Can the Airlines Survive

[ssobol]

You have to ask why people would travel? ....

Some examples:

- Visit family, loved ones. E.g. births, weddings, funerals, etc.
- Recreation. If you don't live near a beach or national park you have to get there somehow. How 'bout that ski trip?
- Conventions, trade shows. Kind of hard to have hands on demonstrations of stuff via a video link. I suspect that having 100K+ people on one video call will be unmanageable.
- Some people actually have to touch stuff to do their jobs and that requires going to where that stuff is. I work on multi million dollar pieces of equipment that require special facilities to house them and I don't live near any of those locations. My commute is via commercial airline.
- Making high dollar purchases. Would you buy your next boat if you can only inspect it via a video chat? How are you going to accept delivery? Unless they drop it in front of your house, you're going to have to travel somewhere to get it.

 

[BandB]

Some examples:

- Visit family, loved ones. E.g. births, weddings, funerals, etc.
- Recreation. If you don't live near a beach or national park you have to get there somehow. How 'bout that ski trip?
- Conventions, trade shows. Kind of hard to have hands on demonstrations of stuff via a video link. I suspect that having 100K+ people on one video call will be unmanageable.
- Some people actually have to touch stuff to do their jobs and that requires going to where that stuff is. I work on multi million dollar pieces of equipment that require special facilities to house them and I don't live near any of those locations. My commute is via commercial airline.
- Making high dollar purchases. Would you buy your next boat if you can only inspect it via a video chat? How are you going to accept delivery? Unless they drop it in front of your house, you're going to have to travel somewhere to get it.

And your post brings up a set of interesting questions.
-When will weddings and funerals resume? I wouldn't go to either in the next few months.
-Recreation-When will people start flying for it again? I think many will as soon as they can. Cabin Fever.
-Conventions and Trade Shows. Most have scheduled their next one for 2021. Will those be delayed longer if no vaccine by then?
-Business requiring hands on I think will resume as quickly as allowed. Right now there are a lot of people who need to go check on factories in China, especially companies that insist on ethical employment practices. I think Apple will have people in China as soon as allowed to travel there.
-High Dollar Purchases. I don't see much of that for at least the next year. In most cases we are treading new waters, but here we will likely see similar to 2008-09, just perhaps worse.

I think flying will resume as part of normal lives, just at a much lower level that before. Individuals will say, "Do I really want to go there?" and companies will say "Are you sure we can't do this by video?" There will be fewer airlines and should be less discounting although knowing the airlines there may be more.

Personally, I think it will be a long time before I get back on a commercial airplane as I don't have a lot of the reasons you posted. I think for a while, any travel I take will be charter. I still don't know who has been on the plane or who the pilots have been around, but I do control and know all passengers. I'll only do it though when I feel compelled to.

 

[Woodland Hills]

Some examples:

- Visit family, loved ones. E.g. births, weddings, funerals, etc.
- Recreation. If you don't live near a beach or national park you have to get there somehow. How 'bout that ski trip?
- Conventions, trade shows. Kind of hard to have hands on demonstrations of stuff via a video link. I suspect that having 100K+ people on one video call will be unmanageable.
- Some people actually have to touch stuff to do their jobs and that requires going to where that stuff is. I work on multi million dollar pieces of equipment that require special facilities to house them and I don't live near any of those locations. My commute is via commercial airline.
- Making high dollar purchases. Would you buy your next boat if you can only inspect it via a video chat? How are you going to accept delivery? Unless they drop it in front of your house, you're going to have to travel somewhere to get it.

All this is a tiny fraction of previous travel. Given the state of the economy there are not going to be as many high dollar purchases. The same with conventions and trade shows: they’ll still be there, but much smaller. Domestic travel or vacations will be way down due to lack of money. Also lower fuel prices and higher ticket prices will encourage driving vs flying.

 

[ssobol]

... I think for a while, any travel I take will be charter. I still don't know who has been on the plane or who the pilots have been around, but I do control and know all passengers. ....

How very nice for you. A vanishingly small portion of the population share your ability to charter aircraft for their travel. Those of us amongst the great unwashed will just have to make do with what the airlines choose to provide.

 

[BandB]

How very nice for you. A vanishingly small portion of the population share your ability to charter aircraft for their travel. Those of us amongst the great unwashed will just have to make do with what the airlines choose to provide.

I don't know when things settle down how much more, if any, chartering will cost for a group than airline and we normally travel with a group. There have been times that six people or more on a charter was comparable to airlines. I will do as little flying as possible. Just right now I'd be scared to get on a crowded airplane. It's fear driven as I could easily see myself having a panic attack the first time I heard a cough on one. I remember one airline trip during flu season that I was close to losing it but my wife kept me from doing so.

Anywhere that doesn't require crossing an ocean, I'll drive, even if it takes a couple of days.

 

[Ski in NC]

There are going to be a lot of commercial airplanes going up for sale, seriously discounted.

Old ones nearing end of useful life, probably going to make one last trip to Arizona..

I'm not too worried about the airline co's themselves. If they go bankrupt due to being too highly in debt, what remains afterward are: Airplanes, airports, pilots, mechanics, support crew. All you need to carry passengers around.

Somebody will scoop them up and organize them somehow.

I worry a good bit about Boeing. That will be real messy as a bankruptcy.

 

[ssobol]

...I worry a good bit about Boeing. That will be real messy as a bankruptcy.

It'll only be messy for the employees, the employee pensions, the common stock holders, and the companies in the supply chain. All the people that think they matter will be laughing all the way to the bank after that soft landing under their golden parachute.

 

[Ken E.]

Boeing had its first-ever virtual shareholders' meeting yesterday. Here's what head honcho Dave Calhoun had to say.

https://www.seattletimes.com/busine...-return-to-2019-level-for-two-to-three-years/

 

[BandB]

Boeing had its first-ever virtual shareholders' meeting yesterday. Here's what head honcho Dave Calhoun had to say.

https://www.seattletimes.com/busine...-return-to-2019-level-for-two-to-three-years/

Here is where he lost me.

“We expect it will take two to three years for travel to return to 2019 levels and an additional few years beyond that for the industry’s long-term trend growth to return,” he said.​

I see no possible way that within 3 years air travel will be back to 2019 levels. We'll be short airlines and planes in use and demand won't return that quickly. Corporate travel budgets will still be down considerably.

 

[ssobol]

... We'll be short airlines and planes in use and demand won't return that quickly. Corporate travel budgets will still be down considerably.

The surviving airlines will jump to fill the gaps. There are plenty of planes to go around, Boeing is already resuming aircraft production. Airlines will either pick up new airplanes (whether they ordered them themselves, get the orders of the airlines they absorb, pick up the vacant delivery slots) or buy recently used ones at fire sale prices. If fuel prices stay depressed, the old planes that airlines were looking to replace will still be viable (who needs a MAX or 320NEO when oil is <$20/bl). There will be no shortage of available airplanes.

Demand is going to be driven more on peoples' willingness to actually go to the airport and get on a plane. That will depend on how the corona virus thing plays out.

 

[BandB]

The surviving airlines will jump to fill the gaps. There are plenty of planes to go around, Boeing is already resuming aircraft production. Airlines will either pick up new airplanes (whether they ordered them themselves, get the orders of the airlines they absorb, pick up the vacant delivery slots) or buy recently used ones at fire sale prices. If fuel prices stay depressed, the old planes that airlines were looking to replace will still be viable (who needs a MAX or 320NEO when oil is <$20/bl). There will be no shortage of available airplanes.

Demand is going to be driven more on peoples' willingness to actually go to the airport and get on a plane. That will depend on how the corona virus thing plays out.

I still think 3 years is too soon to expect it.