Network Thoughts will have a weekly column, starting this week and will try and capture some interesting tit-bits from across the world
This week, we look at
- How masks are becoming mandatory
- Job losses could start affecting aviation industry
- Airbus & Boeing declare Q1 losses
- Older planes are being retired faster than ever
- How will the airlines come back?
You may not be allowed to board the flight, if you are not wearing a mask
As more airlines get back to the air, masks have become mandatory. Almost every airline is joining the chorus of “No mask – no travel”. From AirAsia in Malaysia to jetBlue in the United States, most airlines are mandating passengers to travel with masks. The masks are to be worn at all times from check-in to baggage collection. Few airlines like American Airlines will handover masks at boarding.
Job Losses could hit the industry soon
The sudden loss of demand and near grounding of most carriers has led to increased possibility of job losses. British Airways has said that it would start consultations with trade unions over possible reduction in headcount. Many other airlines are rumored to have handed out the pink slips. IATA estimates that about 10.5 million people are directly employed at airlines and airports and the air transport industry is at risk of losing millions of jobs.
Airbus & Boeing declare Q1 losses.
Both Airbus and Boeing announced losses for Q1-CY20. The world’s top two aircraft manufacturers also announced cut in production rates for most of their product line. Boeing is already grappling with the crisis with its B737 MAX aircraft which has been grounded since 2019 and COVID-19 is just adding to its problems.
Older planes are retiring faster
If you fancied flying the MD-88 or the B757, you may have run out of luck. American Airlines and Delta have advanced the retirement of their older fleet, to adjust the capacity as per current demand. American Airlines has retired E190 and Boeing B767 fleet and accelerated retirement of B757s, A330s and would retire 19 CRJ200s. Delta would be retiring its fleet of MD-88 and MD-90 in June.
Government bailout on the cards?
Airlines the world over are trying to see if a government bailout is on the cards. The industry – while one of the most glamorous, is also one of the most fragile ones. In developing countries, most airlines operate on wafer thin margins and have struggled to stay afloat in the past. COVID-19 could well be the death knell.
The next two weeks will give out details about the contours of the government deals. The United States has been first of the block while others follow. Will it be with equity or a soft loan? We will know soon!
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