Covid-19; Impact on the aviation industry

DFB BOY

Talk to Joe":D:D:D:D,just there seems to be fairly full flights coming in but not many pax departing although he said last saturday there was 2 FR flights back to back,one to Gran Canaria and one to Fuerteventua and the amount of families coming through for them,he was godsmacked :eek::eek:

bk

faceman wrote: »

This was alluded to by one of the ministers among the noise. The gov are consulting the EU on it. The EU will support it but I think Ursula knows this is a tinderbox waiting to go off. If Ireland pulls the trigger first you won’t have to worry about the Garda checkpoint, it’ll be the ban on entry or reciprocal quarantine on the other end that’ll be the problem. If Ireland goes tier green but puts visitors from Germany in detention centres, no way will Germany not do the same in response

Nothing confirmed yet, but it is looking like Germany is about to ban flights from Ireland (plus UK and other EU countries):

https://berlinspectator.com/2021/01/28/germany-prepares-entry-ban-from-countries-with-mutated-corona-variants/

Tenger

acequion wrote: »

Good for them. I hope they'll all have a wonderful time in sunny Clare, Galway, Wexford :pac:

But last time I checked this thread is specifically about the impact on the aviation industry, not about folk going on staycation.

Last I checked you arent a mod

And having a large number of people decide to book domestic breaks will certainly have an impact on the cashflow of the Irish airlines.

bk wrote: »

Nothing confirmed yet, but it is looking like Germany is about to ban flights from Ireland (plus UK and other EU countries):
....

Looks like it has been confirmed.
https://www.irishtimes.com/news/world/europe/germany-imposes-effective-travel-ban-on-ireland-from-saturday-1.4471353
Looks like the CTA is lumping us in with the UK and some others.
Germany has effectively halted private travel to and from Ireland, the UK and South Africa to contain the spread of coronavirus mutations.
The new regulation, applicable also to Portugal and Brazil, outlaws travel “except absolute exceptions” and comes into effect from midnight on Friday.

In addition France is stopping any non-EU entry.
https://www.rte.ie/news/coronavirus/2021/0129/1193967-france-borders-virus/

TeaPot918

I'm full of cans but I hope the bars restaurants bnbs hotels and airlines start putting the more prominant stay at home influencers on a bar/no-fly list.

They can't expect things to still be around in 6 months time while they cry out for their closure.

I think that will slap them into reality.

kona

TeaPot918 wrote: »

I'm full of cans but I hope the bars restaurants bnbs hotels and airlines start putting the more prominant stay at home influencers on a bar/no-fly list.

They can't expect things to still be around in 6 months time while they cry out for their closure.

I think that will slap them into reality.

I think airlines have bigger issues than geebags on Instagram.

duskyjoe

kona wrote: »

I think airlines have bigger issues than geebags on Instagram.

Geebags ..... a real 80s expression! Something funny to read and take our minds off the currently reality as 2021 looks utterly destroyed for the airlines in ireland .... can they survive 2 yrs in a row with zero business ?

PinOnTheRight

Someone mentioned it on here recently but I can't find the post.

Lufthansa (DLH2574 on FR24) are just about to land an A350 in Mount Pleasant in the Falklands after a 15hr trip from Hamburg carrying scientists due to set off on an Antarctic expedition.

Some background on the preparations involved given the pandemic.
https://simpleflying.com/lufthansa-longest-ever-flight/

Nijmegen

I see Ryanair's results are out. As well as unleashing MOL from the restricted period pre-reporting to lambast the EU travel bans, they're guiding an €850-950m loss in this financial year (to the end of March) after a €306m loss over the Christmas quarter and a drop of 80% on revenue and passengers. What's amazing is that the 80% drop still translates into 8 million passengers.

€3.5bn in cash available at the end of December (down from €3.9bn at the end of June), so no actual worries for the business. Seems Ryanair, EasyJet and Wizz are the "investment grade" darlings of the European airline industry expected to grow out of this thing.

Locker10a

Nijmegen wrote: »

I see Ryanair's results are out. As well as unleashing MOL from the restricted period pre-reporting to lambast the EU travel bans, they're guiding an €850-950m loss in this financial year (to the end of March) after a €306m loss over the Christmas quarter and a drop of 80% on revenue and passengers. What's amazing is that the 80% drop still translates into 8 million passengers.

€3.5bn in cash available at the end of December (down from €3.9bn at the end of June), so no actual worries for the business. Seems Ryanair, EasyJet and Wizz are the "investment grade" darlings of the European airline industry expected to grow out of this thing.

I’d replace Easyjet there with maybe IAG, who are in a far better place than Easyjet

Nijmegen

Locker10a wrote: »

I’d replace Easyjet there with maybe IAG, who are in a far better place than Easyjet

It's all about cash and then velocity of return. IAG may have cash but it's significantly more exposed to markets that are going to be slower to return, ie business and long haul.

EasyJet has access to £2.5bn and claims that if revenue falls to zero, they'll burn £40m a week (revenue has not fallen to zero, but they are running bigger losses than Ryanair, about £400m last quarter).

Wizz has about €1.2bn in cash and is looking at about €115m in losses for the Christmas quarter.

So they all have liquidity to survive while their competitors die around them. And then the thinking is that short haul travel for vacations or visiting family will come back first followed over a long period of time by business and long haul travel.

Lufthansa is screwed here - they are probably one of the most exposed to business travel. But IAG isn't immune. If Lufthansa is half business account driven, BA is probably a fifth to a quarter for example.

Ryanair, Easy and Wizz all have investment grade status (ie, can access even more liquidity) and are positioned to take the first flying passengers who return to the air post-pandemic (and are picking up not insignificant volumes already at the nadir of the thing).

opinionated3

From my own limited vantage point, I'm hearing Lufthansa will be changing tact a little bit in the long term. Targeting business customers will still be there, but cheaper prices for less perks....

Stevieluvsye

The days of significant business travel revenue are gone for good. It will only be essential business trvael for here on in. I know this as i work for a large American tech company.

IAG will need a new business plan, otherwise it will have to significantly cut its fleet

Captain_Crash

Stevieluvsye wrote: »

The days of significant business travel revenue are gone for good. It will only be essential business trvael for here on in. I know this as i work for a large American tech company.

IAG will need a new business plan, otherwise it will have to significantly cut its fleet

Not saying your wrong, but I also work for a large American tech company and we have been told our company intends for our business travel between sites to be back to pre covid levels as soon as feasible.

My personal view is business travel won’t be back to quite the same level as before but there will still be a significant amount traveling. It’s not gone forever like some think!

Stevieluvsye

Captain_Crash wrote: »

Not saying your wrong, but I also work for a large American tech company and we have been told our company intends for our business travel between sites to be back to pre covid levels as soon as feasible.

My personal view is business travel won’t be back to quite the same level as before but there will still be a significant amount traveling. It’s not gone forever like some think!

Only customer requirement travel will return to somewhat pre-covid levels, even then, the customer may not want it in all cases. In regards to non-customer travel it will drop by 90%. I mean events, conferances, training etc etc.

Anyway, I know google, microsoft, salesforce are taking a similar approach to this

Captain_Crash

Stevieluvsye wrote: »

Only customer requirement travel will return to somewhat pre-covid levels, even then, the customer may not want it in all cases. In regards to non-customer travel it will drop by 90%. I mean events, conferances, training etc etc.

Anyway, I know google, microsoft, salesforce are taking a similar approach to this

Most business travel isn’t business to customer, it’s travel between business sites etc. I’m not saying who I work for but it’s one of the larger US tech firms and we’ve been told that our previous level of travel will mostly return. Of all the travel I’ve done, it’s never been to a customer, just to another one of our sites! Even during covid there has been a small amount of travel, but that was essential only of course.

Stevieluvsye

Captain_Crash wrote: »

Most business travel isn’t business to customer, it’s travel between business sites etc. I’m not saying who I work for but it’s one of the larger US tech firms and we’ve been told that our previous level of travel will mostly return. Of all the travel I’ve done, it’s never been to a customer, just to another one of our sites! Even during covid there has been a small amount of travel, but that was essential only of course.

Shocked to hear that. Unless of course you(Company) do not have the capability to do what you need to do virtually.

Captain_Crash

Stevieluvsye wrote: »

Shocked to hear that. Unless of course you(Company) do not have the capability to do what you need to do virtually.

Course we do! But just because something is virtual doesn’t make it comparable to physical presence! Businesses decide for themselves what works best! We’ve been told (and like everything, it’s subject to change) that we plan on a comparable level of inter business travel to be back as soon as possible! When that is no one knows tho

bk

I work for one of the worlds largest IT companies and we have been told that business travel will be extremely decreased, even after Covid.

There will of course still be some, but way down compared to pre-covid levels.

Our productivity has actually increased substantially during Covid, while we are saving large sums from the travel budget!!

As a result, lots of the non essential travel won't return, it will be much harder to justify travel going forward.

Lots of changes coming in the big corporate world, not just travel, but also lots more flexibility about WFH and remote working, office holdings being reduced, hybrid office models, etc.

Stevieluvsye

bk wrote: »

I work for one of the worlds largest IT companies and we have been told that business travel will be extremely decreased, even after Covid.

There will of course still be some, but way down compared to pre-covid levels.

Our productivity has actually increased substantially during Covid, while we are saving large sums from the travel budget!!

As a result, lots of the non essential travel won't return, it will be much harder to justify travel going forward.

Lots of changes coming in the big corporate world, not just travel, but also lots more flexibility about WFH and remote working, office holdings being reduced, hybrid office models, etc.

The exact same in my place. From 2021 i'll do one day a week in the office (My choice) instead of me travelling to the states 4 times a year it will be once. Instead of travelling to various hubs across Europe on a monthly basis that will be reduced to once per quarter.

COVID has shown that the WFH environment has increased productivity, although this has meant i have found myself working more at weekends.

Anyway, reverting back to my original point IA i'm assuming will be working on a different business model for the future

Nijmegen

bk wrote: »

I work for one of the worlds largest IT companies and we have been told that business travel will be extremely decreased, even after Covid.

There will of course still be some, but way down compared to pre-covid levels.

Our productivity has actually increased substantially during Covid, while we are saving large sums from the travel budget!!

As a result, lots of the non essential travel won't return, it will be much harder to justify travel going forward.

Lots of changes coming in the big corporate world, not just travel, but also lots more flexibility about WFH and remote working, office holdings being reduced, hybrid office models, etc.

CFOs know how to measure productivity versus travel. This is one of these weird events where a thing everyone said they couldn't risk doing (turn off the travel budget) has and they get to measure the impact. Ditto office rents etc. If productivity in your firm has maintained, grown, or even declined but only a little, the advantages of a hybrid-remote model without a lot of travel will be significant. The amount of time that gets sucked into travel is another material factor.

And apart from anything else, the "jab and go" approach to travel is not a risk corporates will be taking in the next 12 months, unlike say an Eastern European person working in the UK or Ireland hopping a Ryanair or Wizz or EasyJet flight home to see their mother as soon as possible.

IAG, Lufthansa etc will survive because they're too big to fail and they'll probably have to diversify their markets (certainly Lufthansa) but ultimately their state backers will keep them going for strategic reasons and they'll be back with the industry. But if you're investing your own cash, a bet on Ryanair etc seems a lot more likely to have bubbly returns in the next few years.

Stevieluvsye

Nijmegen wrote: »

CFOs know how to measure productivity versus travel. This is one of these weird events where a thing everyone said they couldn't risk doing (turn off the travel budget) has and they get to measure the impact. Ditto office rents etc. If productivity in your firm has maintained, grown, or even declined but only a little, the advantages of a hybrid-remote model without a lot of travel will be significant. The amount of time that gets sucked into travel is another material factor.

And apart from anything else, the "jab and go" approach to travel is not a risk corporates will be taking in the next 12 months, unlike say an Eastern European person working in the UK or Ireland hopping a Ryanair or Wizz or EasyJet flight home to see their mother as soon as possible.

IAG, Lufthansa etc will survive because they're too big to fail and they'll probably have to diversify their markets (certainly Lufthansa) but ultimately their state backers will keep them going for strategic reasons and they'll be back with the industry. But if you're investing your own cash, a bet on Ryanair etc seems a lot more likely to have bubbly returns in the next few years.

This doesn't get as recognised as it should. Time = Costs for the company. Not allowing then for the time in lieu a lot of people then get for trans or euro wide travel.

Say for instance i am travelling to the states (McClean) i am travelling out of office for monday and returning out of office on the Friday, i get the following Monday off in lieu for the travelling out of hours. That's 3 days effectively lost by the company.

In essence, i can do what i need to do from home.

I know slightly off topic but feeds in again to companies reviewing their travel arrangements

PommieBast

Looks like a gang just got busted for selling fake Covid-19 negative test certificates. Not at all surprised but I have yet to see any authoritative information on what standard of documentation is actually required.

snotboogie

Stevieluvsye wrote: »

Only customer requirement travel will return to somewhat pre-covid levels, even then, the customer may not want it in all cases. In regards to non-customer travel it will drop by 90%. I mean events, conferances, training etc etc.

Anyway, I know google, microsoft, salesforce are taking a similar approach to this

It will vary by company. Multinationals will have more scope to and need for travel. I have worked for two US tech companies in the last 5 years and they are at complete opposite ends of the spectrum. My previous company is planning to cut 99% of travel. As you said, customer facing critical only from now on. My current company wants to get back to 100% ASAP. I imagine most will fall somewhere in the middle. For multinationals in Ireland it will be interesting how they balance cost vs results and culture, especially with work from home. Keep in mind, WordPress, the pioneers of Wfh, had high travel costs pre pandemic as they had events once per quarter to compensate for the totally remote communication the rest of the year. Non multinationals will, as you say, go to customer facing only.

NSAman

opinionated3 wrote: »

From my own limited vantage point, I'm hearing Lufthansa will be changing tact a little bit in the long term. Targeting business customers will still be there, but cheaper prices for less perks....

Can they give less perks?

Even on Business their offering is not as good as other carriers.

basill

PommieBast wrote: »

Looks like a gang just got busted for selling fake Covid-19 negative test certificates. Not at all surprised but I have yet to see any authoritative information on what standard of documentation is actually required.

I asked this very question recently and got a blank look. I am not sure that the 18y/o seasonal worker on a zero hour contract checking you in would be any the wiser if you were savvy on photoshop either.

Tenger

Stevieluvsye wrote: »

................
COVID has shown that the WFH environment has increased productivity, although this has meant i have found myself working more at weekends.

Anyway, reverting back to my original point IA i'm assuming will be working on a different business model for the future

To offer a counterpoint, a mate works for a global financial company. He offers the point that his employer wants to get back to the office as soon as feasible. He would be happy with WFH options.
Another mate works for a huge tech company and they are embracing the newfound benefits of WFH.

Just shows that the impact of business will vary across company. Perhaps this will change after 12-18 months as the non-WFH companies see the advantage. (My personal opinion is that increased WFH is a net benefit to them)

Regarding business travel, I do think that it will return but probably at a longer level than before. EG. Instead of 4-5 trips to close a deal or finish a project it may be 2 trips, one to commence and one to finish. Just my 2 cents.

Nijmegen

Tenger wrote: »

To offer a counterpoint, a mate works for a global financial company. He offers the point that his employer wants to get back to the office as soon as feasible. He would be happy with WFH options.
Another mate works for a huge tech company and they are embracing the newfound benefits of WFH.

Just shows that the impact of business will vary across company. Perhaps this will change after 12-18 months as the non-WFH companies see the advantage. (My personal opinion is that increased WFH is a net benefit to them)

Regarding business travel, I do think that it will return but probably at a longer level than before. EG. Instead of 4-5 trips to close a deal or finish a project it may be 2 trips, one to commence and one to finish. Just my 2 cents.

The world rarely changes in 100% swings. But if you take it that business travel over the long term, at an underlying level of x trips per 1,000 businesses in a year, will be down x%... it has pretty major consequences for the industry over the long term. Even if in percentage terms it’s, say, 10% or 20%, which feels conservatively correct over the long term (whilst being a total guess!)

Of course the other side is we may end up reading about the “wild unrepressed desire to travel with cash saved from commutes” driving a Renaissance !

bk

Tenger wrote: »

Just shows that the impact of business will vary across company. Perhaps this will change after 12-18 months as the non-WFH companies see the advantage. (My personal opinion is that increased WFH is a net benefit to them)

Also as they start losing large numbers of top staff to their competitors who offer WFH options.

This is basically what already happened in the biggest IT companies even before Covid. In order to attract top talent, they started offering all sorts of flexibility and benefits. Options for remote working, WFH, flexible hours, etc.

The companies who were more conservative and didn't offer the same started losing large number of top staff and struggled to employ quality replacements and started getting into serious trouble and were forced into the same sort of changes.

Tenger wrote: »

Regarding business travel, I do think that it will return but probably at a longer level than before. EG. Instead of 4-5 trips to close a deal or finish a project it may be 2 trips, one to commence and one to finish. Just my 2 cents.

Absolutely, there will still be business travel, but less.

I'll give you an example. I was chatting to one of my VP's about this. Pre-Covid he'd travel 4 to 5 days a week to meet with customers. Now no travel, instead doing video calls and it has been a big success. He can meet with far more customers about a greater variety of issues by video call, just because he has the time now and isn't spending time travelling too and from airports, in the air, etc.

This has allowed him to engage with more customers about more issues and has been a big success.

He admitted that he will be back flying after Covid, but just one or two days a week to help close the most important deals, doing lots of video calls the other days.

Also when doing deals in the past there would be lots of back and forward with various other staff, legal, accountants, etc. laying ground work and doing due diligence, etc. We have found most of that can be done remotely and as you say, you might just see the executive fly to meet in person for just the opening and closing of the deal.

Basically over the past year, a lot of the corporate world has been figuring out which business travel is really necessary and which is optional.

Stevieluvsye

I'd look at increasing business class capacity for long haul post covid as imo it will be more senior execs who will return to more regular travel. That's where the greater profit margin lies.

Inquitus

Stevieluvsye wrote: »

I'd look at increasing business class capacity for long haul post covid as imo it will be more senior execs who will return to more regular travel. That's where the greater profit margin lies.

There will be a lot less business class travel post Covid as many multinationals have seen the evidence of how much can be accomplished remotely, and how much money they can save on their T&E spend. Remember it was not just execs flying business class, many multinationals fly employees business class if the flight is over 5 hours or so.