- 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
The issue is simple. What percentage of the economy is dependent on tariff goods? The truth, is that the US economy is far more closed than people understand. People genuinely believe that all manufacturing has ceased to exist in the United States all given to China on the altar of woke policy the truth can be further from That statement. Only about 15% of US GDP is related to foreign trade. Of that amount, slightly more than half is from Canada in Mexico. And half of that is energy. What that means, is that about 7% of US GDP is tariff dependent. The proof in the pudding, is how little money tariff generates. People think that 30 or 50 billion is a lot it’s not in an economy that has $3 trillion. The impact on the US economy will be less visible but not absent. Inflation hasn’t occurred yet first because tests have hardly started to bite, but more importantly it’s such a small percent of the economy. Now certain things are critical. The rare earth metals from China were critical....
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