Monday June 8th and the airlines are slowly going back to work, and with it come the decisions and the fall out from Covid19. Toss a coin for the good news or bad news first? Bad news wins, so we’ll end on a positive note!
Tui is one of the biggest holiday package and holiday destination brands in the world, and its come as a bit of a shock to the German pilots union, Vereinigung Cockpit, that its planning on cutting 700 jobs and and half its fleet.
Tui has airline operations in Germany, Belgium, the Netherlands, Sweden and the UK (formerly under the Thomson brand), and its the German fleet that’s being hit first. Currently that’s operating 38 738’s and a single 737-700, although all but 2 are in storage.
There’s now clear speculation that the ageing and relatively inefficient 757-200’s in the UK, of which there are 7, mostly ex BA averaging 19.3 years, 3 767-300ER’s averaging 21.4 years will be for the chop.
There are also 30 738’s averaging 8.7 years and 6 grounded MAX’s which have barely been used in the UK fleet. On top of that are 8 788’s and 6 789’s.
Tui Belgium also has 2 788’s, 4 737-700’s and 17 738’s, with 4 MAX’s, 1 763ER, and 4 ERJ-190’s.
Tui Netherlands is much smaller, with just 1 738 and 3 MAX-8’s, 1 767 and 3 788’s.
Tui Nordic in Sweden has 1738, 2 MAX-8’s and 2 21.4 year old 763ER’s.
Its a massive fleet to loose so many aircraft from, and it will greatly vary on how quickly forward bookings accumulate -especially in the key UK market. If the government hadn’t imposed the 14 day quarantine on arrivals, rule its likely the market would have recovered far quicker, as Brits are normally desperate to get out of the country through July-September.
Swiss has 16 Airbus A320neos, eight A321neos and a single A220-300 on order. The A220-300 is the last from an order for 30 A220s, deliveries of which began in 2016, in total it has 90 aircraft. In addition to the A220s, the fleet includes a single A319ceo, 19 A320ceos, a single A320neo, nine A321ceos, 14 A330-300s, five A340-300s and 12 Boeing 777-300ERs.
The airline’s leisure arm, Edelweiss, has an 10 A320ceos, two A330-300s and four A340-300s.
And cuts are coming. First on the chopping block are likely to be the newly refurbished A343’s, some of the older A320/319 and A330.
In addition the main airport at Zuhrich is planning on its own redundancy packages for up to 3,000 people and SwissPort handling is rumoured to be being put up for sale by its owners again. In the meantime Swissport Belgium is being closed down.
Facing an existential crisis the giant airline, which has a plethora of subsidiaries around the world, many of them maintenance facilities, catering and airport operations services, is planning on selling anything it no longer considers to be a ‘core business’. As “core” means airline, what they’re saying is anything outside of the passenger airline is up for potential sale.
Now I’ve heard, but it’s just a rumour, that even Lufthansa Cargo is not sacrosanct.
This just goes to show how deep and fundamental this entire crisis is for airlines generally. Keeping an eye on Lufthansa and what it does and where it goes is never a bad thing for anyone following aviation globally. Overall, its an efficient, customer focused, well run airline, and it will do whatever is necessary to survive and come back. It will set trends, it will adopt policies, it will work to put things right, and mostly it does so in harmony with its work force. Sometimes it wobbles, but it always comes back to centre.
Unlike some, Lufthansa learns from its past mistakes, and rarely makes them twice.
Like it or not the airline is a basket case. It’s too small, its importance to the State of Israel is outsized and its been able to get away with running inefficiently for years. It might not be state owned in the strictest sense, but it always suffers from excessive political interference.
However now it needs money to avoid collapse, and the answer the government comes up with, isn’t to loan it money or grant it cash, but even more state control through the state buying equity in the airline.
Airports in crisis: Heathrow, Fraport, Tegel
The airports are facing problems with who and what to keep functioning as the airlines return. The fact is, there are simply not enough flights to justify the vast numbers of staff a place like Heathrow needs. It has around 74,000 staff – and it’s now looking at loosing around 25,000.
Fraport, the owners of Frankfurt Airport, Germany’s biggest hub, are looking at loosing 3,000 to start with, more will likely follow.
And this is going to be mirrored around the world, unless flying picks up exceptionally quickly, there just won’t be as many jobs until the virus is either beaten with a vaccine or simply slides into the background like so many other coronavirus have in the past. But that could take years.
Tegel on the other hand has some good news. It was about to be shut, and all flights diverted to Berlin-Brandenburg which opens officially in October some 7 years late (a long complex story, as much about politics, arrogance, personalities and incompetence that is really far more German than you’d think). However the Mayor of Berlin said he’d keep the airport open if arrivals passed 50,000 a day – they did that in a week, so its been given a reprieve. It may also be a positive sign.
Berlin though is special, because of its isolation in the 1945-89 period, domestic flights to the capital are very important, as road and rail is still relatively under developed.
Air New Zealand
The good news: Welcome to the worlds first western covid free country. If you were allowed in, which unless you’re James Cameron hiring a 787 to take the crew out from the US to film Avatar 2 (I mean why?), international flights aren’t welcome. To get into the country you must be able to provide you bring economic value.
ANZ is facing up to the facts that its long haul operations won’t resume until 2021, probably for the northern winter in March. 4,000 staff have already gone, and the company is looking for more, saying its revenue is down 70% but its wage expenses are only down 33%.
ANZ is facing some hugely drastic changes, even by 2023 it expects passenger numbers to be only 15m per year, when the were near to 19m in 2019.
And drastic may be more than we imagined. The fact remains that flights to London were already being axed before this – they’re now gone for good. What else will face the chop in this drastically altered reality?
Oh and the good news to end on: The number of daily passengers carried by airlines in China topped the 1 million mark on June 5—the first time in four months the figure has been achieved.
If they can do it…