evergrn

Asiana could be in trouble.

But the most likely airline to go under is some small privately-owned carrier with significant % international volume.

Spanish

I hope the smaller LCCs and ULCCs will receive subsidies as beneficial as the larger airlines. Love the cheap nonstop flights when available, and the competition benefits us all...

QF ExLurker

I'm not convinced that a government bailing out an airline will agree to bail out the FF mile holders also.

weero

Not to do so proved catastrophic in Ansett's case ....

mrmoo

I'm curious about this too. Most of the news is about large international/flag carriers. ULCCs will be hurt too, I wonder if they're also in the room talking to heads of states.

GrayAnderson

I'm on the other end of the scale here. There were some exceptions, but for the most part the ULCC model seems to be about playing stupid games to suppress the headline price, and was quite focused on leisure travel. I suspect you might see some cases of tourist-heavy areas trying to arrange something, but I also wouldn't be surprised if it comes at the price of killing their business models. The biggest uphill climb for the ULCCs to get support (at least in Europe) might well be environmental pressures...there's a case that the virus will simply be the stick that's used to club them.

And I confess that I won't be sorry to see them go. I'm on the other end of the spectrum, however...to the extent that there's an environmental crisis that needs solving by reducing travel, I'd take the opposite view of that ULCC executive who argued for banning Business Class and argue that zapping cheap fares is the more sensible solution.

mrmoo

I'm not defending ULCCs, I don't fly them myself, but if you start bailing out one airline you almost have to help all of them. Their business model works because people will suffer for a lower price, supply and demand has spoken and ULCCs are a successful business (when travel is possible, that is).

You want to curb environmental impact from travel? Killing business class, killing rewards programs (why incentive more travel?) and imposing higher CO2 offset taxes would likely have the greatest impact, but that's not realistic right now, I don't think.

warakorn

IATA is not an impartial, neutral source of information. IATA is the lobbying arm of the airline industry. Do not believe anything they say.
They putting pressure on politicians to kill an airline's obligation to fully refund a ticket in cash once an airline had cancelled a flight.

The quoted statistics from IATA are only meant to drive forward anti-consumer policies.

How much did the large airlines of the world earn between 2015 and 2019?

GrayAnderson

I think curbing rewards programs might be doable. The question is how to try and make it so it's mostly a question of "which airline do I pick for X travel?" versus "Should I fly vs driving/taking the train?"

I'd note that, IIRC, at least in Europe a lot of the growth in air travel has been down to ULCC (and their close friends) making travel highly accessible (sometimes through slashing costs, sometimes through playing games with how the cost is allocated) and that a lot of that travel would not be happening at lower price points.

One thing that might be worth looking into (as we wander afield) would be restricting the number of seats that can be sold below marginal cost (i.e. O'Leary's "I'll pay you to fly with me" gimmicks get banned).

Back to the underlying issue, however, I think the case behind bailing out the non-ULCCs but not the ULCCs is that, aside from infamously bad corporate behavior (Ryanair's been rather a scofflaw in terms of EU261 compensation) I do think that making a case on bailing out carriers operating a transportation network and serving to facilitate business makes more sense, in terms of "bailout triage", than exclusively or highly leisure-oriented operations.

Edit: And I do think that, even if you're going to bail out ULCCs, taking into account prior behavior as far as terms for said bailouts is reasonable.

mrmoo

You make some great points. I think something that has been a boon for ULCCs was as large airlines doubled down on hub-and-spoke, ULCCs served point-to-point cheaply. You see this in the US/Canada and Europe. Some people who wouldn't have otherwise gone somewhere saw cheap flight and made a holiday around that destination specifically for the flight, not the other way around as travel used to be.

If many of these ULCCs go under, or are forced to change behaviors due to requirements of a bailout, I wonder how many will really come back? I mean, in Ryanair's case, if they only become slightly profitable or breakeven if forced to stop doing X, Y, and Z, would they just throw in the towel?

ProleOnParole

Alitalia, Cathay Pacific, LOT Polish, Norwegian, Singapore, some Asian LCCs, 2nd-tier Chinese carriers but some of these won't be allowed to fail for political reasons.

The_Bouncer

Surely SAA's days are numbered now.

Antonio8069

By region, the IATA report shows N American-based carriers are more vulnerable than other regions.

cbn42

I have always wondered why US airlines don't spin off their rewards programs, which is often done in other parts of the world. It would be interesting to see what would happen, but I don't think the government would require it as a condition of a bailout at this stage.

Why would you say that? Leisure tourism is a huge driver of the economy, and can be very important for communities just like the industries supported by business travel. If business routes are bailed out and leisure routes aren't, it would be yet another example of the government giving money to corporations (which pay for their employees' business travel) instead of individuals.

Bailouts always create a moral hazard, but the government should not be picking winners and losers. After the financial markets crashed, the big firms were bailed out while the smaller ones were left to go bankrupt. This led to the "too big to fail" mindset where large banks started taking more risks, knowing that they had a guaranteed lifeline. We don't want the same to happen to the airline industry because that would stifle competition.

evergrn

https://www.yahoo.com/finance/news/a...035548868.html

Btw, I wonder if one could rely on credit card company to reimburse you in case the airline goes under and you can't get your money back from them.
Unfortunately I've got bookings with 3 of the airlines in this article in June and July.