Covid19, the airline industry. Where do we go from here?

I'm surprised no one has raised this in the last week so I will. Over the last 4 or so weeks we have seen the worlds airline industry absolutely decimated in a way that we have never seen in the history of aviation. What was solid and known just 3 months ago is now swept away. By some industry experts analysis, most of the worlds airlines could be technically if not actually bankrupt by the end of May.

I work for an airline that is in its 100th year, and should be and was planning to celebrate it. Right now there is no celebration and as an engineer for that company I am less than 24hrs away from knowing if I am stood down without pay. I have a 30% chance of continuing paid work over the next 3-6 months, maybe they will rotate us, maybe they wont, information is woefully lacking(typical). I have a wife, child and a mortgage, and frankly no idea what the next few weeks and months hold. My question is, how did we get in this mess and where and what do we go to from here? Its a discussion point, nothing more.

a reply to: thebozeian

If airlines are going under as a whole, it means not a single one of them spent their money wisely. If they had, after all these years in business they should have enough saved up to weather many storms.

a reply to: Puppylove

You obviously don't understand how much it costs to run an airline. I work for an airline too. We are burning through millions a day flying empty planes. We have to keep flying. But we are running out of money. I work for the most financially healthy airline, and we are still going broke. I too do not know if I will be furloughed or not. And my airline has never done layoffs.

a reply to: thebozeian

I for one am looking forward to the government bailouts, I always wanted to own my own 777. Now I can sit in that thing all day while it sits idle on the ground and surf ATS while sipping Bourbon from tiny bottles, all I need is someone to constantly mess with the Wi-Fi so I can have that true airline experience.

I read that some of the bigger US airlines were cash-rich, but have got into the habit of buying back their own shares. This keeps the share price up and enables the top management to meet their targets for bonuses. I am sure that's a simplified view of the purpose of share buy-back, but the result is that some airlines have no cash reserves, so are vulnerable and need a bail-out! Surprise, surprise.

Ah, here we are... Airline share buy-back

a reply to: paraphi

Southwest Had 4 billion at the beginning of the year. Last week they had to borrow a billion because they are running empty planes to keep their 65,000 employees employed. They are at the end of their rope. That has nothing to do with stock buybacks. I know Delta and Jetblue are in the same boat. The legacy carriers (United, American) have filed bankruptcy before, and continue to be run greedily.

Not a big deal guys. We’re currently in the middle of fighting a flu. Priorities people, Priorities! Oh and don’t forget to leave your rights and freedom at the door.

The airlines will be bailed out & the federal Reserve will own majority share of the airline industry's ETFs (stocks), including Boeing & GE. Same with large corporate cruislines, hotels, restaurants, banks, etc.. many would call this nationalization but the Federal Reserve is a private entity run by banksters & is not part of our government. One thing is for sure, there are no longer free markets.

originally posted by: therlloy
a reply to: Puppylove

You obviously don't understand how much it costs to run an airline. I work for an airline too. We are burning through millions a day flying empty planes. We have to keep flying. But we are running out of money. I work for the most financially healthy airline, and we are still going broke. I too do not know if I will be furloughed or not. And my airline has never done layoffs.

Why do they have to keep flying empty planes?

ETA:
Nevermind I found this.

One of the stated purposes of the EU policy is to let smaller airlines get a fair toehold alongside the established airlines that can otherwise dominate entire large fractions of airport availability. In a “Gift of the Magi”-style codependency spiral, large airlines must cling to their spots to avoid losing ground, and small airlines must cling to their spots to keep the progress they’ve made. There’s a finite number of slots, and all are up for changes and trades.

Well I say let the pieces fall where they may. Competition is a good thing. I say no bailouts too.

a reply to: thebozeian

I really do hope things work out for you and your family. I have no doubt airline employees like yourself and others do a great job working in the trenches.

My concern is how the airline industry has been managed by the owners and investors. Not much different that a lot of other industries. Long on short term profit and short on long term stability. Then CV hits and the industry is in no position to weather a period of big downturn without help from the taxpayer.

a reply to: Alien Abduct

And how do you propose to have competition if there's no one left? This isn't just a hiccup that's going to go away in a week or two. You're looking at 80% cuts by the end of the week, and that's on the low end that I've seen. Airports with three runways, have two closed because they need somewhere to store the aircraft that aren't flying. I have pictures from yesterday, going by Marana, that have a couple dozen Delta aircraft in there that weren't there last week.

a reply to: Middleoftheroad

Well thank God for that! Quick, call the airlines and tell them they're stupid for storing all those planes and they need to get flying again!

a reply to: ABNARTY

The airline industry isn't one that you can run like other businesses. Between aircraft cost, fuel cost, e.t.c, it's run on very thin margins. I've seen flights run full that make less than $10 in profit.

a reply to: thebozeian

We've been tracking the shutdowns in a thread. I'll have pictures of Marana later showing a bunch of Delta aircraft stored that weren't there before.

www.abovetopsecret.com...

a reply to: Zaphod58

There are a lot of businesses that operate on a thin margin. I am simply saying the airlines, like anything else, need to be managed wisely. They should also be subject to the forces of the market.

It's hard when folks lose income through no fault of their own. I can empathize with that. However, businesses run as cash cows for the few at the top are prime targets for failure when the economy turns south in a hurry.

As a tax payer, I can live with stimulus to small businesses or individuals meeting certain criteria. I cannot stomach another bailout to those few whose only interest is their own inordinate amount of `wealth.

The airlines can sell stock, like any other public business, to raise funds. If no one buys it, that should tell you something. If they go broke, there are other options for the consumer.

a reply to: ABNARTY

Most airlines have several months of reserves handy, or that they can access. The problem is that this is going to go longer than several months. Executives are taking pay cuts, or forgoing salaries completely in many cases. They're taking what steps they can quickly. United and American are even using their passenger aircraft to run cargo instead of passengers.

The problem with the airline industry is that, depending on how long this goes, it can take years to recover. It's spreading like wildfire through the industry. Boeing shut down for two weeks in Washington, deliveries will be delayed or canceled, e.t.c. The only good thing about it is that retirements will be accelerated, meaning smaller, more efficient fleets, which will help with recovery. The problem is keeping them going until they can recover.

The problem with the more options for the consumer is that all the airlines are in the same boat. We're in a situation where there might not be any options left at the end of the day if we don't help them.

Do you reckon Boeing can survive this? Surely at the very least they will need a huge bailout given what they were already going through with the 737 max?

a reply to: solidshot

If they play it smart, and do something similar to Airbus, maybe. But both Boeing and Airbus are going to take a big hit afterwards. Several large airlines have already announced they're going to smaller fleets after this ends. They may not go through with orders they have on the books.

originally posted by: Zaphod58
a reply to: Alien Abduct

And how do you propose to have competition if there's no one left? This isn't just a hiccup that's going to go away in a week or two. You're looking at 80% cuts by the end of the week, and that's on the low end that I've seen. Airports with three runways, have two closed because they need somewhere to store the aircraft that aren't flying. I have pictures from yesterday, going by Marana, that have a couple dozen Delta aircraft in there that weren't there last week.

Someone will fill the spots if they stop flying. Someone will buy those planes if they go bust and have to sell. As long as there is a demand for flights there will be a company that can and will play the part.

Maybe they should temporarily suspend the rule of "if you dont fly you lose your spot"? How would that be fair to the guys that are waiting for those spots?

Let them go bust and let them be bought up in pieces.

a reply to: Alien Abduct

They did suspend slot rules.

Starting up an airline is not an easy task, even if you are able to buy up existing aircraft. It makes far more sense to preserve the existing airlines than go through the long drawn out process of starting up new airlines and having a significant gap in capabilities, only to see them fail.