Specialist
C-level executive at Flybe Group plc
Agenda
- European airlines’ flight cancellations and fleet groundings
- Operating leverage among major airlines and scope for flexing cost base
- Cash burn for European players and implied survival period without bailout
- Likely structure and beneficiaries of state bailouts
Questions
1.
What do you think would be a reasonable estimate of the YoY monthly revenue decrease we should expect for the major European airlines?
2.
Which airlines have exposure to cargo? I know Air France does. Would you expect cargo to stay resilient? Is that a major proportion of any airline’s revenue?
3.
How much cost do you think can be taken out of these businesses? How quickly do you think that could happen?
4.
Why would the pilots and engineers not have the 80% covered?
5.
What are your thoughts on the parking costs of fleets being grounded? What are the daily rates to park an average jet for the major airlines? Does it differ by airport and the tiered structure of airports?
6.
The IATA [International Air Transport Association] usually has rules where, if you have a pair of slots, you have to use them a certain proportion of the time. Presumably that’s been suspended. What impact might that have on airlines more exposed to slot-constrained airports?
7.
What might be the impact of a very fixed fuel hedging policy on an airline’s liquidity? This is in the context of oil costs falling significantly which has meant a lot of airlines have significant hedging losses.
8.
Do any European airlines make particular use of agency labour?
9.
Which European airlines own vs lease their fleets, and in what proportions?
10.
How do you think discussions between lessors and airlines will develop? Do you think airlines will be successful in deferring some payments?
11.
What kind of discounting should we expect for airlines which are leasing their aircraft?
12.
Lufthansa has said it has about EUR 5bn in liquidity, so it’s not in a terrible position, given it owns a lot of its aircraft. What do you think the calculus is for sale and leaseback activities, when the airline isn’t in an urgent cash burn situation? Do you think some airlines will take the sale and leaseback opportunity? Although that would release some cash, that would increase recurring costs.
13.
What kind of decrease in residuals has there been over the last two months? You said residuals have decreased within wide body. What kind of discount has there been?
14.
How do you think sale and leaseback could compare to a loan from the government based on those assets? Do you think for some airlines that could be a better deal?
15.
What do you think is Ryanair’s market position, with its liquidity and cash brand?
16.
If the novel coronavirus pandemic ended tomorrow, how would the next few months play out? How long do you think it will take for capacity to be brought back to a level where it meets demand and for demand to pick up?
17.
Do you monitor lead time for bookings between leisure and business customers? Do leisure customers book further in advance?
18.
Do you think LCCs’ [low cost carriers’] yield curvess have changed as a result of the desperation to fill as much capacity as possible?
19.
Do you expect any consolidation in the industry after this is over?
