Clackers wrote:

Why has Malaysia been suspiciously devoid of any Coronavirus cases? Seems to be lucky for MH, as it has not been a good decade for them due to unforeseen circumstances.

https://www.thestar.com.my/news/nation/ ... patient-26

What do you mean devoid?

WorkSafe NSW has slapped Qantas with an improvement notice and told to improve cleaning onboard aircraft after an inspection from Worksafe NSW has revealed appropriate measures weren't taken.

On top of this Qantas sacked a cleaner about a month ago about raising similar concerns

https://www.airlineratings.com/news/wor ... -cleaning/

1989worstyear wrote:

piedmontf284000 wrote:

United to cut international flights by 20 percent and domestic by 10 percent. They will also park dozens of widebodies. I imagine there will be furloughs coming very soon for some pilots and flight attendants

https://www.cnbc.com/2020/03/04/united- ... break.html

Do we know which WB's will be retired?

Probably the pre-1988s

They said parked...not retired.

New York Times article with some good details:
https://www.nytimes.com/2020/03/04/busi ... virus.html

Speaking about UA: "Trans-Pacific flights, for which demand had fallen starkly as the virus seized Asia, will be halved in April, while trans-Atlantic service will be cut by about 10 percent. Latin American service will be reduced by 5 percent."

"Thomas J. Donohue, chief executive of the U.S. Chamber of Commerce, said at a news conference on Wednesday that the airline industry didn’t need “bailouts,” though he said that if regional airlines encountered difficulties, “we’ll figure out a way to bring assets together to keep them flying.”"

"How long such bans will last is unclear, according to a poll conducted last week by the Global Business Travel Association. Among corporate travel managers who had canceled or suspended employee trips, only 31 percent expected to lift such restrictions within three months. More than half, 54 percent, said they didn’t know when the travel would resume."



Anyone know what the hold up is on reductions to FCO? Seat maps aren't always accurate, but checking out PHL-FCO, the seat maps are almost completely empty.

This is for tomorrow....not a single seat taken in Premium Economy, and only 4 in Business Class

jco613 wrote:

[twoid][/twoid]

MareBorealis wrote:

jco613 wrote:

If I’m being honest, times like this are the best to travel. Cheap trips and empty flights/hotels. The risk is still low so maybe I’ll take advantage of this hype...

My biggest fear would be a quarantine, someone gets infected in your hotel and you will be locked in for two weeks

Two extra weeks off from work. Not all bad. Hope my boss doesn’t read this!

Are you sure your employer will protect your job through a personal travel induced quarantine?

Adipocere wrote:

jco613 wrote:

[twoid][/twoid]

MareBorealis wrote:

My biggest fear would be a quarantine, someone gets infected in your hotel and you will be locked in for two weeks

Two extra weeks off from work. Not all bad. Hope my boss doesn’t read this!

Are you sure your employer will protect your job through a personal travel induced quarantine?

This is why I speculated today that outside those who commute would airlines tell employees no travel allowed that is not necessary? It seems to me this could be a 4-6 month window where employees could really take advantage of light loads but also get themselves and others sick in the process.

There's certainly a broad spectrum of opinions in this forum as to how long and how severe a decline in demand COVID-19 may bring. I'm going to outline a few ways DL (and AA/UA/WN/AS) may cut expenses or otherwise conserve cash.

1. Fly less. (Yes, it's obvious - new cuts seem to be announced every day.) To the extend that pilots, FAs, mechanics, etc. have been working above guaranteed minimums this will cut wage expense. Fuel burn declines. Landing fees seem pretty immaterial in income statements.

2. They'll be burning cheaper fuel. Spot market price for Jet A was $1.98/gallon on 12/31/19; it had declined to $1.48/gallon today. Various crude oil indices have declined worldwide. DL burns 1 Billion gallons a quarter (and UA and AA similar), so $0.50/gallon is a lot of money. This makes WN's fuel hedges way, way out of the money (for the moment, anyway).

3. Profit sharing will decline with lower profits. Sorry. Profit-sharing earned in 2019 for payment in 2020:

DL, $1.6 Billion
WN, $667 million
UA, $491 million
AA, $230 million (including the MAX payout share)
AS, $130 million

4. DL has been making supplemental contributions to a frozen (no new participants; no further benefits earned for present participants) defined benefit plan. DL makes insurance payments to the PBGC based in part on how underfunded is the plan (a lot). These contributions reduce the premiums due. In excess of required contributions under a 2006 law, DL pumped in $500 million in 2018 and $1.0 Billion in 2019. It announced its intent to add $500 million in 2020. They may not do it.

5. They may pause share repurchase plans. All five of the largest U.S. carriers were busy buying back shares in 2019.

DL, $2.0 Billion
WN, $1.6 Billion
UA, $1.6 Billion
AA, $1.1 Billion
AS, $75 million

6. They may suspend the dividend. Ooh, DL won't want to do that after all the remarks about being a stable, investment-grade entity. Total dividend payments in 2019:

DL, $980 million
WN, $372 million
AA, $176(?) million. It was $44 million 4Q, that I can verify.
AS, $173 million

7. Voluntary reduction in work hours; voluntary unpaid leave. AFAIK, among U.S. carriers only UA has announced programs.

8. Forced furloughs/layoffs.

Other ideas that are significant money?

1. Park aircraft (e.g. LH is parking 150 aircraft. HKG tarmac is full of CX/KA parked aircraft too) and reduce flights (e.g. CX is only operating 60% of original schedule)
2. temporary layoff
3. issue new bonds - now that interest rate has dropped, it's a good time to issue new bonds to raise cash. Investor may demand a higher premium for travel industry issuers, but it would be offset by the overall interest rate drop. Note that bond price is essentially priced by the mechanism of (US Treasury yield + risk premium of the issuer relative to US Fed Govt with same duration). Since US Treasury yield is now at 150-year lowest, it's a good time to raise cash by borrowing, and lock in to that interest rate for the next 5 to 10 years
4. buy some long term oil forward - oil price has dropped 20% in the last month. While the airline doesn't need the fuel now. They will need it next year. It's good time to lock in to some of those at current price level. Of course this carry investment risk but I am sure airline knows how to do it. However, note that this does not help on current cash flow. At worst, it will negatively impact current cash flow (e.g. if you lock on to a contract of $45 for Jan 2021 now, and tomorrow the price for the same contract drops to $43, you essentially will need to pay the counterparty $2 tomorrow as collateral). So this needs to be evaluated carefully against current cash availability

I will bet a hefty sum airlines did not plan for this. The mergers/industry changes such as less competition from low cost carriers and baggage fees more or less set the big airlines in the States to be profitable for the forseeable future minus some sort of catastrophe like a 1929/2008 or a mass terrorist attack or Yellowstone or St. Helens erupting for weeks or months. I'm sure bird flu was in the back of their minds but I doubt they took a threat of a virus that seriously so they might be caught off guard somewhat

Image of LH planes parked



https://pbs.twimg.com/media/ESUbuVAXYAALuPp?format=jpg&

raylee67 wrote:

1. Park aircraft (e.g. LH is parking 150 aircraft. HKG tarmac is full of CX/KA parked aircraft too) and reduce flights (e.g. CX is only operating 60% of original schedule)
2. temporary layoff
3. issue new bonds - now that interest rate has dropped, it's a good time to issue new bonds to raise cash. Investor may demand a higher premium for travel industry issuers, but it would be offset by the overall interest rate drop. Note that bond price is essentially priced by the mechanism of (US Treasury yield + risk premium of the issuer relative to US Fed Govt with same duration). Since US Treasury yield is now at 150-year lowest, it's a good time to raise cash by borrowing, and lock in to that interest rate for the next 5 to 10 years
4. buy some long term oil forward - oil price has dropped 20% in the last month. While the airline doesn't need the fuel now. They will need it next year. It's good time to lock in to some of those at current price level. Of course this carry investment risk but I am sure airline knows how to do it. However, note that this does not help on current cash flow. At worst, it will negatively impact current cash flow (e.g. if you lock on to a contract of $45 for Jan 2021 now, and tomorrow the price for the same contract drops to $43, you essentially will need to pay the counterparty $2 tomorrow as collateral). So this needs to be evaluated carefully against current cash availability

It's not that simple.

1. OK, obvious first step.
2. Temporary layoffs still cost money. Severance pay may be due if not rehired (within X months).
3. If the whole market goes South, investors will be holding on very tight to their wallets. Another problem is that no one would lend to an airline that isn't making any kind of revenues. In most cases, as we saw in 2008/2009, rating companies will downgrade even the best of companies or countries to junk status rather quickly, making borrowing prohibitive even in a low interest environment.
4. Buy oil, ok, with what money? As I explained a few posts back, even DL only has 3 billions of cash on their balance sheet and if you check their earnings reports, you will realise that their monthly payroll cost alone is 3 billions... Sell airplanes to save cash? To whom? All airlines will be in the same boat.
This is what happens when corporate-run airlines don't know what saving for bad times is. In good times, they distribute huge earnings to shareholders, employees and themselves (management) and then when things turn soar, they expect Uncle Sam to come to the rescue.
Is it not capitalism then? Yes, Capitalism of the State. And then suddenly they join the ranks of subsidised basket cases like AZ... AZ may even fare better, they already know who to call for money. Our friends at Flybe can attest to that.

If this goes bazooka as it is lined up to go right now, airlines also have other big problems.
-How are they going to finance aircraft deliveries? Ask Airbus and Boeing to defer deliveries? What are the OEM's going to survive on? Bail them out too?
-Lessors. Some will be lenient and will grant a suspension if the aircraft is stored properly, others lessors who are tight on money will expect to be paid. We are talking 8 to 9 digit monthly bills.
-Many one-off expenses to suspend contracts (handling, catering, airports, etc...)
-Maintenance, parking, insurance, essential staff, leases, listing costs, etc... are costs that keep running.

So bail-outs will be inevitable.

LNCS0930 wrote:

I will bet a hefty sum airlines did not plan for this. The mergers/industry changes such as less competition from low cost carriers and baggage fees more or less set the big airlines in the States to be profitable for the forseeable future minus some sort of catastrophe like a 1929/2008 or a mass terrorist attack or Yellowstone or St. Helens erupting for weeks or months. I'm sure bird flu was in the back of their minds but I doubt they took a threat of a virus that seriously so they might be caught off guard somewhat

Most major carriers in this country have been around for a while. To think airlines do not have a contingency plan for these scenarios is silly. Most majors in this country have experienced shocks to the system in the pat, eg the GULF War, the Patco strike, the 2008 oil surge, 9/11, Sars, etc. etc. i know many are making this the apocalypse, but trust me, it is not the first nor the last crisis the airline industry will face.

In the 2008 oil spike some of our expert anetters were constantly making predictions of who was not going to make it. Who would go under, the sky would fall, etc etc. Then just like that, the bubble burst and little by little things got back to normal. Some things changed, airlines adapted, some (few ) did not make it, but we as an industry survived.


Sent from my iPhone using Tapatalk

Over the past week there have been a spike in reported Coronavirus cases coming in through Australian airports

WA's third case is a woman who flew in from the UK from DXB presumably on EK on Monday

https://www.watoday.com.au/national/wes ... 547a2.html

On top of the QF2 one that arrived last Friday into SYD a second QF flight being QF82 on Saturday also had a passenger who has since been diagnosed, prior to flying on QF82 the passenger flew on 3K686 KUL-SIN

Another case flew in on KE121 ICN-SYD last Thursday

On Sunday another passenger flew in on OD171 KUL-DPS-SYD originally from Iran now diagnosed with Coronavirus

A passenger on a NRT/HND-SYD flight arrived in SYD on 21 Feb was diagnosed on Tuesday

Previous other cases include QR908 DOH-SYD on 23 Feb and OD177 KUL-DPS-MEL last Friday

https://australianaviation.com.au/2020/ ... y-flights/

VA1368 MEL-LST had Tasmania's first case resulting in another 140 people needing to self isolate

https://www.3aw.com.au/coronavirus-pati ... -isolated/

Another 5 flights have been identified via South Australia, with a passenger on arriving on an International flight then connecting on a domestic flight



https://twitter.com/9NewsAdel/status/12 ... 12576?s=20

LAXintl wrote:

Image of LH planes parked



https://pbs.twimg.com/media/ESUbuVAXYAALuPp?format=jpg&

This is an old photo. Lufthansa don’t have B737 aircraft any more and all the Condor aircraft have had the old TC logo removed.

The Japanese Government reportedly has decided to restrict arrival passengers from Korea, China, and Iran only to NARITA and KANSAI, and passengers are required 14days quarantine. ThIs perhaps mean huge number of passenger flights will be suspended.

AAIL86 wrote:

Should travel be banned because over a million people a year die globally from car accidents?

this is a interesting question

china as a military dictatorship took measures a democracy never could
so they could hold down the rate of deceased from Covid-19 below 1%

outside china you ca see rates from about 2 to 3%

Even if we can commit on longterm "only" 1% ..... thats 80.000.000 fatalities a year .....

IATA Updates COVID-19 Financial Impacts -Relief Measures Needed-

- The International Air Transport Association (IATA) updated its analysis of the financial impact of the novel coronavirus (COVID-19) public health emergency on the global air transport industry. IATA now sees 2020 global revenue losses for the passenger business of between $63 billion (in a scenario where COVID-19 is contained in current markets with over 100 cases as of 2 March) and $113 billion (in a scenario with a broader spreading of COVID-19). No estimates are yet available for the impact on cargo operations.

https://www.iata.org/en/pressroom/pr/2020-03-05-01/


Terrible numbers and they will no doubt get far worse

raylee67 wrote:

1. Park aircraft (e.g. LH is parking 150 aircraft. HKG tarmac is full of CX/KA parked aircraft too) and reduce flights (e.g. CX is only operating 60% of original schedule)
2. temporary layoff
3. issue new bonds - now that interest rate has dropped, it's a good time to issue new bonds to raise cash. Investor may demand a higher premium for travel industry issuers, but it would be offset by the overall interest rate drop. Note that bond price is essentially priced by the mechanism of (US Treasury yield + risk premium of the issuer relative to US Fed Govt with same duration). Since US Treasury yield is now at 150-year lowest, it's a good time to raise cash by borrowing, and lock in to that interest rate for the next 5 to 10 years
4. buy some long term oil forward - oil price has dropped 20% in the last month. While the airline doesn't need the fuel now. They will need it next year. It's good time to lock in to some of those at current price level. Of course this carry investment risk but I am sure airline knows how to do it. However, note that this does not help on current cash flow. At worst, it will negatively impact current cash flow (e.g. if you lock on to a contract of $45 for Jan 2021 now, and tomorrow the price for the same contract drops to $43, you essentially will need to pay the counterparty $2 tomorrow as collateral). So this needs to be evaluated carefully against current cash availability

some good idea here.

I saw DL issue bonds the other day. If you have good credit and collateral, the time is now. Better to have some payments later than default right now. Especially if you are not seriously leveraged. WN and B6 should do this too. Both have good balance sheet.

stop buyback plans would be a good way to conserve cash right now. If I'm an investor, I would be very mad an airline is doing stock repurchase when the house is on fire.

buying forward is not necessary. If they just buy some call options for like a year from now, that would work pretty well. It would not cost as much money now as buying futures.

MIflyer12 wrote:

4. DL has been making supplemental contributions to a frozen (no new participants; no further benefits earned for present participants) defined benefit plan. DL makes insurance payments to the PBGC based in part on how underfunded is the plan (a lot). These contributions reduce the premiums due. In excess of required contributions under a 2006 law, DL pumped in $500 million in 2018 and $1.0 Billion in 2019. It announced its intent to add $500 million in 2020. They may not do it.

6. They may suspend the dividend. Ooh, DL won't want to do that after all the remarks about being a stable, investment-grade entity. Total dividend payments in 2019:

DL, $980 million
WN, $372 million
AA, $176(?) million. It was $44 million 4Q, that I can verify.
AS, $173 million

4 is the kind of stuff that's going to kill legacy airlines in times like this. Just too much fixed costs. DL at least has some cash sitting on its hand without crazy level of leverage. What's AA going to do with even more fixed cost, large staff, interest payments on all that debt, lease payments. UA has a little better balance sheet, but it's pretty high in debt also. 2 more months of this, i don't see how AA doesn't run out of cash. And then the vultures come. AA should think very hard about what it's going to do.

As for dividend, I assume if they all lose money then no dividend is needed.

If they have a lot of unencumbered or mostly paid off aircraft, they could sell them to leasing companies.

Government bailouts are coming for the global aviation industry.

tphuang wrote:

stop buyback plans would be a good way to conserve cash right now. If I'm an investor, I would be very mad an airline is doing stock repurchase when the house is on fire.

The counter-argument to that is that it's very cheap for them to buy their own stock right now, much less than they paid per share on average in 2019. Change in prices YTD:

AA, -35%
DL, -17%
UA, -32%
WN, -13%
AS, -27%

All per marketwatch.com, as with https://www.marketwatch.com/investing/stock/alk

Cointrin330 wrote:

Government bailouts are coming for the global aviation industry.

Should governments bail out the shops that can't open, the cinemas that can't open, the hotels that are half empty?

My DL JFK-BOM flight had about 12 empty seats in D1, the rest of the plane looked rather full, judging by the crowd. I even got offered multiple meals in D1, as I assume some people canceled with short notice. This just means that the corporate travellers are canceling, while personal travelers like myself are still traveling.

Asiana changes to their international network

https://www.routesonline.com/news/38/ai ... f-05mar20/

Waterbomber2 wrote:

4. Buy oil, ok, with what money? As I explained a few posts back, even DL only has 3 billions of cash on their balance sheet and if you check their earnings reports, you will realise that their monthly payroll cost alone is 3 billions...

DL's payroll expense ('salaries and related costs') averaged $935 million a month before profit sharing in 2019. See the annual report, page 33.

Hong Kong Airlines rumoured to axe a further 100 jobs, on top of the 300 jobs cut earlier.

mcogator wrote:

My DL JFK-BOM flight had about 12 empty seats in D1, the rest of the plane looked rather full, judging by the crowd. I even got offered multiple meals in D1, as I assume some people canceled with short notice. This just means that the corporate travellers are canceling, while personal travelers like myself are still traveling.

That is probably the biggest problem. The high yield customers break away.

When I see that our company reduced work travel to almost 0, and I guess we are not the only one. And as we always flew on flex tickets (Y in Europe and J for ROW), a lot of revenue is lost to the airlines.

This cannot be substituted with cheap Y pax, as this fares barely turn profit anyway. If only them travelers are left you are better by canceling the whole flight as an increase in ticket prices for Y to make up for lost J will turn the cheap pax away. Then it is better to cancel and safe the fuel costs.

tphuang wrote:

As for dividend, I assume if they all lose money then no dividend is needed.

Needed is an odd word when describing dividends. UA doesn't pay one (according to two sources I checked) but DL, AA, WN and AS all do. Dividends prop up the stock price - it's part of the financial return to shareholders - along with prospective share price appreciation. Common share dividends are discretionary but 'sticky' - companies don't like to reduce or suspend dividends because it sends the message that earnings aren't sufficiently strong and stable to pay a dividend.

Some companies actually borrow to pay dividends. AA's free cash flow has averaged -$50 million a quarter over the last five years. So, yes, AA has been borrowing to support dividend payments and share buybacks. (DL has averaged+$700 million free cash flow a quarter in that same 5-yr period.) https://ycharts.com/companies/AAL/free_cash_flow

Waterbomber2 wrote:

2. Temporary layoffs still cost money. Severance pay may be due if not rehired (within X months).

I had started a separate thread which the Mods merged here. I confined my remarks to DL and select U.S. carriers because I'm most familiar with U.S. law and business customs.

Temporary layoffs don't have an immediate cash cost (at least not for non-union employees - I can't speak to contract specifics). My thread focused on immediate expense reduction and cash flow conservation.

Temporary layoffs don't trigger severance. Eligible (which varies by state) workers are covered by state unemployment insurance (UI) programs. Those payments can be pretty stingy and short duration by European standards. Max weekly payment in 2020:

Georgia, $330/wk for 14 weeks

Michigan, $362/20 weeks

New York, $504/26 weeks

Minnesota, $740/26 weeks

https://www.savingtoinvest.com/maximum- ... -by-state/

https://www.reuters.com/article/us-heal ... SKBN20S1E9
looks like WN is fairing better here than other airlines. Even the high end $300 million doesn't seem that bad for an airline of WN's size. Seems like the bigger hit will be for Q2.

tphuang wrote:

https://www.reuters.com/article/us-health-coronavirus-southwest/southwest-airlines-sees-first-quarter-revenue-hit-from-coronavirus-outbreak-idUSKBN20S1E9
looks like WN is fairing better here than other airlines. Even the high end $300 million doesn't seem that bad for an airline of WN's size. Seems like the bigger hit will be for Q2.

WN has a lot less international exposure (and no Asian/European exposure at all) compared to most other airlines here.

smolt wrote:

The Japanese Government reportedly has decided to restrict arrival passengers from Korea, China, and Iran only to NARITA and KANSAI, and passengers are required 14days quarantine. ThIs perhaps mean huge number of passenger flights will be suspended.

https://www3.nhk.or.jp/nhkworld/en/news/20200305_51/

The "China" part include Hong Kong and Macau also.

Out of HK, HKExpress would be most affected as they has the most flights from HKG to Japanese airports outside of NRT and KIX.

Out of Macau, this would probably just further make planes even more empty. Air Macau is already operating a barebone schedule. But I guess they can always start resuming more flights to/from mainland China.

mcogator wrote:

My DL JFK-BOM flight had about 12 empty seats in D1, the rest of the plane looked rather full, judging by the crowd. I even got offered multiple meals in D1, as I assume some people canceled with short notice. This just means that the corporate travellers are canceling, while personal travelers like myself are still traveling.

Any insight on arrangements you might have noticed at BOM upon arrival? Are they screening all pax? I heard un-confirmed news that India have suspended visas for certain countries and ban on entering from certain countries (Italy, Iran)

Half of positive patients in India are Italian tourists....this is where I don't get it, tourists usually when they are in bunch it is highly likely they are not bag packers as such who are in India for number of months...sounds like mostly charter tourists who usually go for 2 weeks etc. It was well known fact that Italy had a proper outbreak and they couldn't contain it? So knowing this most of the countries should have banned Italy nationals to enter in their countries? Failure to do so results in further issues !! Taxi driver who drove some of them is also tested positive.

This is not for just India - Italy, many countries have taken it lightly from day 1 and should have been more pro active on this.

Just my 2 pence.

theaviator380 wrote:

....It was well known fact that Italy had a proper outbreak and they couldn't contain it? .

democracy has a lot advantages compared to a military dictarship
stopping a pandemic unfortunately is not one of it ...

west european states are unable to execute necessary measures

MIflyer12 wrote:

Waterbomber2 wrote:

2. Temporary layoffs still cost money. Severance pay may be due if not rehired (within X months).

I had started a separate thread which the Mods merged here. I confined my remarks to DL and select U.S. carriers because I'm most familiar with U.S. law and business customs.

Temporary layoffs don't have an immediate cash cost (at least not for non-union employees - I can't speak to contract specifics). My thread focused on immediate expense reduction and cash flow conservation.

Temporary layoffs don't trigger severance. Eligible (which varies by state) workers are covered by state unemployment insurance (UI) programs. Those payments can be pretty stingy and short duration by European standards. Max weekly payment in 2020:

Georgia, $330/wk for 14 weeks

Michigan, $362/20 weeks

New York, $504/26 weeks

Minnesota, $740/26 weeks

https://www.savingtoinvest.com/maximum- ... -by-state/

One caveat is that UI is 100% taxable income, which I learned from personal experience after getting laid off 15 years ago in another industry. So in reality all of the above figures should have about 40% (depending on the state income tax rate) set aside for taxes on 15 April the following year.

MIflyer12 wrote:

Cointrin330 wrote:

Government bailouts are coming for the global aviation industry.

Should governments bail out the shops that can't open, the cinemas that can't open, the hotels that are half empty?

I wasn't advocating for it, but airlines are often bailed out in extreme situations, particularly in the US, which did just that post-9/11.

MIflyer12 wrote:

Waterbomber2 wrote:

2. Temporary layoffs still cost money. Severance pay may be due if not rehired (within X months).

I had started a separate thread which the Mods merged here. I confined my remarks to DL and select U.S. carriers because I'm most familiar with U.S. law and business customs.

Temporary layoffs don't have an immediate cash cost (at least not for non-union employees - I can't speak to contract specifics). My thread focused on immediate expense reduction and cash flow conservation.

Temporary layoffs don't trigger severance. Eligible (which varies by state) workers are covered by state unemployment insurance (UI) programs. Those payments can be pretty stingy and short duration by European standards. Max weekly payment in 2020:

Georgia, $330/wk for 14 weeks

Michigan, $362/20 weeks

New York, $504/26 weeks

Minnesota, $740/26 weeks

https://www.savingtoinvest.com/maximum- ... -by-state/

Wow Minnesota gives you the most why I wonder.

Ishrion wrote:

Royal Air Maroc will resume Casablanca to Beijing Daxing on March 12.

https://www.routesonline.com/news/38/ai ... arch-2020/

Why, oh why?

enilria wrote:

tphuang wrote:

This is interesting. It seems like UA has been the most proactive at making decisions as soon as possible. Maybe they have been hurt the most? I agree that April is probably the earliest you can make this dramatic kind of cuts. I still think more cuts are coming. All the airlines (with the exception of maybe WN) are going to have to make real cuts and possibly park aircraft in the near future imo. The early you do it, the less losses you will have in Q2 imo. Q1 is already shot. I'm surprised AA hasn't made any changes yet. That should come any days now. OAG this will be fascinating. DL's stubbornes will cost them.

Midwestindy wrote:

Keep an eye on Alaska, their main hub is in Seattle, and demand to SEA has dropped like a rock in the last few days, it is pretty ugly....

Further exacerbating their issues is that they don't have an expansive network like the Big 4, and can't really deploy these aircraft elsewhere in the US.

yeah, that will be an interesting one to watch. Q2 is probably a wipeout for them. At least their balance sheet is good. Those SEA adds for this summer look like a goner. If DL really wants to stick it to AS, it should use this opportunity to keep the capacity out there and just stomach the losses. There is no way AS can go through this without cuts to SEA.

I should charge for the OAG update this week! (Kidding)

I do not expect domestic stuff to be cut en masse. It may take another week. I just don't know if they can put it together that fast, plus the crew is locked in 40-60 days out or more. It sounds like loads are 40-60% in a lot of markets from what I am hearing anecdotally. If true it is very hard to cut inside a crew bid and be better off paying the crew to sit. Another thing nobody is talking about is that oil is down from $60 to $45 in the last few weeks and will probably fall further if demand wanes with all of this. That makes it even harder to justify parking huge numbers of planes, although LH just did it.

Good points on SEA. But DL would be suicidal to flood it with capacity. They are reacting very slow on this virus, but they still are very responsive to Wall Street. I don't think WN is really even capable of doing a mass reaccom, but I guess they did when the MAX was grounded.

Yeah I highly doubt Delta or anyone else will make any long term moves at this time. Once you park airplanes and start furloughing pilots, you create a massive training churn as folks get displaced off higher paying fleets. My guess is that they will reduce average line values to the very minimum, and then build a bunch of "lines" that are at minimum guarantee but that have no flying. Folks can get paid to sit. That way, they can be flexible if there is good news. If things still look ugly in the summer and the disease is expected to pick up in the fall, then they can look at shrinking the operation over the medium term and making more drastic moves - parking the 767-300s or something like that. Also, good point on fuel costs as there is some play there.

No one will lay off pilots in the current environment. They would get hired by someone else immediately.

Would this be a good time for airlines, especially UA, to be more aggressive in pursuing cargo? Even if they price it low, fuel is cheap and pax loads are light. That gives more belly space and payload.

asdf wrote:

Even if we can commit on longterm "only" 1% ..... thats 80.000.000 fatalities a year .....

It's 1% of the people who GET the virus, not 1% of EVERYONE, EVERYWHERE.

jetmatt777 wrote:

Would this be a good time for airlines, especially UA, to be more aggressive in pursuing cargo? Even if they price it low, fuel is cheap and pax loads are light. That gives more belly space and payload.

"Cargo" is mostly produced in Asia and volume is collapsing due to supply chain disruptions.

32andBelow wrote:

No one will lay off pilots in the current environment. They would get hired by someone else immediately.

TW870 wrote:

enilria wrote:

tphuang wrote:

This is interesting. It seems like UA has been the most proactive at making decisions as soon as possible. Maybe they have been hurt the most? I agree that April is probably the earliest you can make this dramatic kind of cuts. I still think more cuts are coming. All the airlines (with the exception of maybe WN) are going to have to make real cuts and possibly park aircraft in the near future imo. The early you do it, the less losses you will have in Q2 imo. Q1 is already shot. I'm surprised AA hasn't made any changes yet. That should come any days now. OAG this will be fascinating. DL's stubbornes will cost them.



yeah, that will be an interesting one to watch. Q2 is probably a wipeout for them. At least their balance sheet is good. Those SEA adds for this summer look like a goner. If DL really wants to stick it to AS, it should use this opportunity to keep the capacity out there and just stomach the losses. There is no way AS can go through this without cuts to SEA.

I should charge for the OAG update this week! (Kidding)

I do not expect domestic stuff to be cut en masse. It may take another week. I just don't know if they can put it together that fast, plus the crew is locked in 40-60 days out or more. It sounds like loads are 40-60% in a lot of markets from what I am hearing anecdotally. If true it is very hard to cut inside a crew bid and be better off paying the crew to sit. Another thing nobody is talking about is that oil is down from $60 to $45 in the last few weeks and will probably fall further if demand wanes with all of this. That makes it even harder to justify parking huge numbers of planes, although LH just did it.

Good points on SEA. But DL would be suicidal to flood it with capacity. They are reacting very slow on this virus, but they still are very responsive to Wall Street. I don't think WN is really even capable of doing a mass reaccom, but I guess they did when the MAX was grounded.

Yeah I highly doubt Delta or anyone else will make any long term moves at this time. Once you park airplanes and start furloughing pilots, you create a massive training churn as folks get displaced off higher paying fleets. My guess is that they will reduce average line values to the very minimum, and then build a bunch of "lines" that are at minimum guarantee but that have no flying. Folks can get paid to sit. That way, they can be flexible if there is good news. If things still look ugly in the summer and the disease is expected to pick up in the fall, then they can look at shrinking the operation over the medium term and making more drastic moves - parking the 767-300s or something like that. Also, good point on fuel costs as there is some play there.

100% agree on the pilot and training issues. The widebodies just need to be sitting because they are going to bleed flying anything else. Agreed that they won't layoff. Agreed that the training cost of pushing down pilots to a lower type is not practical in the short or even intermediate term. I see two things happening:
1) Layoff of everybody but pilots
2) If they can't cut costs because of what we just described and this situation persists for 6-8 weeks we are going to see either govt bail-outs or Ch11 filings among the USA carriers. I can also imagine IAG/Qatar injecting cash into AA through a purchase up to the maximum allowed by law.

No healthy airline will do lay offs. Temporary (un)paid leave (which in a lot of countries means they will still 3/4 or so of their pay one way or another anyway) is already happening for flying staff but it will likely extend to office staff too who work on projects that will likely get frozen now or soon will be.

enilria wrote:

jetmatt777 wrote:

Would this be a good time for airlines, especially UA, to be more aggressive in pursuing cargo? Even if they price it low, fuel is cheap and pax loads are light. That gives more belly space and payload.

"Cargo" is mostly produced in Asia and volume is collapsing due to supply chain disruptions.

32andBelow wrote:

No one will lay off pilots in the current environment. They would get hired by someone else immediately.

TW870 wrote:

enilria wrote:

I should charge for the OAG update this week! (Kidding)

I do not expect domestic stuff to be cut en masse. It may take another week. I just don't know if they can put it together that fast, plus the crew is locked in 40-60 days out or more. It sounds like loads are 40-60% in a lot of markets from what I am hearing anecdotally. If true it is very hard to cut inside a crew bid and be better off paying the crew to sit. Another thing nobody is talking about is that oil is down from $60 to $45 in the last few weeks and will probably fall further if demand wanes with all of this. That makes it even harder to justify parking huge numbers of planes, although LH just did it.

Good points on SEA. But DL would be suicidal to flood it with capacity. They are reacting very slow on this virus, but they still are very responsive to Wall Street. I don't think WN is really even capable of doing a mass reaccom, but I guess they did when the MAX was grounded.

Yeah I highly doubt Delta or anyone else will make any long term moves at this time. Once you park airplanes and start furloughing pilots, you create a massive training churn as folks get displaced off higher paying fleets. My guess is that they will reduce average line values to the very minimum, and then build a bunch of "lines" that are at minimum guarantee but that have no flying. Folks can get paid to sit. That way, they can be flexible if there is good news. If things still look ugly in the summer and the disease is expected to pick up in the fall, then they can look at shrinking the operation over the medium term and making more drastic moves - parking the 767-300s or something like that. Also, good point on fuel costs as there is some play there.

100% agree on the pilot and training issues. The widebodies just need to be sitting because they are going to bleed flying anything else. Agreed that they won't layoff. Agreed that the training cost of pushing down pilots to a lower type is not practical in the short or even intermediate term. I see two things happening:
1) Layoff of everybody but pilots
2) If they can't cut costs because of what we just described and this situation persists for 6-8 weeks we are going to see either govt bail-outs or Ch11 filings among the USA carriers. I can also imagine IAG/Qatar injecting cash into AA through a purchase up to the maximum allowed by law.

Not the cargo I was speaking of. United handles a ton of domestic cargo that does not originate in China. Being more competitive with that could help with revenues on existing flying.

asdf wrote:

AAIL86 wrote:

Should travel be banned because over a million people a year die globally from car accidents?

this is a interesting question

china as a military dictatorship took measures a democracy never could
so they could hold down the rate of deceased from Covid-19 below 1%

outside china you ca see rates from about 2 to 3%

Even if we can commit on longterm "only" 1% ..... thats 80.000.000 fatalities a year .....

That's only if you assume we know everybody who has it. It's far more likely that A LOT OF PEOPLE have it because very few are tested and the mortality rate is much lower.

32andBelow wrote:

No one will lay off pilots in the current environment. They would get hired by someone else immediately.

I'm not following this logic- if just about everybody starts laying off pilots (some of hte most expensive employees), which company would pick them up?

Does anyone think the airlines might prices to try and stimulate business from those who will still fly? Or is it more likely to go the other way and airlines will try and compensate for losses by hiking prices as the craze spreads to Europe and NA?

kimimm19 wrote:

Does anyone think the airlines might prices to try and stimulate business from those who will still fly? Or is it more likely to go the other way and airlines will try and compensate for losses by hiking prices as the craze spreads to Europe and NA?

Uhhhhh you may want to look at ticket prices right now......

AS is offering $99 fares or below on nearly all of their routes, saw some $20 fares

Just purchased ORD-FLL round trip on AA for $50.......for two weeks from now (Literally peak Spring Break).

Airlines must be bleeding money heavily at this point.....