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2020: The year the changed aviation – Part 2

written by Hannah Dowling | December 24, 2020
File image of an AA tail (Source: American Airlines).

2020 has without a doubt brought about the single biggest disruptor to the global aviation sector potentially ever seen: the COVID-19 pandemic.

On 31 December, 2019, Chinese authorities officially revealed they were treating a small number of citizens suffering from a mysterious illness in Wuhan. No one knew just what this would mean for the international community in the months to come.

Join us here at World of Aviation for part two of reminiscing and recounting the year that the aviation industry will never forget.

In case you missed it, we already discussed the months of January, February and March – check it out here.

Let’s get into it.

APRIL

Early April saw some optimism, as the market in China appeared to show strong signs of recovery, following getting the virus spread under some control.

China’s commercial aviation sector appeared to make a remarkable recovery in the face of unprecedented travel restrictions, when it was reported that the country’s air cargo capacity had returned to pre-outbreak levels, largely on the back of demand for Chinese-produced medical supplies and equipment.

Soon thereafter, new data also indicated an uptick in domestic passenger flights following reopening of key Chinese airports in the central Hubei province.

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In fact, according to IATA figures, passenger yields on internal routes booked in the first two weeks of March were actually up slightly year-on-year.

However, other markets, still targeting their first wave of the COVID-19 virus, were struggling far more. Many countries, including much of Europe, began implementing 14-day quarantine requirements for new overseas arrivals, which further decimated demand for travel.

Domestic markets took a hit too, particularly in the US, as New York faced its mammoth first wave of COVID infections. Major domestic and international players cancelled services to and from New York in attempts to limit the virus’ spread.

The number of passengers at US airports fell to less than 100,000 a day – a drop of 96 per cent from last year and on a par with levels last seen in 1954.

On 8 April, the US Transportation Security Administration (TSA) screened 94,931 people at US airports, including airline crew members and people still working in airport shops.

Elsewhere, aviation data analyst Cirium revealed that by this point, more aircraft were grounded and stored than in commercial use.

As of 3 April there were 13,655 aircraft classified as ‘in storage’ compared with 12,635 that remained active with observed flight activity within the past seven days.

At the time, the IATA released figures showing that the COVID-19 crisis could see airline passenger revenues drop by $314 billion in 2020, a 55 per cent decline compared with 2019. 

The association also anticipated that passenger demand across both domestic and international markets would fall by 48 per cent year-on-year.

The IATA’s figures were based on assumptions that severe domestic travel restrictions would last at least three months in many countries, “some” restrictions on international travel would extend beyond the initial three months.

Airlines adjust to ‘the new normal’

By April, airlines knew they needed to step up their sanitisation practices for the few passengers who were continuing to fly. Many people living abroad were hoping to get back home and repatriation efforts were well under way.

Emirates were among the first to introduce full personal protective equipment (PPE) for their onboard staff, including cabin crew, boarding agents and ground staff. Staff were provided disposable gowns, safety visors, face masks and latex gloves.

Philippines airline quickly followed suit, with cabin crew to adorn full PPE in-flight, while AirAsia went a step further and commissioned a local artist to hand-design the new branded PPE that its staff would wear. 

At the same time, passengers were often asked to wear face masks while checking in and in-flight, with some airlines also requiring gloves to be worn. Many airlines embraced social distancing onboard, and intentionally spread passengers out throughout the cabin.

For a time, many US airlines, including Southwest and JetBlue, were also blocking the sale of middle seats, so as to leave some space between passengers.

Emirates became among the first airlines to trial rapid pre-flight COVID testing on passengers in April, however ran into some supply issues for testing kits.

A kick for cargo

Airlines also got a little creative in how they adjusted their fleets in order to cater to an uptick in demand for cargo, including the transportation of PPE supplies.

The European Aviation Safety Agency approved a new cargo seat bag that can repurpose an A320 passenger plane into a makeshift freighter. Each block of three seats can handle up to 252 kilograms of cargo with the bag in place.

Meanwhile, the world’s largest cargo plane – the Ukrainian Antonov An-225 Mriya – was brought back into service to assist with intercontinental transport of vital medical equipment and PPE.

Fleets begin to shrink

As mentioned, by now, there were more planes in storage than in service, and some airlines made the tough decision to make more long-term arrangements in order to cut costs of storage and maintenance.

American Airlines announced early in the month that it would retire 145 aircraft from its fleet immediately.

American Airlines had already announced its plans to retire some 50 of its Boeing 757 and 767 jet throughout the coming months and years, however the COVID crisis meant the airline had to add to its list.

As a result, the airline now planned to retire over 100 additional planes immediately, including 76 Boeing 737-800s, 20 Embraer E190s, and nine Airbus A330s.

Lufthansa said it would decommission 32 aircraft in its fleet immediately, including six A380s, seven A340-600s, three A340-300s, five 747-400s, and 11 A320s. It also said it would be closing its Germanwings subsidiary.

More bailouts secured, as staff were laid off in droves

After months of campaigning, many airlines were awarded with government aid packages in order to keep afloat throughout the pandemic.

After warning that the low-cost carrier could collapse due to unprecedented low demand, EasyJet secured a £600 million loan as part of the British Treasury and Bank of England’s emergency coronavirus fund.

Meanwhile, airline giant Lufthansa Group – which includes Lufthansa, Austrian Airlines, Swiss International Air Lines, Brussels Airlines and Eurowings –  also threatened bankruptcy while in talks with four national governments across Europe to negotiate state-funded rescue packages that would total €10 billion.

Air France-KLM secured a total of €7 billion across state-backed and shareholder loans.

At the same time, we saw thousands of aviation worked laid off or stood down, as the industry continued to navigate the treacherous waters of the COVID crisis.

Central Europe’s largest low-cost airline, Wizz Air, announced it was cutting 1,000 of its staff, as its capacity and operations fell to just 3 per cent of its usual. Additionally, British Airways’ parent company indicated the airline could cut 12,000 out of 45,000 staff to survive the coronavirus crisis.

South African Airways, which had been struggling before the pandemic, announced it would lay off all 4,700 of staff at the end of April, after the national government ruled out further assistance to the struggling airline. The carrier said it would make sales of its assets to foot the salary payouts.

Elsewhere, Virgin Atlantic’s owners put the airline up for sale after failing to secure a £500 million bailout from the UK government. The airline was hoping to avoid entering into administration, by finding new investors.

Planemakers struggling

A growing trend in 2020 continued in April, when Boeing posted a net loss of S$641 million for Q1. By comparison, the same period in 2019 netted Boeing a total profit of US$2.14 billion.

The pandemic saw Boeing temporarily suspend its production operations at its facilities in Ridley Township, Pennsylvania, which are mostly used for military rotorcraft production including the H-47 Chinook, V-22 Osprey and MH-139A Grey Wolf.

Boeing also temporarily suspended operations at its South Carolina 787 Dreamliner factory, in light of weakened demand for aircraft.

European rival Airbus also announced that it would pause production at its US manufacturing facility in Mobile, Alabama, standing down 1,100 employees.

April also saw Boeing announced that it would be making two critical software updates to its embattled 737 MAX’s flight control computer in order to return the aircraft to service.

Even as the company wound back its US operations amid the COVID-19 outbreak, it seemed clear that Boeing would push ahead with its bid to win over regulators to approve the grounded jet.

By the end of April, it was said that Boeing may face criminal and civil scrutiny into the beleaguered 737 MAX line.

The Wall Street Journal suggested a full-scale federal grand-jury investigation by Justice Department prosecutors and the FAA could soon be under way. It follows private lawsuits already levelled against the aviation giant in Illinois regarding the Lion Air and Ethiopian Airlines crashes that grounded the popular jet.

It was also reported that a grand jury probe had been commissioned into the aircraft’s problematic flight control systems. Allegedly, the probe would also dig into what potential whistleblowers told the troubled manufacturer, before the two crashes which killed 346 people.

Also flagged as points of potential concern were Boeing’s compliance with production safety guidelines.

MAY

By May, the industry was largely facing the COVID-19 issue head on. It was a month of navigating travel bans, bailouts, a mass exodus of staff, and signs of troubled waters ahead for the world’s four-engined aircraft.

On 6 May, Virgin Atlantic announced it was cutting a third of its workforce, being over 3,000 of its staff. It also said it would close down its London Gatwick base, and cease operations on its remaining Boeing 747 fleet.

Qatar made a similar announcement regarding its four-engined fleet, whilst also threatening mass layoffs in the near future. Qatar Airways boss Akbar Al-Baker predicted a slow recovery for the state-owned airline even going so far as to suggest that its flagship Airbus A380 fleet may not return to service at all.

“They will not return for at least a year, and maybe never,” Al-Baker told the West Australian newspaper this week.

Meanwhile, UAE giant Emirates made an announcement that up to a third of its 100,000-strong workforce could be on the chopping block. Emirates also announced that it was looking to cancel five of its last eight Airbus A380 orders.

In a more significant move, Air Canada said it was looking to axe 20,000 out of its 38,000 roles within the following three weeks, according to a leaked memo to employees.

“Sadly, today the hard truth is that by every indicator we have available to us, we believe that we will be materially smaller for at least three years,” said Craig Landry, Air Canada’s executive vice-president of operations.

The email followed the words of chief executive Calin Rovinescu, who said during his first-quarter earnings call that Air Canada was in “the darkest period ever” in commercial aviation history.

Boeing too made an announcement that it would begin involuntary layoffs in its US operations, bringing total layoff figures by May’s end to around 12,300. The US planemaker had previously suggested it would cut around 16,000 jobs in total.

Two more airlines go under

May brought about two more COVID-induced airline casualties.

On 18 May, the Thai government confirmed suspicions that Thai Airways was to begin bankruptcy proceedings, essentially equal to a Chapter 11 filing in the United States.

The government was set to take rehabilitation plans for the troubled airline to court. The airline had been attempting to negotiate a secondary bailout deal from the Thai government.

By the end of May, Latin America’s largest airline LATAM had filed for Chapter 11 bankruptcy protection in the US. 

The filing included LATAM airlines along with its affiliates in Chile, Peru, Colombia, Ecuador, and the US. It did not include its Brazilian, Argentinian and Paraguayan affiliates.

Other airlines saw drastic measures being taken in order to keep them afloat.

British business magnate Sir Richard Branson took steps to sell US$485 million worth of stock in his space tourism venture, Virgin Galactic, in order to free up funds to rescue floundering airline Virgin Atlantic.

Meanwhile, following its failed $4.2 billion deal with Boeing, Embraer turned to the Brazillian government to beg for financial assistance. The plane manufacturer was seeking credit lines of between $1 billion and $1.5 billion.

Lufthansa also finally accepted a €9 billion government bailout, becoming partially state-owned in the process.

Countries welcome mandatory 14-day quarantine

The UK, Germany, New Zealand and Australia all introduced mandatory 14-day quarantine periods for new international arrivals, becoming the first of many nations that would embrace such a tactic to reduce the spread of COVID.

It was a scheme that ultimately put a further dampener on an already stricken aviation industry.

The announcement was, understandably, met with fierce opposition from the aviation, travel and farming sectors. In fact, Ryanair CEO Michael O’Leary called the UK’s decision to implement the self-quarantine requirement “nonsense”.

In fact, travel bans and nationwide lockdowns caused some havoc in the industry, including one Eurowings flight between Dusseldorf and Sardinia which was forced to turn around mid-flight and return to its departure airport, when the destination airport in Sardinia was declared closed under COVID lockdown measures.

At the same time, we saw the world’s first COVID ‘travel bubbles’ or rather ‘travel bridges’, when British Transport Secretary Grant Shapps indicated that countries with low COVID-19 infection rates may be exempted from quarantine measures in the UK.

PIA plane crashes, killing 97

In some rare non-COVID, though deeply saddening, news. 

On 22 May, a Pakistan International Airlines (PIA) Airbus A320 crashed into a residential neighbourhood about 1.4 kilometres from Karachi’s Jinnah International Airport.

The aircraft attempted to land at the airport without first releasing its landing gear, causing both engines to hit the runway three times before the pilot lifted off again, according to the report released by Minister Khan.

On his second approach, the pilot reported that both engines – damaged by the impact with the runway on its first approach – had failed.

The aircraft then crashed into a dense residential neighbourhood, just short of the airport, on its second approach.

The crash ultimately killed 97 of the 99 people on board, as well as a child who was within one of the 29 homes destroyed by the plane.

JUNE

By June, the IATA revealed that it expected the global aviation industry is set to lose $84.3 billion in 2020, for a net profit margin of -20.1 per cent, due to the ongoing pandemic.

The association also warned airlines to brace for “a hard winter” ahead, given the seasons traditionally low traffic at the best of times.

Alexandre de Juniac, IATA director general and CEO said: “Financially, 2020 will go down as the worst year in the history of aviation. On average, every day of this year will add $230 million to industry losses. In total that’s a loss of $84.3 billion. 

“It means that—based on an estimate of 2.2 billion passengers this year — airlines will lose $37.54 per passenger. That’s why government financial relief was and remains crucial as airlines burn through cash.”

Canada’s WestJet announced a series of changes to the organisation’s structure on 24 June, including cuts to 3,333 employees.

The company’s CEO, Ed Sims, called the decision “difficult, but essential”, adding that the move was necessary “to provide security to our remaining 10,000 WestJetters, and to carry on the work of transforming our business”.

In China, flights were scrapped as fears of a second wave of infection Beijing Capital and Daxing airports cancelled 1,200 flights on Wednesday, as the central government looks to seal off the city amid a secondary spike in COVID-19 infections.

On 17 June, Air China indicated that “large scale cancellations” were likely to take place throughout the day, after municipal officials cited 31 new locally-transmitted cases in the region. China Southern followed suit, cancelling a large number of domestic flights to Shanghai Hongqiao, Changsha, as well as its Guangzhou hub.

Elsewhere, Brazilian aerospace manufacturer Embraer posted its results for the first quarter of the 2020 financial year, in which it delivered just five commercial jets and nine executive jets (five light/four large).

Schedules hikes, fleets ungrounded

On the other hand, some other small signs of recovery were reported.

On 5 June, flight-tracking service Flightradar24 reported that the number of commercial flights was up 10 per cent over the last seven days to 10 June, and up 30 per cent last over the course of the previous 30.

Meanwhile, Vietnam Airlines saw a full recovery in its domestic network, in light of a strong, co-ordinated national response to the coronavirus pandemic in the country.

Emirates Airbus A380’s defied recent obituaries when the airline announced that some of its A380 fleet will be returning to the skies above Europe and the Middle East by 15 July 2020.

The airline had previously grounded its entire A380 fleet amid the COVID-19 pandemic, opting instead for its smaller, Boeing 777 aircraft for international flights.

In the later-half of the month, Delta Air Lines announced it would be re-starting services between Seattle and Shanghai-Pudong via Seoul-Incheon on 25 June.

The announcement marked the first scheduled commercial flights to resume between the US and mainland China since the temporary suspension made in February, in direct response to the outbreak of COVID-19.

Airlines fight for middle seats

At this point, the debate over the sale of middle seats had been raging for months.

An American Airlines flight went viral following video proof that the flight had been booked out in full.

The Allied Pilots Union pushed the federal government to buy out middle seats on all flights run by the airline over the coming months, as the public became increasingly worried.

It came as Canada’s two largest airlines ended their on-board social distancing policies from 1 July.

Air Canada had blocked the sale of adjacent seats in economy class, and WestJet throughout the entire plane, to help prevent the spread of COVID-19.

At the same time, American Airlines and United said they would be filling middle seats and booking flights at full capacity once more, despite the increase in cases of COVID-19 throughout the US, also from 1 July.

During a Senate hearing in front of the Health, Education, Labour and Pensions Committee, the director of the Centers of Disease Control and Prevention, Dr Robert Redfield, labelled the American’s decision to reopen middle seats for sale onboard all flights as a “substantial disappointment”.

30% of Pakistani pilots accused of license fraud

In non-COVID news, more than 30 per cent of all registered pilots in Pakistan were accused of committing fraud in order to obtain their licenses, resulting in an government inquiry.

The nation’s federal Minister for Aviation Ghulam Sarwar Khan told the Pakistani Parliament that 262 of Pakistan’s 860 active, licensed pilots have been found to have suspect licences.

“[They] were found not to have given their exams themselves,” said Minister Khan. “They give money and have a dummy candidate sit in their place.”

The revelation led to the United Arab Emirates’ General Civil Aviation Authority’s decision to temporarily suspend flights from Pakistan.

737 MAX safety tests begin

By the end of the month, safety tests that would see the eventual international recertification of Boeing’s troubled 737 MAX were due to begin within the week.

Pilots and crews from the U.S FAA, in conjunction with technical experts from Boeing, were due to undertake the first of many tests within days, as public opinion of the 737 MAX remained dubious.

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