NBAA, EBAA Shelve EBACE for 2020

The aviation community has been grappling with the rapidly changing environment surrounding the pervasive Covid-19 outbreak as it has faced evolving restrictions, sharp drop-offs in demand, and a multitude of event cancellations—including the massive Farnborough International Airshow and business aviation's European hallmark EBACE. Perhaps most daunting of all for the industry has been the uncertainty of how long the crisis may continue.

Airlines were among the first to feel the brunt, initially with restrictions on flights to and from China. In addition, companies there were restricted throughout the region, resulting in officials turning to use of other technologies, such as EHang drone delivery of medical supplies.

But as the virus spread its tentacles globally, various countries and regions began to close their borders or bar travel from other regions. Notably, the U.S. stopped accepting entry of the vast majority of citizens from Europe and then recommended against all international travel. Europe, meanwhile, followed with a closure of borders to most non-residents. Similar steps, whether outright travel bans or recommendations, rippled globally, from Canada to Australia.

The fallout has been grave. In just a few examples; by late March Qantas and its low-fare Jetstar subsidiary outlined plans to suspend all scheduled international flying following an Australian government advisory to all citizens not to travel overseas. Austrian Airlines and Canada’s Porter Airlines suspended all flight operations due to Covid-19-related entry bans and the rapid decline in air travel. Many others slashed schedules and pulled back services.

By late March, the International Air Transport Association estimated losses reaching $114 billion with at least 420,000 cancellations estimated through June. The U.S. Airlines for America (A4A) trade association labeled the situation “much worse than 9/11.” A4A president and CEO Nicholas Calio said, “Today, carriers are burning through cash as cancellations far outpace new bookings for U.S. carriers, planes are only 20-30 percent full … and this is getting worse each day with no end in sight.”

On the business aviation front, data analyst WingX reported European business aviation flight activity down by 6.9 percent during the first 17 days of March. “There have been big fluctuations day-to-day and a trend towards severe overall decline during the last few days,” the Germany-based company said in its Market Tracker report published on March 19.

WingX managing director Richard Koe confirmed the perception that prospects for business aviation could get markedly worse before they resume any longer-term rebound. “Business aviation is clearly impacted by the Coronavirus, with accelerating declines in the last few days belying the overall seven percent drop month-to-date,” he commented. “We expect flights to dry up …once restrictions are stricter and the repatriation rush is done.”

As for manufacturers, shutdowns and layoffs have already begun. Textron Aviation was among the first to announce mass layoffs, on March 18 saying it would furlough most of its U.S. employees for four weeks in response to the Covid-19 pandemic, enabling it to adjust production to market demand. Those furloughs are staggered over a roughly 10-week period, to end May 29.

Others faced production disruptions. Airbus, for instance, had a four-day production and assembly stoppage at its facilities in France and Spain to ensure a protected environment for its workers.

Boeing, which has already faced multiple challenges associated with the 737 Max, appealed to Congress for a $60 billion aerospace manufacturing package that could also benefit suppliers. But word of the request immediately sent the beleaguered aerospace giant’s stocks tumbling.

Bailout requests were aplenty, from Boeing, A4A (seeking $50 billion), repair stations, and a broad swath of the business and general aviation community.

Proposing an $11 billion package, the Aeronautical Repair Station Association said it was hearing from members concerned about cash flow in light of maintenance work being canceled and customers potentially unable to pay bills.

A half-dozen business and general aviation groups also asked to be included in bailouts, reminding lawmakers in a joint letter that their end of the aviation sector generates $77 billion a year in labor income and supports communities throughout the U.S. “There is currently no certainty as to when economic conditions will improve, which threatens the survival and prospects of thousands of general aviation businesses,” the letter stated. “Further, the threat of potential domestic travel restrictions and locally-imposed travel restrictions have the potential to cause even more significant harm to these companies as this crisis continues.”

The U.S. Congress at press time was hashing out a bailout package. One such proposal included more than $200 billion in loan guarantees.

In Europe, the European Business Aviation Association (EBAA) also pressed for relief. The association said it respected the decision by the EU to suspend border access but called on government leaders to provide assistance to the business aviation sector and asked for exemptions for medical flights from restrictions. “It is still too early to fully evaluate the extent of the crisis’s impact on the business aviation sector,” said EBAA secretary-general Athar Husain Khan. “But we have been receiving reports of operators’ aircraft grounded, airport closures, and staff being put on leave across Europe.”

Disruptions also began extending to air traffic control. The FAA was forced to close its control tower for Chicago Midway Airport to clean after several technicians tested positive for the virus. Tower duties were shifted to Chicago Terminal Radar Approach Control in Elgin, Illinois, but operators were advised of potential delays and a reduced rate of operations. A few days later, the FAA did the same with the Las Vegas McCarran and (New York) John F. Kennedy Airport towers after technicians at those facilities tested positive. And, the Indianapolis Air Route Traffic Control Center partially closed for cleaning in three work areas.

Additionally, many services requiring face-to-face interaction and involving pilot, flight-training and medical requirements were disrupted. This prompted the Aircraft Owners and Pilots Association (AOPA) to appeal to the FAA to provide extensions and maximum flexibility possible. "The current restrictions to the U.S. population create an impossible barrier for these individuals to meet the necessary airman and aircraft requirements,” AOPA president and CEO Steve Dickson told FAA Administrator in a letter.

As for events, nearly all involving the aviation community—except for online activities—have been canceled or postponed, including one of the industry’s most important events for the year, the July 20-24 Farnborough International Airshow, which drew 80,000 visitors in 2018.

The Singapore Airshow occurred as scheduled in February, but with reduced participation, including the cancellation of 70 exhibitors. The Women in Aviation International show took place in early March with only a few cancelations. But the effects really became evident with NBAA’s Schedulers & Dispatchers 2020 event, which was marked by lower attendance and empty booths and then was shortened by a day. NBAA subsequently canceled all of its gatherings through the first half of the year, and nearly all other associations took similar steps.

Another of the largest cancelations involved Europe's Geneva EBACE show, which typically attracts more than 13,000 attendees, 50 aircraft on static display, and more than 400 exhibitors. “This is the hardest decision EBAA’s management and board of governors have had to make in years,” EBAA’s Khan said. “But given the unprecedented circumstances, we had no other choice. We must do everything we can to help protect against exposure to Covid-19 and mitigate any risks associated with the spread of the virus.”

However, despite the dampened business, opportunities did crop up in other areas. In the U.S., some charter companies quietly saw an uptick as people shied away from commercial flying. To wit, Flexjet shifted to flying its pilots and crews to and from assignments on its own planes, rather than commercially.

In late March, some international charter operators kept busy carrying people needing to get home in the wake of rapidly expanded travel restrictions. In a commentary published on March 19, charter marketplace Avinode said, restrictions permitting, there is still strong demand for flights “for the next week or so.” The company confirmed that demand—measured by requests made for flights through its system—started to surge at the start of March and remained significantly higher than in the same period of 2019. But going forward, Avinode saw a flattening in April and a 16 percent decline, year-over-year, in requests for May.

Meanwhile, new business opportunities arose for companies with expertise in disinfectants, cleaning services, and purification. MRO Constant Aviation, for instance, was tasked with applying a protective coating to the entire Flexjet fleet.

For the business and general aviation community, one of the biggest concerns regarding travel restrictions is that they hamper its value proposition.  NBAA joined AOPA, the General Aviation Manufacturers Association, Helicopter Association International, and the National Air Transportation Association in reminding government leaders of the important role their members could play in helping out during the crisis.

“As our nation works to respond to the threat of the coronavirus, we wanted to make ourselves available to assist in any way possible,” the associations wrote in a joint letter to Transportation Secretary Elaine Chao, adding the diversity of the GA fleet enables the industry to operate from 5,000 U.S. airports and has extensive experience in responding to humanitarian crises.