Bulletin: 10 point updates on aviation industry you should know

Airline Industry is undergoing massive changes due to Corona Virus crisis. Unless you follow the industry closely, it is hard to keep a tab on all the news and developments that are going on. To help you stay updated, here are major airline industry updates of recent times that you as a potential future passenger should be aware of.

Flights in the air as of 7.30 PM IST, 16th March 2020

1. Airlines staring at possible bankruptcy
Several airlines were already in deep financial crisis before the Corona Virus and now their situation are even worsened. Following airlines are staring at bankruptcy, unless they get government help or some other miracles happen.

• Norwegian: Norwegian Air Shuttle, based Oslo had mastered the art of low cost long haul flights, connecting Europe to USA and Asia (Thailand), as well as within Europe short haul flights. I flew with them twice and it was great experience (they gave free in-flight WiFi back in 2013).  At present, Norwegian has 3000 flights, has fired half its staff and is seeking Government support to stay afloat. [Details]. Unless Norway Govt decides to roll out some funds, Norwegian may simply wind up.
• Flybe, UK's largest regional carrier has already shut down and declared bankruptcy.
• Virgin Atlantic has asked for a 7.5 billion pound bailout package from UK Govt [News]. Looks like this amount is not entirely for Virgin Atlantic alone but for entire UK aviation companies
• Unconfirmed new claims Iberia is staring at shutdown as Spain goes into lock down [source]

This report even suggests that most airlines will go bankrupt by end of May if Governments do not interfere.

2. Temporary suspension of all flights/Airport closures
Some airlines around the world are striving to conserve their cash and slash expenditure by stopping operations altogether.

• Scandinavian carrier SAS has indefinitely shut down operations awaiting situation to improve [more details]
• Slovakian Airport is shut down for international flights [News]
• LOT Polish has suspended all its flights [News]
• Saudi Arabia suspends international flights for 2 weeks [Details]

3. Fleet Reductions

Where airlines are operating, almost every airline is cancelling flights. The non profitable routes, countries with severe travel restrictions and so on.

• Major US Carriers, Delta, United and American Airlines all have almost stopped their flights to Europe and Asia for a month or two (to be reviewed later depending on how situation improves). Some long term plans like proposed BLR-Seattle direct flight by American are left untouched as of now, that may change in future.
• Most airlines (excluding Emirates may be) are grounding their fleet of A380 super jumbos. These are expensive aircrafts to operate and not at all profitable unless every seat can be filled. Given the current situation, airlines are grounding older planes and uneconomical planes. 
• KLM is retiring their 747s an year earlier. [News]
• Cathay Pacific has cut most of their operations and running a small number of flights
• Air India and other Indian airlines cut flights to Europe, China & Middle East
• Lufthansa has announced as many as 43000 flights will be cancelled in April [Source]
• Air France KLM is cutting flights
• Ryan Air grounding most of its fleet

Contextual image- An American Airline aircraft in Nassau, Bahamas, clicked April 2019

4. Countries banning foreigners- travel restrictions, visa cancellations

Even when airlines are willing to operate, several countries don't want foreigners now. Qatar, Denmark, Sweden and many other countries have closed their borders to foreigners in a bid to prevent Corona virus spread. Even India has suspended already issued visas. Thus even if you are willing to travel you need to be doubly sure that destination country will accept you and airline you have your tickets on is operating the flight.

India bans all flights from Europe, UK, Turkey

Safest thing seems to be to return to your home country asap and wait for situation to improve.

5. Refund mayhem

Millions of passengers around the world are trying to cancel their flights and take their money back. However airlines need to survive too and can't afford to give full refund to everyone. While most airlines are allowing a free rescheduling subject to certain conditions, refunds are allowed only if your flight is cancelled or in some select cases where airline is generous to allow full refund. 

If you have an upcoming flight, do not clog call centre numbers unless you are traveling within next few days. Wait to see if your airline cancels the flight- in which case you will get full refund. If not, check for airline policy on refund, which could vary based on travel dates, booking dates, destination etc. If you qualify for a refund/rescheduling or credit then decide your option and proceed. If not, you may have to pay normal cancellation fees.

Corona virus is not really airline's fault, so they are sort of justified if they don't want to refund when flights are being operated but passengers are not willing to fly. But again, airlines need to retain goodwill of their customers, so it is a tough balance.

Here's how you can minimize travel loses due to Corona Virus.

6. Massive Airfare discount sales

Some airlines are running discount sales. Air Asia was selling domestic tickets for 12 MYR (INR 210). While the low fares could be tempting, you have to factor following aspects

• Financial health of the airline- will this airline survive another 12 months? Is it safe to book with them? This is because most airlines collect money from future sales and spend it for current operations
• When will Corona Virus crisis end? Is it safe to book a ticket 6 or 9 months from now? No one knows. If things don't improve can you take the loss? 
• Are the fares really cheap? A 10% off is not cheap enough. If you have to take big risk and book, savings should be very high- 50%+ over normal fares in my opinion. There is every chance that a even bigger discount is coming up. If you are not fully convinced, wait.

Here's how you can prepare well from now itself to travel once Corona Virus situation gets all clear.

7. Overall Impact on Hospitality Industry

The travel restrictions will have effect on entire hospitality industry. Hotels, theme parks, tourist attractions will be empty, jobs will be lost. When you decide to travel post Corona virus scare, you also have to check if the destination is ready to receive you.

Air BnB has announced full refund to all guests globally (Except China). Other brands have also relaxed their refund rules.

8. Desperate attempts by travel portals to portray a happy picture.

Several travel portals, online travel agents and are hard hit by almost no future bookings and existing bookings being cancelled. Some of these companies are found to mislead customers trying to say it is safe to travel and travel restrictions are not prudent.

However, remember the following

• Unless airlines give full refund, these travel companies will not process refund if you wish to cancel
• OTAs often charge additional cancellation fee in addition to airline cancellation fee
• At times it is better to deal directly with airlines. You don't want to be thrown around by both airline and OTA asking you to check with other party.

9. Empty planes, airports and streets

Inputs from flying public confirm the grim situation aviation industry is facing. Several flights and airports are almost empty. However there is a rush on select routes where passengers struggle to return to their home country before situation gets worse. But this high demand is temporary.

Airline's need to balance safety (risk of Corona virus spreading), survival (operate some flights, keep making money) and critical needs (like students wanting to return home, emergency personnel travel etc)

10. Airline's desperate survival attempts

Airlines are resorting to desperate measures to stay afloat.

• Many passenger planes are being used to ferry cargo [Scoot * Cathay]
• Employees are either being fired or given unpaid leave
• IT investments on hold
• New aircraft deliveries to be deferred
• Requesting govt support
• Extreme cost cutting measures.

Challenging times ahead and situation is getting worse each day as of now. Need to see when it reaches its peak and starts improving.

Have I missed anything crucial? Got any comments? Do share.