State of Airlines

State of Airlines The New Virtual Roller-coaster

I love theme parks as much as airlines/flying, if not more. In the age of COVID-19, the constant cycle of airline news may have given us sensations of the up and down motions. With expectation rising and falling from dizzying heights. Is the state of airlines the new metaphorical roller-caster?

Unprecedented Times

Cathay Grounded Planes
Cathay Grounded Planes

For the first time since I have started this blog, I can say I have time to write. But the sheer speed and ferocity of changes is making commenting on otherwise “huge” news almost impracticable, if not foolish. I’ve already seen one too many blog posts, that only became irrelevant minutes later.

Airlines have been scratching their collective heads. Updating schedules and operations as events unfolded. Only then changed once again by countries imposing their own restrictions. Some are equally going from brink of collapse to a glimpse of a rescue, in matter of hours!
On 22nd March Emirates, the worlds largest international carrier regrettably announced shutdown of operations by 25th March. Just hours later it backtracked on request of some governments to retain flights to some destinations. Subsequently, it had to shut down completely due to its national government’s eventual ban.
For a time, Emirates was able to only fly customers out of UAE only. Currently Emirates has announced its suspension to be extended til 31st July. Meanwhile, other UAE carrier Etihad, is now extending shutdown till 15th May. Turkish, also a large airline ceased flights and currently due to restart May 1st.
These could all change and be pushed back again. Some maybe even bought forward?
As of now for those still flying in some capacity, most are only maintaining a small skeletal network of key destinations. Singapore for instance has 10 out of 200 aircraft operating to just 15 cities. All other flights are suspended until 30th June. Cathay Pacific in a similar boat.

Special Flights/Repatriation Operation

For the last few weeks, governments across the world shut off commercial flights. Then quickly realised many of their citizens are still stranded abroad. U.K Foreign & Commonwealth Office has been working with British Airways and Virgin Atlantic to organise repatriation flights. As have other government entities with their own citizens and airlines.
This also saw some unusual flights all around the world. Lufthansa A380 & 747s for example were sent to New Zealand to pick up German tourists, a first time German planes landed in NZ. Qantas started operating non-stop flights to London from Darwin, due to Singapore travel restrictions. British Airways, operated from London to Australia with just a technical fuel stop in Singapore. The ever-changing circumstances saw Air Tahiti operate the worlds longest commercial flight
All repatriation flights will soon be coming to an end.
What next?

State of Airlines Cargo

Some airlines are converting passenger airliners into cargo planes. In some cases like Virgin utilising passenger seats themselves for cargo and vital medical supplies. British Airways is also sending extra cargo flights from China to bring in more PPE.

Long term storage or half way to graveyard?

Still with over 95% of all flights cancelled, airlines have naturally had to find storage for their planes. Home airports simply do not have enough space to store them.

Lufthansa Grounded Planes
Lufthansa Grounded Planes
Airports all over the world now have planes parked up in every slots they have. That even includes using spare runaways for storage! BA has split them between Heathrow, Gatwick, Cardiff and Bournemouth Airports as well as some in France, Spain and as far as Philippines!
Air New Zealand has grounded all 777s till 2021, and lays off all 777 crew.
Sadly, most airlines have grounded all their A380’s, with most in temporary storage. Singapore Airlines is sending some A380’s to Alice Springs.

Accelerated Aircraft Retirements

In addition to storage, some airlines have made more drastic decisions with their airframes.
Virgin Atlantic has retired all A340’s ahead of time. KLM doing the same with thier 747s.
Lufthansa which has openly stated it does not envisage airline traffic to pick up back to 2019 level for a number of years, has retired some aircraft. This includes 5 747s, 6 A380’s and 7 A340. More may be likely.
Air France has stored all its A380s in a Spanish graveyard. There is every possibility those aircrafts will not be back in their fleets again. It has also said to be considering retiring its A340s.
Sadly more airplanes will be heading to Mojave/Victorville desserts in southern California.

Government Bailouts or Bankruptcies

All major airlines across the world have been seeking government help to keep their companies going. US carriers made headlines with a $50 billion dollar bailout grant, with strings attached. A portion of which also has to be repaid.
Virgin Atlantic’s pleas for government loans, where initially rejected. Though it is now understood, they are still in discussions with the government. Virgin Australia has entered voluntary administration after the Australian government refused to bail it out.
AirFrance-KLM have managed to secure some 10 billon euro bailout. The Lufthansa Group of airlines are in negotiations with their governments.
How many more will face this fate is anyone’s guess at the moment.

Airline Shares have taken a battering

Lufthansa, British Airways parent IAG, Ryanair have all seen their share prices plummet more than 50% and subsequently stabilised at those levels.

IAG has announced shareholder dividends are to be suspended for current period.

Path to recovery

The road ahead will be long and slow, with no doubt turbulence along the way. We could be in a situation where airlines gradually begin to restart some operations, and a second wave of lockdowns follows. Just how far would the bailouts stretch then?
The question of when airline operations might even start to resemble some form of normality would be just pure speculation. Airline’s themselves don’t know. Air France is predicting European flights can restart by summer. It does not envisage international long haul to begin until end of August. Norwegian is not planning on restarting European flights until summer 2021, and long haul until Summer 2022. That is partly due to its dire situation.
With a vaccine and widespread roll out at least 2 years ago, the closest we may see 2019 levels of traffic would be at least 2022/23. That’s only if we avoid any long lasting damage and bankruptcies.