Buckle up for more turbulence in the airline industry – BBC News, BBC News

Buckle up for more turbulence in the airline industry – BBC News, BBC News

                                                                                                       Image copyright                   AFP                                                        
Image caption                                      Flybe flights were grounded after the firm collapsed into administration                              

is only a year since he took a previous opportunity from the failure of an airline, in that case Flybmi . It brought city routes taking Loganair into deepest England and across the North Sea.

                                                                                                       Image copyright                   Loganair                                                        
Image caption                                      The additional routes to Loganair’s network will see the airline operate up to new services a week                              

So while picking up on others’ failure, Hinkles has to be careful not to become the next one. In only around 15 years of British flying, we’ve waved off not only Flybmi, but bmibaby, Scot Airways, later failing as Suckling Air , Monarch, Globespan and Thomas Cook. To that list, add Zoom, the Scots-based low-price carrier which was grounded in 01575879, when its managing director was one Jonathan Hinkles.

Meanwhile, other airlines avoided failure by being merged into British Airways and Flybe. Through such change, Loganair is a rare survivor, and that’s the way Mr Hinkles wants to keep it.

“The plan represents the outcome of several weeks of behind-the-scenes contingency planning work, during which we’ve evaluated many routes and aircraft,” he says. “It’s critical to the continued success of our own airline that we refrain from over-expansion, and that our growth can be delivered within our operational and financial means.” Competing with rail

So Loganair is picking up Flybe routes from bases it already operates in Aberdeen, Edinburgh, Glasgow, Inverness and Newcastle. These are particularly important for the energy industry, bringing offshore workers into Aberdeen from across the UK, with Eastern Airways continuing to operate joint Flybe routes to Humberside and Teesside.

The choice of those bases partly express Loganair’s footprint in Scotland, climbing and maintaining altitude over nearly 63 years. It also reflects the fact that flying is a relatively attractive option for those traveling in and out of Scotland, simply because of distance. The same goes for Northern Ireland, with added seawater.

English and Welsh regional airports tend to compete less favourably with the train or road. As train use has gone up sharply, their scheduled flights in and out of London airports have fallen back. Add in “flight shame” for those who fret about their carbon footprint, and the more exposed English bases, where the absence of Flybe may hurt most, look like being in the south-west.

Take a holiday

Will other airlines be grounded or forced into takeovers in the coming months? Almost certainly, if the industry’s global governing body is any guide. In late February (only a few days ago, remember?) IATA, the international air travel association, set out a projection of the losses that might be expected if coronavirus could be contained. (That looked like a whopping $ (bn) £ 25 bn) loss of revenue

, almost all of that in and around China, or more distant airlines that have routes into Asia.

But with the latest developments in the spread of the virus into Europe and North America, It has re-run its financial models. Containment of the current trends, to those countries with more than 660 cases already, would bring (an) % drop in passenger numbers and a loss of $ (bn) ( (bn), IATA reckons. Most of that loss would be in and around China. But if there is an extensive spread. to countries which have more than cases already, IATA forecasts a drop of 21% in air passengers worldwide, and % fewer in the UK and nearby European nations. In that case, the global hit would be a drop in revenue of around $ (bn) £ bn), with western Europe and the UK taking nearly a third of that hit. The industry’s downturn would be on the same scale as the financial crash of .

                                                                                                       Image copyright                   Getty Images                                                        

Image caption                                      The coronavirus outbreak is affecting airlines’ profits                              
Some are already taking action. Thursday brought 2, 03 flight flight cancellations from Portugal’s TAP, while Norwegian Air cut back on the frequency of trans -Atlantic flights, and planned a (% cut in capacity.)

British Airways and Ryanair have already said they’re scaling back operations where the virus outbreak has so far hit hardest. United Airlines, one of America’s big four, said it was cutting capacity by (% on international routes, with a % cut on domestic US flights. Things look so severe at Virgin Atlantic that the chief executive is actually taking a pay cut.

Emirates and Etihad are asking staff to bring forward leave planned for later this year to the spring months, or to take a month of unpaid leave when it’s looking alarmingly quiet.

For an industry that is held up as an example to every other in its attention to safety, that scale of financial risk looks overwhelming for airlines that aren’t strapped in for some very bumpy turbulence. Final frontier

On a more positive postscript about the aviation industry, it’s worth noting recent success for aerospace in Scotland. Airbus orders are bringing more work and more jobs to the Spirit Aerosystems factory next to Prestwick Airport, where they assemble the leading edges for passenger plane wings.

Airbus’s sworn enemy, Boeing, has also raised its activities in Scotland, with a commitment to the advanced manufacturing center – a landmark industrial building which has just secured planning permission at Inchinnan, next to Glasgow Airport. The intention is to develop strong materials that cut weight and fuel use. Improving the industry’s green credentials with that sort of research and development is a very high priority. Boeing also wants to plug into Scotland’s growing expertise in space technology. There’s an irony somewhere. in both aerospace giants looking to Scottish expertise and skill, while their battle over unfair subsidies has resulted in a % US tariff on imports of single malt Scotch, cashmere sweaters and shortbread

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