United Airlines is preparing for a dark scenario for the aviation industry in the coming months as the coronavirus decimates demand and customers stay away from travel in order to protect themselves from becoming infected with the fast-moving flu-like disease. United’s president Scott Kirby told investors at the JP Morgan Aviation, Transportation and Industrials Conference on 10 March that the airline is already seeing declines in gross bookings of up to 70% in some geographies, and is preparing for a stark drop-off in revenue for the rest of the year “This is a crisis that is going to have a large near term impact on revenue. We are planning for it to be deep,” he says. While January and February were the number one and two winter operations months in the history of the Chicago-based carrier, respectively, United said that demand dropped sharply in the first few weeks of the crisis, from about mid-February. The airline reduced its domestic capacity by 10% and its international capacity by 20% on 4 March. Many conferences, conventions and business meetings across the US and around the world have been cancelled, thus driving the corporate demand lower. ”Leisure travel is just a couple of weeks behind on the booking curve,” Kirby says. Kirby now says United will eliminate 20% of domestic capacity in April and May each, and at least that amount in later months until the airline sees a concrete and significant pickup in demand. So far, gross bookings in Asia-Pacific are down about 70%, with gross bookings to Europe down about 50%, Kirby says. Revenues could fall as much as 70% in April and May, 60% in June and at least 40% in the months thereafter for the rest of the year. “This demand scenario is not a forecast but what we are planning for under a dire stress test scenario,” he says. “Demand was down 40% for two months after 9/11. This is worse than the post-9/11 decline in demand.” He adds that the airline is planning for a full recovery time of 18 months, and it will take two to four years for the company’s capital and operational expenditures budgets to return to normal levels. “We are 100% focused on making it through the near term crisis,” Kirby says. “We have to see demand recover, and then we are going to restore and go further on strengthening the balance sheet before we let capex go up again.” Asked whether or not the airline is considering furloughs of staff during the crisis to keep costs down, Kirby says that the company’s “first objective is to take the steps required for United to survive, and the second objective is to do so without furloughs.” If it becomes necessary to do furloughs to save the airline, “I’ll feel awful, but I won’t hesitate to do it.”
Regarding the ongoing discussion about a government bailout of the travel and aviation industry, Kirby says that for the moment, United will not count on government intervention. “I am encouraged for the US economy to hear that the conversation is starting because I do think this [will have a] short term impact for the economy and an appropriate place for government to be having those kinds of conversations.” Slot relief is another worry for airlines that are cutting routes during the crisis. Earlier on Tuesday, the European Commission said that it will “rapidly” legislate to suspend rules that force airlines to operate 80% of their scheduled flights in order to hold on airport slots. The use-it-or-lose-it rules have been heavily criticised by airlines, which argue that the lack of flexibility prevents them from responding to the demand reductions caused by the coronavirus. Some airlines have continued operating “ghost flights” just to maintain those slot assignment. “If you are worrying about climate change, good grief. How ridiculous is that,” Kirby says.

Source: Cirium

UK regulators are warning that European airlines might not be completely exempt from passenger compensation payments relating to the coronavirus outbreak, although much of the disruption is likely to fall under ‘extraordinary circumstance’ immunity. The Civil Aviation Authority has outlined its interpretation of European Union compensation rules in light of the outbreak. It says the EU passenger rights legislation is “applicable at all times” including the “unprecedented” coronavirus situation. But it acknowledges that – in the event of flight cancellations – airlines could face “significant practical difficulties” in providing alternative flights, and refunds could be the only realistic measure available. While fixed-sum compensation might ordinarily apply to flight cancellations, the CAA believes coronavirus containment measures – such as government advisories against travel, or regulatory activity which restricts airline operations – would be viewed as extraordinary circumstances, exempting carriers from such compensation obligations. Airlines might choose to cancel flights at short notice to avoid costly operation of services with only a small number of passengers on board. “Such [situations] may be viewed as ‘extraordinary circumstances’ under [the EU regulation] and therefore the fixed-sum compensation would not be payable,” the CAA states, but cautions: “This may not be the case in all circumstances.” Although the CAA says it is “cognisant” of the current difficult operating conditions for airlines, and believes it should act proportionately and concentrate on harmful “systematic” issues, it nevertheless expects carriers to act in the interests of their passengers. “On this basis, we will look to airlines to demonstrate that they are being pro-active and flexible in managing the situation and minimising the impact on passengers of the disruption,” it says. It adds that its interpretation of ‘extraordinary circumstances’ is only a guide and each individual case will have its own specific facts to consider. Passengers will be able to seek legal redress if they disagree with the regulator’s view.

Source: Cirium

Investigators probing the fatal Ethiopian Airlines Boeing 737 Max accident have given additional insight into a crucial period during which the crew, having temporarily stopped the aircraft from automatically nosing down, struggled vainly to regain pitch and trim control. In an interim update into the 10 March 2019 crash near Addis Ababa, the Ethiopian accident investigation bureau says the differences training provided by Boeing – to convert 737 pilots to the 737 Max – was “inadequate”. It adds that the reliance of the controversial Manoeuvring Characteristics Augmentation System (MCAS) on a single angle-of-attack sensor input left it “vulnerable to undesired activation”. When the sensor, on the left-hand side of the jet, started transmitting bad angle-of-attack data, MCAS responded by repeatedly triggering the stabiliser trim to force the aircraft’s nose down, and causing the pilots to counter by pulling on their control columns. But while MCAS triggered on four occasions, the third of these had no effect on the aircraft’s pitch because – for a period of 2min 33s – the crew had been flying the jet with the stabiliser trim cut-out engaged. Engaging the trim cut-out de-activates MCAS and, for this critical period, the crew would not have been battling directly against MCAS to control the aircraft’s pitch. The inquiry says the captain, at this point, succeeded in increasing the aircraft’s pitch, and the 737 started climbing at 1,800ft/min. He asked for the first officer to “pull with me” and, over the 2min 33s interval, the crew was applying an average of 94lb force to the control column. Pitch varied between 7° nose-up and 2° nose-down, increasing when both pilots pulled and falling when only a single pilot pulled, and this resulted in the vertical speed swinging between a 4,400ft/min climb and a 2,500ft/min descent. Air traffic control approved a request from the crew to climb to 14,000ft in order to troubleshoot their flight-control problems. The aircraft was travelling at excessive speed, some 360-375kt, and the captain made a “speed” call-out, which was acknowledged by the first officer. The captain again sought the first officer’s help to pitch the aircraft nose-up, and then asked him whether the trim was functional. The first officer replied that the trim was not functioning, and asked if he could try to activate it manually, but subsequently stated: “It is not working.” At the time of the first officer’s comment, the aircraft was mis-trimmed and flying at 340kt. Simulations of the flight, with the thrust and trim settings at the time, aimed to evaluate the control column forces required for the climb and to turn the trim wheel. With both simulator pilots pulling they achieved a nose-up pitch of 5-10°. But the inquiry says: “The forces needed from both pilots to achieve this were considered significantly very high and unbearable for the duration held.” The simulations also revealed that, for the trim setting, the pilots could not move the trim wheel manually at speeds above 220kt. Several times the Ethiopian aircraft’s captain remarked “keep with me”, stating that they should continue climbing to 14,000ft. But the crew then decided instead to return to the airport. The inquiry states that, shortly afterwards, manual electric trim-up inputs were recorded, indicating that the stabiliser cut-out had been disengaged – enabling MCAS to continue triggering nose-down stabiliser trim. Investigators have not specifically stated why, having been engaged, the cut-out was subsequently disengaged, and whether this related to the difficulties with pulling the control column or turning the trim wheel. But the inquiry states that, with MCAS again active, the remainder of the flight lasted just 33s as it pushed the aircraft into its final fatal descent.

Source: Cirium