Issue No. 775

Holding Out for a Hero?

Pushing Back: Inside This Issue

Like a damsel in distress, the world is waiting for its superhero. Not Batman. But a vaccine, which scientists say will likely come soon—before the end of the year, perhaps. Even if mid-2021 before a magic bullet is produced, delivered, and administered, airlines can at least start seeing the day when the world will be ready to fly again. 

How fast will demand return? Will it take years to recover from all the economic damage? It’s only the third quarter of 2020, after all, and things could get a lot worse for six months, before they get better.

Some airlines might not make it. South African Airways, for one, is fading fast. Israel’s El Al is desperate for government help. Most, however, will survive, with government help or, absent that, help from bankruptcy protection. Aeromexico is the latest to enter bankruptcy, joining a parade of other Latin carriers. 

TAP Air Portugal, American, and SAS are a few of the latest government aid recipients. Virgin Atlantic, for its part, denied public aid, seems positioned to survive with help from the private sector, including perhaps Delta. Elsewhere, survival entails lots of cutting. Ryanair is cutting British pilot pay, American is cutting international routes (notably from Los Angeles), Air France is cutting jobs, Norwegian is cutting aircraft orders… and so on. The vaccine can’t come soon enough.

Verbulence

It’s time for Europe to go back flying again. It’s time to reboot Europe’s tourism industry.

Ryanair CEO Michael O’Leary

Mondays With Skift Airline Weekly

William Swelbar, research engineer at the Massachusetts Institute of Technology's Center for International Aviation, joins Skift's Brian Sumers for a discussion of his latest study, "Landed in a Pandemic, Departing in a Recession." The livestream is at 11:30 a.m. Eastern on July 6, 2020, and registration is free for subscribers. We'll take your questions as they come in. Can't make it? We'll post a replay later in the week and an audio podcast at airlineweekly.com.

Earnings

January-March (3 months)

  • TAP Air Portugal: -$439m/-$189m*; -27%
  • El Al: -$140m/-$124m; -29%

*Net result in USD/*Net result excluding special items/ Operating margin

Weekly Skies

As was true for many of the world’s airlines, 2020 started out promisingly for TAP Air Portugal. In January and February, traffic volumes rose 13% y/y on 15% more ASK capacity, load factors increased by two percentage points, unit revenues…

Media

A Bloomberg News look at Labor Department data highlights how the leisure and tourism sector is the biggest economic victim of the Covid pandemic, much like banks were the biggest victims of the 2008-09 financial crisis. Metro areas heavily dependent…

Fleet

The shattered aircraft market, so strong for so long, got another blow when Norwegian cancelled all 97 of its remaining Boeing orders. Most (all but five) are B737 MAXs. The others are B787s. The airline also cancelled a lucrative maintenance…

Landing Strip

Airports Council International (ACI) data reveal that traffic at the world’s airports declined by more than 94% in April y/y, due to the coronavirus pandemic. Traffic fell 56% in March, as the pandemic first started to spread outside of Asia.…

State of the Unions

Deutsche Welle poses an interesting question: Will the Covid pandemic result in a pilot shortage? Carriers the world over are laying off or furloughing pilots, and some pilots could run the risk of losing their currency, especially if they seek…

Marketing

It will be a slow climb back to normal for most airlines and passengers, but at least now on Delta, passengers can toss back a cold one. Alcoholic beverages once again will be available on Delta flights. The carrier noted…

Covid Crisis 2020

United, an early Covid-era bear, is feeling a little more bullish. Last week, it announced revised schedules for August, which feature triple the number of flights the airline offered in June. Domestically next month, it will fly about half its…

Feature Story

It started innocently enough. The first two months of 2020, it seemed, had the world’s airlines on track to deliver their eleventh straight year of profitability. Fuel prices were pretty low. Demand was more or less strong. Businesses were travelling.…

Around the World

A look at the world’s airlines, including end-of-week equity prices