Planning for a world beyond COVID

After 10 months of misery, the worst may be to come for many airlines as – after a barren winter and repeated waves of travel restrictions – the cash starts to run out, and investors, lessors, and, in some cases, governments run out of patience and cash in their remaining chips. However, some have started to look beyond the crisis, and – with the vaccine roll-out accelerating by the day – begun planning for a world after Covid-19.

EasyJet is to base four additional aircraft next year at London Gatwick – where it is the biggest airline. It anticipates leisure travelers returning apace to the skies once restrictions on international movement begin to ease. Even though the low-cost carrier is operating less than a tenth of the services it ran a year ago, chief executive Johan Lundgren is basing his optimism on evidence that lockdown-weary consumers are making travel plans now for the spring and summer.

Norwegian – an airline few gave much of a chance of surviving the crisis – is just about clinging to hopes of recovering. This week, shareholders backed a rights issue which would bring in $453 of additional funding. If this is enough to see it through its current hibernation, the Scandinavian carrier will be banking on a bounce back in traffic in mid-2021 to bring in enough revenue to keep it solvent for another year at least. Its long-term problems, however, will remain.

Despite being the first to suffer as a result of Covid-19 lockdowns, the Chinese aviation market has come back strongly. And now – with relatively strong balance sheets and new domestic routes being launched – the country’s big three carriers are looking at a return of international traffic. To their advantage could be the fact that many of their Asian competitors, which offer their own services into Chinese cities, are struggling financially and have retrenched their fleets.

In its latest financial statement, the world’s best-known low-cost carrier has made clear how damaging the decline in travel demand continues to be. Southwest Airlines said in a regulatory filing on 16 December that it expects to be burning $12 million in cash every day in the final quarter. While things might be looking up for the industry once vaccines take effect, the immediate outlook for many remains grim.

The freight market has a winner of the Covid-19 crisis. Although overall cargo movements are down, demand for air cargo has been outstripping supply because of the drastic drop in belly hold capacity with so many fewer passenger flights. Manufacturers have been responding and – although it was planned long before the pandemic – ATR has become the first in many years to deliver a new-build freighter, this week handing over the first of 30 factory-built ATR 72-600 Freighters to FedEx Express.

The dash to deliver vaccines all over the world has also given a fillip to the air freight sector, although this week Boeing and the Federal Aviation Administration had a warning about the risks of carrying dry ice on board. Pfizer’s vaccine must be transported at very low temperatures and dry ice is one way of achieving that. However, the FAA says that high levels of CO2 can lead to a degradation of cognitive functioning or potential asphyxiation for anyone in the same confined space.

This week, an Israeli company announced plans for a very different type of freighter – a hybrid airship designed to carry outsize cargo to remote locations. Atlas LTA plans to develop a family of new-generation airships, able to transport up to 165 tonnes 2,000km. UK company Hybrid Air Vehicles is already marketing its own hybrid airship – hybrid because it combines lighter-than-air helium with the hull’s own aerodynamic design for lift. Nine decades after the golden age of airships, could these new concepts offer something truly disruptive in the cargo market?