The Ground Handling Blog

Mototok's blog for Hangar Professionals

Written by Mototok on August 19, 2020 // 10:15 AM

What Does a Recovery Look Like

covid-19 recovery

COVID-19 isn’t going anywhere anytime soon. Still aviation has many different possibilities to recover from this pandemic. Here are some of them.

Aviation can’t only recover, but maybe even profit from COVID-19.

COVID-19: Aviation’s recovery from Corona

We are now about four months into the global pandemic, and one question resounds: what is a recovery going to look like for the aviation industry? Over the past few blog posts, we have taken a look at the four largest aviation markets in the world, at their current conditions, trends, and overall where they stand in regards to COVID-19. With much of the world in varying stages of recovery, we are going to explore what complications there will be in a recovery the magnitude of which has never been experienced before. Also, we are going to explore what is going right, and some unexpected positives from the whole thing.

Is a Total Recovery Honestly Likely in the Near Future?

Or ever? I.e., will the aviation industry, especially the airline industry, go back to a place where it looks and operates like it did as recently as February? Probably not, no. If we do, it is nowhere in the immediate future.

As of right now, at least in the U.S., a return to pre-pandemic levels of air travel is all but unimaginable. Some airports were down as much as 92% in the midst of the crisis, and Delta reported a 93% reduction from the previous year. These numbers are staggeringly bad.

From a quick look at their financials, it appears that the other major legacy airlines are fairing either no better, or marginally better, than Delta. American Airlines was on the rise, briefly, until a major resurgence in American cases occurred in June. Since then, their value has dropped again, perilously close to their bottom dollar value back in March. Southwest was a little different, falling less precipitously than most of the other legacy air carriers, but they did eventually find a bottom on about May 15th, and at which point they started digging out of the pit only to abruptly sink again. So this is probably not what a recovery will look like.

But, the U.S. is not the only aviation market in the world. And the U.S.’s woes with the global pandemic are vastly different than most of the world. Europe is widely recovering from the pandemic, whereas North America is being placed under lock and key again.

It is true that the European Union has reinstated a travel ban between them and the U.S. as of the beginning of July, due in no small part to the raging spikes in reported cases in the U.S. While Europe itself is seeing improvements, their airlines are stumbling. Yes, the American and Asian airlines are not recovering particularly quickly, but they are on the mend.

European airlines, on the other hand, are struggling to get back up to normal. As of June, they had provided a cumulative 6 million seats, down from 36 million just a year ago, which represents an 82% reduction in that timeframe.

Some pundits have suggested this is largely due to the amount of air carriers in Europe; there are so many different brands in such a congested space. They were crammed in there before a pandemic, and now they are essentially competing for crumbs. With North America still closed off, major oceanic travel to the West is shut down.

A continued recovery is going to be very difficult to predict, because governments around the globe will not necessarily be in synchronization with each other in regards to travel policies, as well as hot spots cropping up with little to no notice. Forbes suggests that a recovery will be full of starts and stops, as lockdowns will surely crop up, and there is frankly no real idea on when this will end.

There is More to an Aviation Recovery than the Airlines

The airlines are the most obvious indicator of a recovery, and are largely symbolic of the industry as a whole. But behind the flags of the legacy air carriers is the panacea which is MRO, and its associated service markets.

With anywhere between 80% and 95% of flights being slashed across the globe, there is now a surplus of aircraft, and aircraft cannot remain static for long. Parked aircraft must be serviced routinely. They need to have fuel moved throughout the system. The tires have to be rotated. The engines have to be run. Avionics need to be turned on and cycled. Flight controls run through. Hydraulic systems pressurized.

As of now, experts in the industry are predicting that there are between 2,500 and 3,500 surplus aircraft now residing in inventory which will not be needed for the next three years. In order to facilitate this, they have a flow plan at their disposal: temporary parking, long term storage, then either tearing down for parts inventory, or conversion to cargo.

Widebodies will easily be the first on the chopping block, as there is the least demand for them with most international travel still largely curtailed. Qantas has already stated that they are retiring their B747 fleet, and their fleet of 12 A380s is potentially on the chopping block as well, although this is still speculative but they have confirmed that the fleet will stay parked ‘for years’.

Air France waved goodbye to their fleet of A380s a few weeks ago, marking an end of an era, and also signalling a shift in air travel as a whole. The fleet is only eleven years old, but has been well known as an extremely expensive part of the fleet, with many questions as to whether it would ultimately pay for itself. The other likely candidates are older and higher-time widebody jets like the earlier series B777 and A330 jets, which were nearing retirement already. They are just accelerating retirements for aircraft already on the docket to retire. But this won’t be the case as this drags on and on. Qantas has mothballed some of their B787 fleet already just because they have no legitimate need for them at this time, and probably won’t for a long time.

Specific Issues Pertaining to Maintenance

MRO recovery is indelibly linked with airline recovery, obviously. Fleets have been either parked or under-utilized for four months now, which has never happened before, at least nowhere near the scale we are seeing.

One specific concern is microbial buildup in fuel cells. This is not an abnormality; it is a natural process in the water which interfaces with fuel. It is very, very difficult to keep water completely out of fuel cells in any and all aircraft which is why they are sumped during every preflight inspection. Of course, the water burns off when the jets are regularly flown, and the microbes and their growth along with it. The problem is when jets go to sit for long periods of time, and the microbes secrete a nasty sludge which cakes to the tank walls and can cause corrosion, as well as attacking the rubber tank bladders, and can clog fuel filters and damage fuel instrumentation equipment. If this occurs to a wide swath of the parked fleets, it could be a real issue. Contamination can be a real hindrance towards fleet recovery if they have to start looking at hundreds of aircraft. There are a few biocides which can help, as well as sumping fuel and checking for contamination.

Recovering from COVID-19 with unforeseen positives

There might be a couple of silver linings amongst all of this negativity filling the news cycle.

For one, service markets are going to see work in the industry in the form of maintaining parked aircraft, or even stripping down retired aircraft, converting passenger liners to cargo configurations, and even permanently mothballing aircraft. All of these functions will serve to provide work for the services market, i.e., MROs.

Advanced technology in the services market could continue to sell well, maybe even grow. A great example of this is remotely operated tugs. Every single major airline is heavily furloughing staff, some by half or more. United is looking at cutting 36,000, American Airlines may need to offload 25,000 by the beginning of FY21. These will be positions all across the board, to include ramp agents and technicians. Parked fleets will still need to have tires rotated, operational aircraft still need to be pushed back, aircraft moved into and out of hangars for maintenance checks and mechanical work. Using a tool like a remote controlled tug is a powerful tool to offset short-handed staff that will be the new normal for years to come.

Conclusion to aviation’s recovery from COVID-19

We wish there could be a more conclusive answer to the question of what exactly a recovery looks like, but it’s just not there. The markers keep pushing farther out based upon the inexact science of calculating where and when new outbreaks will occur. Some experts are anticipating 2023 for recovery, while others are now looking at 2024. The best we can hope for is watching the airlines and major manufacturers trudge slowly but steadily upwards in the stock markets. As long as they are still improving, it does constitute a recovery or some sort, but it is probably safe to say that the “old normal” will not ever be happening again.

COVID-19 is shaping our workspace and our lives anew from month to month. Stay updated to the latest industry trends by subscribing to our blog – and feel free to exchange your points of view in the comment section!

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