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Welcome to London Air Travel’s Monday Briefing for the week beginning 29 June 2020.
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Willie Walsh: The Worst Is Yet To Come
In just under three months Willie Walsh will, after 15 years, walk through the doors of BA and IAG’s Waterside Headquarters for the final time.
Willie’s retirement was delayed six months to allow for management continuity whilst IAG deals with COVID-19.
In an interview with yesterday’s Sunday Times (we have pulled out some of the main quotes here) he has left no doubt to his successor that the crisis is not over:
“The worst is yet to come. People will survive this initial crisis but next year is going to be really tough, because some airlines are surviving on the back of support they’re getting and they’re not recognising the scale of the change — and they’re hoping things will recover quickly, when I don’t believe they will: 2021 is going to be the toughest year ever for the industry and 2022 is going to be really challenging.”
Many factors may collide. There are regions of the world that have simply not got COVID-19 under control. Border restrictions may remain in place. Corporate customers could continue to ban international travel by employees. Large scale events may continue to be cancelled. Meanwhile, governments will end payroll support programmes and debts have to be serviced.
Whilst there may be pent-up leisure demand, many passengers have already paid for these flights with credit vouchers.
Willie Walsh has long been an advocate of “rational” behaviour and that airlines must not sow the seeds of their demise in the good times. However, no-one in the industry ever anticipated a crisis as great as this.
IAG seems determined to get through the crisis without seeking bespoke state support and not comprising its structure. Luis Gallego will have a full in-tray in September.
UK Government Prepares To Relax Quarantine Regime
The UK is currently governed by press release.
Policy decisions appear to be dictated by what will get favourable coverage on the next days’ newspapers.
The Government announced a mandatory 14 day quarantine regime on arriving passengers, in the face of almost universal opposition and no scientific evidence.
This is due to be reviewed today, with the Government expected to announce the first “travel corridors” to mainland Europe. A Government source speaking to The Times last week conceded it was doomed to fail:
“They realised it was a bad policy before it even came into effect,” the source said. “This is about using the review to effectively ditch the policy without being accused of doing a U-turn.” The source added that ministers had also been taken aback by the scale of the opposition from business groups and Tory MPs, and added it was “clearly unsustainable”.
Comair Business Rescue Plan
Comair, which operates the BA franchise in Africa, is due to publish its Business Rescue Plan tomorrow, assuming it is not delayed.
(Update: An extension to 28 July 2020 has been requested today.)
Staying in South Africa, the deadline for a vote on the South African Airways Business Rescue Plan has been delayed again until mid-July.
In case you missed it:
Virgin Atlantic outlines its plan to reinstate its London route network at Heathrow. (London Air Travel)
Lufthansa secures a €9 billion bailout in Germany. (London Air Travel)
Which airlines applied for slots at London Heathrow? (London Air Travel)
Virgin Atlantic seeks to secure £900m in new finance. (London Air Travel)
BA takes delivery of its first Boeing 787-10 aircraft. (London Air Travel)
Also of note this week:
Former airline CEOs Barbara Cassani (Go), Donald Carty (American Airlines) and Rod Eddington (BA) reflect on their experiences of running airlines after the events of 11 September 2001. (Financial Times)
The CAA has published traffic data for UK domestic and international routes for May 2020. Basically, nobody flew anywhere.
The European Union reaches a preliminary agreement on which countries it will reopen its borders to on 1 July 2020, subject to reciprocal recognition. (Politico)
The impact of COVID-19 on Ireland’s aircraft leasing companies. (The Sunday Times)
Milton Glasner who, in 1977 designed (pro-bono) what became one of the most enduring and globally recognised tourism campaign logos “I ♥ NY”, died last Friday at the age of 91.
Speaking to The Village Voice in 2011 he said of the city “I almost believe there is no New York; there is only a set of projections, and it can be anything you want.” (New York Times)
Late post publication updates:
[Reserved for updates throughout the day]
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