Emirates Airline president Tim Clark expects the Airbus A380 will continue to be a “hugely potent” tool once the industry begins recovering from the post-coronavirus crisis. But he warns that it will hinge on the roll-out of a global inoculation programme against the disease. In an interview with consultant John Strickland during this week’s Arabian Travel Market virtual event, Clark was asked about the future of large airliners like the A380 following the pandemic. The airline’s fleet of 115 A380s have all been grounded since late March amid the coronavirus pandemic. “Much will depend on whether we’ll get the vaccine and global inoculation programmes in place, and if you get that, [the crisis] will all be behind us and we’ll get back to business as usual,” he says. Clark expects that if a vaccine is rolled out quickly, the short-term effects of the crisis will “probably last a year while primary [market] segments – corporate, leisure, VFR [visiting friends and relatives] – sort themselves out”. But he’s confident the business will return and says it “would be folly to exclude large widebodied aircraft in the future. The A380 has proven to be a hugely successful aircraft and if fuel prices were forever to stay at today’s levels, this aircraft is hugely potent. “Providing that demand holds up with the mass-vaccination scenario, I do not subscribe to this ‘new norm’. There will be differences as a result of what has happened – but will this be a paradigm change in everything that goes on in the global economy – no it won’t. The thirst for travel will come back.” However, the scenario where a vaccine does not become available, and the industry has to adopt the current short-term measures to counter the virus spreading for much longer, “will introduce high level of conditionality into the drivers of demand for air travel”, Clark warns. But if a global inoculation programme is implemented, “then the A380 has a place”. Cirium fleets data shows Emirates has a firm backlog of over 200 aircraft, including 58 widebodies from Airbus (50 A350s and eight A380s) and 145 from Boeing (115 777Xs and 30 787s). Clark hints that the airline will seek to renegotiate the size or schedule of these commitments but not until it better understands the impact of the crisis on its business. “We have an orderbook which is pretty substantial and as part of our assessment of what life is likely to be in the next two or three years will have a bearing on what we do with the manufacturers. And, hopefully, this will be done to mutual benefit,” he says. The airline’s last eight A380s had been due for delivery over the next year or so. While Clark does not disclose the status of the schedule, he says the first aircraft equipped with Emirates’ new premium-economy cabin “is sitting in Toulouse waiting to go”.

Source: Cirium

Preliminary information from the flight recorders of the crashed Pakistan International Airlines Airbus A320 in Karachi have not indicated any reason for A320 operators to take safety action. Airbus has contacted operators of the aircraft type following the 22 May accident which occurred as the PIA jet, arriving from Lahore as flight PK8303, attempted to conduct a second approach after executing a go-around. It is understood that the operators have been informed that Airbus has “no specific safety recommendations to raise at this stage of the investigation”, following an initial analysis of cockpit-voice and flight-data recordings, air traffic control records, and site information. “Both recorders provided valuable information for the investigation,” operators have been advised. While the inquiry has yet to detail the circumstances of the accident, the absence of recommendations in the Airbus communication provisionally indicates that there was nothing technically unsound about the aircraft and that its systems showed no unexpected or unusual response to crew actions. No specific flight-data recorder information has been released on the status of the landing-gear during the first approach to Karachi’s runway 25L. But the all-operator communication indirectly strengthens the evidence that the landing-gear of the aircraft was not malfunctioning before the jet apparently touched down on the runway on its engine pods, rather than its wheels, and climbed away. The A320 had previously been the subject of main landing-gear deployment issues in 2013 which were traced to actuator jamming. But crew communications with Karachi air traffic control had not referenced any landing-gear problems. A320 normal pre-landing cockpit procedures include a ‘landing-gear down’ check which typically accompanies setting of the go-around altitude, arming of spoilers, and a check on the flap configuration. After the go-around the crew indicated to air traffic control that the aircraft was unable to hold altitude and had lost engine power. Surveillance video images of the aircraft’s final descent, as it attempted a second approach, clearly show the landing-gear deployed. Just two of the 99 occupants survived the accident. Pakistan’s aircraft accident investigation board is leading the probe, assisted by Airbus, Safran Aircraft Engines, the European Union Aviation Safety Agency, and French investigation authority BEA which took responsibility for downloading the flight-recorder information at its Paris facilities.

Source: Cirium

Air passenger demand will not completely recover from the coronavirus until at least 2023, ratings agency Moody's has warned. "Health concerns, changes in corporate travel policies, potential restrictions on international arrivals, and lower discretionary spending because of weaker GDP and higher unemployment will constrain air passenger demand into 2022," it writes in a sector analysis. Although Moody's believes that demand in 2023 "could approach" the level of 2019, "the uncertain timing of the coronavirus receding on a more permanent basis makes forecasting a challenge". Carriers have responded to the crisis by boosting their liquidity, but this has pushed debt levels in some companies to dangerous levels. Airlines with debt assessed by Moody's have on average 450 days of liquidity, but for many players it is significantly less. The agency expects carriers to burn cash in 2020 and, in many cases, next year too because of depressed passenger volumes. "The airlines we rate will carry on average 20-30% more debt in 2023 compared with 2019, with leverage on average 0.5x-1.5x higher." Many carriers will struggle to survive this period, leading to greater consolidation as those with the weakest finances and that do not benefit from state support fail. This will leave "fewer, larger companies, polarised between more efficient operators and strategic state-supported airlines". Even relatively well-capitalised airlines will see their finances stretched during this period. "Holding sufficient liquidity to operate through a substantial grounding period may not be sufficient for airlines to avoid a financial restructuring," Moody's highlights. Structural changes are likely to impact the sector well into the coming decade. Enhanced health screening could deter passengers even once fears of virus transmission have abated, while corporate travel may also be suppressed. Governments may also demand deeper emissions cuts from carriers as climate-change concerns continue to rise in importance.

Source: Cirium