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Aviation industry during the Corona crisis

Started by Hardy Heinlin, Wed, 18 Mar 2020 04:46

Hardy Heinlin

Obviously, passenger flights are drastically reduced. What about cargo flights?


|-|ardy

Mariano

Hardy,

The company for which I work is actually flying more than it did two weeks ago (stock went up twenty seven percent today alone).

Lots and lots of cargo moves daily in the holds of passenger airliners. Not so much anymore. This, added to the fact that many people depend on e-commerce to get most items other than fresh food delivered to their homes, is fueling a considerable increase in demand for air freight capacity.

Since we not only have full-time Amazon and DHL contracts, but also specialize in ACMI contracts, as Asia slowly opens up again and as supplies run low in many Western countries, we are seeing an increase in demand for transporting goods that used to be moved by ocean freight liners, that now need to be hauled a lot more expeditiously in order to keep the supply lines going.

That being said, as across-the-board layoffs begin in many sectors and once people stop ordering non-essential goods, I suspect our industry will also become victim to the ravages of Coronavirus if things don't improve soon.

Best regards,

Mariano

andrej

Hardy,

I hear the same as Mariano. Cargo airlines (divisions) are busy as every, thanks to increased demand (Asia is growing). I have also heard that airlines are doing "cargo runs only", with no passengers. I presume that it is better to utilize planes like this, than leave entire fleet idle.

We are in interesting times as the longer this crisis takes and people do not travel, I think that we might see change in a behavior. Less business travel if non-sensitive meetings can take place via online platforms. It remains to be seen if such savings (travel, lodging) will be greater than loss from a potential new business.

I hope all are safe and sound and this crisis will not have an adverse effect on anyone.

Cheers,
Andrej

IefCooreman

#3
We fly full-time with lots of pressure to "get it done" which we all want because we see what is happening in the airline industry.

However, flying is logistically more than flying from "A to B". We need hotels, food, taxi companies, airports,... If one of these blocks, it blocks the whole chain. Last week the flying was easy, but the organisation of every single flight becomes a nightmare. Hotels might not accept a crew based on previous countries visited as they come up with their own questionaires, taxi companies are halting operations, etc etc...

We have a lot of waivers and excemptions from the known rules are the rules set out for the regular public, not the "exceptions". Very few people know about these rules. In general it is accepted that "transits" are not considered "visits" to a country, and we basically block everyone off the flightdeck with special procedures to transfer documents.

But these days it is clear Europe remains nothing more than a set of countries that want to cooperate in a certain sense, but when the shit hits the fan, they all step back and work in a very isolated manner. As a result we are sometimes even forced to do empty positioning flights to avoid short term planning problems for crews who continued to work and stayed in different countries. Add to that geopolitical war that is still happening in the background between countries. For us rests nothing more than self-quarantaine in hotel rooms with nothing more than room service, or extra catering if the room service has been halted as well.

We survive in a Europe composed of different countries... so far.

Swiso

To all the pilots and ppl involved in the cargo fleets here... THANKS GUYS !!

Jeroen Hoppenbrouwers

KLM announced that it will retire its remaining six 744s "very soon now" instead of in 2021 as planned before (exactly 50 years after its initial deployment). I suppose that for many other airframes the current crisis will mean a premature retirement, even while the fuel price drop would have meant they actually became competitive to operate (when full).


Hoppie

Will

I'm sure things won't go back to the status quo ante after the acute situation situation resolves. It will be interesting to see exactly how things get permanently transformed. Maybe "social distancing" will become a permanent thing, maybe more people will work from home permanently. Maybe this will change people's shopping habits... perhaps online shopping will be the new norm. Maybe cruise ships with 3500 passengers will be a thing of the past.
Will /Chicago /USA

IefCooreman

Honestly, I think people will forget quickly. However, I do hope politics adds some extra checks to create "walls of defence" to allow quick reaction, like they have done in Hong Kong after SARS.

Hong Kong airport installed temperature "walls", nothing more than some kind of infrared(?) camera that displays body temperatures of everybody entering the terminal. A few meters further you are awaited by people who can take you seperate. I've heard this was so effective that pilots from Qatar ie were having problems as they had to carry their hats, even when it was hot outside, and their heads would light up the screens. It's no wonder to me Hong Kong managed to "control" this crisis in a very efficient way.

emerydc8

Quote from: Will on Fri, 20 Mar 2020 12:46
I'm sure things won't go back to the status quo ante after the acute situation situation resolves.

I agree 100%. Once  people run out of money and credit, the on-line buying spree is going to taper off, so cargo is going to be hit too. Maybe not right away though. The coming home foreclosures and car loan defaults will make 2008/2009 look like a picnic. I don't think most people are going to be going on vacation any time soon. They'll have to save what they can for their retirement because their 401(k) plans are becoming more worthless with every trading day. Massive bankruptcies will finish it off. I think the furloughs on the passenger side here in the US will be in the tens of thousands. I suspect the cargo side will get severely hit as well. I wouldn't want to be junior at any cargo airline right now.

The airline industry as we know it is toast. My country, as I knew it, is toast. Instead of letting the consequences of criminal management take its course (corporate buybacks of stock to bolster the stock price for huge executive bonuses), our president has foolishly demanded the Fed step in and buy up/ bail out individual corporations with our money, printed from thin air. I think Mussolini had a name for the merger of state and corporate power. That appears to be where we're headed and most people seem to be okay with that.

Jon

IefCooreman

The majority of the contracts in cargo is still business to business. There will be a cutback for sure, but as long as business is supported in one way of the other, it will stabilize.

I do see an important "forced shift" to online activities, both private and for business. I see this tendency in my own family where the older people are suddenly "forced" to use the online possibilities. I see this tendency for local businesses as well. We even order our fries now online in our local "streetfoodshop". Ordering groceries online has BOOMED and is facing delays of over a week at this point. People discover the big advantages. The empty streets, the freedom to move WITH distance when they order online.

If you told me this would happen in 2020 last year, I wouldn't have believed you. But my parents immediatly bought a smartphone. Online. Local businesses in Belgium with an online shop are already asking to limit orders to Belgian shops, because once you go online, borders don't exist anymore (except when you checkout and it comes down to taxes). The virus has forced this.

At the end of this online chain, there is production of the hardware and user at a large distance from eachother. Production of that hardware will remain a "global" question, as businesses will again look for cost-effective solutions, which in these days is again connected with labor cost and taxes.

So yes, I remain positive for the cargo airlines. People will move less, hardware will move more. Just my thoughts...

Chris Kilroy

Quote from: emerydc8 on Sat, 21 Mar 2020 09:02The coming home foreclosures and car loan defaults will make 2008/2009 look like a picnic.

Nope. The government will never allow that. They'll suspend all mortgages and rents (a la what a bunch of European countries have already done) until the crisis passes while simultaneously throwing a few trillion at the banks to call it good. The U.S. govt isn't gonna let 50% of the country get thrown out on its ass due to events completely out of their control.

As for the aviation industry, you're spot on. It'll take a decade, at least, for the industry to get back to where it was just a few short months ago.

Hardy Heinlin

X owes Y some money.
Y owes Z some money.
Z owes X some money.

When one of the three is in pause mode, it's difficult to keep the loop well-balanced.
When two of the three are in pause mode, it's very difficult to keep the loop well-balanced.

But when all three are in pause mode, there are no imbalance problems as the entire loop is paused. When the crisis is over, just unpause the loop. The balance before and after the pause is the same.

Just a thought.


|-|ardy

Mariano

Hardy makes a great logical point.

As does Chris. In an election year (US), the government will do whatever it takes to prevent another recession (or to ameliorate most of the effects of an impending one).

I don't think Boeing, Delta, Untied and American will be allowed to cease existing. CEOs already promised no stock buybacks and dividends if they get help.

We'll deal with the fiscal mess later.

It amazes me how so many people hate and disparage government day in and day out, but, when all Hell breaks loose, all of us want money (yes, even the archaic coal industry wants an bailout).

Best regards,

Mariano.


Chris Kilroy


emerydc8

During the last crisis, millions of people lost their homes. The banks were bailed out for the losses and were still able to re-sell the homes after they evicted the previous owners The execs gave themselves huge bonuses with the bailout money and no one did squat about it. It may be a bit naive to think/hope it will be any different this time.

Hardy Heinlin

The current crisis is different. It affects everything and everybody on the entire planet. Everyone depends on everyone. It's not asymmetric. We're literally all in the same boat.


OK, the problem with the toilet paper is asymmetric. But not forever. The free space in the basement is limited.

emerydc8


Will

I'm curious about the ways in which this experience will transform our culture. For example, up until last week, it was taken as a mater of truth that you had to see your doctor in person to receive treatment. Well, in-person visits are not safe anymore, so we've switched outpatient medicine to telephone calls. And to everyone's surprise, it's actually working pretty well!

Maybe, when the dust settles and we reach our new normal, we'll learn that doctors and patients actually prefer telephone visits instead of in-person meetings, and that's how you'll "see" your doctor most of the time. Or maybe the telephone visit will be free, and you'll have to pay for the privilege of coming into the doctor's office.
Will /Chicago /USA

andrej

In a slightly selfish way, I hope that the crisis will renew interest for B748F and new orders will follow.
I expect for passenger traffic to have lower figures in coming years, but I do not anticipate low-cost airlines to suffer much. People will want to travel and on cheap.

Slightly off topic:

Many nations are providing unprecedented support for private sector. For example, the EU relaxed most of its rules and regulations against state aid. Most of it is very good, but some of it is questionable. For example aid to Alitalia, when other national airlines were previously forbidden to be saved (e.h. Olympic, MALEV, etc).

Good examples include payment of salary (up to 80%) if companies do not fire its employees. Banks agreed to give repayment holidays on mortgages and loans, which makes complete sense (it also helps them, otherwise their non-performing loans would skyrocket). Finally, given that this is an election year in the US, I do expect full on support from the president.

Countries like the Czech Republic and Slovakia were among first ones in the EU region to shut down public life. To my surprise Slovaks adhere greatly to these limitations. Most people wear face masks, maintain "social distancing", and follow rules. However, you always get some bad apples. What is more scarier is the fact how unprepared governments were such problems (such as lack of face masks). More than 30 years of good years, made some politicians to think that critical reserves and general preparedness was thing of a past.

I also concur that our behavior will change after this crisis passes on. Many unnecessary things that we do know, that can be done online, will shift to online. For example, when chronically ill patients need to fill prescription, now they visit doctor. But, with electronic receipt, simple call will do. One simply will go to pharmacy to pick up specific medicine. This is just one example. 

Cheers,
Andrej

Jeroen Hoppenbrouwers

Quote from: Will on Sun, 22 Mar 2020 02:27
Or maybe the telephone visit will be free, and you'll have to pay for the privilege of coming into the doctor's office.

HA HA HA HA HA uche uche uche

Maybe they halve the copay for televisits. My current health insurer has all kinds of teleconsult options (had them for years) and they are as expensive as dropping by the urgent care. "Hello?" $75.00 ching-ching. However seeing your doctor in person is $185.00 + $25.


Hoppie