London Air Travel’s Monday Briefing – 14 September 2020

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Concorde Seat Arm Rest (Image Credit: Sir Terence Conran / Factorydesign for British Airways)
Concorde Seat Arm Rest (Image Credit: Sir Terence Conran / Factorydesign for British Airways)

Welcome to London Air Travel’s Monday Briefing for the week beginning 14 September 2020.

Hubert Horan: The Airline Industry Is In Denial

The consensus amongst airlines and industry bodies is that passenger demand will recover to 2019 levels of demand from 2023.

Government wage support schemes, accelerated aircraft retirements and delivery deferrals and new sources of debt will see at least most the industry’s major players through in the interim.

One analyst has struck a discordant note. Herbet Horan gave an interview to the Financial Times’ Alphaville Blog last week (it should be free to read if you register with FT.com).

Put simply airlines and their investors are in a complete state of denial as to the scale of crisis facing aviation. The industry has faced a near total collapse in revenue, without a commensurate fall in costs. Hopes of a ratcheting up of demand when travel restrictions are lifted is wishful thinking. The drivers of airline profits, corporate and long-haul travel, have been obliterated. No other industry would carry on this way when faced with such a collapse in demand.

Not only that measures that airlines thought would have insulated them against shocks have actively worked against the industry restructuring itself. Consolidation in the US market, which the industry would thought make airlines stronger, has prevented the necessary restructuring as these airlines are now simply too big to fail.

Hubert Horan proposes that, for the three major US carriers, bankruptcy should be the proper course of action with control taken away from management and existing investors wiped out.

We may soon find out whether these predictions are correct.

Alex Cruz To Appear Before Transport Select Committee

We’ve not heard much from Alex Cruz lately, partly because BA has been keeping its head down. Alex had also been overshadowed by Willie Walsh.

Alex will be appearing before the Transport Select Committee this coming Wednesday at 09:30. No doubt members of the Select Committee will want to discuss job cuts at the airline, whereas Alex will want to press the need for airport testing.

Willie Walsh appeared before the Select Committee in May. He later branded their views “completely irrelevant” to The Sunday Times. Alex Cruz also criticised their report as based on rumours and emotions and not fact.

Readers in the UK will be able to watch the session on BBC Parliament.

BA Long-Haul Additions

A couple of small additions to BA’s long-haul network at London Heathrow.

BA returns to Abuja this Wednesday. BA will also operate a one-off scheduled passenger flight to Grand Cayman on Thursday.

Sir Terence Conran

Sir Terence Conran passed away on Saturday. Although well known for founding Habitat, the Design Museum and many restaurants, he also worked with BA and Factorydesign in the late 1990s.

Sir Terence and Factorydesign were commissioned by BA to redesign the Concorde cabin interior with the aim of bring the outside of the aircraft as its status as a 20th century design icon to its interior.

Sir Terence also redesigned by the Concorde Rooms at London Heathrow Terminal 4 and New York JFK Terminal 7. These lounges featured many 20th century design classics such the Charles & Ray Eames lounge chair.

Sir Terence, who also flew on the last Concorde flight from New York JFK on 24 October 2003, said of Concorde in the foreword of “Supersonic – The Design And Lifestyle Of Concorde”:

Concorde is the most iconic aircraft of all time and I can honestly say it is the most beautiful and exhilarating man-made object I have ever seen. It is one of the few designs to take my breath away.

Do not think I exaggerate when I say Concorde is the single most important piece of design in my long lifetime. Will we see anything quite so elegant, beautiful and optimistic again? I’m sad to say perhaps not, but that may be the challenge for our great designers, engineers, innovators and artists. Can you work together to create something beautiful, powerful, and iconic it pushes the boundaries of our imagination. Can you make us dream like that again? Can you show us the future?

In case you missed it:

Luis Gallego takes over from Willie Walsh as CEO of IAG. (London Air Travel)

IAG formally launches its €2.7 billion rights issue. (London Air Travel)

Also of note this week:

Singapore Airlines plans “flights to nowhere” to lift passenger revenue. (Straits Times)

The Central Bankruptcy Court in Thailand will rule today on whether Thai Airways can proceed with a debt restructuring plan. (Bloomberg)

The achingly hipster ACE Hotel Shoreditch will not reopen under existing name. Like many urban hotels it placed an emphasis on events and shared spaces which worked very well for hotels until COVID-19. (ACE Hotel)

Late post publication updates:

[Reserved for updates throughout the day]

ACL has granted a waiver of “use it or lose it” airport slot rules for the winter season.

It has issued the following statement:

“ACL is encouraged to see the statement issued today by Commissioner Adina Valean on the EU Commission’s intention to extend the use-it or lose-it slot waiver for the whole of the Winter 2020 season.

“To allow Airlines and airports to advance their planning, and for airlines to make available any excess airport capacity for others to use, ACL will now grant alleviation from non-use of slots to airlines at the 11 airports it coordinates across the European Union and the United Kingdom from 25 October to 27th March 2020. As required by the Commission in the statement by Commissioner Adina Valean, ACL will apply the industry agreed conditions to the Winter waiver”

WestJet has confirmed in a schedule update it will reinstate London Gatwick – Toronto from 9 October. This is in addition to existing services to Calgary.

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