Airlines facing stark choice: use it less or store more?

Lufthansa Group hasn’t yet grounded any aircraft but across the group, by yesterday they’d effectively taken out of the system the equivalent of 150 aircraft in route reductions. It’s going to get worse before it gets better.

British Airways so far has done the same, reducing frequencies – 25 daily trans-Atlantic flights for one.

Cathay Pacific has stood down half its fleet and many Chinese airlines are as much as 66% laid up.

In the US, airlines are on the brink of having to store aircraft and across SE Asia, the drop in passengers has been so marked AirAsiaX has told Airbus it will be looking at deferments on the A330neo deliveries, It’s returning as many as 24 older aircraft to lessors early.

Starlux started up smack in the middle of the outbreak and has had to curtail many of its routes, it could prove disastrous for the airline that only started at the end of January.

Japanese airlines are now even cutting domestic routes and have banned all travel from neighbouring South Korea – making a difficult diplomatic relationship even more fraught.

UAE authorities have told their own people to in effect not to fly on Emirates or Etihad and keep away from foreigners as much as possible.

IATA estimated yesterday that airlines will see $113 billion in losses in the coming year. Many analysts suspect it will be much higher and some airlines are so fragile – Norwegian for example, and Alitalia, SouthAfrican, they’ll just not be able to ride it out.

In any event, let’s be clear that the golden years of airline profits are about to slam into a wall of unpredictability and yet, while the medium term fallout is going to be tough, the long term prospects aren’t so bad.

Once millions of people who have been bottled up and stuck, stressed and even ill and recovered from this mess, start to realise they can travel again, especially by years end, it won’t take long for things to return to normal.