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BUSINESS NEWS


Heathrow blames lack of testing as it falls behind Paris


Heathrow noted it is “no longer Europe’s biggest airport” as it reported a £1.5 billion loss for the nine months to September. The airport reported handling


19 million passengers to date this year, against 19.27 million at Paris Charles de Gaulle. Chief executive John Holland-


Kaye said: “Britain is falling behind because we’ve been too slow to embrace passenger testing. “Paris has overtaken Heathrow


as Europe’s largest airport for the first time, and Frankfurt and Amsterdam are quickly gaining ground. European leaders acted quicker and their economies


are reaping the benefits.” Heathrow revised down its


passenger forecast for 2021 to 37 million, down from a June forecast of 63 million, but reported it had £4.5 billion in cash and credit available in October.


John


Holland- Kaye


Iata warns even a 50% cut in jobs would not avert airline insolvencies


Iata warned that slashing labour costs by half would not be enough to save airlines from insolvency without state aid. Chief economist Brian Pearce


issued a stark warning, saying: “We expect revenues in 2021 to be only 48% of what we expected before the crisis. Airlines need to shrink their costs to that level.” He reported Iata examined the


finances of almost 80 airlines and concluded: “The only option to close the cost and revenue gap is to look at labour costs.” But he argued: “Even with a 52% cut in labour costs, unit costs would still outweigh forecast revenue by 10%-15%.” Pearce insisted: “If we’re going to avoid significant numbers of


failures, we either have to see an effective testing regime allowing travel restrictions to be reduced or we need more support.” He added: “We estimate job


losses of 30%-35% so far. Even 40% would not be enough to bring labour costs down [sufficiently]. The industry has to get smaller but it is going to be really difficult.” Pearce revealed Iata’s revised


forecast partially reflects lower confidence in the impact of a vaccine, saying: “We continue to base our forecasts on a vaccine becoming available in 2021, but we now have a better idea of the challenges of producing and distributing a vaccine. So we’re not as positive about the second half of next year.”


Fain outlines ‘path back to restart’ Ian Taylor


Royal Caribbean chief Richard Fain admitted frustration at the continuing suspension of cruises, but insisted there is “light at the end of the tunnel” as he reported a $1.3 billion loss for the three months to September. The Royal Caribbean chairman and


chief executive said: “It is seven months since we paused our operations. Every single day has been frustrating. The prospect of a further [Covid-19] surge is beyond frustrating.” However, Fain said “greater


understanding of the virus”, developments in testing and progress in developing a vaccine mean: “I feel more positive we’re beginning to see light at the end of the tunnel. “I’m optimistic we are moving in


the direction of a healthy return to services.”


travelweekly.co.uk Royal Caribbean joined


Norwegian Cruise Line Holdings in setting up a Healthy Sail Panel of medical and scientific experts in the summer which submitted 74 recommendations to the US Centers for Disease Control and Prevention on September 21. Fain said: “We intend to make our


ships a bubble. There are things that make a ship more demanding, but there are also advantages and the big advantage is that a ship is a controlled environment.” He insisted: “We are not just


suddenly coming back. We won’t be making a big leap until we and the authorities are comfortable this is viable. We propose to operate trial cruises with no customers. These will allow us to refine things. “This slow start-up and trial trips


will give us opportunities to prove our protocols.”


Fain insisted: “I’m optimistic we’ll


soon have a path back to resuming operations. It will be slower than I wish, but faster than a lot of people are assuming.” Chief financial officer Jason


Liberty described Royal Caribbean’s third-quarter results as “painful” and said: “We’re planning for an initial very limited return. Our decision-making will be guided by the health of our guests and crew, by the customer experience, and ensuring we bring back cruises in the most cost-effective way.” Royal Caribbean’s Quantum of


the Seas is due to resume sailing from Singapore in December following sign-off from the Singapore government and Liberty said: “We’ve seen bookings spike significantly. “It’s just one of 53 ships, but it


highlights the pent-up demand for cruises.”


Richard Fain 5 NOVEMBER 2020 47


PICTURE: LHR Airports Ltd


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