Leased Lightning

Pushing Back: Inside This Issue

On Wednesday, Nov. 25, the day before Thanksgiving, close to 1.1m Americans took to the skies. And in one respect, that marked a sign of progress for the U.S. airline industry: It was its busiest day since mid-March. But in other respects, last week’s traffic bump only reinforced the gravity of the Covid catastrophe: During last year’s Thanksgiving peak, more than double that number of passengers flew. Extending beyond the immediate concerns of airlines, furthermore, was the risk of mass travel making America’s current public health emergency even worse. It’s an invisible tragedy to many, happening behind the closed doors of hospital wards. But it’s a tragedy all the same, and a tragedy with escalating rates of death and suffering. Officials fear the supply of hospital beds and health care workers might soon prove insufficient.

The autumn Covid spike is no less severe throughout Europe, though lockdowns there have case counts now declining in many countries. In East Asia, meanwhile, though still in much better shape, new cases in Japan, South Korea, and Hong Kong underscore the difficulties of containing a virus from which many victims don’t feel any symptoms.

It’s almost the end of Q3 earnings season, which proved less bloody than Q2. But that’s about as comforting as saying Word War I was less bloody than World War II. IATA, for one, thinks the bleeding can ease in 2021, if governments adopt its plea to replace quarantines with testing. Help from vaccines will come later in the year. Not a moment too soon.

Verbulence

“And whilst the recovery will be prolonged, all of our shareholders remain very bullish on the long-term prospects of Hong Kong and GBA (Greater Bay Area) and a strong aviation hub.”

Cathay Pacific CFO Martin Murray

Earnings

July-September 2020 (3 Months)

• AirAsia: -$258m/-$312m*; -165%
• Avianca: -$284m/-$271m*; -95%
• El Al: -$147m; -277%
• Aegean: -$33m; -22%

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