Jet2, Tui Or Ryanair?
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While I agree it is not all doom and gloom. We have to keep one thing in mind though. Package Holiday operators like TUI, Jet2 and others are by law accountable when their customers cannot complete their holidays. They either have to provide their clients vouchers or worse, reimbursements. They also have to work out how much of the damage they can share with their suppliers (airlines / acco / etc). The problem is if one big player falls this might trigger a chain reaction. Package operators like TUI, who have expensive assets like airplanes and hotels are hit the hardest I guess. Luckily TUI was in reasonable good shape.
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Hope so, just booked a holiday with them for next year!
Tour operators continue to offer uber low deposits on holidays next year. I'm not holding my breath but hopefully people will take a small punt on a credit card and book a something for next year. Cash flow for these businesses is absolutely vital right now. Without it we expect some high profile casualties over the coming months.
Tour operators continue to offer uber low deposits on holidays next year. I'm not holding my breath but hopefully people will take a small punt on a credit card and book a something for next year. Cash flow for these businesses is absolutely vital right now. Without it we expect some high profile casualties over the coming months.
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It is far too early to make assumptions about how the industry will shape up! We can all agree it will be a very bad year for Aviation, some weaker Airlines will fail and there will be mistrust between nations and some loss of consumer confidence. However, we are assuming science and technology don’t play their part! Some of the biggest brains on the planet are working tirelessly to find testing kits, trial medication and find technology solutions to allow life to prevail. These are the darkest days now, and it’s understandable to feel vulnerable..... But just like this nasty virus finds a way, humans will find a way. I recall 9/11 was the end of aviation, confidence gone, there will be no demand for air travel, it’s over!
I’m sure there will be many who say the issue is not the virus it’s the impending recession.... Fair comment. However, unlike 08-10 recession there will be a level playing field globally, there won’t be austerity like last time as the world is currently closed for business. Opening the cash taps will be the only way to jolt business and people back to life! I imagine we are only scratching the surface of the state aid that will be required this year. But, remember there are large numbers of people who won’t even notice a difference to daily life... Some even better off.
Also, consider the Government are well aware of the immense pressure on the Aviation sector at the moment. Like many other industries there will be benefits in the form of tax reliefs, APD etc. Plus Airports, foreign countries will be desperate to entice the British public through their gates and to their shores. There will be a period of reduced costs for Airlines. Now, the big one...... Oil.... tanked... through the floor! As this is the biggest single unit cost for most Airlines, we can likely see a period of reduced fuel prices, which could be immensely significant for many Airlines over the next few years in terms of recovery.
Now let’s look at UK Aviation in isolation. In the leisure market a significant player ( TCX ) went bust last year causing a natural contraction. Also, the demise of a Flybe has left a hole in domestic travel which the Government will be keen to see plugged. There is a possibility of a couple of high profile players becoming insolvent, and it is likely the long haul market will be suppressed for a few years to come. However, I recall in the wake of 9/11 a certain Irish Airline picking up large quantities of cheap Aircraft and embarking on a significant growth cycle... We can assume there will be cancelled orders and excess stock of Aircraft knocking around for the next few years.... This will be viewed as opportunity by the more bold/shrewd in the industry.
Ultimately no-one knows what will happen, Aviation is hurting and will hurt More over the next 6 month. The significant pain will be short term ( maybe 3 months more ). A key question I ask myself is the international relationships and trust. If country A is clear, but B has seen a flair up in cases... Will travel restrictions be imposed/remain It is conceivable trust in the market will disappear in the short term, but effective treatment and testing, followed by a vaccine with 12-18 months will see a sustained recovery. I guess we can largely write off this year in Aviation, but I would ask the doom merchants to provide data of demand, forward bookings for this winter or maybe next year. Until we see that sort of data, assumptions are based on people’s own fear and propaganda.
There is no doubt Aviation will bounce back, it may take time and it may change. However, unlike many other occasions there is motivation to get business working. I personally believe the package holiday will emerge even stronger. The benefits of ABTA/ATOL. Also, the concept of all inclusive... ‘ I pay my money and sit by a pool and be catered for...don’t need to leave my hotel and mix .’ It’s simple human nature. That, backed up by science and technology will facilitate the crazy Brits darkening the shores of Benidorm and Magaluf once again. We need to sit tight and ride a very nasty storm and hope our employers have the resources to see the light at the end of the tunnel. But more importantly focus on the bigger picture of thousands people loosing their life... and doing our bit!
I’m sure there will be many who say the issue is not the virus it’s the impending recession.... Fair comment. However, unlike 08-10 recession there will be a level playing field globally, there won’t be austerity like last time as the world is currently closed for business. Opening the cash taps will be the only way to jolt business and people back to life! I imagine we are only scratching the surface of the state aid that will be required this year. But, remember there are large numbers of people who won’t even notice a difference to daily life... Some even better off.
Also, consider the Government are well aware of the immense pressure on the Aviation sector at the moment. Like many other industries there will be benefits in the form of tax reliefs, APD etc. Plus Airports, foreign countries will be desperate to entice the British public through their gates and to their shores. There will be a period of reduced costs for Airlines. Now, the big one...... Oil.... tanked... through the floor! As this is the biggest single unit cost for most Airlines, we can likely see a period of reduced fuel prices, which could be immensely significant for many Airlines over the next few years in terms of recovery.
Now let’s look at UK Aviation in isolation. In the leisure market a significant player ( TCX ) went bust last year causing a natural contraction. Also, the demise of a Flybe has left a hole in domestic travel which the Government will be keen to see plugged. There is a possibility of a couple of high profile players becoming insolvent, and it is likely the long haul market will be suppressed for a few years to come. However, I recall in the wake of 9/11 a certain Irish Airline picking up large quantities of cheap Aircraft and embarking on a significant growth cycle... We can assume there will be cancelled orders and excess stock of Aircraft knocking around for the next few years.... This will be viewed as opportunity by the more bold/shrewd in the industry.
Ultimately no-one knows what will happen, Aviation is hurting and will hurt More over the next 6 month. The significant pain will be short term ( maybe 3 months more ). A key question I ask myself is the international relationships and trust. If country A is clear, but B has seen a flair up in cases... Will travel restrictions be imposed/remain It is conceivable trust in the market will disappear in the short term, but effective treatment and testing, followed by a vaccine with 12-18 months will see a sustained recovery. I guess we can largely write off this year in Aviation, but I would ask the doom merchants to provide data of demand, forward bookings for this winter or maybe next year. Until we see that sort of data, assumptions are based on people’s own fear and propaganda.
There is no doubt Aviation will bounce back, it may take time and it may change. However, unlike many other occasions there is motivation to get business working. I personally believe the package holiday will emerge even stronger. The benefits of ABTA/ATOL. Also, the concept of all inclusive... ‘ I pay my money and sit by a pool and be catered for...don’t need to leave my hotel and mix .’ It’s simple human nature. That, backed up by science and technology will facilitate the crazy Brits darkening the shores of Benidorm and Magaluf once again. We need to sit tight and ride a very nasty storm and hope our employers have the resources to see the light at the end of the tunnel. But more importantly focus on the bigger picture of thousands people loosing their life... and doing our bit!
Last edited by frozenpilot; 5th Apr 2020 at 14:19.
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Vokes55
What type of flying do you do? Because unless you are doing schedule round the UK with weekends off or are part time having any kind of social life is very difficult.
What are you doing with your free time? Oh maybe I shouldn't have asked
Judging by the doom and gloom on this forum, I’d say the majority of members either have no friends outside of the aviation industry or have spent the majority of their new found free time watching the news.
What are you doing with your free time? Oh maybe I shouldn't have asked
It absolutely will be seen as a priority, as soon as restrictions are lifted.
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I would ask the doom merchants to provide data of demand, forward bookings for this winter or maybe next year. Until we see that sort of data, assumptions are based on people’s own fear and propaganda....There is no doubt Aviation will bounce back, it may take time and it may change!
Most agree that the industry will bounce back, that in itself doesn’t make one a sage on the subject, as to when this happens, well, that’s for the debate, but past events have shown that as global disruptions to the world economy go, this hangover may take a few more years to get over than you infer.
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would the GerGov give a “bail out” to an unhealthy company?
The Bail Out in fact was a loan that had to be approved by the banks. You think the banks would approve if they expected TUI not to be able to ever pay back?
The Bail Out in fact was a loan that had to be approved by the banks. You think the banks would approve if they expected TUI not to be able to ever pay back?
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I don't think governments always bailout healthy companies do they, they wouldn't be bailing it out if it was healthy. Healthy companies have cash reserves to cater for the unthinkable.
Quick look at TUI AG's books and they were forecasting a net profit of approximately £500 million, however they have a net debt of over 5 BILLION, so basically they have zero cash in in the bank, hence the reason for needing bailing out.
TUI AG is certainly not a company I would put any cash into.
Quick look at TUI AG's books and they were forecasting a net profit of approximately £500 million, however they have a net debt of over 5 BILLION, so basically they have zero cash in in the bank, hence the reason for needing bailing out.
TUI AG is certainly not a company I would put any cash into.
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At the moment it is not a bailout. It is a line of credit which may or may not be needed depending on how long the current situation lasts. It is a prudent move as there is still much uncertainty and it is better to have it in place now rather than trying to find support later should the world situation deteriorate further. As to putting money into the company, the current situation did not deter a multi-national investor buying 3.5% of the company.
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I agree in part with both Big X and Banterbus. Using the GOV job retention scheme is indeed a very prudent and sensible business move. It simply makes sense - it's effectively free money and will increase the sustainability of the cash reserves the company has. However the communication has to date in my opinion been lacking. The letter we all received was half baked, and unintentionally (I have no doubt) caused a lot of anxiety and uncertainty to a lot of staff. Almost a week on and the fact is, there's not one of us employees who have been furloughed, who have any firm idea of what we may or may not be paid this month or in the months to come. Yes, we all assume there will be an uplift of some kind, but that is actually only an assumption - I'm 100% certain it's a correct assumption, as our Management do actually care, but still, it is an assumption. So yes, I agree the use of the furlough scheme is a good thing, but let's not pretend the communication around has been anything other than dismal.
I agree in part with both Big X and Banterbus. Using the GOV job retention scheme is indeed a very prudent and sensible business move. It simply makes sense - it's effectively free money and will increase the sustainability of the cash reserves the company has. However the communication has to date in my opinion been lacking. The letter we all received was half baked, and unintentionally (I have no doubt) caused a lot of anxiety and uncertainty to a lot of staff. Almost a week on and the fact is, there's not one of us employees who have been furloughed, who have any firm idea of what we may or may not be paid this month or in the months to come. Yes, we all assume there will be an uplift of some kind, but that is actually only an assumption - I'm 100% certain it's a correct assumption, as our Management do actually care, but still, it is an assumption. So yes, I agree the use of the furlough scheme is a good thing, but let's not pretend the communication around has been anything other than dismal.
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I don't think governments always bailout healthy companies do they, they wouldn't be bailing it out if it was healthy. Healthy companies have cash reserves to cater for the unthinkable.
Quick look at TUI AG's books and they were forecasting a net profit of approximately £500 million, however they have a net debt of over 5 BILLION, so basically they have zero cash in in the bank, hence the reason for needing bailing out.
TUI AG is certainly not a company I would put any cash into.
Quick look at TUI AG's books and they were forecasting a net profit of approximately £500 million, however they have a net debt of over 5 BILLION, so basically they have zero cash in in the bank, hence the reason for needing bailing out.
TUI AG is certainly not a company I would put any cash into.
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DTG, EZJ both have net cash. DTG probably has one of the strongest books amongst the airlines.
Any company with more debt that it can pay will eventually go bust, doesn't matter how cheap the debt is, you have to pay it back one day.
Any company with more debt that it can pay will eventually go bust, doesn't matter how cheap the debt is, you have to pay it back one day.
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Some interesting points, please tell me us you have data that the aviation industry will be back to normal by the winter?
Most agree that the industry will bounce back, that in itself doesn’t make one a sage on the subject, as to when this happens, well, that’s for the debate, but past events have shown that as global disruptions to the world economy go, this hangover may take a few more years to get over than you infer.
Most agree that the industry will bounce back, that in itself doesn’t make one a sage on the subject, as to when this happens, well, that’s for the debate, but past events have shown that as global disruptions to the world economy go, this hangover may take a few more years to get over than you infer.
I’m certainly not suggesting this winter and next year it will be back to the good times! I am not inferring that. Outside the Flight deck I work with Aerodrome stake holders and regulators across the globe. It is widely expected it will take several years to recover ( if it’s even possible ) to 2019 traffic levels. However, so many people talk of Aviation being doomed, shrinking to nothing, and all sorts of other scary prospects. However, we must look at each event in isolation. P*ssed off Brits stuck at home for extended periods being part funded by the Government! Oil costing a fraction of what it did previously. Chancellors motivated to prop economies up, not normal in a recession.
I am for not one second suggesting how this may play out.... It is severe for the industry! But.... in the UK we have seen a number of Airlines fail prior to COVID, so there has been a natural contraction. I personally have lived through 9/11, SARS,MERS,swine flu and two significant gulf wars. I am saying that humans do and will find a way to trust the industry again, and they will!. Things will certainly change, it will be most prevalent in long haul markets and business travel. But I genuinely am mildly optimistic that we can and will prevail unlike other times of setback. I do believe a I unilateral global response is key and the limiting factor until we see a vaccine available.
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I’ve been investing for 30 years, I know how it works, but thanks for trying to educate me.
Find a company with excessively more debt than profit, short it and over the long run you will win.
Thomas Cook was one of them, so was FlyBe (it made me a significant amount shorting these) Aviation examples but there are hundreds of companies with excessive debt.
Find a company with excessively more debt than profit, short it and over the long run you will win.
Thomas Cook was one of them, so was FlyBe (it made me a significant amount shorting these) Aviation examples but there are hundreds of companies with excessive debt.
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I found this article, copied from another thread very interesting, as a view from an analyst that seems fairly balanced, pointing that the aviation industry as we knew it in January will take a few years to return.
“...It also warns of weak traffic growth stretching deep into the upcoming decade. “It will take until 2022 or maybe 2023 to recover the level of traffic seen in 2019, since aviation volumes are directly related to economic activity and the world economy will shrink through this outbreak...”
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Jet2 have announced their pay intentions during furlough and for a fixed period of April to Sept 2020. Basic salary will be reduced by 30.00% for Captains, 24.81% for Senior First Officers, 23.14% for First Officers, and 18.56% for Second Officers. When the airline starts flying again, but during the period April to Sept, by 20.00% for Captains, 14.56% for Senior First Officers, 12.09% for First Officers and 8.54% for Second Officers.
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tui pilots are very happy with their covid deal and the collaborative approach from management has been warmly received. EasyJet on the other hand have pilots rejecting deals and management making grabs on terms and conditions.
looking at how pilots have been treated during the furlough certainly indicated Tui and jet2 are the employers of choice amongst these.
tui also receiving massive state support from the German government.
I work for Tui and fly with plenty of ex easyJet, Ryanair and jet2 pilots, I don’t know any that have voluntarily gone the other way.