Airlines too pessimistic about air travel recovery: merged threads

[TT738]

Published on Thursday, May 28, 2020 (from travelmole)Airlines too pessimistic about air travel recovery, says data specialist



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EasyJet and other airlines are being too pessimistic about the recovery of air travel, according to industry analysts.

Data and analytics company GlobalData forecasts that international arrivals should reach 2019 as early as next year, not 2023 as airlines have predicted.

As easyJet announced plans to cut 30% of its workforce, John Vandesquille, GlobalData travel and tourism analyst, said: "With travel in Europe almost at a standstill, trimming costs is a necessity in the short term. However, easyJet's latest announcement stems from management's belief that travel demand will not return to pre-Covid levels until 2023.

"There is an element of risk here because demand could return sooner than that. According to GlobalData's forecasts, the number of international arrivals should reach 2019 levels as early as 2021.

"This can be seen as a slightly risky bet for the airline considering that consumer confidence is returning as the crisis is slowly coming to an end and that a potential 'travel itch' from Europeans following months of lockdown should not be ignored.

"Indeed, it will be essential for airlines, and even more particularly for those that are planning to be ready to fly for peak season like easyJet, to be fully operational as quickly as possible.

"The pandemic will deeply modify the way we see travel and people are expected to be more health conscious. Similarly, a post-Covid-19 economic recession is looming and it could have a significant impact on travel and tourism. But all this is unlikely to fully deter travellers.

"In a difficult economic context, low-cost airlines are the best equipped to make it out relatively safe. As such, easyJet can only hope that its decision to reduce its fleet and its workforce will not impede its recovery."

link

https://www.travelmole.com/news_feature.php?news_id=2042853

[Mach E Avelli]

Well of course consultants (or ‘specialists’) would talk it up for travel agents. They are not the ones with multi million dollar aircraft leases and all the other costs of running an airline to service.
The golden rule of consulting seems to be tell clients what they want to hear.
Easyjet et al would have their own experts telling them what to do, not what they would like to do.

[PilotLZ]

The concept of protective pessimism and erring on the safe side increases an airline's cash reserve margin, should the best-case scenario not materialize. Of course, we all hope that it will, but in case it doesn't, an extra safety net of saved cash and minimized overhead costs will improve the chance of riding it out. If there's a sustained positive trend throughout Q3 and Q4 of 2020, airlines won't be too challenged to ramp up capacity for 2021. Lots of available aircraft, lots of unemployed personnel, lots of vacant slots available these days. Whenever demand picks up whoever's still in business and has solid cash reserves will be quick to benefit from it. But, to fulfill the latter two conditions, a conservative approach while uncertainty is still great helps a lot.

[ozbiggles]

From an organisation that makes it’s money advertising travel...A reliable, independent report no doubt.

[frozenpilot]

Out of interest what is the data stream that is predicting it taking until 2023 for traffic to recover to 2019 levels?

How are Airlines projecting 40%, 60% etc traffic levels in 2021?

That article may be bang on, it could be incredibly wide of the mark... Right now it is completely unknown! There has been no global situation like this before.

Airlines may be over pessimistic right now, which is understandable with little or no revenue for the past 12 weeks... You certainly could argue a late summer bounce back may be on the cards in certain sectors ( IF Governments get their acts together and work on sensible solutions ).

[Ollie Onion]

One thing is certain, by the end of next year we will know how accurate this report is :-) How anyone thinks they can predict the outcome of this mess is beyond me. I have mates in businesses as diverse as bed sales, spa pool sales and building who say they have never been busier and lots of friends who are out of work. Some economic indicators are in the toilet whilst other ps are looking stronger than expected...... no body knows. As one economist said on the radio today, ‘the degree of the fall doesn’t really matter, we are interested in the rate of recovery’ he openly admitted this is something we can’t predict as we have never seen anything like this, he said the worlds top economists are saying anything from 2 years to 10 years + for a recovery to pre coved levels. Hope for the best and plan for the worst I say.

[PilotLZ]

Also, the generalization "airlines" begs the question "Which airlines, and where about in the world?" since some areas and types of operations clearly have a somewhat better outlook than others. In Europe, things are slowly tip-toeing towards normality (touch wood). In the USA, there are some positive signs as well. In South America though, the situation is likely to get worse before it gets better. Due to the very nature of easing the restrictions on a regional and continental level before going transcontinental, short-haul will certainly recover before long-haul. Also, it's likely that low-cost carriers will recover before legacy ones since in times of recession people will be looking for the cheapest solutions possible, with comfort and status somewhat lower on the priority list. So, a forecast that may be applicable to a European low-cost carrier will prove totally irrelevant to a legacy carrier in Southeast Asia.

[Sunfish]

The recovery is going to be Patchy”. The long and short answers involve expense and risk. There are going to be few travel bargains and International travel insurance covering Covid19 is unavailable.

[gordonfvckingramsay]

EasyJet and other airlines are being too pessimistic about the recovery of air travel, according to industry analysts.

First line says it all, EasyJet etc are taking down their own industry. The one and only reason an industry does that is in order to drive an industrial agenda. Doom and gloom equals downward pressure on pay and conditions.

[kev2002]

I've been following Air NZs chief revenue officer over the last week. in the last week he posted that forward bookings have been better than anticipated on the domestic network.

[Mumbai Merlin]

You can talk about 'airline' recovery as much as you like but there is a need to reflect upon;

The ongoing effect of Covid-19, which is with us forever in some form or another, airline charges may well increase....
The individuals personal financial position; discretionary spending has been severely impacted, people with less resources than before will not be traveling. It can take years to recover personal financial loss.

[TT738]

I've been following Air NZs chief revenue officer over the last week. in the last week he posted that forward bookings have been better than anticipated on the domestic network.yes

the negativity in a pilot forum is unbelievable.

You should all be talking it up as much as possible, like real estate industry. Do you want to go back to work full time or not ?

[TT738]

You can talk about 'airline' recovery as much as you like but there is a need to reflect upon;

The ongoing effect of Covid-19, which is with us forever in some form or another, airline charges may well increase....
The individuals personal financial position; discretionary spending has been severely impacted, people with less resources than before will not be traveling. It can take years to recover personal financial loss.

By far the biggest influence on airline recovery, is consumer confidence.

Most of the media focuses on negativity & beats stories up.

Maybe we should all stop reading/watching the daily news.



The following might as well be on news …



BREAKING NEWS

Three thousand deaths in Brisbane overnight.



A person is central Brisbane sprayed an ants news with insecticide last night & killed an estimate 3000 ants.







Everyone should be talking about when they will be flying, not talking about corona.



I’ve even heard people on jobkeeper & jobseeker talking about their next holiday soon. Sure, they might be talking about cheaper holidays, but we can all see that airlines are putting out thousands of very cheap airfares right now for the next 11 months.

[B772]

Many companies have spent large sums of money to set up video conferencing. I suspect this will replace some of their interstate flying.

[krismiler]

I've been following Air NZs chief revenue officer over the last week. in the last week he posted that forward bookings have been better than anticipated on the domestic network

Possibly because people are planning on holidaying at home rather than overseas, however Australian routes could get a boost at the expense of the long haul network once the travel bubble comes into effect.

I've noticed that COVID - 19 is slipping from top spot in the news, it's still in the headlines but Hong Kong and the police killing in America were featured ahead of it when I turned on the TV.

[ZFT]

Many companies have spent large sums of money to set up video conferencing. I suspect this will replace some of their interstate flying.

Why would any company spend vast sums of money on basically free video conferencing?

[Australopithecus]

They have spent money on better facilities etc to use the technology. And the other cool tech do-dads like impressive Zoom backdrops.

on edit: July bookings are apparently running ahead of the very low expectations, but a long way yet from the 40% model.

As far as talking up travel...the market will have plenty of pent-up demand which will be tempered only by personal budgets and price. I don’t like travel much anymore, but after isolation I am itching to go somewhere first chance I get. And so is everyone that I have spoken to lately.

[Sciolistes]

Holiday flights and many other routes at ezy Uk bases are close to full or sold out this August according to their website. Lots of government cash swilling around in middle-low income families. Google trends searches are upward. 2021 is going to be a mass exodus. The problem is The UK government don't seem to want this to happen. There seems to be some kind will to roll back aviation somewhat.

[TT738]

someone could be cynical & suggest that donors to political parties, have some inside info on when borders will actually open.

Also heard today, that international airfares for Xmas period are increasing, which says something, either seats are selling or airlines know countries are opening their borders.

You'd think all airlines would be harrassing their countries leaders everyday to get the borders open.

https://inqld.com.au/business/2020/06/10/defying-gravity-travel-giants-soar-on-hopes-for-industry-still-on-its-knees/Defying gravity: Travel giants soar on hopes for industry still on its kneesBusiness (https://inqld.com.au/category/business/)

Brisbane’s travel duo Flight Centre and Corporate Travel Management are defying gravity with share prices rising steeply on the back of renewed hope for the tourism market.

Flight Centre, which raised $700 million earlier this year just to stay alive, rose 13 per cent on Tuesday alone to $17.52, which is a 96 per cent rise on its March 19 low of $8.92.

Corporate Travel Management closed on Tuesday at $14.92, a rise of 202 per cent from its March low of $4.70.

However, the shares of both companies are still well below the prices before the pandemic hit.

The Australian tourism market may face a much-reduced market when international borders do re-open because of China’s statements that its citizens should be wary of travel to Australia because of an alleged increase in racist attacks.

The overall market is also booming. The ASX 200 closed at 6144 on Tuesday, although it was expected to fall back today after a sell-off overnight in the US.

It has climbed 38 per cent since its March lows and is now 14 per cent below its high in February and added $464 billion to its value since the March lows, but it is still $267 billion short of the February peak.

The Australian dollar is also hovering around the US70 cent mark on the back of higher iron ore prices which has also boosted stocks like BHP and Rio Tinto.

[Stickshift3000]

Travel Co share prices crashed in March due to holders panicking, all are now recovering from their lows.

This is not newsworthy...

[TT738]

Travel Co share prices crashed in March due to holders panicking, all are now recovering from their lows.

This is not newsworthy...
very newsworthy, as insiders know that travel restrictions are going to be relaxed much sooner than previous talk of months away. Good news for pilots, although maybe not ex VA pilots.

[Stickshift3000]

If you studied the share price charts (as I do as a retail investor), you'd soon realise that that travel company share prices are always forward-facing and aligned with community sentiment (and COVID-19 optimism). Their share prices may be viewed as undervalued and some financial gains to be made in the short term.

No level of government has a crystal ball that will tell them the state of affairs in 1, 3 and 6 months' time. If there were significant COVID infection flare ups (I doubt it), further restrictions will be brought back in, significantly setting back the economy and travel. Why would I think this? I work in the government health sector very close to COVID policy...

Move on. No news here.

[-41]

I work in the government health sector very close to COVID policy...

Move on. No news here.

No. it is news worthy - the facts reported in the article are more solid than the COVID 1984 scare mongering from the Government health sector that bought our industry to its knees.

[TT738]

No. it is news worthy - the facts reported in the article are more solid than the COVID 1984 scare mongering from the Government health sector that bought our industry to its knees.yes with the world opening up FC & CTM will recover, probably both a bit smaller to start with.

Like the small numbers rioting in USA & this corona nonsense, it will be old news in a few weeks.

[ozbiggles]

Obviously Bryon Bay still has access to the good stuff.

[TT738]

https://www.travelmole.com/news_feature.php?c=setreg&region=2&m_id=s~Y!m_r_rn&w_id=37650&news_id=2043078

Published (https://www.travelmole.com/news_feature.php?c=setreg&region=2&m_id=s~Y!m_r_rn&w_id=3765 0&news_id=2043078Published) on Monday, June 15, 2020Air bridges could be announced in 10 days (in UK with many corona cases)The aviation industry is becoming increasingly hopeful that the Government will make an announcement on travel corridors before the quarantine is due to be reviewed on June 29.

The Telegraph has cited sources saying the Department of Transport had 'intimated' to airlines that air bridges could be announced on June 25 or 26, allowing travel from select destinations without the mandatory 14-day quarantine.

This would give airlines and travel companies a bit more time to restart their operations and salvage some business for the peak months of July and August.


A House of Commons report on the impact of the coronavirus crisis on the aviation industry, published on Saturday, has called for the UK quarantine to be abandoned.


The report, by the cross-party Transport Select Committee, says the quarantine will 'damage the recovery of the sector and the wider economy'.


It said: "We support a more targeted and nuanced border control policy that would allow people travelling from countries where the infection rate of Covid-19 is relatively low to enter the UK on a less restrictive basis."

MPs also called for the UK Government to publish the scientific evidence that is backing the quarantine, which is yet to be seen.

Ryanair said it welcomed the report's call to end the damaging measure and added: "Thousands of UK families are ignoring this useless quarantine and booking their well-deserved family holidays in July and August."

Meanwhile the pilots union BALPA said it was pleased the Transport Select Committee report highlights the lack of evidence for the 'botched' quarantine policy.

General secretary Brian Strutton said unless it was reversed very soon, it will be 'hugely damaging' for the long-term health of the industry.


Ryanair, British Airways and easyJet have begun legal action (https://www.travelmole.com/news_feature.php?news_id=2043069) against the Government over the quarantine.


The quarantine came into force on June 8 and, according to reports, there have not yet been any fines issued.


Meanwhile France opened up its borders today, no longer requiring visitors from the UK and other European countries to demonstrate their travel to the country is essential. UK visitors are still being asked to quarantine for 14 days on arriving in France but this will not be policed.


Spain is to allow free travel for visitors from the UK and EU countries from June 21, although its border with Portugal will remain shut until July 1 on request of the Portuguese Government.


Spain is also allowing some German holidaymakers to visits its Balearic islands from today as part of a pilot scheme.

[TT738]

& the whole of EU/UK seems to be opening up today, with quarantine still in place, but no one is policing it.

See other post.


https://www.pprune.org/australia-new-zealand-pacific/633262-we-have-quarantine-but-eu-uk-don-t-enforce.html

& yet UK still has cases of corona & few deaths.

[ozbiggles]

Yes, because all theses countries have had so much success at managing COVID they should be held up as an example.

[TT738]

Yes, because all theses countries have had so much success at managing COVID they should be held up as an example.it just shows the mad over reaction here is over the top. Vulnerable people won't be flying anywhere.

Quarantine the vulnerable only here. The rest of the world is opening up, why aren't we ?

Can't drive gold coast to tweed but can fly all over EU & UK without having to quarantine.
& this

https://worldofaviation.com/2020/06/uk-parliament-rallies-against-quarantine-measures/?utm_source=newsletter&utm_medium=email&utm_campaign=15062020

[ozbiggles]

OMG, because....
UK -42000 DEAD
Spain - 27000 DEAD
Italy - 34000 DEAD
France 30000 DEAD
USA - 115000 DEAD

World - 433,648, dead and that numbers is increasing and odds on under reported with countries getting into 2nd waves.

Australia - 102

What don’t you get here? Other than the Pacific bubble there will be no international travel without a 14 day pay for yourself quarantine stay. The numbers speak for themselves. What Australia and NZ did worked, what rational mind would think we should just chuck it away now so pilots get to fly big jets any time soon?

[ECAMACTIONSCOMPLETE]

OMG, because....
UK -42000 DEAD
Spain - 27000 DEAD
Italy - 34000 DEAD
France 30000 DEAD
USA - 115000 DEAD

World - 433,648, dead and that numbers is increasing and odds on under reported with countries getting into 2nd waves.

Australia - 102

What don’t you get here? Other than the Pacific bubble there will be no international travel without a 14 day pay for yourself quarantine stay. The numbers speak for themselves. What Australia and NZ did worked, what rational mind would think we should just chuck it away now so pilots get to fly big jets any time soon?


^^this guy wins PPRUNE today

[alfaman]

OMG, because....
UK -42000 DEAD
Spain - 27000 DEAD
Italy - 34000 DEAD
France 30000 DEAD
USA - 115000 DEAD

World - 433,648, dead and that numbers is increasing and odds on under reported with countries getting into 2nd waves.

Australia - 102

What don’t you get here? Other than the Pacific bubble there will be no international travel without a 14 day pay for yourself quarantine stay. The numbers speak for themselves. What Australia and NZ did worked, what rational mind would think we should just chuck it away now so pilots get to fly big jets any time soon?
I agree - the trouble is, that ship sailed months ago, sadly: I believe both Italy & Spain introduced similar measures, but already too late. The 14 day quarantine here seems pretty pointless now, particularly with so many exceptions to try & rebuild the economy; it feels like window dressing, rather than science..

[DanV2]

https://www.travelmole.com/news_feature.php?c=setreg&region=2&m_id=s~Y!m_r_rn&w_id=37650&news_id=2043078

Published (https://www.travelmole.com/news_feature.php?c=setreg&region=2&m_id=s~Y!m_r_rn&w_id=3765 0&news_id=2043078Published) on Monday, June 15, 2020Air bridges could be announced in 10 days (in UK with many corona cases)The aviation industry is becoming increasingly hopeful that the Government will make an announcement on travel corridors before the quarantine is due to be reviewed on June 29.

The Telegraph has cited sources saying the Department of Transport had 'intimated' to airlines that air bridges could be announced on June 25 or 26, allowing travel from select destinations without the mandatory 14-day quarantine.

This would give airlines and travel companies a bit more time to restart their operations and salvage some business for the peak months of July and August.

..


Shouldn't this be posted in your other thread??

https://www.pprune.org/australia-new-zealand-pacific/632861-all-borders-reopen.html

[VariablePitchP]

OMG, because....
UK -42000 DEAD
Spain - 27000 DEAD
Italy - 34000 DEAD
France 30000 DEAD
USA - 115000 DEAD

World - 433,648, dead and that numbers is increasing and odds on under reported with countries getting into 2nd waves.

Australia - 102

What don’t you get here? Other than the Pacific bubble there will be no international travel without a 14 day pay for yourself quarantine stay. The numbers speak for themselves. What Australia and NZ did worked, what rational mind would think we should just chuck it away now so pilots get to fly big jets any time soon?

So you think it’s right that an Air New Zealand flight to the U.K., from a country which at present has ZERO Coronavirus cases would have all its passengers quarantined subject to legal enforcement, but people who have been in contact with COVID confirmed cases get a polite request from the government to politely self isolate if they can manage it, with zero repercussions if they don’t.

It was a knee-jerk soundbite without any rational to try and bury the Cummings story.

[ozbiggles]

I have to agree Alfa, I’m not sure what a half baked 14 day quarantine bought in too late will achieve?

I said before there were 2 ways to deal with this.(maybe).
Shut the borders, cause massive damage to the economy, lower the death rate or
Don’t shut the borders, cause massive damage to the economy, have a massive death rare.
When I first said it there was no knowing which was right, I think we know now.

What’s the prize for a day on pprune?

Sorry I didn’t see your post VP as I was single point typing this one. I’m not sure of which sound bite you refer too. But I’d have no real problem with Kiwis going into the UK with no 14 day penalty...but they can sure have one when they get back. It also seems there are a few (very few) cases being found after a 14 day quarantine now just to chuck another known unkown into the mix.

[Stardoggas]

Dead people don't pay taxes.

[ozbiggles]

Nor do some of the ones who are alive.

[Stardoggas]

Nor do some of the ones who are alive.
Let the aged die then I guess?

[RubberDogPoop]

Let the aged die then I guess?

Why not? Thats what "flatten the curve" was all about wasn't it? An acknowledgement that some deaths were inevitable in vulnerable communities - somewhere in there we got railroaded into "elimination", like it was an actual achievable outcome. (maybe something to do with the BS numbers out of UCol London....)

[ozbiggles]

Yep, so 400.000 dead with a lot more to come isn’t enough for you yet?That is a real stat.
Thank you for volunteering your oldies as tribute.

Actually past 440, 000 now Rubber, do you have a couple of spare aunties you would like to contribute?

[Stickshift3000]

Why not? Thats what "flatten the curve" was all about wasn't it? An acknowledgement that some deaths were inevitable in vulnerable communities - somewhere in there we got railroaded into "elimination", like it was an actual achievable outcome. (maybe something to do with the BS numbers out of UCol London....)

Yes, deaths were inevitable.

'Flattening the curve' is in efforts to reduce peak cases to ensure ICU bed and ventilator availability for severe cases.

Australia sought to suppress the virus, not eliminate it (like NZ).

[Blueskymine]

People are very happy to appear to have a heart. While they can freeze their mortgage, have jobkeeper and various levels of support.

When it all stops, the mortgage is due and the money has run out, there will be hell to pay. the oldies will be a sacrifice they’re willing to make and all talk of renaming Victoria or Queensland will be quickly forgotten. Coon cheese will be a luxury. And a national treasure.

[ozbiggles]

The only one of those I got was using my own super.
Im relatively happy with the situation in Aus and NZ given the hand that was dealt.
Would you mind coming over and painting my house with your broad brush Blue Sky? Not all of us can’t see past our own predicament...

[RubberDogPoop]

Yep, so 400.000 dead with a lot more to come isn’t enough for you yet?That is a real stat.
Thank you for volunteering your oldies as tribute.

Actually past 440, 000 now Rubber, do you have a couple of spare aunties you would like to contribute?

Hysterical hyperbole Oz, I don't want governments making policy decisions based on my grandma. There is an opportunity cost to every decision, acknowledging that ALL factors need be considered, and ALL lives - both right now (you know, the politically expedient, vote grabbing ones), and in the future, are important. And for all the "go hard-ness", we STILL have 400k deaths. Seems like almost it was inevitable...

[ozbiggles]

Inevitable?
Australia and NZ less than 140 dead. Terrible but manageable cost to economy.
USA alone over 120,000 dead. Terrible but manageable? cost to Economy. ( Actually my own opinion on the US is it is going to be catastrophic and it is only just beginning for them now).
I think there is some way in this to control your own destiny. Easier for this part of the world admittedly.
I do think it is time to open the domestic borders but Victoria will need some special consideration and shows what happens when citizens show ill discipline.

[Climb150]

Inevitable?
Australia and NZ less than 140 dead. Terrible but manageable cost to economy.
USA alone over 120,000 dead. Terrible but manageable? cost to Economy. ( Actually my own opinion on the US is it is going to be catastrophic and it is only just beginning for them now).
I think there is some way in this to control your own destiny. Easier for this part of the world admittedly.
I do think it is time to open the domestic borders but Victoria will need some special consideration and shows what happens when citizens show ill discipline.

So what is the "catastrophic thing" that's going to happen?

[ozbiggles]

Where do you begin.
Opening up too early after going softly. We are now seeing states into 2nd waves. Florida, Arizona, Nevada.
General public disorder, a break down in law and order. Seattle, Minasotta, Atlanta, New York...
Large scale public protests in Covid areas.
A commander in chief who is running rallies ( 7 of the event organisers had tested positive) and saying they should reduce testing because it keeps showing people have Covid?( I’ve actually liked some of the things Trump has done in the past but the longer it goes on the more he has lost the plot). I mean he even bought the military out for crowd control?
All they have achieved is a bad economic downturn but not much in return for it and now seemingly giving up on any attempt to manage it...in my opinion.
To keep it aviation related, how are we ever going to open up our borders to the US anytime in the next year. The UK and US have bought the most international cases of Covid to Aus. If you are the PM, what do you do now?

[Climb150]

Second wave? I think we are still in the first wave. Also, it seems protests haven't caused a spike in infections according to major news agencies.

[Asturias56]

"General public disorder, a break down in law and order. Seattle, Minasotta, Atlanta, New York.."

if you're talking about Black Lives Matter demonstrations it has nothing to do with COVID

[ozbiggles]

You mean the BLM demonstrations and other groups protesting and gathering in larger numbers (including political rallies) not adhering to social distancing and personal hygiene has nothing to do with Covid and it’s spread? Then by your logic it must be helping control it?