“Not All Airlines Will Go Bankrupt”: How Will Coronavirus Travel-Bans Impact Airbus, Suppliers, and Airlines?

All eyes are on China to see how air transport will change in the aftermath of the crisis.

By MC01, a frequent commenter on WOLF STREET:

Airbus CEO Guillaume Fleury and CFO Dominik Adam issued a joint statement on March 23, regarding the European aerospace giant’s plan to power through the Covid-19 crisis. These new provisions include a new €15 billion credit facility, cancelling the proposed €1.80 per share dividend, and “cutting operational costs where possible.”

This gave Airbus €30 billion in liquidity to burn through. While Messrs. Fleury and Adam seem confident Airbus will not need a government bailout, they stressed the rest of the environment will need as much help as possible to get through the crisis.

This “environment” includes dozens of airlines who are now asking Airbus to “defer” deliveries. While Chinese airlines have started accepting new aircraft once again and the Airbus assembly line in Tianjin is already back at full at full capacity, the rest of the world is not in such good shape. Mr. Fleury in particular warned that while “recovery has already started in China” “it’s difficult to assess where the low point will be.”

For the moment Airbus production is unaffected: The main facilities at Toulouse re-opened on Monday, as did all the Spanish operations. The helicopter assembly plants (formerly Eurocopter) near Marseille and Augsburg are both operating at full capacity, and even in the “worst case scenario,” their maintenance facilities will remain operative to ensure emergency services can still operate at full capacity.

This means that Airbus’ galaxy of vendors and contractors has been so far mostly unaffected, but it’s pretty obvious that at some point production will be reduced or even idled as undelivered aircraft fill up all available space.

Key vendors, such as Mecachrome of France, have invested heavily over the past five years to help Airbus increase their production to meet the flood of new orders, chiefly from Asia. For example, starting last Summer, production of the best-selling A320 narrowbody increased to 60 units per month, a tremendous achievement. Production was to be further increased to 63 aircraft in 2021 and 65 in 2023.

One of the bottlenecks is caused by the engines, specifically hard and expensive to manufacture components such as turbine blades and shafts that can ensure the level of performance and reliability airlines require. A single turbine blade used in the first stage of a CFM-56 (a common engine used by many airliners such as the Boeing 737NG) cost the aircraft owner about $8,000, and according to the specific engine model there are between 22 and 44 of them.

While this may sound ridiculously expensive, one needs to remember turbine blades need to operate at prohibitive temperatures (at 35,000 feet, average air temperature is -51°C while combusted gases have temperatures running well north of 1,500°C), with shaft speeds of over 10,000 rpm (here is a discussion of some of the issues of turbine blades), and with maximum reliability.

The facilities, foundries, and equipment to manufacture turbine blades to these exacting standards are expensive. If aircraft production stops, engine production stops as well, and with it the need for components. This means zero cashflow to service the loans with which this plant was funded and cover other expenses.

I suspect this highly alarming prospect is what convinced the French and Spanish governments to greenlight the restart of production at Airbus facilities and at their vendors albeit with many precautions in place, as it should be.

But what about the aircraft already in service? Airlines have grown to dislike the Airbus A380 due to lack of flexibility, high fixed costs, and the difficulties of filling it to capacity. Some of the highest-hour hulls were already being withdrawn from service and scrapped last year after Airbus announced the end of production.

The present crisis will most likely accelerate the A380 demise. Airlines such as Air France never really took to the type, and it’s likely that only a small portion of their A380 fleets will emerge from storage.

For Emirates, by far the largest operator of the A380, it will be more complicated. Already before this crisis, Emirates had started to plan the replacement of their Airbus A380 and Boeing 777-300ER (the older 777-200LR is being phased out) with the Airbus A350-900, Boeing 787-9, and the brand new 777X). Deliveries of the new models are scheduled to start in 2021.

Now all eyes are on China to see how air transport will change in the immediate aftermath of the crisis and beyond.

Freighter aircraft are busier than they have ever been in peacetime. Ironically, the excess capacity that has plagued the air-cargo industry is now coming in very handy. Lufthansa has even started pioneering the use of ordinary passenger aircraft to carry cargo without conversion. All airliners have some cargo capacity in addition to the ordinary luggage hold, but Lufthansa has started to pile light bulky emergency medical supplies on the seats of its airliners as China emerges from the crisis and can afford to ship healthcare supplies abroad (image via Lufthansa):

As Airbus CEO Fleury said, “not all airlines will go bankrupt,” but beyond doubt, many marginal players with little in government backing won’t emerge from this crisis.

The many airlines of Egypt and Turkey in particular are likely to be savaged. These companies completely depend on steady revenues in hard currency (chiefly euro) to stay afloat. With tourism pretty much dead for 2020, and with the large Egyptian and Turkish expat communities either already back home or under lockdown in Europe, there isn’t a whole lot left for them to do.

Egypt and especially Turkey cannot afford a general bailout of their aviation sector. While the existence of their two flag carriers is unlikely at risk, only a fraction of the other airlines may survive. They took on too much debt to fuel their explosive growth, and as most of this debt was incurred in foreign currency, local central banks will only be able to do so much to help.

This scene will likely repeat itself in many other countries, even those that are hopefully the least affected by the pandemic.

But the Civil Aviation Authority of China (CAAC) has already been tasked by the government in February, at the height of the healthcare emergency, to come up with a massive reorganization and support plan for the industry. This plan will likely include a wave of forced mergers and acquisitions at “pennies to the dollar” valuations.

Hong Kong Airlines, already in serious financial difficulties following the collapse of HNA Group, was originally set to receive a bailout worth RMB 2 billion (about $290 million) through state-owned conglomerate Citic and a group of HK magnates. But the deal was scuttled for reasons unknown. Now quasi-bankruptcy administrators, the “HNA Group Risk Management Committee,” seem to favor handing Hong Kong Airlines over to state-owned carrier Air China for what will most likely be a symbolic sum.

As air traffic in China is cautiously but steadily picking up by the week, the CAAC restructuring and support plan will make itself felt. And what are our Western governments doing apart from throwing money around like confetti? By MC01, a frequent commenter, for WOLF STREET

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  130 comments for ““Not All Airlines Will Go Bankrupt”: How Will Coronavirus Travel-Bans Impact Airbus, Suppliers, and Airlines?

  1. Realist says:

    It will be interesting to see at what level typical airline tickets will end up after the dust has settled. Air travel had for a long time been incredible cheap but when a lot of companies will disappear from the market, that will have effects.

    • former says:

      Yes, prices will ‘reset’ unfortunately

      • Mark says:

        “Yes, prices will ‘reset’ unfortunately”

        Just wait till 2 trillion more counterfeit digital dollars are disgorged by
        The Fed to save the rich.

        “Reset” will be the least of our “little-people” hyperinflation worries.

        • patrick helmick says:

          the airline industry “reset” is interesting – BUT- I want to see if there is a real estate reset in china – that could be very interesting indeed

        • MC01 says:

          Patrick, right now there’s no “real estate reset” in China, possibly because the lockdown was over relatively quick. Construction workers are going back to work in pretty much all Chinese cities. As much as I hate real estate speculation it’s almost conforting.

          But the big test for the Chinese real estate market will come in a few months, as the effects of the lockdown in Europe and the US start to be felt. China is already well positioned to fill the void in supply chains worldwide: there will be many more multi-millionaires. The facemasks and hazmat suits are just the beginning.
          But it’s likely those new multimillionaires won’t be able to travel to Vancouver, Sydney or the Orange County to buy real estate for months. They may not even be able to travel to Hong Kong and Macau for a while.
          So where are they going to park their cash?

        • char says:

          Worse, those new millionaires my not want to park their money in Toronto or Sydney. For a economy that is good you need effective government. Some states are showing that they do’nt have an effective government

      • Joe Saba says:

        the 1% reset has begun
        and congress has already given green light to provide liquidity to big corporations to pickup whatever viable pieces left

    • Say It Aitn So says:

      Cheap as compared to what? Round trip ticket from Florida to Denver is $800??

      • DawnsEarlyLight says:

        Are flying first class? Regular seats during normal hours on Southwest round trip direct are $258, and that includes luggage and taxes.

    • 2banana says:

      Many and various independent news sources reporting Chinese factories open and ready for full production. The rest of the world is closed however.

      So what is the time difference for the virus to run its course? About two months between the height of the virus in China to the rest of the world (Europe and America especially)?

      So, about 5/6 weeks to go in the states?

      • worldblee says:

        With that figure you’re assuming the same effectiveness and efficiency in the US as evidenced in China. Given what we’ve seen to date, I wouldn’t want to stand by the assumption.

      • sunny129 says:

        ‘Many and various independent news sources reporting Chinese factories open and ready for full production’

        Please provide links to those independent resources. for many it is still fake news b/c China kicked out most foreign reporters. Besides the fake the utility of electric capacity ( for foreigners gauging that!) was made by running the factories with NO production and no employees!

        • Thomas Roberts says:

          This definitely was happening and still is to some extent. I’m guessing most factories are mostly running now, but, there will be a second outbreak and the response to that is hard to predict.

          Because, South Korea was successful in lowering infection rates “the CCP probably thinks it can imitate South Korea’s success of having a lockdown with open factories” and China had to restart factories to save their economy, they declared it solved and possibly even think they can prevent a second outbreak. But, we’ll have to see what happens.

      • A says:

        The USA and Europe are less functional than China. Unlike China, there’s a realistic possibility most major cities in the west could become Wuhans. Also unlike China, democracies can’t just order the billionaire capitalists to hire workers again.

        The damage in the west could be much more severe and the recession much longer and deeper as the rich horde the wealth and choose to only cautiously hire middle class workers a little at a time.

        • Thomas Roberts says:

          That second outbreak in China is coming. We also can’t forget the entire situation is the CCP’s fault. China hoarded most of worlds supplies and was in a better position, because, of it. The western world isn’t going to forget this. After the CCP Coronavirus is done, alot of factories are leaving China forever. The West’s pacifist approach to China will be less kind and forgiving to the CCP’s crimes

        • Thomas Roberts says:

          When the world was just learning of the CCP Coronavirus outbreak, major Chinese company’s went around the world to buy up remaining supplies of masks and many other things, from western countries, leaving them with little to nothing to fight the coronavirus with. These are just 2 known examples so far. Stuff like this will continue to surface and not be forgotten.

          https://www.smh.com.au/national/chinese-backed-company-s-mission-to-source-australian-medical-supplies-20200325-p54du8.html

          https://www.smh.com.au/national/second-developer-flies-82-tonnes-of-medical-supplies-to-china-20200326-p54e8n.html

        • EchoDelta says:

          We’ve done it before. Why not now?

          -WWI the US took over failing railroads and standardized their operations and equipment designs, cutting costs and making many profitable until 1929.
          -WWII-War Production Board took over every factory in the country and allocated materials, labor and production to support the war effort.
          -Korea and Vietnam to a much lesser extent, but by that time it was unnecessary as a permanent war industry was in place after WWII.

          Under Nixon it hit the fan. In order to finance the Vietnam debacle he decoupled the currency at Bretton Woods II. Lots of people here seem agitated about the fallout from that.

          War production continues despite the lack of need for many products-Abrams tanks, for example. Military Keynesianism is the one thing both parties have agreed on including Bernie Sanders.

        • char says:

          In what why did China hoard stuff? Ordering ventilation machines 2 weeks ago instead of 2 months ago does indicate incompetence on my government, not China.

      • char says:

        No, China did a hard lock down. US does the bare minimum. So more like 5/6 months in the US with many more death.

  2. Aussie says:

    It is clear from all the info that the Chinese
    Will be the winner.
    That makes you wonder why the chinese Pm Xi waited till the 23.1. to make the decision to close Hubai. That was 1 week after the beginning of the chinese holiday ( new year)
    and millions of Chinese travelled to all countries in the world. Xi knew about the virus since end of december. The WHO knew about it as well. But informations was blocked for the rest of the world. If the Hubai were under quaranteen one week earlier, where would the rest of the world now? The infections would be minimal and only the chinese economy damaged. Now it is the chinese already restarting their factories and sending us medical supplies for higher prices. The western world and all our politician have been blind.
    Why cannot young unemployed greek, italien or spanish produce facemask? They might cost then 10 % more than the chinese once, but Greeks young people would have a job.
    Wake up and take the manufactoring back to our countries.

    • Synergy says:

      I am not sure they will be any winners in this pandemic. China still relies on Europe, North and South America to buy their stuff. If the buying stops what happens to them? They need the funds from exterior of the country to help their own populace grow economically. If the outside is not buying their stuff how long can CCP keep up the farce?

      • MC01 says:

        China is preheminently well placed to fill the gaps in supply chains worldwide, and Korea isn’t too far behind. Both are industrial powerhouses and both are very export-oriented.

        The two models adopted are very different: China planned for the restart weeks in advance while Korea never really shut down. But both models seem to work right now: always remember plans don’t need to be perfect. They only need to be better than your rivals’.
        And what is the West planning to do in the future? Nothing. Literally.
        Our politicians seem dead-set on keeping us cooped up for all eternity, more to save face than lives.
        Let’s see who can sell us the stuff to avoid reverting to the Mesolithic (if we are lucky) after six or seven months of full lockdown.

        • char says:

          If you do it right a lock down will be over in 6 weeks, 8 weeks if you are aa bit slack and 7 months if you are incompetent.

      • Jon says:

        Hi you wrote a piece a while back on aircraft leasing in 2018 how come this hasn’t blown up now?

    • sunny129 says:

      But as Bloomberg notes, there is a serious problem developing, one where the virus crisis is locking down the Western Hemisphere, has resulted in firms from Europe and the US to cancel their Chinese orders en masse, triggering the second shockwave that is starting to decimate China’s industrial base.

      A manager from Shandong Pangu Industrial Co. told Bloomberg that 60% of their orders go to Europe. In recent weeks, manager Grace Gao warned that European clients are requesting orders to be delayed or canceled because of the virus crisis unfolding across the continent.

      https://www.bloomberg.com/news/articles/2020-03-26/the-second-virus-shockwave-is-hitting-china-s-factories-already

    • char says:

      Same is true of America, if New York had closed down 3 weeks ago or New Orleans had canceled this would not have happend. At least China could claim that they did not know the results of inaction

  3. Paulo says:

    My own opinion about future tourism revenue is pretty pessimistic. In our mass consumption world the race to show social attainment flipped from buying ‘stuff’ to buying experiences over the last 20 years. I’m 64 (and getting up there myself), but the vision some of my friends paint in their descriptions of overwhelming crowds in the Canaries, “Full of fat Brits who start drinking at 10:00am”, or the danger of small river cruises with a couple who ‘gloms on’ they cannot escape, or the urging of my friends, “You should go with us next time, the bus tour of the temples were unbelieveable”, knocks me back with a giant WTF is happening with these people? That they would have the excess money and time to climb back on aircraft when this is all over, is doubtful.

    Where I live we get visitors from Germany; not many, but they bought rvs and boats to fish from and trucks to haul and launch, and there they sit unused, deteriorating 9 months of the year, needing maintenance when they are used. These are all older Germans, much older than me. They won’t be back this summer and I doubt they will ever return? I know every one of them because they visit my neighbours.

    Why does a European need to fly halfway across the World, stay in an expensive fly-in lodge to ride a bus and sit up in a ‘platform hide’, all to watch a grizzly bear feeding on salmon in an artificial spawning channel? They could see this on their computer in the time it takes to find their shaving trip and start packing. It just isn’t that much fun, let alone worth the thousands of Euros is takes to do it.

    I do know this, North Americans with excess cash (well appointed retirees) are an endangered species. Plus, will traveling to 3rd World countries that house pyramids, temples, quaint markets and offer white beaches ever be safe again? Hemmingway’s Africa disappeared over 50 years ago, or as an old co-worker of mine said after a work stint in Nigeria said, “Too many black guys with machine guns”. And they probably said, “Too many white guys here doing jobs we should have”.

    ‘You Know Who’ calls it the Chinese Virus. You think they want to see American tourists anytime soon, or vice versa? Nah, more people will just stay home and forego the expense, inconvenience, and insane security violations air travel requires.

    • Paulo says:

      Meant to say…”Shaving Kit”, not shaving trip. Need more coffee.

      • VintageVNvet says:

        Paulo, IMO, you don’t need more coffee, at your age, 11 years younger than I am, you need to relax! Try green tea instead, but be sure to ”taper off” the coffee so you don’t get the equivalent of DTs, LOL…
        Seriously, as a young man, I was able to visit Asia courtesy of Uncle Sam’s tin can Navy, and loved the experience of HK, Taiwan, Japan, and even Subic Bay near Manila; all the people I met there were very hospitable and even though some nuisances in HK, with kids following every step, dining at The Peninsula Hotel was a unique and wonderful experience!
        Later, after college, my very thrifty grandma died and left me money with specific instructions to travel: Hitchhiking through England, Wales, Ireland, and Scotland, the people were great, taking me home to share meals and even putting me up for the night sometimes, though I was set up to camp and did so most of the time, right beside the road with never any trouble, etc…
        If I could go back and do it again, I certainly would as soon as this virus is under control, which it will be sooner or later…Be of good cheer Paulo,,, this too will end.
        BTW, similar to you, my wife and I set up a ”farmstead” on 56 acres, mostly native hardwood, about 6 acres fenced to keep deer out of pasture and gardens, and it was wonderful until her parents needed help, and I got too long in the tooth to mow pastures and weed eat a mile or so of fences. So I suggest you make sure your ‘young’uns’ are ready to come in and help, or start preparing your end game as you approach your 70s.

        • Paulo says:

          You’re right, Vintage.

          I know I sound like a cranky twit about 1/2 the time on WS and try and temper it, although usually I keep everyone in stitches around the house.

          This is what I have been doing to relax. Slowing down. Now, when I take my dog for a walk I let the dog sniffing every branch and taking every whiz dictate our speed. Yesterday I had to repair throttle linkage on a small tractor. I really enjoyed it, stripping everything down, the fixes, and now today will take 1-2 hours prepping it up. First job for it is for my 90 year old neighbour’s garden. Stuff like that. Ordered in 8 yards of a 60:40 top soil/fish compost mix to rejuvenate our garden and greenhouse. Will haul it with wheelbarrows.

          We are trying to enjoy each day and all those little chores. I’ve even got some pot plants growing in the living room with some of our other seedlings. I plan to see if I can develop a nice evening tea recipe. :-) The last time I grew the stuff was 50 years ago.

          Life is changing, though. Maybe all of us will compare notes in 6 months… at 1 year…and after vaccination.

      • DawnsEarlyLight says:

        mmmmm…coffee!

    • Mike G says:

      I feel like the mass-tourist experience was already deteriorating in Europe through overcrowding, at least in the famous places where first-time visitors all want to go.
      You may see some short-term rebound effect when isolation is over as people cooped up for months all want to stretch their wings. But there will be some real damage to incomes, consumer confidence and fear of infection exposure which may push tourism down in the longer term.

      • Thomas Roberts says:

        I mostly agree, but infection risk will go away after vaccine. As for future viruses, I don’t think the worry of that will effect future travel unless/until it actually happens.

        As for overcrowding, that will be a problem, it’s possible tourist cities likes las Vegas or Orlando could happen in Europe, but very iffy.

        As for the money part, that will resolve over time “hopefully, will vary by country”, very simply everything needed to have a well off economy well into the future exists in America and Europe, the problem is terrible government polices caused by corruption.

        • char says:

          What is the difference between a tourist cities like Benidorm and Las Vegas or Orlando except fat Brits who start to drink at 9:00am

        • Thomas Roberts says:

          Cities like Las Vegas are built around large tourism and are far more capable of handling it. There are streets in Las Vegas with 7 lanes for vehicle traffic each way “14 total lanes wide” maybe some even bigger by now. Because these cities are built around large new attractions, they can have large crowds in mind. Also, because, the city is built around tourism, there aren’t locals who resist anything being put in, unlike large parts of America, things can be approved and built fast in Las Vegas. The city can also be easily expanded in future if need be, far easier.

          I am aware of smaller tourist focused cities in Europe, but they are usually designed around being much smaller.

          In Europe I think there’s a cultural hesitation to allow large big company dominated tourist cities. In America it hasn’t been a problem “large tourist cities” as long as the cities aren’t intended for large groups of people to live in “mainly those serving tourism live there”. “These cities should be Strictly tourism cities” if cities that are big company dominated started building factories or other things that could lead to problems.

          If Europe allowed some cities like this, it could take alot of the tourist burden off a lot of their big and historical cities.

        • char says:

          The claim is that only Paris has more hotel rooms than Benidorm in Europe. It is not exactly small and its only industry is tourism. I understand you as an American don’t know the town with its sun and dumb holiday fun image. There are enough place in the US to that without flying over the Atlantic but in Europe it is famous

    • Outside lookn In says:

      All your points are excellent. I agree 100%, the problem is most people didn’t travel, they didn’t see the world. They deferred the experience for later.

      I too from my 20’s to my 40’s traveled the world 50%, and made money the other 50%. Thus now in my early 60’s I don’t need to travel, but I have done it. Now I live in South China (Yunan) in a remote village 4 days to town, have a wife 1/2 my age who has a masters-degree. Spend my daylight hours farming, almost every meal, is 100% stuff that I smoked, or grew.

      I agree with you on the reality of ‘China’ wrt to “Chinese Virus”, but so long as you stay off the beaten path, who cares, there’s no other ‘white-guy’ near me for a day in any direction. Nobody cares. Recently lots of Beijing rich tried to come down to Yunan to weather the lock-down up north, and they were treated terrible by the regional native hill-tribe people that inhabit these mountains&river-valleys (Shangri-La). Thus the reality so long as you stay faraway from the ‘tourist areas’, then you’ll never meet an ‘ugly person’, note both the locals & tourists who hang out in ‘tourist areas’ are there only for the money and/or non-comittal entertainment. Not the best people who want to meet. Even at the ‘Temples’ your not going to hang with the real enlightened your guide speaks english, and all the people you meet have something to sell. #1 rule when living abroad is “Run like hell if the native speaks english”.

      Regarding ‘airlines’ I always make a point of taking the bus or train in ASIA, why fly?? If I return to the Western World sure i would fly, but if there were regular sailings on the Titanic I would jump on that, I hate the ‘Booze Cruise-Buffet” would never do that, but living on the ocean as crew, or just paying for a cabin, and eating with the crew is a pleasant way to travel.

      Airlines have become sardine can’s, flight-attendants have become reform school police, the TSA gauntlet alone makes flying un-attractive. The fact you can’t carry large amounts of Gold or Cash, makes flying very nasty.

      What’s the hurry folks?

  4. Happy1 says:

    Today’s circumstances remind me of a slow motion 9/11 times about 100. There will eventually be travel again but it may be 18-24 months. Airlines will go bankrupt but new ones will spring up to take their place. It will probably be 2 years before things are like they were before.

    • MC01 says:

      Airlines in China are going back in business faster than anybody expected: all domestic flights should be greenlighted next week albeit it will take some time to get aircraft out of storage and the large number of foreign pilots now stuck abroad won’t be able to get back to work any time soon.
      Throughout Asia things will probably be the same.

      But Europe… that’s what I worry about. Not only we have no support plans for the aviation industry but the mentality is at the top is “it’s all over”, meaning there’s no “new normal” plan, period.
      I try to keep a positive attitude but there’s nothing to be positive about right now… I think I’ll apply for political asylum in China at this rate.

  5. Endeavor says:

    Sixty four thousand dollar question is at what level will consumer spending reboot. Who wants to consume but can’t, who can but dials down and everyone in between. Those with high time preference still have have huge numbers but will they have the means? May take a UBI. Recall reading one time some advocate crunched the numbers and said a 20K yearly income for all would cost less than half current social program cost as most cost goes to the structure set up to administer it. I think the decadence level would be horrifying though.

    • Unamused says:

      Recall reading one time some advocate crunched the numbers and said a 20K yearly income for all would cost less than half current social program cost as most cost goes to the structure set up to administer it.

      A progressive/regressive take if there ever was one.

      I seriously doubt anyone has proposed a 20k yearly income for the US, unless it was just another corporatist attempt at exaggeration to discredit the idea, insofar as that’s higher than the US minimum wage and therefore politically impossible in any case. The claim that ‘most cost goes to the structure set up to administer it’ is sheer propanganda.

      Perhaps your recollection is in error. Check on it and get back to me.

      I think the decadence level would be horrifying though.

      Translation: “They’ll just waste it on alcohol and drugs and then we’ll never get any profit out of them.”

      • Zantetsu says:

        Unamused, I know contrarian positions and snide remarks are your specialty, but I think you’re being very unfair to Endeavor here.

        “I think the decadence level would be horrifying though” is a thoughtful position that deserves more honesty in interepreting it than you have shown.

        • David Calder says:

          “I think the decadence level would be horrifying though” is a thoughtful position that deserves more honesty in interepreting it than you have shown..

          Not for me to speak for Unamused by here goes. Unearned money would make the recipients behave like those who live off their inherited holdings, wasting it on drugs and alcohol.

        • Unamused says:

          “I think the decadence level would be horrifying though” is a thoughtful position that deserves more honesty in interepreting it than you have shown.

          A ‘decadent’ lifestyle costs more than $20k just about anywhere in the US, Zantetsu, which is why it’s reserved for the wealthy. Most of the Americans I know would be insulted at the suggestion that they would settle for a ‘decadent’ lifestyle and your notion of ‘thoughtful’.

        • Zantetsu says:

          I think it’s more about how people would live with a guaranteed $20K income and no need to be productive.

          There are two aspects to the word ‘decadence’: one is luxury, the other is excessive indulgence in pleasure. I believe we’re talking about the latter here, not the former.

          I think that being productive, working, having responsibilities, etc, all contribute to maintaining a healthy frame of mind and a healthy lifestyle. Taking away the need to work or be productive would I think lead to slovenliness, idleness, and pleasure seeking. Which is I think what Endeavor was talking about. Endeavor’s statement had nothing to do with whether or not profit could be taken from these people. It’s about whether or not a guaranteed income would lead to the moral fabric we want to be surrounded by.

        • Zantetsu says:

          David Calder, I share your sentiment and it’s kind of the opposite of what Unamused was saying. Using the moniker “translation” followed by quoted text implies that he thinks the original author was disingenuously advancing a position and that he was exposing the truth of what Endeavor really meant. I’m just saying that what Endeavor said a) deserves more consideration than that, and b) was not coming from the perspective of someone hoping to milk the public for money like “we’ll never get any profit out of them” suggests was Endeavor’s concern.

        • Unamused says:

          David Calder is speaking for me today, Zantetsu. If you want a turn you’ll have to submit an application.

          If I had any money I certainly wouldn’t waste it on drugs and alcohol. I would spend it very carefully on a still and a grow room.

        • WES says:

          Unamused:

          I like how you end up in the same place but on a sustainable basis!

        • Unamused says:

          Thanks pardner. This ain’t my first rodeo. Could be my last, though. The corrals are crumbling something terrible.

      • char says:

        Being higher than minimum wage does not make it political impossible. The get money for nothing that makes it political impossible. 20k is if you include all the make work programs and how much of the military budget you include in that. Which all depends on who makes the calculations

    • Petunia says:

      With all the jobs disappearing and markets of all kinds crashing, I doubt there will be any consumer spending reboot anytime soon. Right now we can’t find toilet paper or rubbing alcohol.

  6. R Hughes says:

    A technical question? All these parked aircraft in Victorville, Majove in CA and Arizona, etc., in the desert. If they sit for weeks months what maintenance, restoration , ect., is required to get them back into service. Who certifies their air worthiness given the FFA / 737 debacle. Other questions along these lines. Anyone able to comment?

    • Unamused says:

      Those are aviation boneyards. Given the expanding supply glut, the need for makers to sell new planes, and the cost of restoring old planes, you can reasonably expect that very few of them will ever fly again, and very probably none. The same goes for the new 737 Max planes heading for the deserts.

    • MC01 says:

      Victorville is home to the former George AFB which after being decomissioned in the aftermath of the First Gulf War was turned into the “Southern California Logistics Airport” (SCLA) a hub for a myriad of aviation-related activities.
      Among these activities are long-term storage and decommissioning. The latter is self-explanatory, the former is a combination of storage technologies (such as sealing all places where insects can enter) and periodic checks to ensure the aircraft may be pulled out of storage one day and still brought to operational conditions.

      Right now no airline has put their aircraft in long term storage. To give an example American Airlines presently has over 500 jetliners grounded in Tulsa, and smaller numbers in Tulsa, Mobile and Pittsburgh.
      These aircraft are in short-term storage, meaning they can be recomissioned quickly: over the next few days local residents will probably see many of these aircraft take off and land 30 minutes or so later: that’s part of the procedures to keep a stored hull airworthy.
      Ryanair is aggressively doing this throughout Europe.

      Short-term storage allows not only to be back in service quickly, but also to save money… this of course implies a measure of optimism that the world will follow into China’s path and about at the same speed.

    • Nodak65 says:

      Each airline has a maintenance plan that is approved by the FAA, in this plan they have short and long term preservation plans that they do, this includes the storage and return to service.

  7. Cobalt Programmer says:

    One option to consider is, all nations must force China to give a bailout for the airlines because they started this. I see three problems in the future

    1. Baby boom of the 20’s. As many couples are locked inside, ten months from now, hospitals need extra beds for the delivery. May be troops need to be mobilized. If you want to invest, choose baby products.

    2. Divorce boom and single moms. Corollary to the previous theory, most men and women realize how awful a family is and needs a way out. Lot of men lost their jobs and hence we will see a lot of divorces in these coming months. Only if divorce industry issues bonds, they would make a killing literally.

    3. Investment banks have to deal with customers withdraw cash in massive amounts, questioning why their portfolio went down. The only silver lining is guys like me looking for good investment opportunity to jump back in with their paltry sum of 30K. Don’t laugh I have to save this money after a lot of struggles.

    • Rcohn says:

      Many older people will radically reduce non discretionary spending because of losses on their portfolio and because bond returns have collapsed.
      And the easiest item to eliminate is travel.

      • Anthony A. says:

        This is very true. That’s the easiest to cut out and we are doing just that (70+ year old seniors here).

        • DawnsEarlyLight says:

          Road travel may once again become a favorite pastime!

        • Mike G says:

          RVs may become more popular for road trips. More self-sufficient, your own accommodation and meals, minimize contact with potentially-germy other people. Wishing I owned one at the moment.

      • Lisa_Hooker says:

        Also easy to eliminate: vehicle purchase, different home, new appliances. Live with what you already have for a while.

    • MC01 says:

      LOL. My brother predicted exactly the same as #2 yesterday evening.
      He also predicted that if lockdowns aren’t lifted shortly, at least in part, we are going to see a surge in people chopping each other to bits.

      • Cobalt Programmer says:

        Yup, Devil works on the idle single mind. Even hardened prisoners fear lock downs and worst solitary confinement. Humans are social animals and interactions with others is a basic need. We are not consciously aware because its available. No amount of online and telephone conversations can fulfill that. HE also mentioned, people might die of suicide rather than economy or coronovirus. Exercise, reading and spirituality can help. Stay strong everyone.

        • Lisa_Hooker says:

          BS. The Devil works on the collective mind. Living solo here. I go down the driveway for mail once or twice a week. Try to start the cars at least every two weeks to keep them alive. Every 3-4 weeks I go shopping and encounter people – mostly cashiers. Every few days telephone friends all over the world. I have so many things I want to do with what I have right here, without leaving home, that I don’t have enough time left. The Internet makes life more interesting, but without it I have more than enough to stay busy. I have a theory that folks that strongly insist people are social animals are folks that don’t really like themselves. But it’s only a theory. Keep yourself occupied with productive thought.

      • Mike G says:

        Also a rise in underground personal services businesses. Hairdressing is a larger concern for some people than it is for me, and they aren’t going to go without for months as this drags on and storefront hairdressers remain ordered closed.

  8. Willem says:

    ‘As Airbus CEO Fleury said, “not all airlines will go bankrupt,” but beyond doubt, many marginal players with little in government backing won’t emerge from this crisis.’

    I think this will apply across many sectors.

    @MC01, that really was so thought provoking it got me to comment.Thank you

    • Mike G says:

      Airbus had a big backlog of A320 orders before all this and was fretting that it couldn’t expand fast enough to meet demand as the 737 MAX foundered. This might spell the real end of the MAX as production slots for the A320 open up and airlines grab the chance to switch over.

  9. Unamused says:

    One option to consider is, all nations must force China to give a bailout for the airlines because they started this.

    You should use ‘/s’ to indicate sarcasm so people won’t think you’re being serious.

    Only if divorce industry issues bonds, they would make a killing literally.

    I seriously doubt the divorce industry has ever conspired to kill anybody or has any intention of ever doing so. Look up ‘literally’ while you think about that.

  10. kam says:

    There is a far bigger question than airlines and China.
    What about China?
    Every year we get some kind of flu out of China.
    Shall we continue to import disease from a country that is controlled by a Dictatorship, and in whose interest it is to weaken us? How many times can we conjur $6 Trillion to repair the economy?
    China incubates disease, wittingly or not, then people enter a long flying tube that recycles air so that each and every passenger breathes each others breath.
    2020 is not 1920, with the one exception that Imperial Japan has been replaced with Imperial China.

    • Gandalf says:

      MERS, another corona virus, came out of the Middle East (M.E.R.S., got it?). It spread to Asia and other places, we were lucky not to get it here.

      HIV, easily the most deadly world pandemic since the Spanish flu, killing 32 million worldwide and still killing 16,000 Americans a year (although most Americans under the age of 40 seem to think it’s been “cured”) came Out Of Africa, originating as a simian (monkey) virus.

      Spanish flu’s origins are still debated, but a strong line of evidence suggests it originated at an Army base in Kansas and was carried to Europe by arriving US troops

      Ebola also originated in Africa. It kills too quickly with zero asymptomatic carriers, otherwise it would have spread much farther.

      The swine flu of the 1970s likely originated in Mexico and quickly spread into the US and from there around the world. The US is often blamed as its source

      Viruses can jump from animal reservoirs anywhere, anytime

      A bone disease – Paget’s disease – which we used to COMMONLY see on bone x-rays in Radiology back in the 1980s and 1990s was found to be caused by the distemper virus of DOGS. That’s right – your PET DOG could give you its distemper virus and Paget’s disease of the bone. Widespread dog vaccinations against distemper has pretty much made Paget’s disease very rare today.

      Oh, and there was this cat virus that could give you leukemia…..

      Ya know, when you point that finger at somebody, three fingers are pointing back at you

    • Gandalf says:

      Ah, I forgot the BIGGEST and WORST violators of al – US pork, beef, and chicken producers, putting ANTIBIOTICS into animal feed, and helping create and promote antibiotic resistant strains of ordinary bacteria we thought we had conquered ages ago.

      Imagine a world without functional antibiotics

      • Unamused says:

        The common cold was a result of the domestication of horses. La Crosse encephalitis comes from chipmunks and tree squirrels, so people should definitely make sure they’re cooked properly. Cat-scratch fever comes from Ted Nugent.

        Heart disease is God’s revenge for eating his animal friends.

      • Lisa_Hooker says:

        Thanks for the thought, Gandalf. But we no longer have to imagine that world as it is here now. No pharmaceutical company wants to develop a drug that few people need, and then only every few years. More profitable to sell expensive immune system supressors, especially if they require long term maintenance. NIH might fix this but they need more funding (as much as I dislike government funded efforts).

    • Implicit says:

      The 500 lb gorilla in the room- Was it manmade in any way?

      • 91B20 1stCav (AUS) says:

        Implicit-our hubris in discounting the fact that bacteria and viruses never sleep, and are always searching for new environments to propagate in is amazing in the face of our history.

        No species should ever count on remaining at a food chain’s top, especially if it neglects observation and maintenance of the environment that brought and keeps it in the dance.

        May we all find a better day.

        • Tom Pfotzer says:

          91B20: Well done, man.

          Don’t let nothin’ stop you from pointing that out.

          Just bounced a climate-change denier from the premises. I am no longer willing to tolerate this sort of stupid.

      • TXRancher says:

        In all of vast China and 1 billion people what is the probability that the virus would start in Wuhan where coincidentally there was a bio-warfare laboratory that was studying Corona viruses? And according to some accounts the Covid 19 is not a naturally occurring virus but a combination of two viruses. Perhaps cultured viruses? Gorilla indeed.

        • char says:

          It is an unbelievable crappy war fighting virus. People below 30 hardly get sick. And it is claimed for every new virus disease.

        • Lisa_Hooker says:

          Go to Wikipedia. Read the article on “antigenic shift”. Try to understand.

      • MC01 says:

        Manmade, no.
        But if someone hadn’t eaten bat soup we wouldn’t be in this predictament: kinda like HIV is suspected to have jumped from apes to humans due to the bush meat trade, Covid-19 most likely came from people eating stuff they shouldn’t have eaten.
        There’s a very good reason Chinese authorities had the Wuhan Seafood Market bulldozed overnight and the rubble disposed of in a classified location.

        Since China is out of the woods I’d like to say I hope they have learned their lesson, but given they unleashed SARS in exactly the same fashion I am not holding my breath, pun intended.

    • Lisa_Hooker says:

      Curious how you determined the virus is Chinese. No epicanthic fold? Didn’t know the virus had eyelids. /s

    • sierra7 says:

      Kam:
      “….Imperial Japan has been replaced with Imperial China.”
      Really?
      Don’t recollect what country China has recently invaded physically with “imperial” tendencies or motives.
      I do remember Japan invading Manchuria circa the 1930’s with definite “imperial” motives.
      (Nobody asked anybody else to move so much of their essential production facilities to China; “imperial” business decided that)

  11. Bette says:

    Amazing how the metrics work on the internet. Just now I noticed an ad for buying airplanes on the side panel. Never saw that ad before. As a pilot I notice anything to do with aviation. I’m thinking its because of the headline and contents that were in this article.

    • Wolf Richter says:

      Yes, that’s in part of how it works. But there are a lot of other factors, such as your personal browsing history that is stored in your browser and at data centers. Plus, what advertisers know about you personally, etc. It’s all AI driven.

      • Paulo says:

        You mean we all see different adds on WS? I get it with Google etc, but on 3rd party sites?

        I used to get water well pump pop ups all the time. What does this say about those divorce adds and p***s extenders? (not me not me, just wondering?)

      • DawnsEarlyLight says:

        I keep getting ‘pregnancy lingerie’ and ‘toenail fungus’ adds. What am I doing wrong?

      • Jon says:

        Hi Wolf you wrote an excellent article 18 montgs ago? Re Airline Finance and how perilous it was, especially I believe India Any chance you can revisit that as I presume it must be blowing up behind the scenes niw?

    • Mike G says:

      Just in case you wanted to impulse-buy a 777

    • Lisa_Hooker says:

      Internet advertising intermediaries sell IP addresses. The business model says that these are culled from database searches of folks’ internet use profiles. They are paid by the number of IP addresses they provide. If revenues are low why not just throw in a few thousand extra addresses only remotely associated. Advertisers do not verify every address they buy. Caveat emptor.

  12. MCH says:

    It really all comes down to availability of disposable income or the ability to finance such. The latter is going to become increasingly more difficult as time goes on. The former is going to come back given time.

    I think with the everything bubble deflating, the use of leisure air will likely slow tremendously since a lot of people won’t be able to afford this any more. This will collapse the weaker airlines, I figure the strongest ones like Ryan and Southwest will survive. If pattern holds, the legacies are going to further remake their cabin to segregate the economy class from the business class. I think on many wide bodies, business and first takes up almost a 30 to 40 percent of the space already. I figure that will grow to 50 to 60 percent before the end of this decade. While cattle class will have further shrinkage and application of ancillary revenue attached. The same will be true for the narrow bodies as business class expands further.

    Either that or airlines start flights exclusively for business and economy classes, a revival of Ted and United for example, where the former is all economy to include long haul and transcontinental, and the latter becomes the high end brand and even a bifurcation of their frequent flier programs.

  13. Beardawg says:

    Nice recap MC01. This is a focus on airline manufacturers and the financial impacts of reduced travel / transport. It will have capillaries (as you mention) to so many other industries & services. The follow up research / observations as to the bailouts / mergers, then supplemental aid (or allowance to fail) for those capillary businesses will be just as fascinating.

    Feels like this industry and the world economy fell off the cliff, but the canyon is deep and there’s only been a couple bounces off some protruding ledges so far…..much further to go before landing in the flowing river….and then to be able to swim with broken limbs.

    Sorry for the analogy, it just kinda “flowed” out (Hee hee).

  14. MC01 says:

    The number of airlines that will go bankrupt depends on two factors.

    First, how long before traffic returns to normal. I didn’t put it in the article to avoid creating needless arguing but domestic air traffic in China is going up, and faster than anybody expected. Personally I doubt we’ll be so lucky but I would be delighted to be proven wrong.

    Second, how much support airlines will get from governments. Again this is closely tied to how long before things will go back to a semblance of normality. It’s one thing to support airlines for three months and quite another for nine.

    • VintageVNvet says:

      Maybe part of first factor is IF this virus does follow the “Kansas” flu of 1918 through and including 1920, with the later mutations of that one apparently much more deadly? And as part of that being likely or possible, IF we are able to come up with a sorta/kinda ”walk through” testing protocol/facility to add to the current screening for air travel; as others have said, many folks are going to be very shy about getting on an airplane, or for that matter any other mode of transportation forcing close contact.
      IMO, this is the end of the former normal,,, and not even close to the beginning of the next new normal.
      Thanks for your work on this site MCO1, really appreciate the expertise.

    • Implicit says:

      The airlines really pushed thier voucher choice before they canceled flights. My guess over 70% took some kind of voucher or reschedule rather than the cancel option that is/was introduced much later, closer to the original flight departure dates.

    • Gandalf says:

      MC01,
      I think you are jumping too quickly to the conclusion that China has truly got COVID-19 under control

      That cannot possibly be the case as they have openly admitted that they are not counting asymptomatic infections

      S Korea, much more transparent, and having done the best job of any country at controlling the pandemic, is still reporting new cases

      • MC01 says:

        There will be isolated cases and localized outbreaks for months if not years to come, nobody argues with that. It may even become endemic in some areas, like bacterial meningitis is in my area. You learn to live with it.
        But that’s a completely different thing from having whole countries under lockdown.

    • char says:

      Local, so in China or in EU traffic will probably be fast back to normal but i doubt that is true for long distance

      • MC01 says:

        The EU will split in two: Germany, The Netherlands, Poland, Sweden etc will probably be back to some measure of normal rather quickly. Their politicians seem to have accepted how this disease works and apparently the population is ready to accept it.
        But Italy, Spain and France… they are too far gone to recover. We will stay in lockdown until we have either starved to death or we have become some sort of leper colony kept barely alive by handouts.

        • char says:

          Sorry, but you make me laugh. Netherlands is not as bad as the UK but it is just as bad as Spain, France and Italy except a few days later and a much lower population

  15. IslandTeal says:

    Great article..thank you for writing.
    For all of you thinking that there will be a return
    to some “type of normal”. No. The game has been changed forever. There will be no mad rush to book next summer or winter vacations.
    To quote Jeremy Irons from Margin Call….”THIS IS IT !!!!”.

  16. Bobber says:

    It won’t just be airlines that go out of business. Why wouldn’t a lot of other small businesses go under as well. I’m looking at the details of small business support in the stimulus bill (CARES Act), and all it does is provide loans to small businesses. What small business owner is going to take out a loan to keep employees on payroll when revenues are down 50-100%? As long as the loan has to be repaid, it’s not enough incentive.

    • tom says:

      I think the youngsters will have some great opportunities to
      start up or buy small businesses.
      Myself, and most of my friends run businesses. We are all grey haired or bald. None of us are going to touch savings and start over like we did in 08.
      And we sure as hell are not going to take out a loan so that we can shut our businesses down again next fall/winter for the next killer virus. Two have already closed. Not easy with employees you have had for decades.
      They’ll fire sale the properties.
      As a youngster, great time to approach & strike a land contract contingent they stay on for a period to train.

      • tom pfotzer says:

        Tom: would you please elaborate on that “land contract” notion? What would the (typical, pro-forma) terms be that you/your friends might be likely to accept?

        • tom says:

          My longest was @ 15yr @ 6% . Shortest was @18 months 4% ( not
          a large sale$$). I would assume they would be more interested in a 10yr. Not sure at rate, I’m sure they would shave points based on down payment.

    • sierra7 says:

      Bobber:
      RE; the CARES Act….for small businesses:
      Not an expert; conversations with children (all adults in business or working for small to medium size 500 employees or less)
      There seems to be opportunity in that Act that even though (which I dissented also) they are “loans”; they are useful (4% repay and possibly forgiveness in future)
      in recalling key employees in helping to assure that the whole business doesn’t go down the tubes…….
      On that basis one of my family’s business is already planning on (this coming week) recalling at least one key employee who was let go without giving up their “key” to the front door and was told not to “clean” out their desk……So I will assume lots of other small businesses will take advantage of the terms of the Act.
      Of course it would be nice if small business could have their “special window” to finance to receive almost “free cash” that so many of the “biggies” seem able to access.

  17. Michael Engel says:

    1) If US gov will own 30% of Boeing, the gov will have an incentive
    to reward BA with lucrative projects. It will lift share prices and provide cash flow.
    2) LMT might do the same in order to stay competitive, because it will not be a fair game.
    3) US gov is likely to partner with the airlines. US gov cannot
    dictate state governors what to do, but they can constrict flights
    from severely infected areas to other locations.
    4) A severe European recession will send EURUSD < parity, possibly below 0.75. EU metamorphosis structural changes.
    5) Gold futures, GC weekly, left behind a large selling tail, after failing
    to breach Mar 9 high.
    6) GC was stopped on Nov 14/21 2011 big gap, Sept 19 2011 big red
    selling bar, and the 2011,12 trading range, that built a cause to
    the next plunge.
    7) Depression talk, but investors action do not match their negative sentiment with real action.
    8) Bullish "inventory" reached a new all time high on Jan 2018.
    Oct 2018 a lower high. Dec 23 2019 was another lower high. While market makers were liquidating bullish "inventory" until Feb 19 plunge, they sent SPX up for x2 additional months.
    9) Bearish "inventory" reaches a BS level and turned down. They are
    far from capitulation.
    10) TnT to provide liquidity to the financial markets. If covid-19 will not
    fade within x2 month there will be TnT #2.
    11) The gov will win the war with $2T repetition. It will be a new NORM.

  18. Endeavor says:

    1) The gov will win the war with $2T repetition. It will be a new NORM.
    That may be why the airlines, technology and the EV and Self Driving Auto Industry may also come back more than we expect. Defense applications.

    • Unamused says:

      Defense applications.

      If pandemic preparedness isn’t a part of your ‘defense applications’ you might like to commission an updated threat assessment.

      Stop worrying so much about the ‘missile gap’ and the ‘mine shaft gap’ and maybe you won’t have to depend on Red China to close your ‘hospital supplies gap’.

  19. nick kelly says:

    ‘Not all airlines will go bankrupt’

    But a bunch will and were doing it before the crash. So a big question is: how many good used planes will be on the market at irresistible prices? To a buyer that is, assuming there are some.

    The used plane market is different from the used car market. There is no keeping up with the neighbor, no stigma attached to sitting in seats that have held other bums, because that’s true of all planes. The only reason an operator buys new is to save money, lately on fuel. But with fuel at these prices, can they hedge for a couple of years at a substantial savings without buying a more fuel efficient plane?

  20. Michael Engel says:

    12) USDCAD = 1.47 // WTI = 20.80 // Canadian Select – WTI = (-)16.45.
    13) Canadian oil will not die, it will stay in the ground.
    14) Energy infrastructure is very expensive. It take time to build
    a pipeline.
    15) When US shell pipelines will become like Roman Aqueducts, Canada
    oil will have a moat.
    16) After a decade of oil glut, US will starve for supply of the dirty filthy oil + coal.
    17) To finance their gov, during capitulation, OPEC + Putin will sell gold.
    18) Hurting US became SA NORM. When WTI will jump > $150, ARAMCO will become $10T co, unless somebody will teach them a lesson.

  21. Brant Lee says:

    I just hope the general working/middle class aren’t broke and deep in debt (completely ruined) after this nightmare.

  22. Unamused says:

    All eyes are on China to see how air transport will change in the aftermath of the crisis.

    According to Forbes, $865 million in US taxpayer subsidies went to China Eastern and China Southern, so Chinese aviation should do splendidly.

    According to The Hill, a coalition of groups that represent parts of the American aviation industry are calling for a federal review of subsidies received by a trio of Middle Eastern airlines that fly to the United States under the “Open Skies” agreement.

    The groups say Qatar Airways, Etihad Airways and Emirates Airlines, which are owned by the governments of Qatar and the United Arab Emirates, have received more than $42 billion in subsides since 2004.

    The coalition, known as the Partnership For Open and Fair Skies, says the subsidies make it hard for U.S. airlines to compete with the foreign carriers and also violate the spirit of the current Open Skies agreement between the nations and the U.S.

    Crony capitalism at its finest knows no borders when it comes to transnational corporations.

  23. Michael Engel says:

    19) The American Premier League : x6 monthly derby games between C&T.
    20) Tickets will cost $2T/ game. Get the new show, for free.

  24. timbers says:

    So applying what I’m seeing out in the real world jungle just outside my home doors – barriers at retail checkout, enforced social distancing standing in line to get into Trader Joe’s or Home Depot because customer entry rationing…it seems logical airlines will need to meet these standards, too. That’s a ginourmous cost increase. Oh dear, think of that list revenue that could have gone to share buy backs.

  25. George W says:

    For the retired with guaranteed incomes, the coronavirus is a spectator sport. Hoarding toilet paper, what a joke.

    Airline industry workers like so many other can’t afford to be without work for months at a time. Homes, cars, jobs and life’s will be lost.

    The biggest threat to the world is not the coronavirus but the ridiculous response, ie lock it all down. The government is not going to bail out those that could still be working. The destruction is done and chaos is coming.

    • timbers says:

      We only we could lockdown the lunies and corrupt in the WH & Congress & Pentagon, and set up our own government for us…think it’s time to re watch The Stand…

    • MC01 says:

      Oh, don’t worry: our governments will make 100% sure they (and retail workers, and waitresses, and book sellers, and small engine repairsmen etc) will be out of work not for months but for years if not forever. Their mentality is “we’ll be in lockdown forever”, they have zero intention and no plans to restart this whole show. In short they will drag everybody down with them.
      Then who will pay the rents and leases that ensures those guranteed incomes?

      Stuff is already breaking down in the strategic industries and in the hospitals. Companies manufacturing facemasks have shut down because their vendors have been closed for weeks and they are out of spare parts and raw materials. But politicians don’t care: perhaps they hope China will take pity on us and keep us alive on handouts forever.

      • char says:

        The disease has to run out and that takes 6 weeks After that you can restart. Be at least happy you don’t loose 3% of your population

  26. timbers says:

    Off topic… anyone else noticing interest speeds slowing? Especially on cell phone? My carrier I believe is a buy back Queen. I plan on demanding full credit for slow days.

    • MC01 says:

      I have to give credit to our internet operator: on Friday they updated the local infrastructure to support the massive increase in traffic we’ve seen since the full lockdown started. They even gave instructions on how to reset the antenna (we use WAN technology) once the upgrade was over.

      Great company, I hope they pull through this unscathed because they really deserve it.

  27. Iamafan says:

    A grade school mate was the captain of the air vac Lion Air flight to Haneda that crashed. I have many pilot captain flying for Asian airlines. RIP.

    I got a very sad message.

    • Iamafan says:

      The crash was in the Philippines.

      • Iamafan says:

        Absolute tragedy.

        An American and Canadian were on board the flight, according to the flight’s passenger manifest. The other six on board were Filipino, according to the manifest.
        The passengers included medical personnel, according to Red Cross spokesman Richard Gordon.

        The plane was reportedly carrying medical supplies, the Philippines News Agency said, adding that the plane caught fire on the runway.

        PS. He has another cousin who flew EVA plane from LAX. My condolences. Last time I talked to him he said he was taking an Air Asia assignment.

  28. OutWest says:

    The US is heading into an economic depression? I don’t know how one can be avoided. Consumer and corporate spending has been in a nose-dive for weeks now.

    RIP Qtr one. Definitely negative growth.

    The second quarter begins in a few days and everywhere you look there are shutdowns and newly unemployed.

    RIP Qtr two.

    Yes, the airlins are in big trouble.

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