Dec. 21, 2020, © Leeham News: This is my last Pontification of 2020. I’ll be off between the Christmas and New Year’s holidays.
It’s only fitting to look back at what is the worst year in commercial aviation—ever.
I’ve just completed my 41st year in this industry. I’ve seen two Gulf Wars, SARS, 9/11, the Great Recession and several economic cycles.
Lockheed and McDonnell Douglas exited the commercial airliner business.
I’ve seen three groundings: the McDonnell Douglas DC-10, Boeing 787 and 737 MAX. I’ve been on site of two significant crashes: the American Airlines DC-10 in Chicago and Delta Air Lines’ 727 in Dallas. I flew over a third, a Delta L-1011 in Dallas the day after it happened.
I worked for the first new airline certified by the Civil Aeronautics Board in 40 years, the first Midway. I also went through one bankruptcy and one merger, each part of the deregulation shake-out.
As a reporter, I covered some of the business giants, including Bob Crandall, Herb Kelleher, John Leahy and others.
It’s been a great four decades.
But nothing compares to the global industry disaster of 2020.
Airlines dropped like flies as the coronavirus pandemic took hold in March. Other airlines survived only because of massive state aid packages. Lessors were bombarded with lease deferral requests, sometimes repeated from the same lessee.
Airbus, Boeing and Embraer suspended production for a short time while decontaminating plants. Then each reduced production rates to unprofitable levels, although Airbus reached a cash-neutral status in the third quarter.
Boeing, already reeling from the MAX grounding, saw the 787 sort of grounded as well. Defects required grounding of eight in-service aircraft. By mid-December, some 50+ new=production 787s were parked, undergoing inspections for production flaws.
Bombardier completed its final exit from commercial aviation. Not only were the Q400, C Series and CRJ programs sold, so were its plants in Belfast and Morocco.
Mitsubishi Heavy Industries had a once-in-a-lifetime opportunity to enter the market with a new generation regional jetliner. MHI could have become the second primary provider of RJs. Aviation doesn’t like a monopoly. MHI handed this over to Embraer without a fight.
As goes the airlines, so goes the manufacturers. As goes the OEMs, so goes the supply chains.
The production and financial disasters trickle down to the small shops that can’t hang on. The Tier 1 suppliers, like Raytheon Technologies, Spirit Aerosystems, etc., struggle as well.
The 2020 Farnborough Air Show and the 2021 Paris Air Show were canceled. Virtually every in-person conference and event was canceled after March this year and well into next year. So far, the IATA AGM is scheduled to be a live event at the end of June in Boston. We’ll see.
Although there are positive developments as vaccines begin entering the UK, USA and elsewhere, distribution so far is spotty. COVID diagnosis and deaths are skyrocketing in the US and Europe.
Opinions widely split how quickly recovery to 2019 passenger traffic levels will be. Initially, most forecasts pointed to 2024-25. Some since advanced this to 2023-2024.
Some believe business travel will permanently be less than 2019 as Zoom and other virtual events gained widespread use. Yet, others (me included) believe business travel will return—face-to-face, in-person contact still is better than any Zoom meeting. Relationships matter. Sterile computer screens don’t cut it.
It used to be a cliché, “it can’t get any worse.” But it can’t.
Here’s fervently hoping things get better in 2021.