Skip to main content

Where the airline industry is today (Highlights of serveal conference calls


  • Total losses for the global airline industry, so far, is around US$ 100 billion -- with the prediction that the total could be as high as US$ 330 billion for 2020.

  • There is a real "shift" in the business model; Lufthansa, Air France, and Alitalia are all getting state support in the form of a 15% to 25% capital injection.  Alitalia is always getting free stuff.  British Airways may also get help, but the non-state players not so much (Virgin).  South African Airways is back into the African Chapter 11 (actually its the 6th time that SAA has gone bust).

  • Numbers show airlines cutting capacity with Singapore 97% cut incapacity, and at the low range, North America with a 60% cut in capacity.

  • In terms of aircraft, the biggest losers are the A380/A340 and B747 -- many of those aircraft are gone for good.  The future would seem to favor the 787/777 and A350 -- the biggest winner will probably be the 737 and A320 -- but there is a dark dark cloud over the 737MAX -- not only getting FAA certification but getting certification from Europe.

  • Travelers are buying tickets with the idea that they will be redeemable anytime between now and the end of 2021; the implication is that they could have cheap fares.  

  • The idea of removing the middle seat will not fly, as it would reduce capacity and increase costs.  If the middle seat were removed on all flights the impact would be a 40% reduction in yield.
  • In Canada:  The CEO of Air Canada is working with the assumption that it will take 36 months for normality to resume -- therefore the airline anticipates losses for the next 18/24 months as its fleet is repositioned.  
  • In Canada:  Possibly more direct flights and fewer "hub flights"  for the time being daily flights to some destinations may be "off", but again the issue is demand recovery 
  • North America remains the preferred destination for ticket buyers





Comments

Post a Comment

Popular posts from this blog

Ok so I lied...a little (revised)

When we began looking at farming in 2013/14 as something we both wanted to do as a "second career" we invested time and money to understand what sector of farming was profitable.  A few things emerged, First, high-quality, source-proven, organic farm products consistently have much higher profit margins.  Secondly, transformation accounted for nearly 80% of total profits, and production and distribution accounted for 20% of profits: Farmers and retailers have low profit margins and the middle bits make all the money. A profitable farm operation needs to be involved in the transformation of its produce.  The low-hanging fruits: cheese and butter.  Milk, generates a profit margin of 5% to 8%, depending on milk quality.  Transformed into cheese and butter, and the profit margin rises to 40% (Taking into account all costs).  Second:  20% of a steer carcass is ground beef quality.  The price is low, because (a) a high percentage of the carcass, and (b) ground beef requires process
Post a Comment
Read more

Spray painting Taylor Swift G650 aircraft (updated)

 First, a bit of paint will not harm anyone.  These climate activities are going to learn two things in the next few days:  (1) Trespassing at an airport is a felony almost anywhere in the world.  That means criminal prosecution.   (2) removing paint from an aircraft is expensive.   So these climate activists are about to find out the reach of the British criminal system and it will not be pleasant, the UK has very strict laws about that, I would be surprised if cleaning the aircraft of all the paint will cost less than $100,000.     I am sure that when they planned (premeditation) this little show they had a very valid logic to doing this.  Tonight, they are probably realizing the depth of their troubles.   I understand that in the UK it's a minimum one-year jail sentence.    Also, good luck travelling with a criminal trespass charge against you.  I am relatively certain that the airline industry will slap them with no-fly status. Update;  It seems that what they threw on the airc
Post a Comment
Read more

21st century milk parlour

When we first looked at building our farm in 2018, we made a few money-saving decisions, the most important is that we purchased our milk herd from a retiring farmer and we also purchased his milking parlour equipment.  It was the right decision at the time.  The equipment dates from around 2004/05 and was perfectly serviceable, our installers replaced some tubing but otherwise, the milking parlour was in good shape.  It is a mature technology. Now, we are building a brand new milk parlour because our milking cows are moving from the old farm to the new farm.  So we are looking at brand new equipment this time because, after 20 years of daily service, the old cattle parlour's systems need to be replaced.  Fear not it will not be destroyed instead good chunks will end up on Facebook's marketplace and be sold to other farmers for spare parts or expansion of their current systems. All our cattle are chipped, nothing unusual there, we have sensors throughout the farm, and our milki
Post a Comment
Read more