Covid-19 'to sort winners from losers': Wizz chief
October 21, 2020
Wizz Air chief executive Jozsef Varadi sees a "major opportunity" for his carrier to expand into the vacuum left by retrenching competitors amid the Covid-19 crisis. During an online broadcast by the UK's Aviation Club, Varadi said Wizz had been "waiting for a crisis" to emerge since the financial crash of 2008/9, given the role of recessions in shaking out weaker players. "Of course we didn't know it would be Covid," he adds, "but we knew any crisis would be an opportunity… It sorts winners from losers." Varadi's confidence that Wizz will emerge as the former appears bulletproof. "This is a commodity business, and the lowest cost prevails," he says, opining that his airline can offer the lowest fares in Europe – an advantage he expects the pandemic to only accentuate. This is on the basis that, in contrast with many carriers, Wizz has continued to accept new aircraft throughout the crisis, taking 12 Airbus jets since March, and with a further 40 due for delivery over the next 15 months. This will continue to bring down the age of the fleet and reduce costs. Many airlines have meanwhile been slashing aircraft deliveries as they look to cut all but essential spending. "Not only are we using our unit cost [advantage] versus the industry, but the industry is going to increase its unit cost with an ageing fleet," says Varadi. A younger, more efficient fleet has, he notes, the double benefit of bolstering the carrier's environmental credentials, something of growing importance to passengers. Continued market diversification is another of Wizz's core strengths, Varadi contends. Whereas some airlines have withdrawn to their key routes, Wizz is flying to 85-90% of its usual destinations, axing flights only when government restrictions make operations effectively impossible – "and we will be resuming the balance when we can, from a restrictions point of view". Wizz's capacity is at about 45% of last year's levels, but it has launched more than 200 new routes in the past five months, and opened 12 bases."Some of our competitors are contracting in a big way and leaving a market vacuum behind them – of course we make sure that we take advantage of that," says Varadi. In addition, the carrier's Abu Dhabi unit, a joint venture with the city-state's government, has recently received its air operator's certificate and is preparing for the start of operations. Securing financing has been a challenge for many carriers, but, again, Varadi believes Wizz has in this area been able to plot a smooth course amid the crisis. Other than securing one support loan from the Bank of England, something he describes as "more like testifying our standing in the market", the carrier has not taken any significant liquidity measures. This "shows the resilience of business model", Varadi argues, adding: "We didn't need to raise equity or borrow money."
Again, he draws a contrast with competitors. Many, Varadi suggests, will not make it to the other side of the crisis. Although some will be able to access government support, this is not available to the majority. "There will be less players in the industry," Varadi predicts. "This is not rocket science. Out of 3,000 or so flying around the globe, not 3,000 are going to survive."

Source: Cirium

New BA chief issues urgent plea for airport testing
October 20, 2020
British Airways' new chief executive Sean Doyle is pressing the UK government for a rapid rollout of pre-flight Covid-19 testing at airports as a means of eliminating the requirement for passengers to quarantine. "We think pre-departure testing is the way forward," he said during the Airlines 2050 conference today. "There is a risk we will not see beyond this crisis if we do not get people flying again." Highlighting evidence that quarantine of just one week is enough to deter passengers from taking flights, BA is focused on removing them altogether. To this end, the IAG-owned airline is urging the establishment of a pre-flight testing pilot scheme which can then be rolled out on a wider scale – but complains of being left in the dark as to the authorities' strategy. "At the moment we are not getting any support or action, and we are not hearing from government what they're thinking," says Doyle. BA is particularly keen to reduce the need for quarantines on transatlantic routes, but this will require an agreement between the US and UK governments. The carrier's US network has shrunk from 30 cities pre-pandemic to less than half that now, Doyle notes, while its 12 daily flights to New York have reduced to just two, often carrying fewer than 200 passengers pay day. Doyle replaced Alex Cruz as BA chief last month, having previously headed up Irish IAG stablemate Aer Lingus. Speaking as part of the same event, following Doyle, UK transport secretary Grant Shapps outlined his hopes that a test-and-release scheme would be ready in around six weeks' time. This would involve Covid-19 testing of self-quarantined passengers one week after their arrival back in the UK. He dismisses the viability of pre-flight testing because it "may wrongly tell people they are not bringing Covid back with them". Launched last year, Airlines 2050 is hosted by FlightGlobal in partnership with industry groups Airlines UK, BAR UK and IATA.

Source: Cirium

‘All airlines are going bankrupt’: UK industry body chief
October 20, 2020
UK airlines desperately need a coronavirus testing regime in place avoid a “really, really bleak winter” for the industry, according to Tim Alderslade, chief executive of Airlines UK. “All airlines today are effectively going bankrupt,” he states during the Airlines 2050 conference. “It’s just a matter of time, depending on their own balance sheets and their own economic situations.” Calling on the government to take action on the introduction of pre-flight coronavirus testing as soon as possible, Alderslade says “we know the clock is ticking”. He notes progress on testing is being made by the UK government through a task force which is due to report its findings soon, but cautions that “airlines are running out of money, and if we cannot get a testing regime in place, economic measures come to the fore”. On the latter point, he highlights the importance of the UK’s economy-wide furlough scheme in helping airlines through the last few months, but laments that little sector-specific support is available looking forward. In the absence of either a comprehensive testing regime or further financial help, UK airlines could collapse. Then, ”you are effectively outsourcing your connectivity to heavily subsidised overseas carriers”, Alderslade states, citing the government bailouts given to airlines elsewhere in Europe, including Air France-KLM and Lufthansa, which ensures their survival. UK aviation summit Airlines 2050 – launched last year by airline groups Airlines UK, BAR UK and IATA UK, alongside FlightGlobal – is being held today via a live online stream.

Source: Cirium


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