Most observers and commentators agree that 2019 was an awful year for aviation. It went beyond a cyclically weak year—aviation is very clearly a cyclic business but 2019 plumbed new depths for operators, regulators and the travelling public itself.
Big business hates uncertainty, and 2019 was full of that; the trade conflict between China and the US, US tariffs on European products, (including a 10% tariff on Airbus) Brexit and unrest in Hong Kong.
By far the biggest commercial aviation event was the grounding of the Boeing 737-MAX subsequent to the two crashes in Indonesia in October 2018 and in Ethiopia in March 2019. The repercussions remain with us and will continue into 2020. The failure of the holiday company Thomas Cook was a major blow at the time, although the long-term effects seem relatively minor. 2019 was perhaps a watershed year for the environment awareness and nowhere was this more apparent than in the aviation world.
And next year’s prospects? Other than a massive fuel price increase, it’s difficult to see how it could be worse, so here are our thoughts and key questions for 2020. See what you think!
When will the MAX return to service?
And it’s a question of when, not if! An intelligent guess for the MAX to be flying globally again seems to be mid-year. A number of US airlines are not scheduling MAX services until June/July and potentially it’ll take longer in the rest of the world, so the third quarter of the year seems reasonable. There are a few other imponderables in relation to the re-entry of the MAX,
- Are the suppliers still able to deliver, and have they been able to retain the skills?
- Will there be a ‘sudden’ over-supply of MAX seats making for cheaper fares, or conversely, reduced incomes for the operators?
- Will people still be willing to fly the MAX? Some studies (almost buried under a mountain of caveats) suggest that between a third and a half of people wouldn’t be willing to fly the MAX at this time.
The very green LCY
Airlines and (to a lesser extent) airports will be under greater pressure to reduce or compensate for their emissions. We can expect these organisations to make the most of their ‘green’ credentials and encourage individuals to offset their flight shame (‘flygskam’) by using those facilities; ‘The Greenest Airline in Europe!’ It seems likely there’ll be some steady if slow progress in electric or hybrid power for commercial flight.
Survivor; The Airline
We reported on three airlines just avoiding bankruptcy in 2019; Air India, South African and Hong Kong Airlines. Only HKA seems to have a fighting chance of remaining in operation in its current format, assuming the unrest in the territory subsides. The likely outcome for Air India seems to be a privatisation sale at a rock-bottom price, and a shutdown closure of South African.
Agree? Disagree? Let’s have your thoughts in the comments section below!
Tomorrow, we’ll look at three more critical factors in 2020; Boeing vs Airbus, Gulf airlines strategy and big sellers for the year.