July 18, 2020, ©. Leeham News: It’s time to wrap our Corner series about flying during the COVID-19 pandemic.
We started the series on the 8th of May. A lot of knowledge has been gained since, about COVID-19 in general and when taking a scheduled flight.
Open To All Readers
By Judson Rollins
July 13, 2020, © Leeham News: As the world waits for the COVID-19 storm to abate, questions are growing over the duration of a demand downturn for airlines.
Many journalists and industry observers have been obsessively searching for “green shoots” indicating the beginning of a recovery, but much of this commentary misses the mark. For instance, much attention has been focused on capacity restoration in the US and China. However, little is known about the percentage of seats filled by Chinese carriers – and last week United Airlines told employees in an internal presentation that while US carrier capacity in July is back to 47% of 2019’s level, it believes industry traffic has only reached 28% and revenue just 19%.
Last month, investment research firm Bernstein published an analysis calling for narrowbody traffic to recover by 2023 and widebody traffic by 2025. This is consistent with most public forecasts from airlines, banks, and industry observers. The firm’s analysts said that single-aisle concentration in short-haul and domestic routes should see them returned to 2019 utilization sooner than twin-aisles due to reduced long-haul demand and lower demand in short-haul markets previously served by widebodies (e.g., in most of Asia).
LNA believes that 2024 is the earliest possible date for a return to 2019 global passenger traffic – and it could conceivably take until 2028. Many obstacles lie between the present situation and a full recovery: deployment of a successful vaccine (or vaccines), rollback of border restrictions, passenger confidence in the medical safety of air travel, and most importantly, restored willingness to pay by business and leisure travelers. Specific countries or regions – especially those with local vaccine production – may recover sooner, but a global recovery to pre-COVID traffic levels requires all these to happen at a global scale.
To be clear, LNA’s definition of “herd immunity” is that of the global medical community: population-level resistance to virus transmission that occurs because a large majority have been vaccinated or previously infected. This differs from an increasingly popular usage of the term in reference to the passive infection-oriented virus management approach taken by Sweden and other countries.
July 13, 2020, © Leeham News: Earnings season calls for the second quarter begin this month.
For our readers, Airbus and Boeing are the big ones.
Boeing’s earnings call is July 29. Airbus follows the next day.
A few early analyst previews were issued last week for Boeing.
By Bjorn Fehrm
July 9, 2020, © Leeham News: Last week, we started the analysis of restoring capacity with the Airbus A330-300 or the A330-900 when reopening international traffic after the COVID-19 lockdown.
As we did with the A330-200 versus the A330-800, we fly them side by side between Paris Charles de Gaulle and Sao Polo’s Guarulhos airports. It’s a 13-hour flight with maximum freight in the cargo bays to gain revenue in addition to our part full cabin.
Will the payload-range of the A330-300 or A330-900 be sufficient to load the aircraft for maximum revenue on the route? We use our airliner performance model to find out.
Fourth in a series.
By Bjorn Fehrm
July 8, 2020, © Leeham News: All airliner OEMs have a disastrous 2020, but for Embraer, the year has been even worse. After spending a year and over $200m to carve out the Commercial Aviation division to merge it into Boeing, the Joint Venture Agreement (JV) was stopped by Boeing at the last moment.
The Executive Jets and Defense side were not affected, but now Embraer was organized as two companies instead of one. The company must now re-merge the organizations to save costs in a COVID-19 environment where limiting cash outflow, and lowering costs are necessary for survival. At the same time, it’s arch-rival on the world market, Airbus A220 has gone from strength to strength through basket selling with the popular A320.
How does Embraer come back from the Boeing pass up and regroup in a regional market that is no longer a fight of equals? Embraer competes with Airbus that in 2019 was 11 times larger in airliner deliveries and 29 times in airliner revenue.
Only in the below 100 seat market is it saved from the giant, who doesn’t have a model in the segment. And it seems the below 100 seat competitor, Mitsubishi, might fold its entry.
July 6, 2020, © Leeham News: I really, really want to return to traveling by air soon. But I don’t expect to fly until next year.
I’m not worried about being on the airplane. As LNA’s Bjorn Fehrm detailed over a series of Friday posts, the cabin purification technology scrubs the air every few minutes.
The problem is not the airplane.
It’s the people who fly.
July 3, 2020, ©. Leeham News: In our Corner series about flying during the COVID-19 pandemic, we examine how cabin humidity affects the risks of getting COVID-19.
The extensive research around the seasonality of flu infections gives us tips for our behavior during flights, now and when the pandemic has left us.
June 26, 2020, ©. Leeham News: In our Corner series about flying during the COVID-19 pandemic, we look closer at the boarding and deboarding part.
We have identified it as possibly the most troublesome part of a flight during the COVID pandemic. We look at the findings from simulations by boarding/deboarding experts.
By Bjorn Fehrm
June 25, 2020, © Leeham News: Last week, we started looking at the Airbus A330-200 market and whether to hold on to one’s A330-200 or restoring capacity after the COVID-19 shut-down with the newer A330-800.
We looked at the history of the A330-200, the reasons it sold 642 units to date, and why the sequel, the A330-800, is not selling well.
We dig deeper into the replacement question today. In a post-pandemic world, is holding on to or even leasing an A330-200 for long-range operations the better alternative, or should we take delivery of a new A330-800?