Aviation industry and Covid-19

[Bozza]

Twenty years after Richard Branson launched a low-cost Australian airline, then called Virgin Blue, the carrier is reported to have gone into voluntary administration.

Virgin Australia, which has a network of domestic and international flight, is around A$5bn (£2.55bn) in debt.

As a result of the coronavirus pandemic, which has seen passenger numbers collapse, the carrier applied for a A$1.4bn (£715m) bail-out from the Australian government – which was refused.

MORE >>> https://www.independent.co.uk/trave...line-sir-richard-branson-latest-a9473581.html

 

[KZNSeagull]

He wants us to bailout Virgin Atlantic too.

 

[The Wizard]

I’m not sure if I’m being thick, but how do any of these airlines make money? All I ever seem to see is airlines getting billions in loans, being bailed out and the lark surely once you are a billion pound in debt you should think alright maybe this isn’t working?

 

[Bozza]

He wants us to bailout Virgin Atlantic too.

Virgin Atlantic want a loan, not a bailout.

Easyjet has already had a £600m loan from UK government. Also not a bailout.

 

[Wozza]

Owners (according to Wiki):
Etihad Airways (20.94%)
Singapore Airlines (20.09%)
Nanshan Group (19.98%)
HNA Group (19.82%)
Virgin Group (10.42%)

 

[Bozza]

I’m not sure if I’m being thick, but how do any of these airlines make money? All I ever seem to see is airlines getting billions in loans, being bailed out and the lark surely once you are a billion pound in debt you should think alright maybe this isn’t working?

Wafer thin margins I assume, given most of the market has little loyalty to any provider and will look to pay the cheapest price for the journey they wish to make.

 

[Barham's tash]

Owners (according to Wiki):
Etihad Airways (20.94%)
Singapore Airlines (20.09%)
Nanshan Group (19.98%)
HNA Group (19.82%)
Virgin Group (10.42%)

This is how he makes his money or the parent group make returns. Establish airline, usually with a single partnership.

Create brand awareness, capture market share, make slim profits but then sell slugs of the business on to other airlines often billed as strategic alliances to gain access to code shares etc but ultimately it’s the only way to make positive returns.

Ultimately if it goes tits up this time round Virgin Group will already have made its money.

 

[Kinky Gerbil]

Follows South African Airways yesterday.

 

[Rugrat]

Wafer thin margins I assume, given most of the market has little loyalty to any provider and will look to pay the cheapest price for the journey they wish to make.

Recently airlines (in general) have been making good money but I assume they then use that profit to either replace more aircraft, make other investments and pay larger shareholder dividends. They look at their debt and see that they can afford to pay the interest payments and so no problem. Rightly or wrongly some make little provision for their revenue stream being cut off entirely

 

[KZNSeagull]

Virgin Atlantic want a loan, not a bailout.

Easyjet has already had a £600m loan from UK government. Also not a bailout.

Oh ok. All the news outlets are banging on about a bailout, but I see it is a loan that they have asked for. Thanks.

 

[Kinky Gerbil]

Oh ok. All the news outlets are banging on about a bailout, but I see it is a loan that they have asked for. Thanks.

He’s put the island up as collateral

 

[Kinky Gerbil]

Norwegian all but gone now

 

[Springal]

Norwegian all but gone now

Just a bodge isn't it? Close the subsidiaries that hire the pilots, crew etc to easily get rid of the staff - but keep the airline itself going, intact and propped up by Norwegian government?

Then re-hire when things settle down

 

[beorhthelm]

Norwegian all but gone now

an ex-airline, pining for the fjords?

 

[Kinky Gerbil]

Air Mauritius enter administration

 

[nicko31]

Will aviation ever the same again? Its a long way back

 

[Springal]

Lufthansa on the verge of bankruptcy without government bailout - wouldn’t happen in Germany

 

[Icy Gull]

Lufthansa on the verge of bankruptcy without government bailout - wouldn’t happen in Germany

They will get one. I doubt that there is a major airline that will survive without a bailout

When this is over will running an airline in the right sector be a massive business opportunity or a road to ruin? I am going for the former. Hard to know if the end of the lockdown will make people want to travel even more than they did before it..finances permitting.

 

[mikeyjh]

Will aviation ever the same again? Its a long way back

It will be a long, long time - Even when demand starts coming back, it will take months or years for airlines to be back up to speed, Lufthansa are suggesting demand levels to return in 2023, even that's optimistic I think. From a business travel perspective (biz travel essentially pays for airlines), every organisation on the planet is going to look at how they coped during this crisis without travelling and reflect that it's something they need to do less.

 

[Springal]

Virgin Australia reportedly enter voluntary administration

A lot of airlines will decommission older planes that probably still had a few years left in them but the whole economics will have changed.
That will mean reduced capacity all round at least.