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View Full Version : COVID19’s Industry impact


tnkrdrvr
03-10-2020, 07:51 AM
Airlines slash routes, outlook and executive pay on coronavirus fallout Delta and American scale back U.S. and international flights, while executives at Southwest and United cut their salaries.https://www.washingtonpost.com/wp-apps/imrs.php?src=https://arc-anglerfish-washpost-prod-washpost.s3.amazonaws.com/public/VXCWKFRWYYI6VIP7YSGB2WNEUE.jpg&w=767Delta Air Lines announced it was cutting back its international routes by as much as 25 percent and its domestic flying by 10 to 15 percent. (Ted S. Warren/AP)By
Rachel Siegel (http://www.washingtonpost.com/people/rachel-siegel)
March 10, 2020 at 11:09 a.m. EDTSeveral major airlines, feeling the coronavirus’s tightening economic squeeze, moved Tuesday to slash routes, redraw their financial outlooks for the year and even slash executive pay.

Delta Air Lines said it is cutting international flights by as much as 25 percent and domestic routes by 10 to 15 percent. The carrier is also withdrawing its 2020 financial outlook, instituting a hiring freeze and suspending its stock repurchase program.
Speaking at the J.P. Morgan Industrials Conference, Delta executives said that the global outbreak has cut net bookings by at least 25 percent, a drop-off they expect will worsen. Executives said most of the uncertainty surrounded domestic travel, with CEO Ed Bastian adding that the fear that’s now keeping travelers home was “more akin to what we saw at 9/11,” as opposed to some broader economic force.

ADAmerican Airlines also is pulling back, announcing plans to scale back peak summer international flying by 10 percent. Those cuts include a 55 percent reduction in trans-Pacific routes as the outbreak continues to exact a toll on China, South Korea and Japan. American will also reduce domestic flying in April by 7.5 percent.

Trump says he will seek payroll tax cut, relief for hourly workers as part of coronavirus economic package (https://www.washingtonpost.com/business/2020/03/09/trump-coronavirus-paid-sick-leave/?tid=lk_interstitial_manual_8&itid=lk_interstitial_manual_8)

Meanwhile, United Airlines said Tuesday that its CEO and president will forgo their base salaries through at least the end of June. United and JetBlue were the first U.S. carriers to cut domestic service last week.

Southwest Airlines CEO Gary Kelly is also taking a 10 percent pay cut as the carrier contends with steep declines in bookings. The decision was first reported (https://www.wsj.com/articles/southwest-ceo-to-cut-his-pay-by-10-as-coronavirus-chills-bookings-11583840287?mod=hp_lead_pos6) by the Wall Street Journal and later confirmed by The Post.

ADLast week, (https://www.washingtonpost.com/business/2020/03/06/white-house-could-seek-timely-targeted-aid-us-industries-hurt-by-coronavirus-outbreak-top-adviser-says/?tid=lk_inline_manual_12&itid=lk_inline_manual_12) Southwest said it expects to lose $200 to $300 million in March alone because of the outbreak. Kelly compared the jarring drop in sales to the aftermath of the Sept. 11, 2001, terrorist attacks, saying the blow to the travel industry “was more fear, quite frankly, and I think that that’s really what’s manifested this time.”

The coronavirus outbreak has thrown much of the tourism industry (https://www.washingtonpost.com/travel/2020/03/08/state-department-cruise-ship-travel/?itid=ap_rachelsiegel&tid=lk_inline_manual_14&itid=lk_inline_manual_14) into free fall. In a matter of weeks, hotels, airlines and convention centers have seen their bookings plummet as leisure travelers stay home and businesses discourage or cancel employee travel. The State Department warned against going on cruises during the coronavirus (https://www.washingtonpost.com/health/2020/02/28/what-you-need-know-about-coronavirus/?tid=a_inl_auto&tid=lk_inline_manual_14&itid=lk_inline_manual_14) scare and U.S. health officials prevented some ships from sailing. Share prices for major carriers and hotel chains have plunged.

On Monday, (https://www.washingtonpost.com/business/2020/03/09/trump-coronavirus-paid-sick-leave/?tid=lk_inline_manual_15&itid=lk_inline_manual_15) Trump said he would ask Congress to cut payroll taxes and provide relief to hourly workers suffering from coronavirus’s economic fallout. He also said he was looking to help the airline, hotel and cruise industries. But it wasn’t clear whether he would ask Congress to help these industries or if he thought he could do it alone.

ADSome U.S. airlines are offering flexible policies as coronavirus spreads. Here’s what travelers need to know. (https://www.washingtonpost.com/travel/2020/03/02/airlines-are-offering-flexible-travel-options-adapt-spread-coronavirus-heres-what-we-know-so-far/?tid=lk_interstitial_manual_17&itid=lk_interstitial_manual_17)

On Tuesday morning, Delta’s Bastian said there was “no question” the airline industry would see some form of government intervention.

“Hopefully we’ll start to see some light at the end of the tunnel before massive structural changes,” Bastian said.

Foreign carriers were hardly immune.Norwegian Air Shuttle ASA said Tuesday that it will cancel 3,000 flights through mid-June. It is also temporarily laying off workers to ride out the crisis.

Loizos Heracleous, an aviation industry expert at Britain’s Warwick Business School, said there are estimates that coronavirus could cost the aviation industry up to one-fifth of its revenue, or nearly $219 billion. Much depends on when the virus is contained and how quickly the world economy bounces back.

“The aviation industry has already been consolidating over the last few years, especially in Europe where the market is very competitive,” Heracleous said. “With the added pressure created by coronavirus, it would be no surprise to see weaker airlines go out of business or acquired by rival companies.”

9 Comments (https://www.washingtonpost.com/business/2020/03/10/delta-american-southwest-united-coronavirus/?outputType=comment)https://www.washingtonpost.com/wp-apps/imrs.php?src=https://s3.amazonaws.com/arc-authors/washpost/99364408-8c15-40fa-a769-daa2aa15a1c4.png&w=90&h=90 (http://www.washingtonpost.com/people/rachel-siegel)
Rachel Siegel (http://www.washingtonpost.com/people/rachel-siegel)
Rachel Siegel is a national business reporter. She previously contributed to the Post's Metro desk, The Marshall Project and The Dallas Morning News.Follow (https://twitter.com/@rachsieg)

I have yet to see any firm numbers out of either UPS or FedEx similar to what the pax haulers CEOs are giving. Has guidance been given or are we playing it close to the best?


UPSFO4LIFE
03-10-2020, 09:31 AM
Maybe the fact that people will sit in their homes and order more crap online instead of venturing to the store with the crowds, will not hurt UPS as much. I do think that any downturn will be short lived and the fundamentals of the economy are still good. Let's hope for the best.

brownie
03-10-2020, 03:47 PM
https://www.bizjournals.com/atlanta/news/2020/03/10/sources-david-abney-may-retire-as-ups-ceo.html?ana=yahoo&yptr=yahoo


whalesurfer
03-10-2020, 04:59 PM
https://www.bizjournals.com/atlanta/news/2020/03/10/sources-david-abney-may-retire-as-ups-ceo.html?ana=yahoo&yptr=yahoo

_____
..."It's a very unexpected retirement," Haber said. "My understanding is he planned to be there for a couple years... [Barber] left two months ago; it doesn't add up for Abney to retire so soon after that. That doesn't make any sense to me."...
...
Chief Financial Officer Carol Tomé (https://www.bizjournals.com/atlanta/news/2020/03/10/atlanta/search/results?q=Carol%20Tom%C3%A9) could take over the role. Tomé has served as a director (http://www.investors.ups.com/governance/board-of-directors) of United Parcel Service Inc. since 2003 and chairs UPS's audit committee. Tomé retired (https://www.bizjournals.com/atlanta/news/2019/04/30/home-depot-cfo-carol-tom-to-retire.html) from Home Depot last August. UPS' annual shareholder's meeting is set for May 14...
_____

Very interesting..

Was Tomé a successful Home Depot CEO? IF transition rumors are true, hopefully he won’t turn out to be the next Scott Davis.. :-|

tnkrdrvr
03-10-2020, 05:38 PM
_____
..."It's a very unexpected retirement," Haber said. "My understanding is he planned to be there for a couple years... [Barber] left two months ago; it doesn't add up for Abney to retire so soon after that. That doesn't make any sense to me."...
...
Chief Financial Officer Carol Tomé (https://www.bizjournals.com/atlanta/news/2020/03/10/atlanta/search/results?q=Carol%20Tom%C3%A9) could take over the role. Tomé has served as a director (http://www.investors.ups.com/governance/board-of-directors) of United Parcel Service Inc. since 2003 and chairs UPS's audit committee. Tomé retired (https://www.bizjournals.com/atlanta/news/2019/04/30/home-depot-cfo-carol-tom-to-retire.html) from Home Depot last August. UPS' annual shareholder's meeting is set for May 14...
_____

Very interesting..

Was Tomé a successful Home Depot CEO? IF transition rumors are true, hopefully he won’t turn out to be the next Scott Davis.. :-|

I saw the article about Abney resigning. Not good for us if true. He seemed to get the math of how much payback the company as a whole got for investing in more lift. Hopefully, whoever replaces him would be equally supportive of Ops and not a bean counter.

SaltyDog
03-10-2020, 06:28 PM
Abney was a Davis acolyte. What made him invest unlike his predecessor? The market turned around and UPS was starving when he took over as CEO. The lean Davis years left UPS in a great place for a declining market but not for a growing market demand he found himself in as new CEO. Abney realized the only way forward (out of the burning building he previously supported under Davis as a senior executive was to go out the "invest in the business" door to survive. Unfortunately, UPS doesn't value its lower to mid level managers vital to the business success as it did when UPS was privately held. Maybe that is why UPS cannot hold onto all real management talent. If UPS cannot bring forward a strong senior executive, then leadership has failed at UPS. Outside is good like Scott Price. The suggestion that next CEO will be an outside UPS executive, and no one is able to take over from the stable of senior executives internally, then says much about the poor development of leadership at UPS. Not good long term. Hope UPS can attract and find a former CEO like Oz Nelson who truly was a global marketing innovator and good for UPSers and customers.

jetlaggy
03-10-2020, 11:02 PM
_____

Very interesting..

Was Tomé a successful Home Depot CEO? IF transition rumors are true, hopefully he won’t turn out to be the next Scott Davis.. :-|

I would think Carol is a she.

whalesurfer
03-11-2020, 12:05 AM
I would think Carol is a she.

My bad. Saw a Carol Tome linked to Verizon, not Home Depot so I figured it was someone else.

DaRaiders
03-11-2020, 05:02 AM
https://theloadstar.com/air-freight-rates-expected-to-hit-10-kg-but-atlas-keeps-aircraft-grounded/

tnkrdrvr
03-11-2020, 07:37 AM
https://theloadstar.com/air-freight-rates-expected-to-hit-10-kg-but-atlas-keeps-aircraft-grounded/

Definitely has the potential to be a nice short term boost. How this plays out over the rest of the year is anyone’s guess.

C2078
03-11-2020, 08:19 AM
https://www.reuters.com/article/us-health-coronavirus-airlines-freight-idUSKBN20Y062

Looks like it, hopefully nice boost for Brown and Purple!!

Chris25
03-11-2020, 05:22 PM
The tables may have just turned...

Machtransition
03-11-2020, 05:25 PM
The tables may have just turned...

Can you elaborate, or are you just referring to the pandemic status?

UPSFO4LIFE
03-11-2020, 05:31 PM
Maybe cause there will be no flights to or from Europe for 30 days. Not good folks, as I don’t think cargo is exempt. We will see?

C2078
03-11-2020, 05:50 PM
Maybe cause there will be no flights to or from Europe for 30 days. Not good folks, as I don’t think cargo is exempt. We will see?

Cargo is not included. Pax only per State Dept order.

tnkrdrvr
03-11-2020, 05:52 PM
Cargo is not included. Pax only per State Dept order.

There is always a cargo cutout. We are immune to corona virus. Didn’t you read your China NOTAMS.

cessnapilot
03-11-2020, 06:55 PM
Cargo is not included. Pax only per State Dept order.
”Mr Trump said the travel suspension would also "apply to the tremendous amount of trade and cargo" coming from Europe into the US.”

airupser41
03-11-2020, 06:57 PM
Here is the actual order. It applies to people, not goods.
https://publicpool.kinja.com/subject-proclamation-suspension-of-entry-as-immigrants-1842280740

cessnapilot
03-11-2020, 07:11 PM
Here is the actual order. It applies to people, not goods.
https://publicpool.kinja.com/subject-proclamation-suspension-of-entry-as-immigrants-1842280740

thank you... I guess he wasn’t fully briefed on what he signed!

Madella0124
03-12-2020, 04:09 AM
Is anyone hearing actual numbers on the freight we are moving? This last week my flights were way more packed than over peak.

busdriver12
03-14-2020, 09:53 AM
Hey, question for you UPS guys/gals still flying into the hot zones. Are you required to stay in your hotel room for the entire duration of your layover in any countries? Our pilots (FedEx) are now required to remain in their hotel room, only getting room service, in TLV, PVG, and CAN (maybe even more that I missed). One horror story layover is scheduled for 7 days in CAN. Trying to figure out if everyone else is required to do this, or just us.

Whalehunter
03-14-2020, 10:22 AM
Hey, question for you UPS guys/gals still flying into the hot zones. Are you required to stay in your hotel room for the entire duration of your layover in any countries? Our pilots (FedEx) are now required to remain in their hotel room, only getting room service, in TLV, PVG, and CAN (maybe even more that I missed). One horror story layover is scheduled for 7 days in CAN. Trying to figure out if everyone else is required to do this, or just us.

Not at K4.

whalesurfer
03-14-2020, 10:25 AM
Hey, question for you UPS guys/gals still flying into the hot zones. Are you required to stay in your hotel room for the entire duration of your layover in any countries? Our pilots (FedEx) are now required to remain in their hotel room, only getting room service, in TLV, PVG, and CAN (maybe even more that I missed). One horror story layover is scheduled for 7 days in CAN. Trying to figure out if everyone else is required to do this, or just us.

Yes. Some cities they moved us to airport hotels but in Shenzhen they just moved us back to the regular hotel (the same one y’all are staying at).
You have to stay in your room, they check your temp several times a day and you can order food directly to your room. Interesting times. :-/

whalesurfer
03-14-2020, 10:27 AM
Is anyone hearing actual numbers on the freight we are moving? This last week my flights were way more packed than over peak.

Minor correction - we don’t move freight, we move cargo. ;-)
(years ago ups told us there was no money to be made in freight lol)

Madella0124
03-14-2020, 10:37 AM
Minor correction - we don’t move freight, we move cargo. ;-)
(years ago ups told us there was no money to be made in freight lol)
.....well I stand corrected. Cargo it is

31wins
03-14-2020, 12:17 PM
At least as of 3/12, you can leave the szx jw Marriott and go to 7/11, McDonald's, Starbucks. There are more locals walking around than a month ago

Sent from my F5321 using Tapatalk

Seatwarmer
03-14-2020, 04:33 PM
With all the changes happening almost hourly are guys waiving the contract? Crew scheduling asked us to waive the other day on an international leg and we said no even after they tried to bribe us. Got a call from an ACP who was shocked we wouldn’t help them out. I’m “ no waivers, no favors” all the time. I figured everyone else was too?

767pilot
03-14-2020, 05:00 PM
I’m “ no waivers, no favors” all the time. I figured everyone else was too?

They can kiss my pimply white butt. Does that help?

tnkrdrvr
03-14-2020, 05:02 PM
With all the changes happening almost hourly are guys waiving the contract? Crew scheduling asked us to waive the other day on an international leg and we said no even after they tried to bribe us. Got a call from an ACP who was shocked we wouldn’t help them out. I’m “ no waivers, no favors” all the time. I figured everyone else was too?

Based off the amount of HK flying that’s dumped into MD open time. I think the company has more volume coming out of Asia than it can handle. And no, you aren’t the only one holding the line. Thank you!

recut
03-14-2020, 06:30 PM
Hopefully all of that cargo will influence them to drain the pool!

Probe
03-16-2020, 10:16 PM
I am an invader from he PAX side of the industry, just looking what is going on in cargo right now. One interesting thought is the whole freight/cargo world, just in time delivery, etc. There are ships in the wrong place, containers in the wrong place. Our current logistical system was built slowly over 20-30 years, no one ever designed it from scratch.

It is now in chaos. Is there anyone in the world who knows how to put it all together, quickly? Car companies buy parts and assemble them. Those parts are made from other parts and materials, also many of which are outsourced. If you are missing one part for a transmission, the transmission doesn't get built, and therefore the car doesn't get built. How far down the road will it be before GM or VW can assemble a car? TV? A320NEO?

I am guessing your services will be in great demand for the next year. At a premium price.

MoosePileit
03-17-2020, 05:57 AM
With all the changes happening almost hourly are guys waiving the contract? Crew scheduling asked us to waive the other day on an international leg and we said no even after they tried to bribe us. Got a call from an ACP who was shocked we wouldn’t help them out. I’m “ no waivers, no favors” all the time. I figured everyone else was too?Report bribe attempts to the IPA. Taking such is not smart to anyone new- QA has a nice habit of pulling others' monetary promises that are outside contractual.

Seatwarmer
03-17-2020, 09:50 AM
Agree, 109%

Machtransition
03-17-2020, 12:33 PM
Hopefully all of that cargo will influence them to drain the pool!

any idea how many are swimming?

recut
03-17-2020, 04:01 PM
No idea. I started swimming last month and know of two others that did. Know of one that started this month.

tnkrdrvr
04-13-2020, 05:29 PM
FedEx Puts Parked Jets Back in Service to Meet Asia Cargo Surge (Bloomberg, April 10)
https://gallery.mailchimp.com/a456c16dc65d4399728dd4735/images/2b32f71b-28f9-4991-b25d-516b877ca4d4.jpg FedEx Corp. is redeploying aircraft it mothballed earlier this year and plans to add 150 flights over the next month to ferry masks, protective suits and other health-care supplies to the U.S. from Asia.
The activity adds to the usual seven to nine daily flights across the Pacific, said Richard Smith, chief of FedEx Express operations in the Americas and son of company founder Fred Smith.
At a time passenger travel has ground almost to a halt, the company also has increased U.S. domestic flights to meet higher package volume for the U.S. Postal Service as shut-in Americans buy more goods online, he said.
“It’s a tremendous uptick in flying,” Smith said in a telephone interview. “We were actually surprised we were able to crew all these flights.”
The federal government has turned to FedEx and United Parcel Service Inc. to transport supplies bound for front-line health-care workers in an operation called Airbridge. The logistics giants are also transporting virus test kits and results and helping set up temporary hospitals as the number of Covid-19 patients is poised to peak in many states.
FedEx also has flown cargo directly for states, including Illinois, Arkansas and Alaska, Smith said, and has even moved material at the behest of celebrities who’ve donated health-care supplies. Smith said the aircraft brought back into service is “a moving target,” and declined to give specific numbers.
Pilots have to undergo “rigorous testing” when they arrive to countries such as China. FedEx confirmed that one of its pilots died from the coronavirus, but Smith declined to discuss how many employees have contracted Covid-19. The company hasn’t had a large problem with absenteeism, he said.
While cargo volume has increased for the Express business, the shutdown of many U.S. businesses has hurt the company’s industrial freight unit. At FedEx’s ground unit, a decline of packages sent among businesses has been offset by the surge of consumer deliveries.