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brooklynchris13
Topic Author
Posts: 295
Joined: Fri Mar 19, 2010 12:11 am

Airline Industry: Post Corona Virus (COVID-19)

Sat Mar 21, 2020 6:54 pm

Maybe its a little early, but with many of us spending much more time at home, I am curious to see what everyone's thoughts are on exactly what the long term impacts of this may be on the Airline Industry? Do you think this is just a hiccup and in a year or two all we will be back to normal? Or do you think this is going to be a significant milestone in aviation where, afterwards, nothing is quite the same?

Some of my initial observations/thoughts: 1) There are clearly some A/C types at some airlines for whom this will likely be the end... MD90s @ DL; 763s; E190s; A333s at AA; and others. 2) dramatic, long term reduction in long-haul international flying 3) Some sort of impact on the Regionals. Granted, Trans States and Compass were already on the way out, but will this force airlines to perhaps go back to more mainline flying over the importance of frequency? (Which would also have a positive environmental impact as well). We now have two types of regional flying here in the US: Markets that can not support anything but a 50 seat aircraft and other markets where the regionals replaced what used to be 3-4 mainline flights a day-- BNA to ORD; CMH to CLT; and even the LGA-DCA-BOS shuttle type operations. If the mainline fleets are drawn down significantly, that will demand a major reduction in regional flying as well... Where will the lines end up being?

Looking forward to hearing your thoughts on this and where you think we might end up. (And stay safe everyone, its a crazy time for all of us everywhere, best wishes to everyone as we work through it all!)
"Be the change you want to see in the world" (mg)
 
slcdeltarumd11
Posts: 4753
Joined: Fri Jan 09, 2004 7:30 am

Re: Airline Industry: Post Corona Virus (COVID-19)

Sat Mar 21, 2020 7:10 pm

These are impossible to answers right now. All depends on:

1.how long stuck at home lasts
2.when some people are comfortbale to travel again
3.when everyone feels comfortable to travel again(different)
4.how much work from home or virtual meetings are the new norm. Everything I have seen people expect businesses to travel alot less. That technology was already really good now people are just use to making it work

No one on Earth know the answers, but it's looking a while. Can't even imagine levels going back to even close in the next five years. Is why delta says they will come out a smaller airline they see the writing on the wall just specifics are unknown.

It will definitely be a challenging time for airlines and all of their employees.
Last edited by slcdeltarumd11 on Sat Mar 21, 2020 7:16 pm, edited 1 time in total.
 
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NameOmitted
Posts: 883
Joined: Sun Oct 23, 2016 7:59 pm

Re: Airline Industry: Post Corona Virus (COVID-19)

Sat Mar 21, 2020 7:12 pm

Much is the changes that will need to be made ate in the ground, and hit directly controlled by the airlines themselves.

Right now, the image of airline safety in a pandemic is the security queue.
 
hpff
Posts: 90
Joined: Sun Mar 24, 2019 5:20 am

Re: Airline Industry: Post Corona Virus (COVID-19)

Sat Mar 21, 2020 7:49 pm

I fully expect some carriers to go under because of this. I won't predict which ones - airlines which were profitable six weeks ago may not come out of this alive depending on their location, their debt load, and the way their business has been structured.

I also expect there will be fewer point-to-point routes in northern hemisphere summer 2021 than there were in summer 2019.

Apart from that, hard to say specifically.
 
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FLALEFTY
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Re: Airline Industry: Post Corona Virus (COVID-19)

Sat Mar 21, 2020 11:52 pm

The Big 4 in the USA, DL, AA, UA & WN will survive this, but perhaps with some downscaling. Look for DL to take down at least one of their hubs, with either DTW or MSP likely getting the boot (DL signed on to an on-going, $4B+ expansion of SLC, which will be tough to get out of contractually). AA will probably do likewise; look for MIA or PHX to be put on the hot seat. UA has two hubs located between the two coasts, IAH and ORD, so I expect both of them will survive. However, IAD is suspect. WN has been using BNA and ATL as defacto hubs, even though it does not have even have a crew domicile in BNA. I expect BNA and ATL to get drawn down.

The real pressure to survive will be felt by the "white shoes" LCC's, SY, G4, F9 & NK. I think descretionary travel will be very slow to recover even after the "all clear" horn gets sounded.
Last edited by FLALEFTY on Sun Mar 22, 2020 12:11 am, edited 1 time in total.
 
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PacoMartin
Posts: 901
Joined: Sun May 27, 2018 8:18 pm

Re: Airline Industry: Post Corona Virus (COVID-19)

Sun Mar 22, 2020 12:04 am

It took from 2001-2004 to recover from 9/11 and then it was the same in Sep 2009 as it was in Sep 2004.

Domestic boardings (,000) in September in US
46,395 September 2000
30,543 September 2001
40,276 September 2002
44,594 September 2003
48,018 September 2004
50,896 September 2005
50,193 September 2006
52,581 September 2007
47,928 September 2008
48,510 September 2009
50,601 September 2010
51,320 September 2011
50,429 September 2012
51,037 September 2013
52,785 September 2014
56,239 September 2015
58,882 September 2016
57,405 September 2017
60,696 September 2018
64,200 September 2019

Right now the interest in using the A321XLR to fly transAtlantic has been kind of mild, but I think it will go up exponentially. The larger widebodies are difficult to deploy economically on shorter routes in the event of a catastrophe, but the smaller A321XLR can be used on shorter routes without too much disruption.

Among the US airlines, Delta has a lot of old equipment which can be retired without a big loss. I suspect they will remain the most profitable airline in the US. American is the least profitable major US airline and most of their jets are much newer and cannot be retired while they are still being paid off. I suspect you will see an American/United merger but the government won't let the combined airline keep two mega hubs (DFW and IAH) only 195 nmi apart.

Four of the smaller US airlines have a similar makeup in fleet equipment.
259 JetBlue 10.8
130 Airbus A320-200 14.5
63 Airbus A321-200 3.6
6 Airbus A321neo 0.3
60 Embraer ERJ-190 11.4

147 Spirit 6.0
31 Airbus A319 13.4
64 Airbus A320-200 5.4
22 Airbus A320neo 1.4
30 Airbus A321-200 3.1


98 Frontier 4.0
6 Airbus A319 15.1
20 Airbus A320-200 7.6
51 Airbus A320neo 1.6
21 Airbus A321 3.3

100 Allegiant Air 13.8
38 Airbus A319-100 14.7
62 Airbus A320-200 13.2
 
DeltaPSCFlyer
Posts: 77
Joined: Fri Nov 22, 2019 4:39 pm

Re: Airline Industry: Post Corona Virus (COVID-19)

Sun Mar 22, 2020 4:56 am

FLALEFTY wrote:
The Big 4 in the USA, DL, AA, UA & WN will survive this, but perhaps with some downscaling. Look for DL to take down at least one of their hubs, with either DTW or MSP likely getting the boot (DL signed on to an on-going, $4B+ expansion of SLC, which will be tough to get out of contractually). AA will probably do likewise; look for MIA or PHX to be put on the hot seat. UA has two hubs located between the two coasts, IAH and ORD, so I expect both of them will survive. However, IAD is suspect. WN has been using BNA and ATL as defacto hubs, even though it does not have even have a crew domicile in BNA. I expect BNA and ATL to get drawn down.

The real pressure to survive will be felt by the "white shoes" LCC's, SY, G4, F9 & NK. I think discretionary travel will be very slow to recover even after the "all clear" horn gets sounded.


Surprised you didn't include HA, B6, and AS?

For United, I would expect to see big reductions at IAD (very close to EWR), IAH (relatively close to DEN & ORD) and LAX (very close to SFO). This would leave four key hubs: EWR, ORD, DEN & SFO. They have strong JV partners in LH and NH that can pick up a lot of European and Asian flights.

For Delta: I would expect to see very big reductions at SEA and MSP, especially on the international side. I also think a lot of their P2P flights, while profitable and promising pre-virus, will be at high risk of being dropped. As much as I hate to say it, but routes like PDX-LHR are likely gone for a long, long time.

WN will survive because they are WN! But the MAX has burned them badly, so a strategic acquisition of the likes of F9, NK, B6, or even G4 would help them diversify their fleet. Eventually the MAX will come online.

For AS? Hard to say...they tried to expand nationally on their own organically, and succeeded, but then failed with the VX acquisition. I could see an eventual tie-up with HA. AA is too debt-ridden to consider an outright purchase of AS at this point.
 
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FLALEFTY
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Joined: Tue Jan 31, 2006 11:33 am

Re: Airline Industry: Post Corona Virus (COVID-19)

Sun Mar 22, 2020 6:00 pm

DeltaPSCFlyer wrote:
FLALEFTY wrote:
The Big 4 in the USA, DL, AA, UA & WN will survive this, but perhaps with some downscaling. Look for DL to take down at least one of their hubs, with either DTW or MSP likely getting the boot (DL signed on to an on-going, $4B+ expansion of SLC, which will be tough to get out of contractually). AA will probably do likewise; look for MIA or PHX to be put on the hot seat. UA has two hubs located between the two coasts, IAH and ORD, so I expect both of them will survive. However, IAD is suspect. WN has been using BNA and ATL as defacto hubs, even though it does not have even have a crew domicile in BNA. I expect BNA and ATL to get drawn down.

The real pressure to survive will be felt by the "white shoes" LCC's, SY, G4, F9 & NK. I think discretionary travel will be very slow to recover even after the "all clear" horn gets sounded.


Surprised you didn't include HA, B6, and AS?

For United, I would expect to see big reductions at IAD (very close to EWR), IAH (relatively close to DEN & ORD) and LAX (very close to SFO). This would leave four key hubs: EWR, ORD, DEN & SFO. They have strong JV partners in LH and NH that can pick up a lot of European and Asian flights.

For Delta: I would expect to see very big reductions at SEA and MSP, especially on the international side. I also think a lot of their P2P flights, while profitable and promising pre-virus, will be at high risk of being dropped. As much as I hate to say it, but routes like PDX-LHR are likely gone for a long, long time.

WN will survive because they are WN! But the MAX has burned them badly, so a strategic acquisition of the likes of F9, NK, B6, or even G4 would help them diversify their fleet. Eventually the MAX will come online.

For AS? Hard to say...they tried to expand nationally on their own organically, and succeeded, but then failed with the VX acquisition. I could see an eventual tie-up with HA. AA is too debt-ridden to consider an outright purchase of AS at this point.


I am pretty much in agreement with your predictions.

Reconsidering my United predictions, unless oil prices rebound quickly, IAH might also be a candidate for de-hubbing. The energy industry is a major driver of O&D business traffic at IAH which could push down yields if it doesn't come back to pre-crisis levels. Another factor is that IAH's primary hub flow is from the Southeast to the Southwest and even in good times United has not been especially strong in the Southeast. Most of United's feed from those Southeastern markets through IAH has been provided by their regional partners.

American might have to take Chapter 11 so they can get out of open orders and leases for new/newish planes that they probably will not need for some time. AA's management knows the drill, having been down this bankruptcy restructuring path a few times before. I think the recent order for 50 A321XLR's might get cut: I don't think taking on a slow, narrow bodied, capacity-restricted plane just to connect "nice to have" routes like EWR to DUB, or IAD to MAD is going to pay off in the recovery period. This will also apply to using old B757's and B763ER's on these routes, too.

As for B6, I think they will be in the "Corporate ICU" for a while. Like my prediction for AA, I think B6 may need to take Chapter 11 to get out of leases and purchase agreements since they were in the midst of a major re-fleeting effort when this crisis hit. They are facing difficulties operating at their main hub at JFK and their most important O&D markets, FLL & MCO are in freefall in terms of passenger demand. I also think their plans for Trans Atlantic service will be shelved. Will they become takeover bait for a larger, healthier survivor (e.g. WN)? Maybe.

AS is fairly lucky in that the B737MAX is grounded and leases on A319's & A320's they inherited from Virgin America are winding down, so that should help. However, they are still stuck with a large open order for A320&321NEO's that needs to be dealt with. I expect with discretionary flying dampened, even after the "all clear", I think they will drastically reduce their Hawaiian operations and many of their coast-to-coast routes.

HA is a unique case. They have their all-important inter-island route network that is certain to get government assistance so it can continue to operate. However, their routes to the Mainland US and to Asia may get significantly trimmed. I haven't checked to see if they are parking their A330's, but if they are it is unlikely they will return to service.
 
BNAMealer
Posts: 816
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Re: Airline Industry: Post Corona Virus (COVID-19)

Sun Mar 22, 2020 8:00 pm

I doubt DL entirely abandons either DTW or MSP as long as there are no further mergers among with the US3. They know doing so would give AA an opportunity to leave ORD and gain another high margin hub.

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