The owners of Jet2, now a UK-wide holiday and charter aviation company that started in the north as a bucket and spade airline, shipping millions to Spain on their summer holidays, has said that if it had to ground the entire airline it could do so until August next year.
Dart Group said it now has enough credit available to finance itself for another 12 months if it had to take drastic action.
While that sounds good in and of itself, its a worrying trend that analysts are saying cannot go on indefinitely: Airlines – indeed businesses in general, are piling up huge amounts of long term debt that threatens their existence post Covid.
The scenario that worries the finance industry is that what if the vaccine isn’t perfect, or just doesn’t work? Airlines will face an existential crisis, not be able to acquire any more debt to bail themselves out, and if anything, will face the recall of the debt from the current round of Covid related groundings. Even the biggest groups like IAG would struggle to fight their way out of that scenario.
A350 & Rolls Royce XWB-84
Rolls Royce is rapidly moving to reassure airlines and investors that it doesn’t have another Trent-1000 crisis looming with the XWB-84 engines fitted to the A350.
A problem with the stage one intermediate pressure compressor blades on higher cycle engines has been identified and a directive from EASA for inspections is expected on Wednesday. Several engines in the 5 years age category had been found to need work.
While Rolls Royce is bending over backwards to reassure everyone this is no big deal, it’s still expected to cost up to £100 million to fix and heaps pressure on already desperate finances. The total bill for the Trent-1000 problems on the 787 is expected to end up being £2.4 billion by the time final works is completed in 2023.
Cathay Pacific Cargo
With the bulk of its fleet in storage and Hong Kong’s reputation falling apart as a bastion of free speech and free thought, with the Chinese Government arresting just about anyone connected with the Democracy movement, the way back for the passenger airline business seems hard. Chinese authorities have effectively taken control of the airline by proxy, to make sure staff tow the government line.
Its only bright opportunity is outside of Hong Kong, with a still burgeoning cargo market. It’s a far cry from just a couple of years ago when the separate cargo business was folded into the passenger airline management because it just wasn’t deserving of operating alone.
Things have changed so much that the Cargo business is now on the point of separation again, with high rates and a demand for globally scheduled services in and out of Hong Kong, but also globally. New management has been installed to oversee the expansion of the cargo offering, so that at least some part of Cathay pacific can make some income while it can.
The Russian Irkut MC-21 Airbus competitor shows off in its dramatic water ingestion test video.
Aegean’s new livery
Aegean’s new livery seen on a brand new A321neo waiting for completion at Airbus. A major improvement on the old ultra-simple livery!