Industry veteran and Managing Director of Indigo Partners William (Bill) Franke believes the two most pressing issues airlines are facing as they attempt to recover from the sudden onset of the COVID-19 pandemic are ensuring that they can achieve breakeven cash flow, and ensuring that passengers feel safe to travel.
During CAPA’s fourth online Masters Class Mr Franke stated that airports and airlines needed to convince passengers through a series of actions before a vaccine is available that it is safe to travel, and a more coordinated effort, which is largely absent today, is necessary.
There will obviously be some marketplace changes as airlines work to adapt to a post COVID-19 reality, but Mr Franke remains bullish on the resiliency of the ULCC model. It is yet to be determined whether Indigo will ultimately be successful in its pursuit of Virgin Australia, but Mr Franke believes the Australian market is interesting, and needs two airlines.
In many cases, airlines are scurrying to rework their order books, which will create pressure on aircraft prices.
From now, Indigo feels reasonably comfortable with its large order book with Airbus, and Mr Franke said that airframers and lessors were working to find solutions that would work for everyone. However, there will inevitably be some pressure on aircraft pricing in the near term.
CAPA's next Masterclass features Alexandre de Juniac, Director General and CEO IATA, and Gloria Guevara CEO and President World Travel & Tourism Council, to explore the crossover between aviation and tourism recovery.
It will take place on Wednesday, 3-Jun-2020, at 4 pm London time, 11 am in New York, and 11 pm in Singapore.