure and virtue signaling.

[Slasher1]

Ya know, there's not this magical money Tree O' Health care in much of the world. There are places when the loss of a job may well mean your access to medical care just got a great deal worse than it was. So when you target fixate on ONE disease (which is in general really contagious, and really dangerous for a certain fraction of the population but relatively benign towards others) -- at the expense of everything else -- you kill people.

It's not like all the other diseases go away.

In the US, they've emptied out hospitals and literally banned 'elective' surgeries and preventative medicine to make room for COV patients who'll never show up. So what happens to these folks who now have their care at best pushed to the right several months ? Who otherwise might have had access to potentially life saving preventatives and diagnostics ? And to the laid off medical staff who now needs to regen to get back to work. While a doctor given a diagnosis can probably use his expertise to determine if care is essential at the time, it's impossible to look in from the outside with a broadband ban saying that some things are essential and these other things are not. Especially when driven by politicians and bureaucrats. So that preventative or elective might well be essential in reality; perhaps preventing a heart attack, embolism, or other serious condition from claiming a life.

I can see perhaps an ortho surgeon deciding for himself if it's in his (the doctors') best interest to be operating during a pandemic. But not some idiot in a tie making that decision for him.

So we are effectively killing people when we knee-jerk and overreact to one specific disease like this at the expense of everything else.

[drfaust]

Well gents, it’s going to be interesting that’s for sure. I hope people have something saved up because we seem to be heading for the catastrophe of a lifetime. LongTimeInCX has a solution that calls for the survival of the fittest, in the end if they don’t find a vaccine soon enough we will see that scenario play out. I don’t know what’s wise, I like my parents and would like to avoid rolling the dice with this one myself if I don’t absolutely have to.

However, I do not worry. We as a species are pretty resilient. We have survived wars, genocides, great leaps forward, ethnic and religious persecution, disease, famine and other catastrophes and as a species we will survive this one. Whether we do so with dignity will be up to each individual to decide for themselves.

Let’s wait and see what the managers come up with to try and get the group to survive this. In the end that’s critically important for all of us. If they can survive, it means we can all come back at some point after a period of furlough for a segment of the employees. If they do not survive, some of us may never work in a flight deck again. It is what it is.

I guess this is what they mean when they say “interesting times”.

[mngmt mole]

Comments from another website:

My employer mentioned last week that all 27k UK employees will remain work from home for a considerable time partly due to finding out the business operates just as well when home based, there are also rumours that the majority of the 16k located in London will be offered home working permanently and the company will offload several large properties. It would not be surprising to see the majority of companies doing the same in order to remove the costly real estate burden now that they have successfully experienced lengthy working from home. My employer also announced zero travel and complete change around travel in the future stating video conference will be the go to option.

This is the problem we now face...

[FlyingNun]

Meanwhile, getting back to the title of this thread “Airlines Going Under” BA just announced plans to make 12000 employees redundant.
BA employs 45000 of which 4500 pilots, 16000 cabin crew,
I wonder if CX will follow that trend.

[mngmt mole]

No. CX will keep filling new courses weekly with cadets. Makes perfect sense. Don't worry though, the currently employed workforce will dilute their earnings to pay for them :ugh:

[hyg]

Comments from another website:

My employer mentioned last week that all 27k UK employees will remain work from home for a considerable time partly due to finding out the business operates just as well when home based, there are also rumours that the majority of the 16k located in London will be offered home working permanently and the company will offload several large properties. It would not be surprising to see the majority of companies doing the same in order to remove the costly real estate burden now that they have successfully experienced lengthy working from home. My employer also announced zero travel and complete change around travel in the future stating video conference will be the go to option.

This is the problem we now face...

Not just in UK, Australia is the same.... my sister told me their CEO said last week in an email, people who were all sitting in the offices tgt before the virus may never sit in the same offices with each other again. Even when ppl can go back to work, they might just run a team A and B rotation for hot desks at the office. As you said, apparently lots of businesses have realised that they can have ppl working from home, saving office rental costs etc while still actually run to a rather regular standard.

It's always the case when business management was forced to take drastic measures and realise 'oh wait, this works and cost less money?? WOW' then it would never go back to the old way that cost money....

[Climb150]

Many people who now think working from home is a viable option long term will be surprised when demand actually returns to normal. It's easy to work from home with very little to do.
I read somewhere today that only about 15% of people have jobs that are possible to do at home. How effective that 15% will be at home is another matter.

A previous employer of mine banned working from home all together.

[cxorcist]

The current social science says most people working from home aren’t very productive. There are exceptions of course, but I don’t think most employers are willing to go down that route long term unless very strict measures of performance are possible. Also, online communications are often deceptive. Without in person body language, it’s tough to know if perceived truth is real or not.

[Tommy Gavin]

[QUOTE=cxorcist;10772331]The current social science says most people working from home aren’t very productive. There are exceptions of course, but I don’t think most employers are willing to go down that route long term unless very strict measures of performance are possible. Also, online communications are often deceptive. Without in person body language, it’s tough to know if perceived truth is real or not.[/QUOTE

BS:
https://www.businessnewsdaily.com/15259-working-from-home-more-productive.html

My friends say the same. That is of course if you don't have little kids running around.

[Flex88]

The current social science says most people working from home aren’t very productive. There are exceptions of course, but I don’t think most employers are willing to go down that route long term unless very strict measures of performance are possible. Also, online communications are often deceptive. Without in person body language, it’s tough to know if perceived truth is real or not.

This has been tried extensively years back and, for the most part, failed on productivity performance.. Some will say the companies didn't have the correct technology and they will be wrong.. It was silicone valley who was first, the inventors of the technologies, and the effort did not last long.. Other than "coders" (who work 100% by the piece) you see large tech companies continue to buy/build/rent massive campuses worldwide and there's a reason ( e.g. Apple)..

As an aside, The US Dow is tanking at this very moment due to a annual Corporate Shareholder Meeting by Berkshire Hathaway (i.e Warren Buffet).. Literally everyone in the world listens to this guy and react to his moves. His big move today - selling his entire holdings in the 4 largest US Airlines and, after being pressed on this, indicated that getting into this sector in the future - share purchasers should use extreme caution (caveat emptor) !!!

[cxorcist]

[QUOTE=cxorcist;10772331]The current social science says most people working from home aren’t very productive. There are exceptions of course, but I don’t think most employers are willing to go down that route long term unless very strict measures of performance are possible. Also, online communications are often deceptive. Without in person body language, it’s tough to know if perceived truth is real or not.[/QUOTE

BS:
https://www.businessnewsdaily.com/15259-working-from-home-more-productive.html

My friends say the same. That is of course if you don't have little kids running around.

So you think one article and/or study makes it so?

Seems a bit flimsy to me. Fake news/study?

[Tommy Gavin]

[QUOTE=Tommy Gavin;10772408]

So you think one article and/or study makes it so?

Seems a bit flimsy to me.

At least I refer to one.
But if you've ever worked in an office environment you know there is way too much distraction which isn't at home provided the little ones are at school.

Maybe not 5 days per week but 2 or 3 are entirely possible. However face to face contact will always be important. Having said this I dare to say that at least 20 percent of business trips are unnecessary and an excuse to go on the piss in a different city / country.

[cxorcist]

[QUOTE=cxorcist;10772497]

At least I refer to one.
But if you've ever worked in an office environment you know there is way too much distraction which isn't at home provided the little ones are at school.

Maybe not 5 days per week but 2 or 3 are entirely possible. However face to face contact will always be important. Having said this I dare to say that at least 20 percent of business trips are unnecessary and an excuse to go on the piss in a different city / country.
So, if I google an article and/or study and post it here, it gives me more credibility? Wow, who knew the Internet was so devoid of garbage?

How about the value of human interaction, synergy, working groups, sharing, learning, etc? All that can and should be done online now? So all these modern tech companies with their big campuses and open work spaces are wrong? Businesses have been spending all this money, all these years for no good reason. Who knew?

To me, you sound like a gullible, new age youngster thinking we should recreate the wheel because, all of a sudden, your much smarter generation has it all figured out. Please!

[Tommy Gavin]

[QUOTE=Tommy Gavin;10772504]
So, if I google an article and/or study and post it here, it gives me more credibility? Wow, who knew the Internet was so devoid of garbage?

How about the value of human interaction, synergy, working groups, sharing, learning, etc? All that can and should be done online now? So all these modern tech companies with their big campuses and open work spaces are wrong? Businesses have been spending all this money, all these years for no good reason. Who knew?

To me, you sound like a gullible, new age youngster thinking we should recreate the wheel because, all of a sudden, your much smarter generation has it all figured out. Please!

To me, you sound like an arrogant, reminescent old age alcoholic who thinks his way is the only way. Please!

Now if you've actually read what I wrote you realise I actually value human interaction.

[Tommy Gavin]

Apparently I touched a nerve with cxorcist... #snowflake
Private message. I rest my case

Momma’s Boy
From cxorcist (https://www.pprune.org/members/274738-cxorcist) 4th May 2020 20:02
[QUOTE=Tommy Gavin;10772521]
Quote:
Originally Posted by cxorcist
To me, you sound like an arrogant, reminescent old age alcoholic who thinks his way is the only way. Please!

Now if you've actually read what I wrote you realise I actually value human interaction.
Alcoholic? You got that from my post. Good one Sherlock.

How about keeping your fake news and bad science in your overpriced universities where all the academics tell each other how smart they are and then use their friends in the media to reinforce their inflated self worth. Meanwhile, the “reminiscent, old age alcoholics” will keep you safe, fed, and pampered. ****!

[cxorcist]

... and here’s a post from Dearest Gavin:

“Whilst we are saving money. Is the Captain really necessary?”

Now we know...

[anxiao]

Tommy I love this quote from the article.

"Office workers spent an average of 66 minutes per day discussing nonwork topics, while remote employees only spent 29 minutes doing the same. Managers were found to be particularly distracting, as they were found to spend nearly 70 minutes talking about nonwork topics compared to the 38 minutes spent on average by nonmanagers.

You don't need to see the source research to agree to the second sentence. I would guess every non manager worker in the world has experienced it at some time ;-)

[mr did]

Man Working From Home Holds Useless 2-Hour Meeting With Himself

Saying he wanted to replicate the feeling of working from the office, Melbourne account manager Liam Hickey has set up a daily 2-hour meeting with himself, with no clear agenda or likely outcomes.

After exchanging a few superficial pleasantries with himself about what he had planned for the weekend, Hickey spent the remaining 110 minutes trying to impress himself with long words and meaningless suggestions.

“We need to drive the strategic-focused optics on this solution and then circle back,” Hickey said before repeating the same phrase, but louder and more slowly.

After going off on a twenty-minute tangent about needing to move the needle on operational efficiencies, Hickey suggested to himself that he take that offline and discuss it at a separate meeting, which he would set up for later in the day.

Towards the end of the meeting he began to make his first interesting suggestion before cutting himself off with a comment about an unrelated matter.

At the end of the meeting he spent ten minutes scheduling the next meeting, and then sent an email to himself with the key topics discussed, which he did not read.

The Shovel

[Tommy Gavin]

... and here’s a post from Dearest Gavin:

“Whilst we are saving money. Is the Captain really necessary?”

Now we know...
Oh dear. That was a sarcastic answer on a stupid question. To putt something out of context. Bravo!
Now back on topic

[Tommy Gavin]

Tommy I love this quote from the article.

"Office workers spent an average of 66 minutes per day discussing nonwork topics, while remote employees only spent 29 minutes doing the same. Managers were found to be particularly distracting, as they were found to spend nearly 70 minutes talking about nonwork topics compared to the 38 minutes spent on average by nonmanagers.

You don't need to see the source research to agree to the second sentence. I would guess every non manager worker in the world has experienced it at some time ;-)

Yes exactly. Maybe not for everyone, maybe not everywhere and definitely not full time, but working from home will definitely increase. And business trips will decrease, at least in the coming years:
https://www.forbes.com/sites/danielreed/2020/04/15/covid-19-wont-kill-leisure-or-business-travel-but-it-will-change-it-significantly-perhaps-forever/

[Flex88]

CX office workers working from their homes would crash eBay & Amazon ....

[Oasis]

CX office workers working from their homes would crash eBay & Amazon ....

at least there they can sleep in their own bed after that 2 hour lunch.

[Flex88]

https://www.dailymail.co.uk/news/article-8288689/Virgin-Atlantic-axe-3-000-jobs-cease-operations-Gatwick-Airport.html?ito=social-twitter_dailymailUK

Much more to follow..

[theleftphalange]

So the hunger games society begins. Anyone see that recent London real interview?

[Flex88]

Read and notice here what no-one at CX has heard "Clerical AND Management." How many "Managers" at CX are being prepared for furlough ??? The BS and berating at CX is always always always about bashing Flight Crew and never doubting management sycophants !!!

https://www.newsmax.com/finance/companies/united-airlines-cut-jobs-aid/2020/05/05/id/966131/

[mngmt mole]

Spoke with a friend at United yesterday. He confirmed that they have been notified of approx 4000 pilots to be furloughed. Further, he told me that his colleagues at both AA and DL have also told him of similar numbers to be let go at both of those carriers as well. You can draw your own conclusions...

[cxorcist]

Spoke with a friend at United yesterday. He confirmed that they have been notified of approx 4000 pilots to be furloughed. Further, he told me that his colleagues at both AA and DL have also told him of similar numbers to be let go at both of those carriers as well. You can draw your own conclusions...
Yep, it’s going to be a sh!tshow. At least 10000 US pilots furloughed, possibly over 20000 across all passenger airlines. It’s going to be ugly for quite a while. It’ll be interesting to see which ones come crawling back to CX on their hands and knees for DEFO. That assumes CX still exists and doesn’t have its own redundancies.

[BuzzBox]

Read and notice here what no-one at CX has heard "Clerical AND Management." How many "Managers" at CX are being prepared for furlough ??? The BS and berating at CX is always always always about bashing Flight Crew and never doubting management sycophants !!!

We don't know what CX is planning, but if other airlines are any guide then redundancies across the board are likely. Were you asleep several years ago when a large number of office staff AND managers were made redundant at the beginning of the 'transformation' program? I don't recall any pilots being made redundant at the time.

[cabbages]

GMA now claiming that ' ....approaching 500 pilots employed on COS18........including experienced Captains.........which provides a strong foundation for us to come through this crisis.'

Surely a big hint here as to what all the remaining CX HK pilots will now be expected to sign up to?

[Coronavirus]

How will those on Arap survive on Cos18? I can assume some have Young families and will need to pay 40-60k/month mortgage payments.

​​​​​​What is the purpose of the AOA after this is all done?

See you all in economy when you're pxing


​​​​​​
​​​​

[Bokpiel]

Spoke with a friend at United yesterday. He confirmed that they have been notified of approx 4000 pilots to be furloughed. Further, he told me that his colleagues at both AA and DL have also told him of similar numbers to be let go at both of those carriers as well. You can draw your own conclusions...

Spoke to a friend at Rumour Air yesterday. He confirmed that they have been notified of approx 83646383 pirates to get the lethal injection. Further, he told me that his colleagues at Air Thumb Suck and Mole Airlines have also told him of similar numbers to be let go at both of those carriers as well.

But hey psssst, please keep it quiet as only me and the very bored exclusive ring I'm in knows about this and the media will never find out...NEVAAA!

[Bokpiel]

Not saying things won't get bad. Just saying we have some real characters here who have nothing better to do than continually start their own rumours. Shame...

[Flex88]

Not saying things won't get bad. Just saying we have some real characters here who have nothing better to do than continually start their own rumours. Shame...

Here you go Bokpiel, another one of those pesky "rumours", this one from Forbes Magazine just 2 days ago. This rumour relates to only ONE of the worlds 5000+ airlines.. Do the math ??????

https://www.forbes.com/sites/danielreed/2020/05/03/united-launches-plan-to-eliminate-at-least-a-third-of-its-pilots-jobs-other-work-groups-there-and-at-rival-carriers-are-likely-to-follow/#71a4115d2bf5

[boxjockey]

Yep, it’s going to be a sh!tshow. At least 10000 US pilots furloughed, possibly over 20000 across all passenger airlines. It’s going to be ugly for quite a while. It’ll be interesting to see which ones come crawling back to CX on their hands and knees for DEFO. That assumes CX still exists and doesn’t have its own redundancies.

WOW!! Come crawling back to CX on their "hands and knees" he says!! I spent 12+ years at CX, and I would rather be DESTITUTE than to subject myself and my family to that life again. Please be careful not to fall off of that pedestal!!

[Pickuptruck]

GMA now claiming that ' ....approaching 500 pilots employed on COS18........including experienced Captains.........which provides a strong foundation for us to come through this crisis.'

Surely a big hint here as to what all the remaining CX HK pilots will now be expected to sign up to?
unless you’re a CX pilot in which case you won’t get the hint. Back of napkin says around 105 million a month putting everyone on COS18. Exactly why would the company miss this opportunity?

[Dragon Pacific]

I think we’ll lose one of our group airlines. My money is on the amalgamation of KA and Express. Lots to be saved by one set of managers etc etc.

[cxorcist]

WOW!! Come crawling back to CX on their "hands and knees" he says!! I spent 12+ years at CX, and I would rather be DESTITUTE than to subject myself and my family to that life again. Please be careful not to fall off of that pedestal!!
Box and others offended,
My bad! That wasn’t my intention. It was more of a statements about how crappy CoS18 is than about those willing to take it during hard times. We all fall off the pedestal at some point. Most of us do it more than once. I certainly have and may yet again if the sh!t hits the fan at CX.

[Pickuptruck]

Box and others offended,
My bad! That wasn’t my intention. It was more of a statements about how crappy CoS18 is than about those willing to take it during hard times. We all fall off the pedestal at some point. Most of us do it more than once. I certainly have and may yet again if the sh!t hits the fan at CX.
Compared to what? BOAC captains? Starting pay first year cadet at CX is better than first year at Ryanair, BA, etc. You obviously haven't got a clue what other airlines are paying. The cheapest I've seen is earning 1000 Euro a month RHS on a 320 in Europe. You think COS 18 is worse.
Boxjockey, another full of sh*t poster on here. You have any idea at all what destitute means? Sleeping in your car in the carpark mall with 2 kids in the back. Getting woken up every 3 hrs by security and told to move on. Washing in a public bathroom, queuing at a soup kitchen, trying to get a job with no fixed address, trying to stay current as a pilot so you can find a job. You have no idea what the guys out of work in this profession are going through right now. So wind your head in, when you say you'd rather be destitute. You have no clue.

[cxorcist]

Pickup,

You are the problem! First year pay? What about the rest of the contract? Destitute? You are comparing a pilot to an unemployed and homeless person. Why? Pilots are capable of much more than flying. We can do many other things. History shows us that. During every downturn, many pilots have left flying and never returned because they found better gigs elsewhere. Wake up JA!

[controlledrest]

Compared to what? BOAC captains? Starting pay first year cadet at CX is better than first year at Ryanair, BA, etc. You obviously haven't got a clue what other airlines are paying. The cheapest I've seen is earning 1000 Euro a month RHS on a 320 in Europe. You think COS 18 is worse.....

With seniority there is no 'mobility of labour', so pay rates only matter for attracting enough at the bottom. One has to also consider quality of life, cost of living etc. $ alone is only one aspect of a gig. Once the golden handcuffs are in place one can't move, so one must fight for what you have. If the company will fail without concessions I will make concessions to keep myself employed. Once the company is back in profit I would expect my sacrifices to be recognised and to share in those profits.

[LongTimeInCX]

. Once the company is back in profit I would expect my sacrifices to be recognised and to share in those profits.

Such hopes are at best wishful thinking, and more likely, simply naive.

With all due respect, history has shown, that they have seldom, given anything back, once taken.
I would humbly suggest that unless our HKAOA obtain in writing, exactly what or how much of any concession will be returned once CX return to profitability, that the chances of a voluntary return is so slim a possibility, as to not being worth considering.

[AllWobbly]

Such hopes are at best wishful thinking, and more likely, simply naive.

With all due respect, history has shown, that they have seldom, given anything back, once taken.
I would humbly suggest that unless our HKAOA obtain in writing, exactly what or how much of any concession will be returned once CX return to profitability, that the chances of a voluntary return is so slim a possibility, as to not being worth considering.

I think we have to be realistic. The corollary of expecting a “payback” in good times would be to take a proportional cut during the bad.
At the moment we are obviously losing a lot of money far more that the monthly reduction due to SLS (cos18 excepted). Purely a personal opinion but I am amazed that we haven’t as yet seen redundancies. I know at times we all have our gripes about the company but talking to my mates in BA and Virgin is sobering ( normally it isn’t !)

[main_dog]

I don’t think we would require being “paid back” any income lost during a (defined) period of hardship for the company, personally I would already be satisfied with not permanently give up any terms and conditions (which we would indeed never get back). In other words, any concessions made (such as a salary sacrifice) should be limited in time, after which an automatic return to current terms and conditions occurs.

Anything else is just trying to take advantage of the current crisis to permanently cut unit costs and our income/quality of life. If they don’t need our labour, redundancies are natural; but if they want to keep the frontline workforce intact in view of making a killing post-crisis, then asking for permanent concessions is not acceptable.

[TheGreenDragon]

Do I want to be out of work?
Do I want a year of unpaid leave?
Should I stick to my rigid views about the company?

No .

I read about expats working for free in Vietnam. Donating their time to save the company.

Would you rather donate your time without pay or loose your job?

A bit like Ronald Regan who said he’d rather be dead than red .

[Gnadenburg]

I read about expats working for free in Vietnam. Donating their time to save the company.

Would you rather donate your time without pay or loose your job?

GD

I hope you are OK. Tough times for many.

I read about one expat guy only? There's thread running over on the Far East forum. Not sure if that's your info' source and it certainly seems he's upset locals and expats alike. Some suggesting upsetting locals in that country means sleeping with one eye open for the rest of your contract!

[Bangaluru]

I don’t think we would require being “paid back” any income lost during a (defined) period of hardship for the company, personally I would already be satisfied with not permanently give up any terms and conditions (which we would indeed never get back). In other words, any concessions made (such as a salary sacrifice) should be limited in time, after which an automatic return to current terms and conditions occurs.

Anything else is just trying to take advantage of the current crisis to permanently cut unit costs and our income/quality of life. If they don’t need our labour, redundancies are natural; but if they want to keep the frontline workforce intact in view of making a killing post-crisis, then asking for permanent concessions is not acceptable.

Thanks for this very succinct and sensible post. It helped me clarify our position.

[never ready]

Perhaps a better way for the company to implement a temporary pay cut would to introduce a compensation scheme on salary sacrificing rewarded with Cathay Pacific share allocation. For example, for every HK$9 (being current share price) of pay reduction one CX share is allocated. These shares do not fully vest for three years or normal retirement, whichever comes first. If you leave before the three years you get zero. This keeps us all "in the game" and on side.

[controlledrest]

Not a bad idea.

[Shot Nancy]

[/QUOTE]rewarded with Cathay Pacific share allocation
[QUOTE]

No. No. No. No.
They will just reissue a different class of share later and screw you.