This past week the industry gathered together via a live online broadcast event hosted by Apex and Inmarsat Aviation to address the challenges the aviation sector is facing as a result of the global pandemic and economic crisis. More than 3,000 individuals logged on to watch and participate in the 7+ hour event. The synopsis is outlined below and there is a link provided if you didn’t manage to attend the live session. Overall, there was a thread of cautious optimism throughout the various presentations/discussions but there was no sugar coating the fact that we are all in for a long, hard road on the way to recovery. Over the coming weeks, we will see more and more of  these live broadcast events as the industry seeks a path forward. Welcome to the new normal! So let’s delve into this week’s news.


FlightPlan

The global aviation industry came together on April 29, 2020 for a unique all-day broadcast event to encourage collaboration during the most challenging and unpredictable time in its history. FlightPlan: Charting a Course into the Future, hosted by Inmarsat Aviation and the Airline Passenger Experience Association (APEX), saw more than 50 leading voices exchange views on the present and future of aviation. Over 3,000 viewers tuned in from almost 100 countries worldwide for a series of live debates, interviews and news analysis. Experts voice confidence in eventual bounce-back for aviation industry Nick Careen, Senior Vice President of Airport Passenger Cargo and Security at the International Air Transport Association (IATA), observed that although the COVID-19 pandemic has “no parallel to draw upon in recent memory –  the airline industry has illustrated time and time again that if there’s any industry in the world that knows how to deal with a crisis, it’s this one”. Careen predicted that changes to airline passenger journeys as a result of COVID-19 may include staggered boarding processes, alongside faster adoption of biometrics and self-service technologies in the airport. Christoph Mueller, who has previously served as CEO of Malaysia Airlines and Chief Digital and Innovation Officer at Emirates Group, gave some reassuring words of encouragement to airlines: “I have a lot of confidence that at least a lot of airlines will come out of this crisis with a new and regained strength.”

In an interactive poll[1], FlightPlan viewers were invited to share their own predictions on the COVID-19 recovery phase throughout the day. Highlights from the results included:

  • Four in ten (43%) predicted that recovery will take from 18 months to three years
  • Four in ten (44%) said the industry was poorly prepared for COVID-19
  • Nearly two fifths (36%) stated that governments have helped the industry to navigate the pandemic, but could have done more
  • 9 in 10 (87%) expect to see more deep cleaning and slower turnarounds
  • 86% believe that personal protective equipment (PPE) will become standard for cabin crews in the coming months
  • 8 in 10 (80%) expect thermal scanners to become part of the passenger journey
  • Only 9% see blood tests for airline passengers becoming the norm

Unified effort essential to tackling aviation’s environmental impact

Discussing some of the ambitious sustainability targets the industry has previously set itself, such as net-zero carbon emissions by 2050, the experts agreed that collaboration was fundamental. Anko Van Der Werff, CEO of Avianca, argued that “the whole ecosystem needs to work together on this.” Paul Stein, Chief Technical Officer at Rolls Royce, added that the impact of single-nation initiatives has been limited and a “coalition of the willing” with industry bodies, airlines, manufacturers and fuel providers is needed.
Encouragingly, industry leaders expressed confidence that COVID-19 will not interrupt progress on sustainable aviation and may even push the topic higher on the agenda. Stein reflected that “the post-COVID-19 world is going to be one that will recognize the fragility of the planet – sustainability isn’t just going to come back to the point it was before COVID – it’s going to be an even stronger issue.” The FlightPlan poll results reflected this view, with 40% of respondents agreeing that COVID-19 will accelerate the drive to reduce emissions. Digitization will catalyze industry recovery and future growth Rupert Pearce, CEO of Inmarsat, spoke about the power of connectivity to drive global development and industry recovery. Although “2019 already feels as though it belongs to a different era”, Pearce remarked that the pandemic has not slowed the fourth industrial revolution. “I believe that digitalization lies at the heart of our ability to first survive this crisis, and then to drive our ability to rebound from it and start to thrive in whatever new reality lies in front of us.”

The next generation of passengers were at the center of a discussion around the need for airlines to continue preparing for the future. Behavioral scientist Rory Sutherland spoke of Generation Z’s “incredible need to travel”, observing that his own children “don’t see it as a privilege – they kind of see it as a right”. Aviation analyst Alex Macheras delved deeper into their digital expectations, adding that “if airlines are going to better satisfy Gen Z, inflight connectivity will continue to be a driving force.” Other experts agreed that these attributes, paired with growing spending power, will put young passengers in the driving seat when it comes to digital transformation in the cabin. Philip Balaam, President of Inmarsat Aviation, said: “As we look towards recovery and ensuring long-term resilience, there will be no one-size-fits all approach. However, it will remain important that airlines can differentiate for customers. It’s clear that the safety of consumers will continue to be at the forefront in this new world, and that digitization and innovation will be crucial to driving much-needed efficiencies, reducing environmental impact and improving passenger experience.”

Reflecting on the event, Dominic Walters, Vice President at Inmarsat Aviation, commented: “In times of crisis, it’s imperative that industries collaborate to find the best way forward. With so many of this year’s leading aviation events cancelled, we wanted to connect the industry in a unique and helpful way, and the response has been phenomenal. Together, more than 50 leading voices shared a clear shared message – that while the aviation industry contends with a period of extreme uncertainty, these clouds will eventually clear. Now is the time to focus on accelerating our recovery and rebuilding an industry that is stronger, more agile and fit for the future.” And, you can watch the whole event here.


Thales

Thales has deployed the world’s first GSMA-certified eSIM activation solution on Google Cloud. This solution will offer telecom operators secure and highly scalable support to manage increases in mobile subscriptions for eSIM-capable devices. It also lets them benefit from the reliability of Google Cloud’s carbon neutral technology. eSIM adoption is being fueled by a new generation of smartphones, tablets, wearables and new IoT use-cases. Thales’ subscription management expertise not only ensures seamless remote activation of a vast number of devices, but also provides data analytics and protection of the subscriber’s data.

  • Thales to use Google Cloud technology to deliver highly secure and scalable activation of eSIM (embedded SIM) capable devices.
  • The solution enables telecom operators to support a massive global increase in the volume of embedded mobile subscriptions (ABI Research expects around 1 Billion eSIM-capable devices to be shipped annually by 2024).
  • The Thales-operated solution provides secure eSIM management services and provides compliance with data protection and privacy requirements.

Airbus

Airbus posted 481m Euro net loss for 1Q20 (vs 40m Euro net profit in 1Q19) on 15% lower revenues, citing COVID-19. It has withdrawn all delivery guidance after already reducing monthly production rates to 40 A320s, two A330s, six A350s and four A220s. It has net cash position of 3.6b Euro. Furthermore, the airframer is furloughing some 3,200 workers in Broughton in the UK.

Airbus is developing a modification for A330 and A350 family aircraft which will enable airlines to install freight pallets directly onto the cabin floor seat tracks, after removal of the economy-class seats. This solution will help with the airlines’ own business continuity, and also alleviate the global shortage of ‘belly-freight’ air cargo capacity due to the widespread grounding of long-haul aircraft in the context of the COVID-19 pandemic. Additionally, it helps the industry to address the high demand for humanitarian flights to transport large quantities of medical equipment and other supplies rapidly over large distances to where they are needed.

Compared with loading cargo onto seats, this Airbus solution facilitates easier and quicker loading and unloading operations, as well as reduced ‘wear & tear’ to the seats themselves. Other important benefits include the added security of robust fire protection, and the 9g load restraint capability to prevent anything from shifting in flight. The modification is packaged for operators as an Airbus Service Bulletin (SB). Under this arrangement Airbus defines the engineering work-scope and also manages the process for obtaining the one-time certification from the European Union Aviation Safety Agency (EASA). Its scope includes the removal of the seats & IFE (Inflight entertainment), installation of cargo pallets and associated safety equipment – and also the re-installation of the original passenger cabin elements for reverting back to passenger operations. The SB approach will also be valid beyond the COVID-19 pandemic.


Boeing

On April 30, 2020  Boeing  released the following Statement on the Bond Offering: “We’re pleased with the response to our bond offering today, which is one of several steps we’re taking to keep liquidity flowing through our business and the 17,000 companies in our industry’s supply chain. The robust demand for the offering reflects strong support for the long-term strength of Boeing and the aviation industry. It is also in part a result of the confidence in the market created by the CARES Act and federal support programs that have been put in place – a testament to the Administration, Congress and the Federal Reserve. As a result of the response, and pending the closure of this transaction expected Monday, May 4, we do not plan to seek additional funding through the capital markets or the U.S. government options at this time. The bond offering includes debt instruments with an aggregate principal amount of $25 billion across seven tranches with maturities ranging from three to 40 years. We will continue to assess our liquidity position as the health crisis and our dynamic business environment evolve.”

On April 30, 2020 Boeing conducted a productive and successful first flight of the second 777X airplane. Captain Ted Grady, 777X project pilot, and Captain Van Chaney, 777/777X chief pilot, flew for 2 hours and 58 minutes over Washington state before landing at Seattle’s Boeing Field at 2:02 p.m. Pacific. Designated WH002, this airplane is the second of four in a dedicated flight test fleet and will test handling characteristics and other aspects of airplane performance. An array of equipment, sensors and monitoring devices throughout the cabin allows the onboard team to document and evaluate the airplane’s response to test conditions in real time. The 777X test plan lays out a comprehensive series of tests and conditions on the ground and in the air to demonstrate the safety and reliability of the design. To date, crews have flown the first airplane nearly 100 hours at a variety of flap settings, speeds, altitudes and system settings as part of the initial evaluation of the flight envelope. With initial airworthiness now demonstrated, the team can safely add personnel to monitor testing onboard instead of relying solely on a ground-based telemetry station, unlocking testing at greater distances. The 777X includes the 777-8 and the 777-9, the newest members of Boeing’s market-leading widebody family. Below is a comparison between the dash 8 and dash 9:

  • Seat Count (Typical 2-class)
    777-8: 384 passengers
    777-9: 426 passengers
  • Engine
    GE9X, supplied by GE Aviation
  • Range
    777-8: 8,730 nautical miles (16,170 km)
    777-9: 7,285 nautical miles (13,500 km)
  • Wingspan
    Extended: 235 ft, 5 in (71.8 m)
    On ground: 212 ft, 8 in (64.8 m)
  • Length
    777-8: 229 ft (69.8 m)
    777-9: 251 ft, 9 in (76.7 m)
  • Program Launch: 2013
  • Production Start: 2017
  • Ground Testing: 2019
  • First Flight: January 25, 2020
  • First Delivery: 2021

Additionally, “BOEING announced plan to lower its number of employees by roughly 10% company wide, including 15% cut across its commercial airplanes and services businesses, as well as corporate functions.”

Lastly, the First Quarter Financial Results are listed below:

  • Financial results significantly impacted by COVID-19 and the 737 MAX grounding
  • Revenue of $16.9 billion, GAAP loss per share of ($1.11) and core (non-GAAP)* loss per share of ($1.70)
  • Operating cash flow of ($4.3) billion; cash and marketable securities of $15.5 billion
  • Total backlog of $439 billion, including over 5,000 commercial airplanes

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