Chamberlink Plotting aviation’s route to recovery


Postcard from Bahrain, June 2020 Paul Kehoe, past president of Greater Birmingham Chambers of Commerce and now chief executive of Gulf Air, based in Bahrain, says the Covid-19 crisis has been a ‘doomsday scenario writ large’ for airlines – but he remains optimistic about the recovery


You can always rely on Michael O’Leary, the CEO of Irish low-cost airline (LCC), Ryanair, to be the first to lead the charge. Whether you like his style, him or


his airline or not, you can point to a pretty impressive almost rags to riches story for him and his company. In the old days before he


remodelled the company, Ryanair operated turboprops and was loss- making, then did a deal with the Romanian builder of the British BAC1-11 aircraft to use them in what became the Ryanair success story. I open my postcard with this as,


MOL, as he is known, is leading the charge again. Having created Europe’s most successful air carrier and possibly its most consistently profitable, he is not waiting for the regulators or Governments to tell him he can fly again. He has already announced he


will start with some significant operations during the summer. This time, though, he is following


fellow lost cost operator, the Hungarian Wizz Air, who have been


‘Announcements are made daily about the impact of the Covid-19 pandemic on aviation and there never appears to be any good news’


quietly flying in and out of the UK during the lockdown. How both would cope with the


UK Government’s intention, at the time of writing this note, of two weeks quarantine for arriving air passengers, I’m not yet sure. It’s bizarre that the UK has had open borders during the peak of the crisis but now it may be abating, they are closing that particular stable door. Nevertheless, it may be too late


anyway. If someone takes away between 90-95 per cent of your revenue or 100 per cent of your tourism flight product and you still have all your costs with the exception some Government furlough support, you can really burn through what you thought was a very stable cash position in a very short space of time. The fact that airlines usually


make the bulk of their cash in what


is called the Northern Hemisphere Summer Season (April to October) so that they can maintain operations during the winter means that year, they may not get the chance to top up their vital cash reserves. Announcements are made daily


about the impact of the Covid-19 pandemic on aviation and there never appears to be any good news. Virgin Airlines in Australia has


gone into administration, while its UK namesake has indicated it will close its Gatwick base (its original home) and may not survive without more help from Government. British Airways, the UK flag carrier, albeit owned by the Spanish registered International Airlines Group (IAG), has advised that there will be redundancies and grounding of some it fleet. IAG, captained by former Aer


Lingus pilot Willie Walsh, has through its BA subsidiary built up a cash store to keep it going through tough times. Walsh and O’Leary are both very


robust business people and although Walsh is standing down shortly, he has ensured that his company is in a better position than most to survive this crisis. In the financial crash of 2008, we


saw several flag carriers go down and some come back reformed but this time there will be a few more dropouts from the international aviation scene including some of the upstream supply organisations. Aviation had already been particularly bleak in the UK from 18 months before, with the demise of Monarch Airlines, Thomas Cook and, just at the start of the crisis, the cessation of services by Flybe. Each hit was countered by a


Downturn: Heathrow’s passenger numbers have dropped from 220,000 passengers per day to under 15,000


54 CHAMBERLINK June/July 2020


resilient passenger market that saw others pick up the market, so much so that the UK managed to process


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