A Code Of Conduct For Aviation’s Recovery
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A Code Of Conduct For Aviation’s Recovery
The article below is from Aviation Week. While it is USA tilted, we can draw parallels that apply here in Asia.
Some very interesting code of conduct points. I'd like to think that our airline would take all on board.
Desperate times call for bold measures, and the $2.2 trillion coronavirus economic rescue package passed by the U.S. Congress and signed into law by President Donald Trump certainly passes that test. Tucked into the gargantuan measure was $58 billion for airlines and cargo carriers, including $29 billion in grants to keep workers paid for the next six months, even if they are staffing empty flights. Boeing did not get the $60 billion directly that it had sought for aerospace manufacturers, but the aircraft giant and its suppliers still qualify for hefty rescue loans or guarantees.
The secretary general of the United Nations has called COVID-19 the worst crisis the world has seen since World War II, and governments have a duty to ensure that this unprecedented pandemic does not wipe out vital industries. But the torrent of rescue money could have negative side effects, and it is imperative that governments step back when the crisis subsides.
The market distortions of state aid already are apparent in the airline industry, where a lack of coordination among governments—even those within the EU—has tilted the playing field. And what if Boeing receives government backstops that Airbus has said it does not need?
It is increasingly likely that when the pandemic subsides, the aviation industry will be facing a long uphill march to recovery, rather than the quick bounce-back that had been hoped for. As such, we urge the industry’s stakeholders to start looking ahead and taking steps that will position them to recover as quickly as possible. Consider this Code of Conduct:
Take care of your employees. You will need them to excel and work as a team when you recover. Do whatever possible to keep them healthy and well-informed. In the near term, furloughs, wage freezes and hiring freezes may be unavoidable to control costs. But prioritizing shareholders or senior executives over workers would create labor issues that could slow any recovery.
Take care of your customers. You will only recover if they recover, so be flexible in responding to their issues during the crisis. Relationships cemented during hard times will pay off, while fractured relationships could cause long-term damage.
Take care of your suppliers. Aviation manufacturers have spent decades pushing risk down to suppliers while trying to limit their rewards to reduce costs. If your suppliers do not survive or take too long to recover, all those risks will rebound onto you.
Take care of your industrial base. The Pentagon wields an enormous amount of buying power at the taxpayers’ expense. That should be deployed to keep its supply base healthy in the near term, even if it is at the expense of delaying long-term capabilities.
Take care of your business. You need to come back more agile and flexible than ever to adjust to the immediate challenges of a recovery and to tackle future challenges unrelated to the coronavirus, such as climate change.
And what about taking care of shareholders? Consider that in one recent year Boeing returned nearly six times as much money to shareholders through stock buybacks and dividends as it invested in R&D. Or consider that U.S. airlines sent 96% of their free cash flow to shareholders over the last five years. Now that hard times have hit, taxpayers are being asked to step in and foot the bill to save the industry. Shareholders need healthy airlines and healthy manufacturers. They can wait their turn.
Some very interesting code of conduct points. I'd like to think that our airline would take all on board.
Desperate times call for bold measures, and the $2.2 trillion coronavirus economic rescue package passed by the U.S. Congress and signed into law by President Donald Trump certainly passes that test. Tucked into the gargantuan measure was $58 billion for airlines and cargo carriers, including $29 billion in grants to keep workers paid for the next six months, even if they are staffing empty flights. Boeing did not get the $60 billion directly that it had sought for aerospace manufacturers, but the aircraft giant and its suppliers still qualify for hefty rescue loans or guarantees.
The secretary general of the United Nations has called COVID-19 the worst crisis the world has seen since World War II, and governments have a duty to ensure that this unprecedented pandemic does not wipe out vital industries. But the torrent of rescue money could have negative side effects, and it is imperative that governments step back when the crisis subsides.
The market distortions of state aid already are apparent in the airline industry, where a lack of coordination among governments—even those within the EU—has tilted the playing field. And what if Boeing receives government backstops that Airbus has said it does not need?
It is increasingly likely that when the pandemic subsides, the aviation industry will be facing a long uphill march to recovery, rather than the quick bounce-back that had been hoped for. As such, we urge the industry’s stakeholders to start looking ahead and taking steps that will position them to recover as quickly as possible. Consider this Code of Conduct:
Take care of your employees. You will need them to excel and work as a team when you recover. Do whatever possible to keep them healthy and well-informed. In the near term, furloughs, wage freezes and hiring freezes may be unavoidable to control costs. But prioritizing shareholders or senior executives over workers would create labor issues that could slow any recovery.
Take care of your customers. You will only recover if they recover, so be flexible in responding to their issues during the crisis. Relationships cemented during hard times will pay off, while fractured relationships could cause long-term damage.
Take care of your suppliers. Aviation manufacturers have spent decades pushing risk down to suppliers while trying to limit their rewards to reduce costs. If your suppliers do not survive or take too long to recover, all those risks will rebound onto you.
Take care of your industrial base. The Pentagon wields an enormous amount of buying power at the taxpayers’ expense. That should be deployed to keep its supply base healthy in the near term, even if it is at the expense of delaying long-term capabilities.
Take care of your business. You need to come back more agile and flexible than ever to adjust to the immediate challenges of a recovery and to tackle future challenges unrelated to the coronavirus, such as climate change.
And what about taking care of shareholders? Consider that in one recent year Boeing returned nearly six times as much money to shareholders through stock buybacks and dividends as it invested in R&D. Or consider that U.S. airlines sent 96% of their free cash flow to shareholders over the last five years. Now that hard times have hit, taxpayers are being asked to step in and foot the bill to save the industry. Shareholders need healthy airlines and healthy manufacturers. They can wait their turn.
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Good article. Especially like how they snuck climate change in there to get the nod from all the pc pinheads. Last thing aviation should stay “flexible” for right now is climate change.
Btw, where are all the climate nazis? They ought to be dancing for joy. This virus has done what they’ve wanted to do for two decades, destroy the world economy so it can cool 0.2C.
Btw, where are all the climate nazis? They ought to be dancing for joy. This virus has done what they’ve wanted to do for two decades, destroy the world economy so it can cool 0.2C.
To be honest - for the UK aviation isn't the important issue. If we don't subsidise the cross-channel freight/ferry capability they will collapse in a wee or so and then the country will starve within 4 weeks. Roughly 50% of our food comes across the channel by ferry, so we need to sustain that. Aviation can safely left to die so it can emerge again from the ashes in 6-12 months time. It's not that important strategically, and it was going to fall apart due to brexit anyway - this just brought that collapse forward by a few months.
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To be honest - for the UK aviation isn't the important issue. If we don't subsidise the cross-channel freight/ferry capability they will collapse in a wee or so and then the country will starve within 4 weeks. Roughly 50% of our food comes across the channel by ferry, so we need to sustain that. Aviation can safely left to die so it can emerge again from the ashes in 6-12 months time. It's not that important strategically, and it was going to fall apart due to brexit anyway - this just brought that collapse forward by a few months.
PDR
PDR
If the country is short of food no one will be buying other goods - all commerce is fundamentally driven by the need for food production (Adam Smith said that a quarter of a century ago, and it's just as true now as it was then). There is no point in preserving something to be available after the crisis if we don't survive the crisis. To survive the crisis we need the cross-channel ferries FAR more than we need aviation...
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Part of this brilliant “globalism” experiment the world has going is that the production of vital goods has been outsourced, in many instances to villainous nations like Mainland China, yes, the source of the virus. Therefore, the UK (and all other western nations) are hopelessly connected to China. Without air services, critical portions of the supply chain will further cripple these economies where shipment by sea transport is too slow.
