Air & Travel July 2020 by AirandTravel

AIR& travel Infrequent flyers YOUR VISION, OUR MISSION

JULY 2020

How soon will aviation & travel return to normal? BOEING & EMBRAER END OF THE AFFAIR AIRCRAFT LEASING RENTS GO AWRY FRONTLINE TRAVEL AGENT TELLS THE STORY

JULY 2020 PAGE 02

SEAT 1A Last month in numbers

u1.6tn Amount generated by international tourism in 2019 prior to Covid-19 crash.

1.5bn Number of people who holidayed abroad last year according to the WTTC, likely to fall to a tenth of that in 2020. u1bn Ryanair profit to March 2020. As for the next year: “good luck with that.”

530m Number of people employed in tourism worldwide. 1,000 Number of flights per day promised by ryanair in their return to the skies on July 1.

530 Number of passengers passing through Dublin airport on an average day in May.

Lanzarote; Likely to be the first major holiday destination to reopen

170 Number of passengers who flew throughout the whole month of April on the Government funded six times daily flights to and from Donegal and Kerry.

330 Number of unencumbered aircraft that ryanair have on their books.

150 Number of countries closed to international travellers in mid April. 80pc seat load factor on Ryanair flights to and from Portugal in week after lockdown lifted. 5 Number of travel agencies in Ireland who have failed since the outbreak of Coronavirus.

0 Number of

passengers arriving from Italy or Spain during the month of April.

THE GREAT REOPENING

o travel again we need two things to happen; Ireland to unlock and somewhere we like to go to unlock simultaneously. Most likely candidate are the Canary Islands, so if they reopen in September we can expect a return to travel in substantial numbers. Virus cases in Lanzarote and Fuerteventura are among the lowest in western Europe, meaning they should be among the first to unlock under Spanish government plans. Gran Canaria will be a little higher and tenerife a little higher again.\The Balearics,

the Malaga coast and Costa Daurada are all in the queue, as is the Algarve in Portugal, second only to Alentejo among the country’s provinces in having the least cases. It is a testament to international travel that the holiday hotspots of Europe have the lowest rates of infection. Even in the blackspot of Lombardy, the coastal resorts towns around Lake Garda were relatively clear of infection. The quest then is for confidence. We will see the mother of all seat sales but the question is whether bargains will overcome apprehension.”

My special destination: Alan Joyce

Every month we ask a leading travel professional to write about their personal holiday experience. This month: Alan Joyce of Qantas.

here is a picture I keep on my ipad as a screensaver and it is from a trip to the Aran Islands It is still my screen saver and I tell everyone look at that, go to this island. We then went up to Scotland took a car drove down to Cardiff it is one of the best holidays I have had in a long time. It comes from an amazing holiday during the global financial crisis in 2013. We went back to Ireland because of the Gathering cam-

Inisheer: Alan Joyce’s favourite destination paign. I decided let’s do that. I picked up my parents in Dublin went over to the west, to the Aran Islands, drove up through Mayo into Donegal Derry and Belfast. I didn’t fly until I was 21 and working for Aer Lingus, would you imagine, because I was from a working class background in Tallaght. We used to go to Butlin’s to Mosney and then to the Isle of Man on the ferry. That was

our holidays when we wee kids. I would really recommend Sydney. It is an amazing city the most iconic. I have had amazing experiences in the Kimberleys in western Australia. I went fishing for barramundi in Bunga Bunga. It was out there, very outback, very Australian and one of the most amazing experiences

CONTENTS

4 News Cityjet’s fight for survival 6 Return to aviation: The plan 8 State aid: Back to the future 11 Aer Lingus: No cabin bags 12 Aercap: Technology the key 14 Avolon: Postponing deliveries 16 Embraer: End of the affair 18 Ryanair: Those refunds 20 Ryanair & recovery: The July question 25 ALC All about deferrals 26 IAG: Willie in Westminster 31 Fly: The Asian question 32:Con Horgan at eighty 39 From the front line, Mike Shinnors 42 Eoghan O’Mara Walsh 44 Niall Gibbons 46 Cruise & Ferry 48 Flying column 50 Travel Trade 52 Destinations & meditations 54 Peter McMinn on surviving the crisis 44 Aer Lingus new uniform 56 Tribute to Dervla Murphy 57 Great travel headlines 58 Obituary Chris Kane 59 Obituary Peter Dolan 60 Obituary Tom O’Donohoe 61 Out and about with the trade 64 Oberammergau & the Plague Air & Travel, Clownings, Straffan, Co Kildare, Ireland. ISSN 2712-0333 Airandtravel is published monthly to cover the aviation travel and hospitality industries. Editor: Eoghan Corry eoghantravel@gmail.com Commercial: sineadtravel@gmail.com Web: www.aerandtravel.com

When errors occur it is the policy of this publication to have them corrected in the next edition. Email sineadtravel@gmail.com

Cleared for take off W

elcome to Air & Travel, the first magazine dedicated to managers and professionals in the aviation, travel, hospitality and tourism industries. Never before has this combined sector faced a larger and more exponentially existential crisis. Never before has the need for news, informed opinion and analysis been more acute. This is our goal. To bring you the latest developments and foment the conversations that accompany them. To celebrate the experiences and joys that travel has made possible, and will so again. Your vision is our mission as we try to rebuild the industry and its related parts into a force that will carry us all through the next exciting phase of the evolution of world travel. We hope that you will join us on that journey. Eoghan Corry Editor eoghantravel@gmail.com

JULY 2020 PAGE 4

EXECUTIVE LOUNGE LONDON SLOTS ON THE TABLE

ondon’s Competition and Markets Authority is investigating the Atlantic Joint Business Agreement between American Airlines, members of International Consolidated Airlines Group (British Airways, Iberia and Aer Lingus) and Finnair. A Decision on whether the CMA will accept commitments proposed by American Airlines and International Consolidated Airlines Group is now due in July 2020. BA and AA have offered measures to try to resolve the concerns. The proposed package includes: n Releasing additional take-off and landing slots at London Heathrow or Gatwick airports to enable competitors to begin or increase nonstop flights between London and Boston, Dallas and Miami. n Measures to support competing services on these routes as well as on the London to Chicago and London to Philadelphia routes, including access to connecting passengers on preferential terms.

STATS IN THE TIME OF COVID

he new monthly release on comes from the CSO Air and Sea Travel Statistics for March are predictably disastrous. This release has been introduced to provide data on passenger numbers, in the absence of monthly tourism surveys, because of the COVID-19 situation. The figures in the new release are based on information provided by the airports and sea ferry operators, but still take about six weeks to deliver. Passengers are by route, aggregated by country-pair, and by direction, not by area of residence.

NOTHING STOPS STOBART SOAO OPERA

he news that Stobart Group chairman David Shearer has taken the unusual step of intervening to appoint Chris Mann as an interim chief financial officer to Dublin-based Stobart Air increases the air of uncertainty around the Swords based former Aer Arann.

Changing fo the guard at Stobart

John Mulligan has reported that Stobart Air CEO Andy Jolly said the appointment had been made at the “bequest” of David Shearer. He quoted a memo to staff: “reporting to me, the interim CFO is responsible for the management of the interface between Stobart Air and the Stobart Group for the duration of his tenure and in particular the presentation of that detailed business case data to the various interested third parties commissioned for the purpose of securing Stobart Group and Stobart Air funding as that relates to Stobart Air”, Debbie Power remains Stobart Air’s finance director and will continue to manage and oversee the airline’s finance department function. Those include budget and “forecast business case constructions”, the long-term financial affairs of the company, as well as undertaking duties as company secretary.

THE MAX OR THE VIRUS?

ven by his own standards, Michael O’Leary’s comments sound profoundly optimistic when he said the grounding of the Boeing MAX could delay Ryanair’s plan to fly 200m passengers by 2020 “by a year or two.” O’Leary said the talks with Boeing on compensation and a possible new order had accelerated, but would likely not be concluded by a deadline of May 18-19 and may not conclude until the MAX returns to service, which he said was likely to happen in August or September. The Covid-19 crisis has changed the dynamics between Dublin and Seatltle considerably. Ryanair plans to move back towards an

all-Boeing fleet by cancelling leases for Airbus A320s for its Lauda subsidiary and likely replacing 30 Airbus jets at the Austrian airline with Boeing 737s, Chief Executive Michael O’Leary told Reuters. On Tuesday, O’Leary said he currently viewed talking with Airbus as a waste of his time. “We would not initiate talks with Airbus until such time as Airbus wants to initiate talks with us,” he said in an interview. Until they need an order from the Ryanair Group, frankly we are wasting our time talking to Airbus,” he added, without elaborating. Instead, Ryanair planned to “significantly reduce the scale of the Lauda fleet,” said O’Leary, who is known for his brinkmanship in negotiations. “We have (Airbus) aircraft that are due to be delivered over the next 12 months and we will cancel almost all of those deliveries,” which are from leasing companies, he said. Assuming talks with Boeing about compensation for delays in the delivery of 210 B737 MAX jets - and on a possible new aircraft order - go to plan, then Ryanair will probably replace Lauda’s 30 Airbus jets with Boeing, he added. “As long as we can reach an acceptable outcome with Boeing, the Boeing orders we have in place would readily replace - I think Lauda will have a fleet of about 30 Airbus aircraft - we would probably replace those Airbus with Boeing over the next couple of years.” In February, Ryanair said it was planning to increase Lauda’s fleet from 23 to 38 Airbus A320s by the summer of 2020. Ryanair is also in talks with unions at Lauda about pay cuts and a new labour agreement. O’Leary said the Austrian union was refusing to engage and if this did not change by the end of May, Lauda’s home base in Vienna would close, with Ryanair Boeing jets replacing the Lauda Airbus planes.

JULY 2020 PAGE 5

PaschalDonohoe and Pat Byrne of Cityjet being photgraphed

FEISTY RYANAIR KEEPS FIGHTING

yanair has demanded that Spain’s Prime Minister, Pedro Sanchez, scraps airport charges in the Costa del Sol and Costa Blanca areas. . TheSwords based airline has also said that they “want to resume flights as soon as possible,” once travel restrictions have been lifted Ryanair is annoyed that it is having to pay parking fees for its stranded planes across the Spanish airport network operated by stateowner Aena.

CITYJET’S FIGHT FOR SURVIVAL

ore woes for CityJet, who had its French subsidiary placed in compulsory liquidation by the Bobigny Commercial Court, resulting in the loss of around 80 jobs. and its Dutch unit declared bankrupt by an Amsterdam court as pilot wages could no longer be paid. CityJet also closed its base at Brussels Airport, laying off 90 people due to finances and the loss of a major contract. Previously two other CityJet subsidiaries, City Jet Sweden AB in Sweden and CityJet Oy in Finland, filed for bankruptcy. Cityjet’s Danish subsidiary still exists, so that the Danish members of the Flyvanchers Personnel Union in CityJet A / S are not affected by the bankruptcy in Sweden and Finland. Anders Mark Jensen, Vice President of the Aviation Industry Personnel Union, said he

had high hopes for the company’s continued production in Denmark. “CityJet in Denmark is doing a lot for SAS, and SAS probably still needs someone to operate the routes at a time when the crisis is over.” Pat Byrne of CityJet’s parent company in Ireland, undergoing reconstruction under examinership, is also optimistic for the survival of the airline due to stakeholder and customer engagement. CityJet’s lawyers argued that there were positive aspects, including that the company’s main customer, SAS, has agreed to support the company over the current period and that there had been positive discussions with the creditors, writes check-in.dk. According to the website, the company’s debt is currently €500m and it exceeds book assets by €186m writes check-in.dk. In Denmark, the subsidiary CityJet A / S employs 180 employees from Denmark and southern Sweden and the company is responsible for manning the majority of the 14 aircraft that are not employed from the base in Stockholm.

TILL DEBT DO US JOINED

ar rental and mobility company CarTrawler sale of aa controlling stake to investment firm TowerBrook in a deal worth more than €100m was timely and may have saved an unsightly car crash. Following news that it was to enter debt restructuring talks as a result of the impact of Covid-19 on the car rental and travel industries, CarTrawler is now set to be taken over by investment firm TowerBrook. TowerBrook has made a controlling equity investment of more than €100m. The Irish

Times reported that the deal will also see €120m of debt and €25m of revolving credit facility from banks undergo a significant writedown. Founded in 2004 and employing around 425 people, CarTrawler develops software for airlines and travel companies offering car hire services. Now, it hopes the takeover will help see the business through a significant downturn in the travel industry. “This investment will allow CarTrawler to come out of this period of unprecedented disruption with a stronger platform for growth,” said Cormac Barry, CEO of CarTrawler. “Like many companies in the travel sector, we have experienced material trading impacts as a result of the Covid-19 but the crisis will pass, and this deal will allow us to further enhance our proposition to our partners and our suppliers. TowerBrook is an ideal partner for CarTrawler as our objectives are closely aligned, and their deep operational experience and strong network will enable CarTrawler to not only return to previous growth levels but further expand and scale our business.” Gordon Holmes, managing director and chief investment officer of TowerBrook, said CarTrawler “provides a valuable service to the travel industry”. “The lockdown measures implemented in response to Covid-19 have presented enormous challenges, even for well-managed and attractively positioned companies like CarTrawler,” he added. “However, the company’s value proposition is, if anything, even more relevant postCovid-19 than before.” The possibility of a deal taking place was first revealed earlier this month as CarTrawler was attempting to secure emergency financing. In December 2019, the company announced a four-year deal with EasyJet that would provide car rental software to the airline.

JULY 2020 PAGE 6

AFTER COVID-19

Back to the skies The uncertain future of aviation

ou may hear a squawking noise in the background, Dalton Phillips said at the start his video to Dublin airport staff. “That’s the sound of airport police trying to scare away the birds. Clearly with such a massive reduction in traffic, all the birds are trying to nest.” Dublin airport is processing just over 500 passengers a day at a time it would be expecting to process 80,000. The authority is projecting 9m passengers for the year, 5m of which have already flown

this year. Their best estimates are that numbers will come back to 65pc of its 2019 record in 2021, 20m to 23m/24m mark. Dublin Airport’s dilemma is not the collapse in numbers, the scale of which will be an educated guess at best under current conditions. It is the dystopian queue-lengths it faces if social distancing is to be observed, in common with airports everywhere who are facing government regulation and the expense of temperature checking and increased sanitisation as airlines lobby for a July return to the skies.

At peak, T1 can handle 6,150 passengers an hour, which would mean 7.6 miles at full capacity with people 2 meters apart. It would take three 112 metre queues to fill 737, a 475 metre queue for security if it is to get back to processing 240 passengers an hour through each of 15 security lanes. Physical distancing would cut the capacity at Dublin Airport by 70pc with passengers potentially facing huge queues into the car parks. Rushing passengers through the airport would destroy the retail base which pays for almost

JULY 2020 PAGE 7

AFTER COVID-19

Above and opposite: Lisburn-based security company Mercury Security & Facilities Management (MSFM) has invested heavily in thermal screening technology that will detect if someone is suffering from a fever in just under a second. The Mercury TC-1 camera produces thermal images to enable the speedy detection of a high body temperature which may indicate the presence of a fever - one of the first vital symptoms displayed by carriers of the Coronavirus. From a social distancing perspective, the Mercury TC-1 can measure body temperature from a distance of 1.5 to 2 metres – thus avoiding unnecessary physical contact. everything at the airport, as expenses soar. If temperature checking is to be introduced, if seems likely judging by the Asian precedent, it is the airport who will end up paying for it. No wonder Dalton Phillips was pessimistic in his address to airport staff by video. The stakes are high. Dublin airport employs 3,000 people directly, another 16,000 people in related franchisees and 117,000 jobs indirectly. Dublin has more reason to be optimistic than sister airports throughout Europe. Both of Ireland’s main airline customers are likely to survive the crisis (as is Easyjet, the main customer in Belfast International), and Ryanair are even talking about expansion as soon as they get cleared to fly. Ireland’s aviation recovery will come earlier than elsewhere, and may even serve as a laboratory for recoveries elsewhere, in terms of best practice, debate, including social media debate, and consumer reaction to the prospect of flying again. With social distancing seen as economically impossible on aircraft, a showdown over whether airlines or airports pay for extraordinary new screening measures is inevitable

EUROCONTROL ESTIMATED RETURN OF AIR TRAFFIC FOR 2 SCENARIOS n July 38pc or 15pc n August 50pc or 25pc n September 60pc or 40pc n October 70pc or 55pc n November 80pc of 65pc n December 80pc or 70pc n January 80pc or 75pc n February 85pc or 75pc Source: Eurocontrol, estimate of level of fleet return for co-ordinated or uncordinated exit from travel restrictions

he narrative was still dominated by masks, temperature checks and commentary on social distancing when Ryanair’s ebullient CEO (now sporting Willie Walsh’s haircut), switched on the summer in people’s heads with his announcement of a

seat sale and return to the skies at the beginning of April. The prospect of 40pc of Ryanair’s schedule back in the skies within two weeks when lockdown was still in place and there was no prospect of 14-day quarantine regulations being lifted for inbound passengers was alarming. It led to swift rejection by the health and political authorities, but also provoked a debate about how much appetite for travel was left in a population who had seen their holiday bookings go up in smoke, and worse, were left waiting for a refund of the money they had already paid over. While all of the focus was on airlines, airports, social distancing, safety and the level of preparedness, in the background a separate drama has been unfolding which has damaged confidence in the entire travel sector. regardless of whether bookings were made direct with airlines, cruise companies, hotels,

online intermediaries, travel agents or tour operators, the consequences have been the same, poor response to communication, reluctance to refund customers with actual cash, and offers of vouchers and credit notes. Airlines in particular were guilty of removing the contact link on their websites for anxious customers. Cruise lines introduced refund polls of 120 days. Airlines swiftly introduced credit notes that were valid for a year, at the end of which a refund was possible. The EU responded blankly that Eu261 and the Package Holiday Directive were still in place, so vouchers were not valid. Events had overtaken the legislation, but not everyone recognised that. Member states introduced modifications of their own to protect their travel industry going bankrupt. Aviation split between the distressed airlines seeking state aid and the well-resourced airlines who complained about the others (not to mention some well resourced airlines seeking state aid). At the end of the line the consumer and the travel agent were both deprived of their money. It is not the health authorities or the politicians who will decide when it is safe to fly again. it is the consumer. It is up to airlines and airports to ensure they are safe to do so and able to pay for it.

STILL FLYING

n Ryanair extended to May 28 Birmingham, Bristol, Gatwick, Manchester, Stansted, Edinburgh, Glasgow, Berlin, Cologne, Amsterdam, Brussels, Lisbon, Cork to Stansted, n Aer Lingus US: Boston, Chicago, JFK, Heathrow, Manchester Amsterdam, Belfast City, and Cork to Heathrow Belfast City and Cork to Heathrow Stobart - Donegal and Kerry

JULY 2020 PAGE 8

STATE AID AND AVIATION

The spirit of

Airlines go trotting to governments for state aid amid the crisis

redictably, it is the man from Mullingar who is most colourful in raising the objections and creating the metaphor of Lufthansa as a state aid junkie. In one of his oft-repeated media performances, O’Leary declared: “Lufthansa his like a crack cocaine junkie looking or state aid. They are already getting huge payroll support form the German government. What do you need more state aid for? “Actually we don’t have many other costs at the moment because we are all grounded. “If they re paying state payroll support, which we and IAG and other airlines are getting, what do you need the €10bn for? “And it is not just €10bn, they are looking for €10bn from the German government, they are looking for nearly a billion form the Austrian government and form the Swiss government. “They are off their heads. they see this as an opportunity to get one last huge quantity of state aid two they can go around and buy up everybody when this is all over.

s always, there is a little bit of truth breaking out of the bluster, expressed less controversially by Willie Walsh when he referred to “illegal state aid typically given to a failed company”. The problem state aid junkies are not so much Lufthansa, but the portfolio of airlines that never quite coped with the suspension of state aid under EU rules in the first place. The airlines which were strongest coming in to the crisis, O’Leary mused on another occasion, could end up being the weakest coming out of it. Predictably, one of the first to get EU approval was the renationalised Alitalia at the very start of the crisis. The Italian government will inject at least €3bn fresh capital into Alitalia and retook control of the loss-making airline after 11 years of difficult private management and three failed restructuring attempts. The Labour ministry said it had given a green light to place 6,622 Alitalia workers on a temporary layoff scheme until October. Patuanelli said Rome would do its best to protect current job levels at the airline,

which currently employs 11,132 people. Ryanair’;s argument is this will distort Europe’s level playing field in airline competition for many years. “Lufthansa, Air France-KLM and Alitalia can now fund many years of below cost selling, whereas Ryanair and other well-run airlines will not request (and would not receive) such State Aid. Ryanair will challenge these unlawful State Aid bailouts in the EU Courts to protect fair competition in Europe’s aviation market, which has done so much to lower fares for consumers over the last 20 years. Ryanair calls the payroll support in which it itself has engaged as different because it is transparent and non-discriminatory.

’Leary says:”Lauda feels like it’s in methadone treatment centre at the moment in Germany and Austria.” “We will be competing in Stuttgart, Düsseldorf with Lufthansa getting about €9bn of state aid from the German government. Austrian Airlines, which is owned by Lufthansa is into the Austrian government looks like 800m of state aid. “And Lauda in teeth of both, that Lauda will get state aid from the German government or from the Austrian government.” “This could, for example in Germany, have involved cutting departure taxes or reducing airport taxes in France, which would have benefited all airlines and passengers equally and not just favoured the local flag carrier.”

ufthansa’s deal comes with state provises, an all Airbus fleet and board memebrship for government nominees. The airline has to pay rising interest, but has to sell the shares by 2023. “Lufthansa is a disgrace, O’Leary says. “We have to wait for the EU to approve the state aid. We will then challenge the state aid in the European Court. I think we will win in the European courts because it is so manifestly anti-competitive. “The challenge is that, if we win it and the German government appeal the result, it will be four or five years before we get a decision, at which point Lufthansa will have repaid the state aid anyway.

JULY 2020 PAGE 9

STATE AID AND AVIATION

state aid future

but is this a return to the 1980s or just postponing the inevitable?

“All we are really trying to do is highlight the point, we, Easy jet, BA and others, Laudamotion in the German market, that we now have to compete for the next four or five years with a Lufthansa that has not just €9bn from the German government, but nearly €12bn in state aid from three governments. “ “They will use it to dump on the rest of us with below cost selling and they will buy up Condor and the rest of the German airlines that they don’t already own. “ ‘There are massive distortions going on now in the air travel market. There is Alitalia getting €3bn, an airline that has never made a profit in 75 years, was teetering on the edge of bankruptcy but then Covid-19 arrives and it is an opportunity for the Italian government to renationalise the airline and then give them another €3bn. to do what with? “ “They only account for 20pc of the traffic in Italy. They are not even systemically important in Italy anymore. This is just naked distortion of completion “Ryanair also cried foul about France, where the State is refunding aviation taxes but only to French airlines where all other EU airlines flying in France, such as Ryanair, EasyJet & B) must still pay these taxes. This bailout discrimination is clearly in breach of State Aid and competition rules.”

t was a sign of how things have changed that France’s tax deferrals for airlines won EU approval, the first state subsidies for carriers to be cleared under looser EU rules to help companies survive the coronavirus downturn.

‘Lauda feels like it is in the middle of a methadone treatment centre at the moment

Michael O’Leary with the man he described as a state aid junkie, Carsten Spohr Ryanair said it is challenging the state in the courts but the cases will take many years to work their way through the system. O’Leary says “the problem with state subsidies is they all come with chemicals on them that will prevent those airlines from engaging in meaningful labour reform or productivity gains or efficiencies over the next number of years.” “BA has announced 12,000 job losses. We have announced 3,000 job losses, Wizz has an-

nounced job losses, We are all making meaningful efficiencies, not because we want to but because we have to. We have no choice. we will have meaningfully lower unit costs going forward for the next couple of years, where any airline getting state aid will have made no changes to their cost base. They will just use the state aid subsidies to fund below cost selling.” “So if you compare and contrast, what really was to the team in IAG are doing, taking out

JULY 2020 PAGE 10

STATE AID AND AVIATION

Frankfurt airport. Lufthansa has received state aid from three governments large numbers of jobs and driving efficiency gains, compared to what the subsidy junkies Air France and Lufthansa are doing, they just take billions of state aid. But there will be no labour reform there be no productivity reform.”

he problem is getting the genie back in the bottle, once state aid has been sanctioned, as it appears to be. Ryanair is noting “the bizarre edict coming out recently last week, not lower the Italian government could give the Alitalia In state aid, but they’re also now attempting to impose these Alitalia, terms and conditions, labour pay rates on all other airlines. “This is abuse of state aid rules, but also tearing up the competition or the level playing field rules in Italy.

t is all all a far cry from March 3 in Brussels with Carsten Spohr talked about his opposition to state aid at A4E summit. He has long complained about Middle Eastern airlines and their alleged state aid and fuel price subsidies, and even as the Covid-19 crisis broke has was in no meed to retract. In his defence, the scale of the crisis had not emerged at that stage. “Before we need help there are a lot of burdens that can be taken away. Europe it is us competing against the rest of the world. “We all believe that consolidation in Europe is overdue. A crisis can also help to accelerate consolidation. Don’t tell my CFO that Coronovirus is an opportunity because he is losing his sleep.” Back in Leinster House Paul Murphy, called for Ryanair and Aer Lingus to be nationalised. Romantic Ireland may not, after all, be dead and gone and with O’Leary in the air.

‘Lufthansa is like a drunken uncle at a wedding’

DESPATCHES FROM THE BOTTOM OF THE BEGGING BOWL AEROFLOT

IBERIA

AIR FRANCE/KLM

ICELANDAIR

€3.7bn Russian govt tax break granted €4bn French 90% loan guarantee Granted €3bn French direct loan Granted €3bn Dutch loan guarantee Requested €100m French deferral of aero charges/taxes for “French airlines” Approved by EC

AIR BALTIC

€250m Latvian govt investment granted

ALITALIA

€1.2bn Italian renationalisation Implemented €500m Italian C19 fund for “Italian airlines” Granted

€1bn Spanish loan guarantee Requested

€175m Finnish loan guarantee Pledged €600m Finnish statutory pension premium loan Pledged

€455m Swedish loan guarantee Approved by EC €137m Danish loan guarantee Approved by EU €137m Norwegian loan guarantee Approved by EU €132m Swedish loan guarantee for Swedish airlines Granted

€250m Polish grant / loan Pledged

€250m Czech buyback

€700m Iceland Govt aid Granted

FINNAIR LOT

LUFTHANSA

€65m Romanian loan Requested

€8.9bn German loans and/or equity investment, Granted by german government & subject to EU approval €800m Austrian loans & grants Requested €290m Belgian loan guarantee Requested €1.4bn Swiss loan guarantee Granted

€550m Hesse state loan, EU approved

€265m Norwegian loan guarantee Granted

BLUE AIR CONDOR

EASYJET

€680m English govt guarantee granted

SAS

NORWEGIAN

SMARTWINGS TAP

€350m Portuguese loan guarantee Requested

TAROM

€65m Romanian grant or loan Requested

TUI

€1.8bn German loan Granted

VIRGIN

€500m UK grant Requested

JULY 2020 PAGE 11

AER LINGUS RETURN

Curtailing cabin bags Aer LIngus video shows the mechanics of post-Covid flying

er LIngus COO Pater O’Neill fronted the new Aer Lingus Covid-19 safety video, in preparation of the airline’s return to the skies. Obviously, Aer Lingus have a skeleton schedule still operating. Our future routes are under review. Future plans will be very much be in line with what the government guidelines are and work within that. We are continuously looking at what the schedule will be and what demand will look like. It is really difficult. All the old models are out the window in this new world. When we start tis see green shoots we will be ready to go with operational processes. By putting out a video in a quiet but reassuring way, we think people will start to think about it and make enquires on travel.

t is all about reassurance. Within the aviation process we are used to all the safety and procedures. These things are common form for us. Now we have to adopt the same processes now to give that little bit more reassurance to people as they contemplate life outside of Covid-19 restrictions. First and foremost, we are seeking to put that reassurance out to people, and as they start to form lans and get a little bit more comfortable as restrictions are eased, that air travel is a viable option. What are the airlines doing and what are we doing to reassure people? We are looking at it from the end to end journey, the pieces we can control. Obviously the airports are doing their piece in line with the EASA guidelines as well. We have been walking the ground with the DAA in particular here in Dublin. They have the markings in place and social distancing. They are starting to do their piece. Their hand sanitisation equipment is in place. The conversations re going on at a national level as well as to how much more they do.

here is a conversation about the recommendations about the wearing of masks. While it is mandatory on board the aircraft we are obviously recommending from the moment you enter the airport, that passengers wear the mask or face covering along the way. It is reinforcing those sensible guidelines and etiquette that have become commonplace now, to reinforce that the whole way through. We are not going to be in a position where if someone is willing to wear a mask and they get through to a boarding gate and don’t have it, we are not going to turn away people on that

Peter O’Neill fronting the new Aer Lingus post Covid information video basis, to get people m moving. That said, the supply of PPE has been a problem for everyone. We want to know that we have enough, primarily for our staff, but we will have a small backup. All our messaging, everything we do, is to come with an adequate supply of either face veering or a mask.

oarding or deplaning is going to be in small groups. Priority boarding will be dispensed with until things settle, or maybe it becomes the new normal. Passengers will be called strictly by seat row number and then move forward in small groups. From the airport side, we have actually seen the physical markings come into air bridges and the creation of gaps to allow that to happen. For the deplaning piece, passengers are being asked to remain in their seats. The PA’s on board are being adopted for that. If they are exiting through the front door of the aircraft, it will be by row number and instructions are to remain in your seat. To reinforce and help with that, we are encouraging people to check hand baggage, as

well, to minimise the amount on board, and to allow as smooth a flow on and off aircraft as possible, by reducing the amount that people are bringing on board. We will be taking the hand baggage piece for free on a check in basis.

e have had a soft launch, watching individual flights. The teams have been in the airport, working with the DAA on issues like the screens, that will go up at boarding gates, what will work and what is practical. Things like the security check, matching the ID to remove the mask or face covering temporarily for that piece. that needs to happen. we are trying to go through al those pieces step by step. There has been no issues reported around the wearing of masks since we have put it out there. The vast majority of people are arriving with them. We have not had any issues at all. We are dealing with small volumes at this point in time. The real asset test will be as things start to build. We will be looking at things like staggering our flight departures. It will be a gradual build up as things start o build, to manage that flow at all times.

JULY 2020 PAGE 12

AERCAP Q1 RESULTS

All about technology

Aercap takes long view on leasing in an aviation crisis

ho would have thought? Lessing giants AerCap faced a 12pc share surge after delivering their quarterly update in the midst of the worst crisis the aviation industry has ever faced. Gus Kelly, predictably, withdrew the fullyear outlook and turned his attention instead to the abundance of caution the lessor was employing to tide our the crisis, both in the .2020 Q1 results and the subsequent earnings conference call. So what has Aercap got that nobody else can match? During the conference call they emphasised experience, that 100pc of new aircraft deliveries through December 2021 were already placed, that 70pc of aircraft were placed with flag carriers, US and Chinese majors and other investment grade airlines, their 55pc new technology aircraft with average age of 2.5 years, that current technology wide-bodies are only 12pc of the portfolio, their strong liquidity and $11bn sourced finance, double the requirement for the next 12 months, the lowest leverage level since 2014, over $24bn of unencumbered assets, available as security for borrowings or saleable).

here is no doubt that some airlines will fail because of this crisis,” CEO Aengus Kelly told the conference call. Airlines will need lessors a lot more than they did over the last few years, and I do believe there will be fewer lessors. In this environment, not having a global platform is a massive disadvantage. And those who have entered the space on the basis of trying to pick up yield over the last few years, I suspect that they will retreat from the space over the coming years and they will be reluctant to reinvest. So I think, on the far side of this, opportunity for sale and leaseback will not be the issue, and there is no need to rush into it, there will be plenty there.

ny crisis accelerates trends that were already evident, they don’t create new ones. As we highlighted in prior calls, we were seeing a trend towards certain variants of new technology aircraft and slowly out of current technology aircraft. “We saw this trend out of current and older technology aircraft and we acted on it, by selling over 600 aircraft in the last six years. AerCap’s fleet has more new technology aircraft than any airline or lessor in the world. “Coming into this crisis, AerCap did not have a single new aircraft slot available until 2022. Furthermore, of the 55 used aircraft that

Aengus Kelly: benefits of having longer than average lease terms

had lease is scheduled to expire this year, we only had 6 left to place - a manageable task for a company used to placing up to 200 aircraft a year. This is one of the key benefits of having longer than average lease terms, fewer expiries each year.”

n March, we took the decision to draw down our RCF, revolving credit facility, out of an abundance of caution due to the volatility of the capital markets at that time. Given the actions of the Fed since then, and further stability in the broader funding markets, we have repaid $3bn of this RCF. As part of this agreement to defer 60 B737 MAX deliveries, we retained our contractual rights and remedies. However, I do think it is likely that there will be additional delivery delays due to the challenges that the OEMs will have in their supply chains as they restart production.” “As you can see from the actions of governments, what might be good for creditors of airlines, such as aircraft lessors, may not be as advantageous for equity investors.” Amid the crisis Aercap has been granting or progressing two to three month rent deferrals to some lessees, to be repaid during the remainder of the year, in total $600m representing 13pc of annual lease rentals, compared to $1bn of security deposits and letters of credit.

erCap has rescheduled the delivery of 37 aircraft that were previously expected to be delivered in 2021 and

2022. These aircraft are now expected to be delivered in 2023 and later years. AerCap has now rescheduled the delivery of 100 aircraft that were originally planned to be delivered in 2020, 2021 and 2022. The rescheduling of these deliveries has reduced our cash capital expenditures in 2020 and 2021 by $4.7bn. Gus Kelly said “we currently expect to have cash capital expenditures of approximately $1.1 billion for the remainder of 2020 and approximately $2.5 billion for 2021. We expect our cash capital expenditures during these years to decrease further as we continue our discussions with the aircraft manufacturers and our customers. All of the aircraft delivering in 2020 and 2021 have been placed on long-term leases.

Any crisis accelerates trends that were already evident, they don’t create new ones.

JULY 2020 PAGE 13

AERCAP Q1 RESULTS

Aengus Kelly and former Aer Lingus CEO

“On our first quarter earnings call, I noted the positive trends that we were starting to see in Chinese air traffic. Similarly, since the low point in mid-April we have seen a steady increase in air traffic in Europe and the United States.

ercap is in active discussions about managing deliveries and delays over 60 near term deliveries, reducing 2020 capex by $2.3bn (55pc, 28 deliveries) and is working on or has an extra $1bn of new funding initiatives. As economies begin to reopen, our airline customers will play a vital role in the recovery of their respective countries. We have taken these steps to better align our delivery schedule with the needs of our airline customers and our OEM partners during this period of market dislocation. We expect to reschedule additional aircraft deliveries in the future as we continue to work with our customers and the manufacturers.” Net income increased 18pc to $276.8m, driven by higher maintenance revenues as well as net gain on sale of assets. Diluted earnings per share increased by 27pc, driven by the same factors as net income and the repurchase of 14.1m shares from Jan19 through March 2020 with a 14pc increase in book value per share since 31Mar19 to $73.69. [Market price today $29.82; 31Mar19 $46.54]. The average age of owned fleet at end of 2020 Q1 was 6.2 years (same as 2019 Q1) and the remaining lease term 7.5 years, up from 7.4. 12 aircraft were sold during the quarter (5 A320 family, 6 B737 NG and 1 B747) for $265m and 7 purchased (5 A320neo family, 1 B787-9, 1 Embraer E2) for $427m. The short-haul fleet is by majority A320 family and the long-haul fleet Boeing (787, 777, 767). The same is true of the order book except that the long-haul aircraft are exclusively B787.

GUS KELLY’S AVIATION ANALYSIS VIRGIN AUSTRALIA To REFUSALS If the airline just says,

date, in our portfolio, we have seen Virgin Australia and Air Mauritius enter administration, which is a similar process to Chapter 11. When an airline enters Chapter 11 or administration, they will normally have between 30 and 60 days of protection from their creditors. After that, they either pay for the lease or return the aircraft. If we believe the right thing to do is remove the aircraft, then we won’t hesitate to do so. In a number of cases the airline can emerge from Chapter 11 and in these situations, they generally maintain the majority of their fleet. I think this is a likely outcome in the case of Virgin Australia.

TECHNOLOGY We were seeing a trend towards certain variants of new technology aircraft and slowly out of current technology aircraft. Critically, we saw this trend out of current and older technology aircraft and we acted on it, by selling over 600 aircraft in the last six years. AerCap’s fleet has more new technology aircraft than any airline or lessor in the world.

CONFIDENCE When the quarantine rules in Beijing were relaxed, it led to a surge in bookings on the online travel websites. This demonstrates confidence in the safety of air travel and the desire of people to travel, once authorities say they can. We are also seeing the first agreements on cross-border travel, with the protocols being discussed between China and South Korea and other countries in Southeast Asia. What is occurring in China today is what Europe expects to see in two to three months’ time.

B737 MAX There will be additional delivery delays due to the challenges that the OEMs will have in their supply chains as they restart production.

we are not taking delivery and there is an airplane up for delivery, you will generally work with the manufacturer. The three parties concerned are trying to work together to avoid those types of situations, that the lessor has to take an unplaced airplane.

WIDEBODY There will be fewer aircraft operating in 2021 than expected. This will come from aircraft retirements by the airlines and a reduction in supply from the OEMs. To date, airlines have announced the retirement, or possible intent to retire, of approximately 700 aircraft. Importantly, 240 of these aircraft are very large aircraft such as A380s, B747s, B767s and A340s. These large aircraft will take a disproportionate amount of ASKs out of the system. STATE AID

Airlines will be focused on retiring debt, or government aid, and we’ve seen clear evidence of this behaviour from the financial crisis. Once the banks received significant government aid, the priority was to retire that government support as fast as possible, because it strategically impaired and tactically impaired the ability of management to run the business. And I do believe we will see the same behaviour here. And so, there’ll be a greater focus on using operating lessors, when we get to the far side of this, than spending billions of dollars of their own money buying airplanes from Boeing and Airbus.

CHINA Over the course of the last two months, we have seen a steady increase in flight activity and load factors in China, where they are now running approximately half of the flights they were operating in 2019. They hope to get to approximately 65pc during the summer.

JUNE 2020 PAGE 14

AVOLON Q1 RESULTS

‘We are well positioned’ Avolon cancels 75 BMAX as it enters Q2 with 855 aircraft

Dómhnal Slattery: 80pc of customers have already requested relief

ómhnal Slattery, CEO of Avolon Leasing, says the company has acted “swiftly and decisively” during 2020 Q1 to cooper with eh Covid crisis. He said Avolon has significantly reduced near-term capital commitments; re-aligned the order book with the new market outlook; and enhanced liquidity by drawing down on unsecured revolving credit facility. “The prudent management of our balance sheet over the last number of years, specifically in increasing our unencumbered assets and operating with minimal near-term debt maturities, means we are well positioned for the medium-term.” Avolon delivered 29 new aircraft to nine customers during the first quarter of 2020; sold 18 aircraft, including two managed aircraft; committed to sell 21 narrowbody and widebody aircraft with an appraised value of US$747m to the Sapphire 2020-1 vehicle.

We have agreed rent deferral arrangements for an average of 3 months

n Total owned, managed and committed fleet at year end was 855 aircraft. n Average owned fleet age was 5.0 years with an average remaining lease term of 7.0 years; n Avolon ended Q1 with a total of 150 airline customers operating in 62 countries. n Lease revenue for the quarter was US$644m, up 5pc, while delivering $154m in profit for the quarter, down 13pc. n Avolon generated $444m of net cashflow from operating activities (down 2pc). n Avolon ended the quarter with $5.5bn of total available liquidity, up 4pc. n Net debt to equity was 2.3, up from 2.1, all comparisons with 2019 Q1.

lattery commented: “while Avolon entered 2020 in its strongest position as a company, the impact of COVID-19 has been severe for the aviation industry. “The forced lockdown by governments around the world has resulted in the effective grounding of the global fleet. Consistent with our experience of managing through previous cycles, we materially re-profiled elements of its order book to better align to the current market outlook reducing future aircraft commitments in the 2020 to 2023 timeframe from 284 aircraft at 31 Dec 2019 to 165 aircraft at 31 March 2020 “Those changes included: cancellation of orders for 75 unplaced B737 MAX aircraft

in the 2020-23 timeframe and the removal of commitments to acquire 4 A330neo aircraft due to deliver in 2021; and rescheduling the delivery of 16 B737 MAX during the 202023 timeframe to 2024 or thereafter and the re-profiling of 9 A320neo family aircraft from 2020/21 to 2027. Avolon financing activities during the quarter including closure of a private offering of US$1.75bn aggregate principal amount of senior unsecured notes with maturities in 2025 and 2027; repaid $1.195m debt while extending the term and reducing interest rate on other facilities.

volon, which started in 2010 in a the middle of another crisis. has already received requests from its customer base for relief from payment obligations under their leases during the quarter. These included requests for payment relief from more than 80pc of its current owned and managed customer base. These lessees account for more than 90pc of annualised contracted rental cashflow of the current owned and managed fleet. The requests have taken a number of forms including, but not limited to, requests for short term rent deferrals for part or all of monthly rental for a specified period of time; As at 31Mar, Avolon was engaged in what it calls “active dialogue” with its customer base

JUNE 2020 PAGE 15

AVOLON Q1 RESULTS and had agreed a number of rent deferral arrangements for an average of three months. It is expected that some form of short term rental deferral arrangement will be agreed with a majority of its customers.

lattery told Richard Curran on RTE radio this as “a most challenging environment for us in the aviation industry, indeed a crisis of epic proportions. It is significantly more challenging than the great financial crisis. The CEO of Airbus, Tom Enders, described it as 9-11, SARS and the global financial crisis all merged into one.. “There are about 24,000 commercial aircraft in the world. At the ,moment 90pc of those are grounded and are being maintained on the ground by the airlines. The big issue for us in the industry is how many of those aircraft will go into long term storage. Our estimate at the moment is there is probably 4,000 too many aircraft in the world for a few years. “Think of the aircraft leasing company as the middle man between the banks and the bond market, and our customers the airlines. We borrow from one market and we lease the aircraft to the other. “At the moment, almost 80pc of our airlines globally have sought deferrals. They simply do not have cash. We have been working very constructively on a global basis, but at the same time we have got to balance our cash flow needs, because we have to continue paying our banks and our bond holders. “At the moment the vast majority of the aircraft are at airports, but when they are put into storage they are generally moved to locations in the world like the Mojave desert in the USA which is one of the largest and safest, from a safety perspective and from an atmosphere perspective. “From an Avalon perspective, the good news is that we entered this situation in robust health. We had over €5bn of liquidity on our balance sheet. We believe, based on the most draconian forecasts, and they are pretty draconian, that we can survive through this crisis.

rust me, in our industry there will be no winners in this, there will be just survivors. We are going to lose airlines. And we are going to lose aircraft leasing companies who do not have the balance sheets to weather the tsunami. If you think of world aviation as domestic and international, the biggest domestic markets are China and the United States. We are seeing green shoots in China. Our team in Chinas just reported that traffic is 20pc higher than it was four weeks. We are seeing green shoots in the United States for booking in the second half of this year. But that is just domestic. International travel we believe will take two or three years from now to recover to last year’s levels. Barclay’s Bank survey last week, talking to business people and leisure travel managers,

Dómhnal Slattery: air travel will recover because demographics will push it there

and the result software that survey were quite startling, particularly for business travellers which showed 40pc of respondents saying they were going to put off business travel indefinitely until there is a vaccine or a complete elimination of new cases of Covid. We are very pessimistic on the prospects for international travel.

ir travel will recover because demographics will push it there. But it is going to be a real challenging two to three years ahead. People will start to travel again. They will balance the risks and the rewards. They will look at the facts. Aircraft air filtering systems on aircraft are extremely sophisticated. And the air is filtered within an aircraft 20 to 30 times more frequently than in an average office, and five to six times more frequently than in a grade A hospital. The filters that are in these aircraft are 99.9pc effective in trading airborne particles and other biocontainment such as Covid 19. It is important that people understand that, within that tube, the air in there is very clean. The challenge is that, going from your home to the airport, there are so many touch points along the way that are not so clean. They will look at the mortality rate and the demographic profile of that. people will want to get back to living life. We have been all contained and isolated now for two and a half months. There will be a desire to get back to the new normality very quickly. The middle seat debate does not have any validity. It does not make the aircraft any safer. The reality is, in my view, is that air fares are going to go up and they are going to go up pretty significantly over the medium term. The other side of that argument is that air fares had arguably gotten to a point, particularly with the low cost and ultra low cost fares, that they were un economic for a lot of airlines. They were basically loss making. Look at Norwegian Airlines, teetering on bankruptcy and just about surviving, losing money on literally every international air route they flow.

here is a rebalancing that will go on in the world. What is the right economic price for an aircraft seat? “I have a really fundamental view on state aid and you have to break it into two buckets. One is the responsibility of the government to protect the employee, the aircraft mechanic, the flight attendant, the cabin crew, to try to preserve their ability to live on a week by week basis during the crisis. that kind of social support I am 100pc behind, and we have seen that play out throughout the world. “I am not a supporter of government bailing out the equity or the ownership in an airline because all that does, ultimately, is distort competition. Michael O’Leary is correct on that point. But nevertheless we are seeing governments in Europe and in different parts of the world stepping in and bailing out airlines on the equity side. It is hard to stop that, because these airlines are national champions, flag carriers, politically very relevant. I don’t think it is stoppable but i don’t think it is the right business model.

lattery said that, given the ongoing impact on its customers’ operations he anticipates that additional requests for rent relief will be received. A number of lessees will fall behind on their rental obligations with a related increase in Avolon’s trade receivable balance. During the quarter Fitch Ratings, Moody’s Investor Service, S&P Global and KBRA affirmed Avolon’s issuer rating as BBB-, Baa3, BBB- and BBB+ respectively. All four moved Avolon’s rating outlook to negative.

There will be no winners in this. There will be just survivors

JULY 2020 PAGE 16

BOEING & EMBRAER

The end of the affair I

Embraer: facing a sales crisis as Boeing deal collapses

t all started out so well. Romantic candle light dinners, that’s a beautiful shirt and that’s a beautiful dress, champagne, and fine wine, and a little peck on the cheek to finish the evening. “Your wings are more shiny than my wings.” Now they are not even taking each other’s calls. Boeing and Embraer have hired the learned gentlemen as they go to battle over the deal that fell through. Embraer said Boeing told lies and never intended to see the deal through in the first place. Boeing said Embraer were half hearted in accepting their courtship. They are going to take each other’s calls, as

Where did it all go wrong?

sometimes happens, because they have a lesser romance tied to the C-390 Millennium military aircraft.

hat caused the rift? Many fingers point at Boeing’s decision to seek state aid from the US government, with tight restrictions on the bailout fund, as the company faced a post-MAX, post-Covid meltdown. While Boeing espoused the importance of access to Embraer engineers and Brazil’s lower cost base, the deal they valued at $4.2bn had a market value closer to $1bn, according to some analysts.

Eamonn Brennan CEO of Eurocontrol, with John Slattery of Embraer at the CAPA aviation conference in Powerscourt, Co Wicklow, May 10-12 2017

Boeing’s application for federal money would present huge political problems if Boeing was to send $4bn to Brazil. It was all going so well. The planned strategic partnership between Embraer and Boeing comprised two joint ventures. One joint venture made up of the commercial aircraft and services operations of Embraer (Boeing Brasil – Commercial) in which Boeing would own 80pc and Embraer 20pc. Another joint venture was to promote and develop markets for the multi-mission medium and air mobility aircraft C-390 Millennium (Boeing Embraer – Defence) in which Embraer would hold a 51pc stake and Boeing the remaining 49pc.

oeing said it exercised its rights to terminate after Embraer “did not satisfy the necessary conditions.” Embraer denied that it had violated the terms of the agreement and accused Boeing of lying to cover up its true motivations for dropping out. In a statement emailed to reporters it foreshadowed possible legal action, Embraer vowed to “pursue all remedies against Boeing” for what it called a “wrongful termination of the agreement.” “Embraer believes strongly that Boeing has wrongfully terminated the MTA, that it has manufactured false claims as a pretext to seek to avoid its commitments to close the transaction and pay Embraer the US$4.2bn purchase price.”

JULY 2020 PAGE 17

BOEING & EMBRAER

John Slattery with the Embraer E190 in Dubln, P{hotograph by Mike Kelly

“We believe Boeing has engaged in a systematic pattern of delay and repeated violations of the MTA, because of its unwillingness to complete the transaction in light of its own financial condition and B737 MAX and other business and reputational problems.” The Joint Venture agreement provided for a $100m break-up fee to be paid by Boeing if anti-trust approval was not forthcoming. By terminating the agreement early, Boeing hopes to avoid paying the fee Boeing and Embraer will maintain their existing MTA, originally signed in 2012 and expanded in 2016, to jointly market and support the C-390 Millennium military aircraft.

oeing’s near-term priority is saving itself, getting the MAX recertified , deliveries restarted and rebuilding its balance sheet. Product development has ground to a halt, in the foreseeable future. All those marvellous Seattle aviation acronyms are gone. No MOM, Middle of the Market aircraft. No NMA Light, New Midsize Airplane. No FSA, Future Small Airplane. Worse, no customers.. Despite the optimism of Embraer’s aviators, Embraer could not fit into this scenario. The 2020 decade has already been described as Boeing’s lost decade. It could also be Embraer’s. The ball has been dropped on a deal had been conjured up after a courtship of Bombardier was flunked, party because of intervention by United States Secretary of Commerce Wilbur Ross. Bom-

bardier are back in the airframe business they promised to exit. Embraer are now forced to do the same. Embraer’s commercial operation has shifted, focussed now on realigning with the rest of the company and conserving cash, Ennis born John Slattery, who is Embraer’s Commercial Aviation president and CEO, said that Embraer’s post-Boeing-breakup strategy does not include seeking out a new partner to restart the deal but stopped short of saying that Embraer is not open to being approached. To say it is not a good time to find a new partner is an understatement.

hen in Dublin for an aviation finance conference earlier in the year, Slattery described the deal as “mission-critical” for Embraer if it is to withstand pressure from Airbus. “Without it, it is difficult to see where Embraer will be within five or 10 years. The joint venture had received regulatory approval in Japan, China and the United States, but the European Commission had stalled for more information, fearful of giving the number three airframe provider up to the number one airframe provider and granting Boeing effective dominance of the 95 seats an lower market. The deal would also give Embraer the financial muscle to develop a new challenger turboprop . New-product development including the notional turboprop, put on hold while the business regains its footing.

mbraer now has a crisis committee that meets daily and no end in sight for its troubles. The two main attractions Embraer offered vanished in a whiff of aviation fuel. The first was that it would pay US$1.6bn in dividends from the sale. The second was that it would receive enough cash to wipe debts clean and rejuvenate defence and executive-jet units. Embraer would then start as a revamped company. Executives also hoped Boeing’s marketing muscle would power up a much needed GEnx under the commercial wing, to be 80pc-owned by Boeing. The break up could not come at a worse time. Sales of Embraer’s E2 have stalled. There are no E175-E2 orders, It is too heavy to be economically viable under pilot labour scope clause contracts. E190-E2 sales stood at just 27 at end December. E195-E2 sales stood at just 171. Demand from airlines and lessors alike has dried up due to coronavirus. Of Embraer’s deliveries from March through December, 86pc are concentrated in Brazil and the US. Of these, 58pc are E175-E1s destined for US airlines. It is unlikely many of these will be delivered. Brazil’s Azul Airlines is scheduled to receive 25 E195-E2s in the nine months this year, the 28pc. Plummeting oil prices have further weakened the case for new aircraft, sold mainly on fuel efficiency. The candles on those romantic dinners have been firmly extinguished.

JULY 2020 PAGE 18

RYANAIR & RECOVERY

10 million refunds

Ryanair normally process between 5,000 and 10,000 in a month

tsunami of 10m refunds hit Ryanair as a result of the cancellations in march. A further tsunami of 25m may be on its way, if there is a delay in getting people back into the sky in April and May. Before departing the airline, Kenny Jacobs explained that a refund requires human intervention, whereas a voucher or a rebooking can be processed automatically by computer. “People don’t understand the scale of the crisis being faced by the airlines on refunds,” Michael O’Leary says. O’Leary says: “In a normal month we would have to process between 5,000 and 10,000 refunds for occasional flight cancellations, things like that. We are staffed up for that.” “Under lockdown we were origin with about a quarter of that normal refund staff because of social distancing and bans on people travelling to work. we were dealing, just in the month f April, with 10 million refunds, because all of the flights have been cancelled. “We have 25pc of the staff dealing with about 10,000 times the normal level of refunds. We are processing refunds. What we are trying to explain to everybody is that it is going to take us weeks and months to get round toe everybody. We will get to you eventually if what you ant is a cash refund. The French government allows tour operators up to 18 months to pay a refund. Other government allow twelve months and the Irish government six months. “It does not make any difference whether it is six months, twelve months or 18 months. We will still get to you certainly within the 18 month period.”

ichael O’Leary says: “we started to see a significant surge in free moves in mid May as people now realise that actually they could travel in July and August. A lot re taking the free move options. Approximately €300m operating costs on the refunds have been settled so far. That is a combination of vouchers that have been accepted by customers, cash refunds, and of course free flight changes across the business. So it wasn’t all cash out the door. That €300m is effectively about a quarter of the backlog of refunds we have at the moment from March, April, May into the first half of June. We are dealing with a historic backlog of cancellations that have been imposed upon us by European governments having basically three months of flying. We are geared about 10,000 refunds a month. Currently, we’re trying to process something of the order of 25m or 30m refunds over the next couple of months.

Eddy Wilson CEO of Ryanair and Kenny Jacobs, who departed the airline in April

It is going to take some weeks and months to eliminate this backlog of refunds. We are working our way through the rest. We are staffing for over 10,000 tickets. At the moment, three quarter of our staff can’t even come to the office and they must come to the office. We will continue to process that if we’re allowed and we are hoping that the offices will return to full staff here from the June 1 onwards in Dublin, that will significantly increase our ability to process refunds.

ichael O’Leary says: “our cash refund processes is that the individual customer communicates with us. We communicate with the individual customer. We ask them to fill in the refund form and where they want that refund sent and then they have to fill it out, so that we have the authorisation to make those cash refunds. Those procedures are required under audit rules and Consumer Protection rules. Without them we cannot make refunds. We get about 25pc, 30pc of bookings come through OTAs and third parties. But we cannot just lash out money to some automated process to third-party intermediaries. It is customer money. The customers paid us. So we have to make sure that we send that refund back whether it’s the customer’s credit card. I don’t know what the payment terms are in Germany,. It could go straight to their the cash transfer into their bank account as well. We require every customer who wants a cash refund to give us or to verify where they want the cash to go and that they sign-off on that liability, otherwise we could be refunding money to intermediaries that our customers would never see.

Generally speaking, we don’t allow travel agents and OTAs to make bookings but they are all operating some with phantom credit cards, phantom addresses and phantom emails. If I made a booking through Joe Bloggs OTA or eDreams, who levy handling fees, we would never dream of refunding customers’ cash to those people because I am sure the customers would never see the cash back as well.

ichael O’Leary says: “As we move through the summer and the fuel hedge kind of the fuel cash outflow decline, the refunds cash outflow will increase. One will substitute for the other, but if we get back to some kind of normal flying in July, even if it’s only 40pc, the cash flow then will begin to be very positive because the forward book is into July, August, September, October. We can handle cash refunds. We are trying to communicate with our customer base just please be patient with us. We are not denying you a cash refund or trying to sit on it. We just can’t process these numbers automatically. We can automate vouchers because that is not cash out the door. We can automate free moves. We cannot automate the payment or the cash refunds because a lot of cash refunds will

‘People don’t understand the scale of the crisis being faced by the airlines on refunds’

JULY 2020 PAGE 19

RYANAIR & RECOVERY

disappear into somebody else’s bank account, like a travel agent, and not the end customers’ account. Cash refunds cannot be automated. We cannot issue refunds unless we get in correspondence with the individual passenger.

ichael O’Leary says: “what we are asking most people to do just to help us ease the backlog is, huge numbers of few fly with Ryanair regularly, just move the booking to September or October when we know we will be back flying with some kind of restrictions. But if you want a cash refund, the cash refund is going to take many months to get to as we get round to it in sequence. “Even once our people are allowed to come back to work here in head office, we will have to spool up and add many more people to process refunds.” Kenny Jacobs: architect of the Always Getting Better campaign

KENNY JACOBS’ CORONAVIRUS ANALYSIS

SEPTEMBER The best we can

hope for is some travel brightness for about three months and then everyone will hunker down for the inter.

NORMALITY Anyone in hotels,

airports and airlines and hope that the winter is when we will hunker down and some solution is found and in 2021 from springtime on the world gets back to a version more normal, albeit in the mother of all recessions.

CRITICISM Is there a swiftie being

pulled on refunds? No there is not. We are sticking to the letter of the law. When a flight gets cancelled you get a standard email that you would have got pre-Corona which is that you can get a refund or you can get a move. That is the Eu261 requirement,we are not changing it. we have not changed it.

VOUCHERS What we changed at

the beginning of April is that we are now offering people the option of a free move without any fees or you can take voucher or you can continue to wait for the refund. The eventual bill will depend on the potential number of customers that take a move, the percentage that take these new vouchers, and the percentage that take a refund when we get round to it.

PATIENCE I think people are

thinking a refund should happen instantly. It doesn’t happen like that in any retail business or any travel business. that is what slowed down the refund process. We are not trying to pull a fast one here. Refunds are happening but they can take months. Vouchers and flight moves can happen instantly because they are fully automated. We have offered a third choice which is a voucher. it is as good as cash if you fly with us regularly.”

AUTOMATED We can do free

moves and we can do vouchers as an automated process. This can be done within minutes. it gets attached to the mail. It brings you to a standard landing page on the website or the app. These are automated processes. we do not need any audit, we do not need any manual check or reconciliation of these.

AUDITING The refund process is

different because it involves money going tut the door. That has to go back to the card it was paid with. Finance are involved. Audit are involved. It is not an automated process. It is a manual financial process that is audited. The team that do refunds are, like most teams across the business, socially distancing. We would be used to normally processing about 5,000 cancellations in a month at this time of the year. Now we are processing about 10 million cancellations in a month. That is what has slowed down the refund process by months

SUMMER 2021

I was looking at some of the summer 2021 schedule earlier. The guys in commercial are putting it together at present. there are going to be some airport casualties over the next few months. We will the looking at the summer 2021 schedule and getting that out as soon as we can. people will hunker down in the winter but they want to know they have something to look forward to. Weddings and other things like that will shift. We will try to get it out as soon as we possibly can. The demand will be there for that period of time.

RECOVERY PLAN I think

all airlines will be able to scale back up to something like 50pc capacity and 50pc lads on July 1. I think everyone will be able to do it in two to three weeks. There will be strong demand. Some people won’t want to get on an aircraft. Some people won’t want

to get to an airport. Even if you think people geed up at home, wanting to get out in the sunshine, we are probably being lulled into a false sense of security in Ireland with the weather we have had in the past few weeks. Even for people wanting to visit family and friends, there will be an initial “I just want to get away,” piece of demand. Airlines will respond quite quickly.

WINTER CASUALTIES It will be the winter before you will see the men separated from the boy in terms of who is going to survive, the acceleration in consolidation, albeit some European governments are getting involved in a way that technically, they shouldn’t be, under EU state aid rules. The French government are saying any French registered aircraft do not have to pay aviation taxes in France. That is state aid in another form. You are looking at a tough winter but the airlines that have the best balance sheets will survive at winter, but you will have some funny business, or inappropriate state aid potentially by the French, the Italians have already done it, and potentially the German and Austrian governments etc. let’s wait and see. In winter we will see the thinking out of the market. the stronger airlines will be the ones that come through best. SEAT SALES You will see seat

sales that you haven[’t seen for a long time to stimulate the market, and it will stimulate the market. People will see the late summer early autumn as a period you can get away. i think people can expect Dublin and other Irish airport fares to Spain, wither Italy and Portugal at fares that they have not seen for a long time. We are set up to operate at a 95pc load factor. We will do everything we can to reach that. there is one lever wee pull to get for a 50pc load factor to a 95pc load fact, that is the price lever.

JULY 2020 PAGE 20

RYANAIR & RECOVERY

Putting out the fire Ryanair reduces cash burn from €1.2m an hour to €300k

uess who just produced the bulliest outlook of the few bulls remaining in the aviation industry? Ryanair had already c reated surprise by deciding the time was right to move from a skeleton service to around half its normal capacity on July .I then, said it had seen a “significant spike up in bookings” and suggested it may fly more passengers next year than last year. They markets were impressed with the fighting talk, on the back of a @1bn profit in 2019-20 to March , slightly ahead of analyst forecasts. While rivals sought significant state support and indicated they will exit the crisis as smaller airlines, Michael O’Leary and Neil Sorahan guided through the mechanics of cost cutting, down from €200m a week to @60m a week, potential base closures and negotiations with airports and unions to reduce unit costs. Ryanair expects to post a loss of a little more than @200ms in the three months to the end of June and then tor break even or post a small loss for July-September. A profit forecast for the year, O’Leary said, was “impossible.” Who said never waste a good crisis?

Michael O’Leary: Was losing €1.2m an hour

MICHAEL O’LEARY CORONAVIRUS ANALYSIS

UNPRECEDENTED Just to

give you an impact on how dramatic and sudden the Covid-19 has been on Europe. In both January and February Ryanair delivered just over 10 and a half million passengers, marginally ahead of our budgets in both months. Our budget for March as 11.6m passengers. We fell 5.9m passengers short. Just under 51pc less than the budgeted number. For April, May and June we will be carrying less than 1pc of our normal targeted traffic. So it has been unprecedented. It has been enormously disruptive. To put it in some context, after the 9-11 terrorist attack in New York, aircraft were grounded for three or four days. We are now being grounded for four months. So the impact on the aviation industry here in Europe will be severe.

CASH BURN Thanks to the tremendous work we have done on cost savings our cash burn has reduced from €200m in March to €60m a week at the moment we are focussed now on getting the business back and getting Europe flying again. We believe that is possible subject to the lifting of government restrictions by July 1.

QUARANTINE We expect to

operate about 40pc of our normal July schedule during that month. We still need the waiving of some of the government movement restrictions and we are pushing back against some of the more absurd and unpoliceable restrictions such as 14 day isolation periods. We are actively campaigning for effective measures such as face masks, temperature checks in public buildings such as airport, terminals which we think will be much more effective than 14 day isolation periods which deliver nothing.

BMAX We are focussed on taking the

Max deliveries, we hope from October this year to March next year, subject to Boeing achieving its September return to service clearance in North America.

CONFIDENCE We can safely

deliver a return to some flight services from July. We are hoping to operate about 40pc of flight services in July, about 60pc in August and 80pc in September. We will have rolled out a video with effective health measures for our staff and customers which

consist of masks, temperature health checks, our aircraft are fitted with hospital level air filters. Nevertheless there will be lasting impact on the air industry in Europe. Thousands of EU airline jobs are being lost. Seat sales will be necessary to stimulate demand. We think that will result in weaker yields for the rest of 2021.

COMPETITION One of the

challenges we face is that EU government are providing enormous sums of state aid particularly to former flag carrier air lines, in breach of state aid rules and competition rules. This is going to allow these carries to engage in massive and widespread below cost selling over the next couple of years which will put downward pressure on our pricing and yields which will deliver stronger return to passenger volumes.

BASE CLOSURES Our focus

at the moment is on closing bases in Britain, Spain and Germany, which re loss making. if we do not secure pay cuts all across the board in Europe, other bases in Italy, Belgium and Eastern Europe will also be up for closure.

JULY 2020 PAGE 21

RYANAIR & RECOVERY

Those results T

€1bn profit overtaken by events

hese results are historic due to the impact of Covid-19, Michael O’Leary declared at his 2020 results presentation. “It was a reasonably successful year. Profit would have been higher if we had not lost 5m passengers in the second half of March. It was a strong set of results with strong passenger growth, strong cost control and strong revenue growth, particularly in the area of ancillaries. Ryanair remains the lowest cost airline in Europe. We have the lowest fares, but also the lowest costs. We are number one for traffic. We grew to 149m passengers in the past twelve months. It would have been 154m but for Covid-19 disruption. We offer more coverage than any other airline across Europe.

The big issue is that the Covid-129 pandemic has grounded our fleet from middle of March until we think July. Thankfully Ryanair has a very strong balance sheet. Our financial strength combined with lowest cost, means not only will we recover strongly but we will be the long term winner. Our average fare last year was €37, significantly cheaper than any other airline across Europe. We also have the lowest unit costs. Our unit costs last year were just €31 per seat excluding fuel, significantly lowers than all of our airline competitors her in Europe. We have drawn down the €600m under Britain’s Covid Corporate Financing Facility programme and we qualify for that because of

Neil Sorahan

our triple BBB credit rating. As a result of that we have strengthened the balance sheet. Our year end cash has grown from €3.8bn to €4.1bn. It is important to remember we have 330 unencumbered 737s on our balance sheet with a book value of €7bn, If we need to raise extra cash.

MICHAEL O’LEARY CORONAVIRUS ANALYSIS

RETURN TO FLYING We

plan to operate around 40pc of the schedule in July, we hope that will grow to 60pc in August, subject to the easing of government flight restrictions and restoring some level of consumer demand. That will involve about 1,000 daily flights. We will fly up to 90pc of the route network. We expect significant price discounting to stimulate these travel volumes and also as we compete with these state aid junkie flag carriers around Europe, all of whom will engage in below cost selling to take advantage of the enormous sums of state aid they received in recent weeks.

SAVINGS We have grounded 99pc of the aircraft fleet since the middle of March. We have imposed 50pc pay cuts across the board in March, April and May. We have deferred all non essential cap-ex and the share buyback programme. we have cancelled all recruitment and discretionary spending. We have accessed government payroll support schemes across the entire continent. we are now in active negotiations with airports, un ions and aircraft lessors about further delivery cancellations and further cost cutting but we can only achieve that if we get the 20pc pay cuts we need

NEGOTIATIONS We initiated

discussions with the unions in the last four weeks. The process is under way. We cannot give any detail or colour on those talks but this is serious and urgent. It is inevitable that payroll support schemes will run off in the next couple of months. We have already let go 200 of our valuable team members at our

office in Dublin, Breslau and Madrid over the past three months. As we return to flying we will need considerably fewer pilots and cabin crew. The challenge for the unions is we are trying to minimise job losses.

DEMAND RETURN We think

demand will restore pretty quickly once government travel restrictions have been limited. we think wearing a face mask will encourage people to travel rather than make them nervous. I think the critical thing is going to be deep price discounting, both by Ryanair and our state-died competitors. We think this will stimulate rapid volume growth once return to service is established over the period July, August, September.

STATE AID Illegal state aid distorts competition and distorts the market. To give an airline like Alitalia, which is the number two airline in Italy, Ryanair is 50pc larger than Alitalia in the Italian market, to give Alitalia €3bn in state aid which it will then waste, without reforming its cost base, will damage competition in Italy from Ryanair, Easyjet and others, because it will engage in below cost selling, is not the way forward. The French government are refunding aviation taxes to airlines to Air France only, but requiring that the aviation taxes are paid by Ryanair, BA, easy jet and others which are then returned to Air France, is clearly in breach not just of EU state aid rules but also competition rules as well.

GROWTH We will certainly look

at opportunities. It will depend on securing some aircraft deliveries from Boeing this

winter. we will return with as many aircraft as we can. Certainly there are opportunities. We are in active negotiations with a wide number of airports whoa e seeing incumbent carriers tailor see them cut capacity. They’re talking to us about the possibility of either entering our airports or taking up more slots at their airports and delivering them faster growth.

LAUDA Lauda is facing an existential crisis. Lauda was loss making on the way in to the Covid-19 crisis. The fleet has been grounded in Germany and Austria since the middle of March. Lauda, when it returns, will be facing competition from Lufthansa subsidiary Austrian Airlines which will be receiving €800m in state aid from the Austrian government whereas Lauda will receive not a penny. The only way Lauda can survive is a deep restructuring of the Vienna operation. Those discussions are already under way. we have already cancelled eight of the aircraft deliveries we expected to take this year and our fleet will cap out at thirty. Frankly it will be cheaper for us to ground the airbus aircraft in Vienna and not fly them, than it will be to continue to fly them in an ineffective and disastrous situation. The Lauda bases in Stuttgart, Dusseldorf and Palma will continue, but I think it is likely that the Vienna base will close because we do not see the union, which after all represents mostly Austrian airlines employees, agreeing to these reforms that were necessary to allow Lauda to survive. if they do agree, the Vienna base will survive and thrive, but we do not think that is likely.

JULY 2020 PAGE 22

RYANAIR & RECOVERY

‘Back of an envelope’ A

Ryanair intends to be back in growth mode by 2022

t first glance, Ryanair’s Michael O’Leary timed his announcement of resumption of flights on July 1 a bit early. When he produced his safety video and declared the great reopening, most of western Europe was in lockdown. The chain of events that followed was astonishing. Margaritis Schinas produced an ambitious and optimistic 500-page programme for the recovery of tourism across Europe, urging that borders be reopened by mid June. Spain, the key holiday destination for most of Europe, announced a dramatic unlocking, movement between regions and opening for tourists on June 7, then a full open for business on July 1. Portugal, who had never closed for business in the first place, produced a countrywide timetable for opening beaches, bars and restaurants. June 15 was announced as the D-day for European tourism, with Ireland, sulkily retaining a 14-day mandatory quarantine on return, making sure to avoid the liberation. Michael O’Leary was ,as ever, unphased by the opposition. “Once we announced we were going back flying there was a surge in bookings, admittedly off a low base. In the last two weeks of May the skeleton service we were operating was raised from a 20pc load factor to a 40pc load factor. That is still reasonably small. But people are back moving again. We have flights going to Lisbon that are running with 80pc load factors. and that bis while we were flying 30 to 40 flights a day. From the last two weeks in June we start flying 60 aircraft a day. From July 1 we go back to 1,000 daily flights spread across 200 aircraft. Our load factor for July looks like being about half what it was at the same date last year. last year we built it up to 95pc. We have only just started promoting the flights again, but there is a surge of people booking holidays, particularly to the Canaries, the Spanish

‘Any resistance to travel is always broken down by low fares.’

Michael O’Leary: “we are making this up on the back of an envelope.”

resorts, the Balearics, Italy and Greece, all outbound. there is a large volume of bookings which would been the traditional July/August stuff here, coming in from the UK. The challenge for them is the hotel accommodation is not great at the moment in July and August What Ireland needs to do, like all other Eu countries now, is to open this thing up from July and August on. We are seeing a surge of bookings out of Britain, people booking holidays, going to Italy, Portugal, Spain and Greece for July and August.

ur planning is based on running about 40pc of the fleet through July. We think we will end up with a 60pc load factor but that is not sure. That is partly because we think we are not going to be very aggressive on pricing. We are not doing €9.99 seat sales in the middle of August. We are pushing the message that Spain, Portugal and Greece are open, and flights start from €29.99. They are still phenomenally cheap prices for travel this close in July and August. We think we will finish with a 60pc load factor. It could be 50pc it could be 70pc. Honestly we don’t really know. We have five more weeks to crank this up anyway. That is why we are so opposed to the quarantine here in Ireland. It kind of makes people nervous. We are making the point, why is there quarantine in Ireland, when everybody else in Europe is opening up? I spoke to various ministers and they said they are very nervous about the risk of importing the Covid infection. The only real risk

we have is Britain, the only country we don’t have a quarantine relationship with. The British quarantine is for the birds. The idea that you impose a quarantine into people who fly into Heathrow and Gatwick, and allow them on the London underground before they go into quarantine, is just so absurd. Everyone in Britain is ignoring it anyway. The advantage we have is that you don’t get a lot of UK visitors during July or August. Most of the traffic is going outbound, to Spain, to Portugal, to Italy, to Greece, and we think that is largely what we fill the flights with. Certainly the initial indications out of Ireland and Britain through this week is very strong bookings, families going on holidays, recognising, fine they will have to wear masks, but they are delighted to go somewhere. Any resistance to travel is always broken down by low fares. It happened immediately after 9-11,. immediately after the Gulf War, immediately after the terrorist attacks in Paris and Brussels. A seat sale always cures everybody’s nervousness. people underestimate the fact that families, particularly mothers and children have been locked up for ten or twelve weeks now, they are gagging to go. The idea that they will all go to Lahinch, or to Brittas Bay is nuts, Brittas Bay does not have the space for the whole of South County Dublin, and you also factor in the huge number of people in Ireland who have apartments in France, Spain, Portugal and other places. They are going. All they want to know is that the beaches are open in Spain and Portugal, and that message is coming across firmly in recent days.

JULY 2020 PAGE 23

RYANAIR & RECOVERY

ther markets are responding the same way. Across continental Europe, places like Belgium, with 800 deaths per million population, they are completely open again now,. “I talked to Eamon Brennan of Eurocontrol. He said that there was traffic jams on the way to work this morning,. The bars and cafes are open. Everything’s back. That does not mean there will not be spikes upwards. They are back, and people are going on holidays “ Ireland is the worst, independently confirmed by the Oxford school of governments. Since May 11, we now are the m most restrictive, most stringent lockdown conditions of any EU country, and that was before we introduced the stupid quarantine. I don’t worry about the quarantine because nobody is going to pay any attention to it. The government are really mismanaging it. Having done a terrific job of managing the Covid not having the hospitals overrun, they are mismanaging the return. It is far too conservative. Taking three week gaps is far too late. There are some basic things we are calling on them to do. The first two things we are calling on them to do are to announce at the end of this week the quarantines are gone, even to say the quarantines are gong from the end of June, fine, get it out of there, because nobody is going to pay any attention to it anyway. The other thing is open up the hairdressers.

e will have to be more aggressive. What’s going to happen for the next two years is prices are going to be much lower. People are going to get good deals which means the volumes will return pretty quickly. By summer 2021, the volumes will have returned. But it will take two or three

Having done a terrific job of managing the Covid not having the hospitals overrun, they’re mismanaging the return

Michael O’Leary: His bulk purchase of Boeing 737s in the aftermath of 9-11 was a years for the pricing to return to 2019 levels. All this bull about people won’t fly or people being nervous or whatever, they will be flying like bandits because it will be cheaper than ever before to fly. We will have lower cost fuels, subsidised low fare completion from the flag carriers, we will have less people, instituting pay cuts all over the place, and airports will be doing big discounts. You are going to see lower than ever pricing for the next year or two, so I think the traffic volumes will recover strongly, but it will take a couple of years before the pricing recovers. And that is entirely down to the illegal state aid that the French and the Dutch and the Germans are getting. The unit costs are going to get wider. One of the destructive elements about state aid in these countries, it will come with no efficiencies, no labour cost reductions, job preservation and protection. You are putting all these inefficiencies into aspects or gelatine for ever more, at least until the state aid runs out or they get the next lump of state aid. BA has announced 12,000 job losses. We have announced 3,000 job losses, Wizz has announced job losses, We are all making meaningful efficiencies, not because we want to but because we have to. We have no choice. we will have meaningfully lower unit costs going forward for the next couple of years, where any airline getting state aid will have made no changes to their cost base. They will just use the state aid subsidies to fund below cost selling. We are launching 1,000 daily flights on July 1st. July is the peak travel period anyway. I do not think we have to go back to €1 sale fares.

e are making this up on the back of an envelope. July and August will be about carrying 60pc or 70pc load factors at reasonable air fares. That builds confidence. People will say oh yeah, I flew, it was fine, we did not all get the Covid-19,. Yeah the HEPA filters work. The mask was a bit unusual, but everybody at least was protected wearing masks. Then, by the time the schools go back in September, people will have a lot

more confidence in flying. They will be back flying for business, visiting friends and relatives. The weddings that have all been postponed out of May, June, July, some of them will take place in September/October, a lot of that traffic will recover but it will recover on the back of lower prices. We have no choice but to park up aircraft. It is clear for the next year we are going to carry about half our normal traffic. We will do 7580m passengers instead of 150m passengers. Again the problem will be, we fly 40pc of the fleet in July, 50pc in August, 60-70pc in September/October, and then you go in to our winter schedule when we are only flying 60pc of the fleet anyway. In essence we are talking about grounding 40p of the fleet until we get to April. That is what is driving the job losses and the need for pay cuts. We will be operating less flights and we will need less pilots. The tragedy of the Covid-19 is that it has taken out aircraft. Norwegian has reduced the fleet by 90pc. Even Lufthansa is talking about grounding 30pc of its fleet. Air France is talking about grounding 25pc of its fleet. There will be far fewer jobs for pilots and cabin crew for the next 12-18 months. Those that survive, like Ryanair, through the summer of 2021, if we can get more aircraft, will have new jobs to create.

e will come back strongly, will create many more jobs to get those unemployed pilots and cabin crew back to work. Boeing MAX is a great aircraft. We have sent all the pilots over. They have all flown it. We have the MAX simulators. This is a terrific aircraft, and is going to be a critical part of our ability to compete with state aide airlines. These aircraft will carry 4pc more passengers with 16pc less fuel. There is nothing but opportunities out of this thing. We will be moving forward with lower cost aircraft and lower cost airport deals. This is going to be 9-11 multiplied by three or four in terms of opportunities.

JULY 2020 PAGE 24

RYANAIR & RECOVERY

Don’t use the toilet

Conditions for Ryanair’s return to the sky in July

olitical and medical authorities have reacted with a combination of trepidation and horror to Ryanair group plans to restore 40pc of its flight schedule from July, with all crew and passengers required to wear face masks and pass temperature checks. The airline said it hopes to have nearly 1,000 flights per day, with 90pc of its normal network on offer. The emphasis is on serving lots of ro0utes at lower frequencies, to stimulate interest and demand with a view to higher load factors in September. Routes on the scheduled are flagged as “sold out” for all but one daily flight and some such as Dublin-Southend, totally sold out. Surprise new additions after the announcement included regional services, such as Cork to Tenerife The restoration would be dependent on governments lifting restrictions on flights within the European Union, restrictions that were put in place to limit the spread of the coronavirus.

RYANAIR’S RETURN

n July 40pc capacity, 50pc loads n August 60pc capacity, 60pc loads n September 80pc capacity, 70pc loads n Winter 50pc capacity, 70pc loads

Michael O’Leary: Used media to emphasise state aid was distorting competition

Ryanair said that “effective public health measures” such as temperature checks would also be needed at airports to ensure it is safe for passengers and crew to travel while COVID19 remains a threat. Other measures would include fewer checked bags, online check-in, downloading boarding passes to smartphones and social distancing where possible, the airline added. A limited inflight service will be offered -

pre-packaged snacks and drinks and payment to be cashless only. There will be no queues allowed for toilets, although passengers will be able to request to use the toilet. During July and August, passengers will also have to give details of their trip at check-in, including the duration of their visit and their address at their destination. This information will be given to EU governments to help monitor any isolation regulations.

Strongest in business

Ryanair have 330 unencumbered aircraft on balance sheet

yanair CFO Neil Sorahan claimed the airline’s bur balance sheet is one of the strongest in the industry. A triple B rated balance sheet with very strong assets. We have in excess of €3.8bn cash at year end, and 330 unencumbered debt free 737s with a book value of €7bn, significantly higher on a market value. For April, May and June we are looking at carrying less than 1pc of our normal targeted air traffic. Revenue per passengers was up 6pc to €57. Average fare grew by 2pc to €37. Ancillaries grew 20pc to €3bn or 16pc per passenger. Initial costs were up 4pc, two points ahead of where we expected due to lost passengers in March. Profit after tax before exceptional items was up 13pc, just over €1bn profit in the year. We have put a lot of work into preserving cash and cost cutting over the past number of weeks. we have cancelled our share buyback

programme. We have grounded over 99pc of the fleet between April and June and we expect to take a couple of months before we are up and running again. we implemented 50pc pay cuts in April and May and that may go on for a longer period of time. We have had pay freezes, and we have benefitted from the government payroll support schemes across Europe. We have eliminated all discretionary spend from the business including non-essential CapEx and we have deferred a member of payments. We are not just happy to end there. We are looking at a number of other initiatives. We are looking at all of our bases across Europe. There may be some base closures this inter or need into the summer. There are potentially dup to 3,000 job losses and further pay cuts. mainly in pilots and cabin crew. We are actively engaged with all of our air-

ports for future growth from the Ryanair group as we get back to service later this summer. The game changer aircraft the Max will hopefully start to come into the fleet in the autumn of this year, maybe around October which will deliver significant savings, 16pc on fuel, four extra seats, and 40pc less noise emission, so it will be essentially a game changer. At the same time we are in active negotiations with both Boeing and our A320 lessors in relation to our growth plans going forward. All of this has helped us reduce our cash burn and conserve our cash. Back in February we were spending something in the region of €200m a week. At the moment we are spending €60m a week. That may creep up slightly when we return to service but I think we have done a very good job in holding on to the cash. That will be what sees us through this crisis.

JULY 2020 PAGE 25

AIR LEASE CORPORATION Q1

ir Lease Corporation, announcing 2020 Q1 results said: “we are adjusting our forward delivery schedules with Airbus and Boeing to reflect significant delays in deliveries as a result of temporary production halts and lower production rates.” Steven Ferencz Udvar–Házy, Chairman, said: “The operating environment for our airline customers is challenging in the near-term. “We believe that as our customers work through these difficulties they will become increasingly attracted to leasing models to restore their fleet in an industry with fewer leasing players. With our diverse customer base, young fleet and strong financial staying power, our position in the industry will continue to strengthen. Environmental sustainability meanwhile will only continue to grow in importance, and we believe many government bailouts, especially in Europe, will be tied to some sort of sustainability goals. The order book for new aircraft will enable ALC to help our 100 global airline customers modernizse their fleets, whenever older aircraft are retired from service.

dvar-Házy said, as of May 7, most lessees have requested some form of accommodation. Each has been dealt with on a case-by-case basis. ALC has worked out accommodation arrangements with approximately 46pc of its lessees, generally in the form of partial lease deferrals for payments due during 2020 Q1 and Q2, typically with a short-term repayment period, with the majority of the deferrals repaid by the end of this year. In many cases, lease extensions were also negotiated as part of the deferral accommodations. ALC has agreed to defer approx $125m in lease payments which represents approx 6pc of ALC total revenue for fiscal year 2019. “Despite challenging industry conditions, and significant new aircraft delivery delays from both OEMs, we have not experienced any alarming desire by our airline lease customers to cancel their commitments with ALC to take future deliveries of our new aircraft. At the same time, Air Lease does have flexibility in our agreements with Boeing and Airbus to adjust to current market conditions.

n the MAX 737, Udvar–Házy, said “we are now beyond the 12-month point of delay on nine of our contractual delivery slots. “With the cessation of production to date, coupled with the lower announced production rates ahead, it is likely that a majority of our forward positions will be more than 12 months delayed on the 737 program. “With both Boeing and Airbus, there’s a mutual right to cancel, if any delivery stretches more than 12 months beyond the original contracted delivery date. “We are working closely with The Boeing

Delivery pause ALC ‘accommodating’ 46pc of customers

John Plueger: 90pc collection rate

Company and our customers to address these delays and to look at deferral or cancellations on a case-by-case basis”.

ohn Plueger, Air Lease CEO said “while we do expect continuing customer challenges, including possible airline bankruptcies and aircraft repossessions, our fleet is young, our global customer base is diversified, and our financial position is strong. “We believe in the fundamentals of the global airline business and we are well positioned for the recovery that will take place.” “We have always said that in good times, airlines need our aircraft and in bad times, airlines need our balance sheet”. Plueger likened the aviation industry ‘to someone coming in to the hospital ward and having emergency surgery and now moving to a critical care recovery phase.” In a conversation with Phil LeBeau broadcast by CNBC he said “about 26,000 jets comprise the western fleet today and about 62pc are grounded. About 3,500 or 3,600 of those units are about 20 years of age. It is probably fair to say that probably most of those aircraft will not come back.” “The airlines are going to focus on offering their youngest most fuel efficient fleets. We have already seen major airlines, Lufthansa, American, Delta, announce major retirements of older aircraft, 757s, 767s, the older 747s, a lot of wide bodies, that is taking massive capacity out of the market place. Delta for example took out the B777 200 models, 10 to 15 years of age. They are not the state of the art 777X or 787, they re not as fuel efficient. “They have a higher maintenance cost. Airlines are under huge financial stress and at times of stress they turn to leasing aircraft so they do not have to finance it themselves. we

can provide those aircraft for them. Secondly, huge environmental pressure continue. “That means that the airlines are going to continue to focus on getting the youngest, most fuel efficient, technologically advanced aircraft. Some of the bailouts that the governments are giving in Europe, those to Air France being an example, are dependent upon Air France reflecting and continuing to modernise its fleet. “From our order book perspective, that bodes well for us. We have got almost 400 aircraft on order, the most modern technology aircraft. That plus the shift towards leasing.”

he Collection Rate (after giving effect to lease deferral arrangements made as of 07May) for 2020 Q1 was 90pc. For April 2020, the Collection Rate for the month was 86pc. ALC expects that the Collection Rate will remain under pressure while air travel is reduced in a number of countries. It does not anticipate that this will have a material impact on the liquidity position. ALC reported 2020 Q1 revenues up 9.7pc to US$511m with net income down 3.5pc to $133.3m ALC’s liquidity position was $6.3bn as of 31Mar20. CapEx for 2020 was cut to $2.5bn It ended the quarter with a 90pc first quarter Collection Rate for its operating lease portfolio and a 99.7pc Lease Utilisation Rate. It ended Q1 with $28.8bn in committed minimum future rental payments consisting of $14.2bn in contracted minimum rental payments on the aircraft in its existing fleet and $14.6bn in contracted minimum future rental payments related to aircraft on order.

JULY 2020 PAGE 26

WILLIE WALSH & IAG

Pilot amidst the storm

Ryanair normally process between 5,000 and 10,000 in a month

onfident and unphased by the scale of the crisis facing IAG, Willie Walsh strode purposefully in to meet English MPs for cross examination about IAG, British Airways (the English MPs had difficulty distinguishing between the two) and the future. The questions were hostile and his gaze unfaltered as he faced them, just down the corridor form Room 1010 of the 1891 split.

RECOVERY Our estimate at this

stage is that it will probably be 2023 or 2024 before we get back to the levels of demand that we witnessed in 2019. We are likely to lose three or four years of growth. It is going to be a slow recovery, based on all the analysis that we have done. That view is generally shared by other analysts and by analysts of the global industry. During that period, we will gradually build up our activity and we expect that it will not be before 2023 that we get back to the levels of flying we saw last year in 2019. That clearly depends on not just

Willie Walsh at the A4E summit in Brussels in March

THE QUESTION AND THE ANSWER

n Sam Tarry MP (Labour, Ilford South): You have a track record of offshoring jobs within BA and IAG. If those jobs are going to India or Eastern Europe, people will be wondering why British taxpayers’ money is being used to do that. My question for you, Mr Walsh, is this. If you are going to be moving jobs, at a very difficult time, out of the UK, so that British citizens are losing their jobs and you are then giving them to citizens in different parts of the world, will you be prepared to hand back the British flag? Perhaps a flag that would be more relevant would be one from the Cayman Islands or perhaps Panama. You are certainly not doing justice to the citizens of this country with those kinds of manoeuvres. n Willie Walsh : I tell you as an Irishman that I was very proud to work for British Airways. I am very proud to work for a company that held the British flag. I remain proud and I will be proud for the rest of my life to have worked for an organisation that carries that flag with great pride and does such a great job repre-

senting Britain in every corner of the world. I have no doubt that it will continue to do that— Which I am proud of. I am very proud of my track record. I am proud of everything I have done. I am proud to have run a company in the way that I have done. I point out to you that outsourcing is not a feature of British Airways since I joined. British Airways outsourced its activities for many years before I joined the organisation. I have absolutely no doubt that we will continue to do so, as do a lot of other very big and very successful British companies. I have absolutely no doubt that that will be the position going forward, in the same way as there are a lot of companies who outsource activity to UK companies. It is a feature of the global economy, and I have no doubt it will continue to be a feature. We will do what is right to ensure that we have a business that is as efficient as possible to enable us to compete effectively on a global scale. That is what we compete with, and we will do so with pride.

the post-Covid-19 environment but the post-global recession that we are all forecasting. Without any doubt, global economies have effectively come to a halt. Some people predict that it will not be until 2026.

RESTRUCTURE

We are now in the deepest downturn that the aviation industry has ever seen. Our capacity is going to be significantly lower in 2020, 2021, 2022, 2023 and beyond than we had planned it to be, but the amount of flying we do will be significantly lower than the flying we were proposing to do. We will need to restructure our business

IAG REACTION

When we analyse the impact of Coronavirus, we task each of the airlines to assess the impact independently. They have all looked at how they see their market—their segments—responding and we have built it up from the inputs of the individual airlines, and from the top-down approach that we have at IAG. They are remarkably similar; there is very little difference in opinion between the management teams at each

of the airlines as to how it will play out in the global aviation scene. The issue for British Airways is whether business travel responds at the same rate as leisure travel, given that BA has much greater exposure to business travel than other airlines in the group.

PREMIUM v ECONOMY One of

the things we will have to look at is the business mix between premium and non-premium. Clearly, post the global financial crisis we did see a shift in that mix. The level of premium traffic did not recover to the level we witnessed. And if we look at this on a global basis prior to the global financial crisis, that is an issue that I think we do have to better understand. It’s coming at a point where we do have a lot of flexibility to adjust, if necessary, our premium, non-premium mix and it’s definitely going to influence issues like fleet selection and fleet configuration of new aircraft, in addition to decisions around the potential retirement of existing aircraft.

JULY 2020 PAGE 27

WILLIE WALSH & IAG

IAG is a single economic entity with multiple operating entities. Each of the eight airlines that sits in the group operates its own profit and loss and has its own balance sheet. It fundamentally makes most of the decisions either at management or board level in the operating company. The activity is co-ordinated at IAG level and consolidated where it makes sense to do so.

BA When we look at the financial impact of the downturn, the swing from profit to loss is going to be much greater at British Airways than in the other airlines, and that was certainly the case in the first quarter. The risk for BA in the short term is that, yes, it is profitable, it makes the lion’s share of the profits and, typically, has over 60pc of the invested capital, which would make about 60pc-plus of the profitability. We look at a number of metrics. One of the principal metrics is the return on invested capital—the amount of capital that each of the airlines uses. British Airways has the lion’s share of the capital investors, so you would expect it to make the lion’s share of the profits. Unfortunately, it is also the case that British Airways probably has the highest fixed-cost base of all the airlines in the group. In the downturn, unless British Airways adjusts its cost base more significantly than the others, it is going to make significantly greater losses than the other airlines. That is exactly what we saw in the first quarter of this year.

LONDON CITY airport was the airport that had the greatest challenge as the evidence of the uncertainty and the downturn became apparent. It was the first airport that I am aware of that basically closed. It was the airport that had all of the traffic removed ahead of pretty much every other airport in Europe. That clearly points to the specific customer segment that supports London City airport. I think the airport is one that will be greatly challenged as we go through this as we come out of it. Our future there will be something that we consider in consultation.

REFUNDS British Airways has provided cash refunds on 921,000 tickets involving 2.11m flights. There are 47,400 bookings outstanding, which are being processed. In addition, 346,000 bookings were cancelled by customers in return for a voucher and there are 1,700 bookings where a voucher has been requested but has not yet processed.

GATWICK I see a future for British Airways at Gatwick. I like Gatwick. I think Gatwick is a better airport than Heathrow in many ways; it is better run and the management team are more commercial. I think the customer base is one that we would want to serve. The challenge we face at the moment is doing what is right in the environment that exists, but I would like to think that British Airways will be operating at Gatwick in the future.

Willie Walsh while CEO of Aer Lingus

QUARANTINE It is a very severe,

very significant crisis, and, quite honestly, the likelihood of its improving in the short term is zero. The announcement yesterday of the 14-day quarantine period for people coming into Britain is definitely going to make it worse. We had been planning to resume flying on a pretty significant basis in July, but we will have to review.

STATE AID If there are general

government financing facilities that are available, we will, where possible, avail of those facilities if it makes sense to us. In the case of Iberia and Vueling, the Spanish Government have provided a guarantee to the Spanish banks for up to 70pc of the loans that they make under what they call the ICO process. That is a commercial loan that Iberia has taken from a consortium of Spanish banks. Vueling has taken a loan from the same consortium. That is debt that Iberia and Vueling have to repay. Should we not repay it, if there is a default on the part of Iberia or on the part of Vueling, the Spanish Government will provide a guarantee of up to 70pc of the debt to the Spanish banks. Those facilities are not available in Britain—certainly not at this stage—nor are they available in Ireland. The facilities that we have availed of across the group are income support facilities, which is the case in Ireland, Britain and Spain, and the specific coronavirus funding under the Bank of England, where we issued £300m of commercial paper that the Bank of England bought. To avail of that facility you had to have an investment grade credit rating on 1 March, which we had. That is not specific to airlines; it is available to any company that had an investment grade credit rating on 1 March, so we applied for that.

BOEING We have NOT ordered 200 MAX aircraft from Boeing. We have signed a letter of intent with Boeing. That is not a firm order. We still have time to address whether we turn it into a committed order. We are not interested in acquiring Austrian or any other airline you may have read about. That is not the case. We are solely focused at this stage on taking the measures necessary to ensure that we can in the short term shore up the liquidity we have. Teams both at IAG and in the operating companies have been working extremely hard to secure cash where it is available and to secure additional liquidity, so that we can survive when we are not actually flying. We still have significant costs. CASH is held by the individual operating company, so British Airways holds the cash that BA has and Iberia holds the cash that it has. The cash is held at operating company level, but for reporting purposes we aggregate cash and then report it as a single figure. AIR EUROPA The acquisition of

Air Europa, if it proceeds, will be an Iberia acquisition, in the same way that, when BMI was acquired, it was acquired through British Airways. The Air Europa acquisition, if we proceed with it, will be by Iberia. It will have nothing whatsoever to do with British Airways. British Airways will not be involved in it. British Airways will not have any role in the acquisition, either funding or managing it. That will all be done at an Iberia level.

JULY If I go back to February, we were

looking at an impact that was significantly less than this. During March, we had a scenario with recovery in May towards the end. Now, we’re talking about towards the end of June and into July. So, it’s a very different environment.

JULY 2020 PAGE 28

RYANAIR RESULTS: BEHIND THE HEADLNES

Annus Ryanairius

Annus mirablis or annus horriblis? The engines are revving up

ow spectacular were Ryanair’s result to the end of March 2020? How terrible is the year ahead? How brutal was the miscalculation on fuel hedging? Ryanair’s results generated a handsome reaction among media and markets alike, a spectacular achievement in an environment when the aviation industry is bleeding and air-lines are running to national governments in quest of state aid. The results are remarkable and, unusually for Ryanair, complex and difficult to interpret. Ryanair carried 148.6m passengers (+4pc), serving 242 airports and 2,100 routes with a seat factor of 95pc (down about 1 percentage point). Revenue was €8.49bn, up 10pc. So, average revenue per passenger was up about 6pc (which could be good or bad depending on which message is desired). Breakeven seat factor by a crude calculation was around 82pc. Operating profit was €1,127.4m, up 11pc and Profit after Tax (PaT) €1,002.1m, up 13pc. Also an exceptional loss of €353.4m was reported for “hedge ineffectiveness”. In cash terms, this happens next year. It is the current estimate of the difference of the hedged price of fuel it was intended to consume next year but won’t be because the planned operation has shrunken dramatically and the future market price. That reduces the profit for the year to €648.7m, down 27pc. Other cash flow hedge reserve movements relate to price variations of fuel expected to be used, currency exchange rates (as committed, relative to the current expectation of future current market rates) and interest rates (do,). These movements may or may be real as market rates can fluctuate quite wildly. The figure presented for 2019-20 is €332.1m negative, compared to €634.3m positive in the previous year, giving total comprehensive income for FY20 of €316.6m, down from €1,519.3m in FY19. So was it a good year or a bad year? The “running the airline” profit of €1.127.4mbn (operating) or €1,002.1 (after tax) suggests good. We will concentrate on the latter number which is what Ryanair always focuses on.

hat number is in the middle of the range Ryanair guided on 03Feb when Covid19 hadn’t yet been named, there were 1,115 total deaths globally of which 1,114 were in China and 45 confirmed cases in Europe. So did Ryanair know something no one else

Michael O’Leary guidance was cautious, as always

did and include the impact in their guidance? No they didn’t. In fact their guidance was “heavily dependent on close-in Q4 fares and the absence of any security events”. It seemed conservative since there were less than 2 months to year-end and Q3 had been very strong with traffic up 6pc and revenue up 21pc

aking published quarterly results at face value is a bit hazardous because of retrospective updates. In FY20, Q4 was actually the closest to the previous year (Q1 €66m worse, Q2 €68m better, Q3 151m better, Q4 €38m worse). The variations were very volatile. Ryanair passenger numbers for Jan20 and Feb20 were slightly ahead of Budget. The first hit was in March which was 51pc below budget and a cataclysm thereafter with almost no traffic. Q4 passenger numbers totalled 27m, down from a Budget of 32.7m, down 17pc on the previous year. Revenue was €1,199m, down from last year’s €1,242m, down 3.5pc, so average revenue per passenger was about €44, up 17pc on last year, continuing the momentum from Q3 (up 13pc). The actual fuel cost was down €68m.

Neil Sorahan, Ryanair Holdings CFO in his presentation referred to revenue for the year benefitting particularly from ancillary revenue growth. Ryanair Labs new digital platform was launched on Oct and the growth in ancillary revenues (now over 50pc of fare revenue) should have followed. The strong growth in revenue per passenger could also have followed a selective pruning of operations in Mar, spilling routes and services which were heavily discounted to fill seats, were not paying their way and might have been justified as having some “strategic value”.

hat brings us to what happens next. Michael O’Leary is optimistic: Financial strength + Lowest cost = Long term winner = Ryanair. He believes built-up demand will appear once flights are offered AND people have confidence, so he wants to resume operations on 01Jul, with about 40pc of the normal schedule (though the flights posted so far are all Irish or English), going to 60pc from August. His grouches relate to any requirement to quarantine passengers which he sees as pointless and unenforceable. He sees temperature

JULY 2020 PAGE 29

RYANAIR RESULTS: BEHIND THE HEADLNES

checking and masks as sufficient with airports enforcing them. He dislikes the idea of a patchwork of states with arbitrary rules, such as, exemptions for travel Ireland-Britain or UK-France. He is driven mad by state aids to carriers (about €30bn promised in Europe so far), particularly when they are explicitly anti-competitive (deferral of French airport tax payments only for French carriers, same (Alitalia) pay rates for all carriers in Italy).

o profit guidance can be given for next year FY21 due to all the uncertainties. Michael O’Leary now expects 80m passengers at best with fares driving traffic, state aid driving down fares of those carriers and Ryanair undercutting them because of its lower costs, ultimately with competitors failing and cutting capacity, allowing Ryanair to expand market share. He expects a loss between €200m and 300m in Q1 and a small loss or breakeven in Q2. Analysts at Davy (Ryanair’s own broker) have pencilled in a loss of €801m for the year as a whole. Getting there requires about 3,000 job losses in flight and cabin crew plus pay cuts of up to 20pc,(or equivalent savings) plus about 250 office jobs already gone in Dublin, Stansted, Madrid & Wroclaw, where Ryanair Labs are based. “The pay cuts will be restored over three or four year period, we would hope to restore, some or if not all of those job losses. Now, it won’t be the individual people, but we’re not going to give anybody the rights that you could be … the first one back. But clearly, we will favour rehiring those pilots and that those cabin crew who lost their jobs to no fault of their own because of the COVID-19 pandemic”. No commitment was given to last in first out, no commitment to restoring pay costs and no right to return. Some base closures are likely.

Change

Ryanair

€37

+2%

Wizz

€47

+3%

easyJet

€59

-3%

€99

+9%

+168%

Lufthansa

€178

+1%

+381%

IAG

€190

+414%

€213

+1%

+476%

Avg Competitor Fare

€131

- 40% of normal schedule Jul

- Isolation is ineffective & unenforceable

 Seat sales to stimulate demand = weaker yields for FY21

- Arbitrary exclusions (Ire & Fra)

 EU Govs must comply with State Aid rules

S u d d e n I m p a c t o f C ov i d - 1 9

WIZ

EZJ

NOR

E’Wings

LUV

Staff/efficiency

Airport & Hand.

Route Charges

Own’ship & maint.

S & M other

Total

87 +181%



210 orders (135 firm, 75 options)



USA RTS Sept 2020



Target deliv MAX-200 Oct – Subj to RTS in Sept

Pay cuts & up to 3,000 job losses



Gamechanger: 4% more seats, 16% less fuel

New apt & handling deals



Envir savings: -16% emissions, -40% noise

Actual

Chge

Jan

10.7

10.8

0.1

+1%

 Reduced op. spend & non-essential capex

Feb

10.4

10.5

0.1

+1%

 Payment deferrals

Mar

11.6

5.7

(5.9)

-51%

Apr

13.6

0.04

(13.6)

-99%

101

 Grounded fleet, pay cuts (50% Apr/May), wage support schemes

 WIP:

14.3

0.05

(14.3)

-99%

MAX deliveries (-16% fuel/4 extra seats)

Jun

14.6

0.06

(14.5)

-99%

Fleet review (B737s & A320s)  Weekly avg cash burn down: €200m to €60m

* Wizz Air incl. “one-off“ exceptional gain on aircraft disposals

4 4

Base closures

May

Slides form the Ryanair full year presentation

Boeing 737MAX update

 Cancelled share buyback

Budget

+226%

11 11

Cost Savings & Cash Bur n

Pax (m)

+203%

 FY22: 31% jet hedged @ $541 (65% €/$ @ $1.15) 9 9

7 7

3 3

RYA

+71%

 Possibly more ineffectiveness if slower RTS

 Pressure on yields from flag carrier below cost selling

 Senior Board changes from June

+254%

+26%

 Some P&L volatility in FY21: ineffective hedges MTM each qtr

 MAX deliveries Oct to Mar (subject to Sept RTS)

(Source: FY results/Annual Reports)

%> Ryanair

 €353m ineffective P&L charge now (FY20) on excess FY21 fuel vol

 Thousands of EU airline job losses

- Public health – masks / temp checks

Eur ope’s Lowest Costs W ins! € per pax

 Fleet grounded – excess fuel hedges for FY21

 Health measures incl. masks, temp checks & HEPA air filters

 Cost Savings / Cash burn cut to €60m per week  Get Europe flying

Fuel hedging & inef fectiveness

 90% expected FY21 fuel vol hedged pre C-19 crisis

 Subject to Govt restrictions

 Bal Sheet strength – €4.1bn cash, 330 B737s debt free (€7bn)

+59%

yanair continues to exude enthusiasm on the B737 MAX - a gamechanger: 4pc more seats, 16pc less fuel, 16pc less emissions, 40pc less noise; 135 on firm order (plus 75 options) and has more confidence in recently install Boeing management

 40% scheduled flights from Jul, 60% from Aug

 UK CCFF £600m drawn down (BBB credit) +27%

In April, it raised just under €690m unsecured (12 months) debt for general corporate purposes under the HM Treasury and Bank of England Covid Corporate Financing Facility (CCFF). This scheme is available to any business with a BBB balance sheet “that make a significant contribution to the English economy”, so Ryanair does not see it as state aid. BA got £300m under the same scheme, easyJet £600m, Jet2’s owner £300m. Wizz Air has been confirmed as eligible. There are conditions re showing restraint on the payment of dividends and other capital distributions and on senior pay. Ryanair has had proposals re aircraft sale and leasebacks but doesn’t want them based on relatively high interest rates, 4pc upwards compared to rates just above 1pc on recent Ryanair pre-Covid bonds

Retur n to Ser vice - Jul y

 C-19 grounds 99% of fleet mid-March to Jul

% > Ryanair

Norwegian

AF/KLM

ore important than reported profit is having enough cash to outlive the crisis. Ryanair sees itself as well positioned. At 31Mar20, Ryanair had cash of €3.81bn and assets of €10.94bn incl 330 unencumbered B737NGs valued at €7bn in the books (average US$23m) and Ryanair believes the market is higher. Cash burn was €200m in Feb but has been reduced to €60m/month of which €25mn relates to the ineffective fuel hedge payments. It says it could continue this for a year or two. The usual levers were applied n Cancelled share buyback n Grounded fleet, pay cuts (50pc Apr/May), wage support schemes across Europe n Reduced operational spend, eliminating non-essential capex n Payment deferrals (notably to Boeing) n Work in progress on the payroll cuts, examination of base closures n Focus on airport and handling charges This continuing reduced cash burn is presumably subject to achieving and maintaining all of these targets and to some continuing government supports of payroll which it is getting in most countries.

Cur r ent Developments

Eur ope’s Lowest Far es Avg. Fare

With Johan Lundgren of Easyjet and Carsten Spohr at the A4E summit in Brussels i

8 8

10 10



Lower cost MAX drive EU mkt share gains post C-19



Boeing talks can’t conclude until RTS successful 13 13

JULY 2020 PAGE 30

RYANAIR RESULTS: BEHIND THE HEADLNES

Michael O’Leary: Seeking to accelerate growth into 2021

and its credibility. It expects a return to service in the US in Sep with deliveries to Ryanair Oct to Mar. It has bid for compensation for delayed deliveries. There was no talk of capex in FY20 except that it will be minimum and minimal. Ryanair seems to be seeking to manage that with a deal that pre-delivery payments already made for the whole order will be applied to paying in full for 20-30 deliveries before next summer. An order for the B737 MAX 10 about 3 seats rows longer than the MAX 8 already on order, close in size to the A321, is being dangled in front of Boeing (or at least option conversions) once Ryanair knows when the 10 will operate and when it can get it. Airbus has not made what Ryanair sees as a serious offer. A bond repayment of €850m is due in Jun21 and an additional share buy-back programme was already off the agenda pre-Covid. The accounts show outstanding bond liabilities at end FY20 of €2,444.1 but a fair value of €1,965, a hidden benefit which should offset some of the nasty year-end negative hedge offsets reported.

he accounts break down figures for Ryanair DAC and the totality of other group airlines. The fleet seems to remain on the DAC books. Revenues earned and costs from services operated on behalf of DAC are attributed there, so the others “numbers” don’t mean much. The accumulated deficit of assets over liabilities of the others is shown as €284.8m, up from €186.9m. I suspect a lot of that is in Lauda. Buzz Air (formerly Ryanair Sun) operates about 45 B737-800s. It has expanded outside Poland with new bases in Prague and Budapest. Malta Air operates about 120 B737-800s).

It has taken over the group’s French, German, Italian and Maltese bases. Ryanair DAC (Ireland) now operates only (!) about 275 B737-800s. Ryanair UK is not mentioned any more. It still has 1 B737-800.

auda is described as in “existential crisis” facing competition from Austrian Airlines which is to get, or is at least seeking, €800m in state aid. Ryanair is seeking cost savings without which the Vienna base will be closed on 30May with over 300 job losses and the airport served from other Ryanair bases. Ryanair has also said it was likely to replace A320 jets at Lauda, the only part of the Ryanair group not to fly Boeing 737s, with Boeing aircraft. Michael O’Leary said that Ryanair had cancelled eight A320s that were due for delivery to Lauda from leasing companies. That leaves about 22 of planned 30 of which 15 were to be based in Vienna leaving 7 others at Lauda’s other bases in Stuttgart, Dusseldorf and Palma which would remain open. These numbers may not be precise. Michael O’Leary claims than over 95pc of pilots and 66pc of cabin crew at Vienna have signed up to the savings sought but Austrian law says the agreement cannot be effective unless it is signed up by the Union, which, they say, mainly represents Austrian Airlines staff. Lauda also has crews in Stuttgart and Düsseldorf, who are paying their social taxes in Germany and should be entitled to exactly the same payroll support as Lufthansa pilot. Michael O’Leary said this was approved and cancelled 4 days later. So Ryanair is engaged in legal correspondence with the German government. Lauda has clearly been a disappointment for Ryanair which did not expect to trigger so

much competition. Michael O’Leary said Ryanair is looking at the possible closure of loss-making bases in Britain, Germany and Spain but could widen that to Italy, Belgium and central and eastern Europe if necessary. .

ichael O’Leary thinks there is going to be significant opportunity into the summer of 2021 for Ryanair to grow strongly.”. “In fact, if anything, I would try to accelerate our growth into 2021 because it is just going to be opportunities there with airports. There is certainly going to be a huge surplus of available pilots and cabin crew. Those pilots and cabin crew will be zero, we will be making redundant and whose jobs will be lost in Ryanair over the next number of months, we would want to at least be able to offer those people the chance of coming back to employment in Ryanair, maybe in the summer of 2020, want to get them back working as quickly as possible they want to come back to work. And it’s not true as many other airlines will be offering people any new jobs for the next month or two or next year or two in Europe, Ryanair will “We think once people start to move that it will be largely Pan European on a Schengen basis, and then at the other countries will also move to similar kind of restrictions, which I think if you’re sensible will be facemask and move away from non-sensible restrictions like two-week isolations that are only implementable and unpalatable”. We will need, we’re looking at extending, those aircrafts are coming off lease but you’re talking about lease rates now that are down at $150,000 or $175,000 a month: these will be very cheap aircraft, if we decide to extend those leases.

JULY 2020 PAGE 31

FLY LEASING RESULTS

Colm Barrington of Fly leasing

Fly’s Air Asia dilemma ‘A320s and B737NG will be first to recover after Coronavirus’

olm Barrington headed Fly Leasing says that it does not expect its inevitable rent deferrals to reduce reported lease revenue, “provided a collection of rents continues to be reasonably assured.” Fly has already received rent deferral requests from most of its lessees, and expects to grant rent deferrals to lessees representing about 70pc of annualised contracted rents. Fly expects the vast majority of rent deferrals to conclude within this year and expect to agree to approximately $90-95m of rent deferrals between Q2 and Q4.

ly Leasing (Ireland) reported 2020 Q1 net income of US$38.1m (2019 Q1 $45.0m) on total revenues of $121.5m ($134.7m).

The emphasis used to be on unclouded future for airlines and for growth, now it is is on survival

FLY had 84 aircraft and seven engines in its portfolio with 5.2 years average lease term average age 7.8 years (weighted by net book value), with $560m net book value of unencumbered assets FLY sold six aircraft and two engines for a gain of $31.7m ($27.6m), a 20pc premium to book value. Unrestricted cash and cash equivalents were $361.2m ($364m) at quarter end. At 31 March 2020.

ccording to Fly; “while the emphasis used to be on the unclouded future for airlines and for growth, this quarter, it is on survival.” Fly expects that the demand for relatively new midlife A320s and B737NG will be the first to recover as these aircraft satisfy domestic and regional airline operations. The demand for these aircraft will likely be strengthened by lower fuel prices. Cash balance is strong, net debt/equity is relatively low at 2.1. The presentation differed significantly from previous presentations by Fly which placed much weight on growth from a transaction with AirAsia, facilitated by BBAM which holds 23pc of the shares. FLY was a vehicle for purchase and lease-

back of 21 A320neo family aircraft contracted by AirAsia with Airbus, 1 of which was delivered to FLY in 2019 Q4. The deal also included options for up to 20 A320neo family aircraft from AirAsia Group due to deliver from Airbus, not subject to lease. In August 2019, FLY exercised options with respect to eight of these aircraft to be delivered in 2020 and 2021.

ly has options remaining to purchase up to nine aircraft delivering between 2021 and 2025. Due to the impact of COVID-19, Fly expects that the delivery of all these aircraft will be delayed. It has no orders with manufacturers and no other commitments to buy aircraft. . The fleet includes 33 A320ceo family, 1 A320neofamily, 38 B737NG and 2 B737 MAX. Since Airbus has offered for sale four A320neo and two A321neo built for AirAsia, the status of the BBAM deal might work to the advantage of Fly. On the other hand, AirAsia is also Fly’s largest customer accounting for 11pc of net book value of its aircraft lease rentals. FLY Book value per share at end March 2020 was $29.21, up 28pc since a year ago.

JULY 2020 PAGE 32

CON HORGAN AT 80

Ireland’s travel (i)Con

Con Horgan, 80 years young, looks back on 62 years in travel

t was on board the flight to Cordoba for the 2019 conference of the Irish Travel Agents Association that Con Horgan divulged just how long he was in the travel business. “I started in Aer Lingus on the day that the first trans-Atlantic flight was flown”, he said. We told the cabin crew, most of whose parents had not been born before the date in question, April 28 1958. Many industries have a father figure. Con Horgan, cocooned for his 80th birthday last month, serves as a grandfather figure across Irish travel, tourism and aviation. His advice and insight is sought throughout the industry, even in advance of the crisis which forms the biggest existential threat ever faced by aviation and travel, outbound and inbound, all the areas where Con performed at the highest level.

n that April in 1958 he started a temporary job as sales in Aer Lingus. He moved to become Iberia’s first country manager in Ireland, moved again to head up Ryan’s travel business before becoming CEO of Ryan’s hotels when they were one of Ireland’s leading inbound hotel groups, founded Abbey travel in 1978 before selling it on to Liam Lonergan’s Club Travel and retired to run his own hotel, Castlerosse in Killarney. More recently, he headed up the committee which Gonzalo Ceballos formed to streamline Ireland’s holiday business to his beloved Spain, and which helped drive it past the 2m visitor barrier.

Con Horgan receiving the ITAA President’s Award from Clare Dunne in 2013.

An industry that faces profound change could use a wise man to take stock of where it came from and where it is going.

The 100 years of outbound travel industry BC, before Con, had seen very little change. The 60 years since, have seen it transformed.

Clockwise:: Two pictures form Iberia days with Joe Keane of Shannon Travel and between Denis Brennan. and Eugene Conway of Bord Failte,, with Pat Dawson CEO of the ITAA and Con Horgan at the United Airlines north v south event at Carton, Sept 3 2013, with Bill Smith at TIGS event in 2019, with Gerry Keogh of Dublin Airport and Valerie Metcalfe of FCM at ITAA conference in Cordoba, October 18, 2019

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CON HORGAN AT 80

Christmas decorations on the Aer Lingus office in Cathal Brugha St in the 1950s he job with Aer Lingus was just for the summer. The national airline tended to recruit temporary staff to work the season. “Come back lads next year and we will have another job for you and eventually you might be made permanent. That was the way into Aer Lingus,” he recalls. “Jobs were extremely difficult to get, even at £5 12/4 a week. Plus shift pay. If you started before 6 o’clock in the morning or worked after 10 o’clock at night. ‘In order to get yourself out of that rut you had to think in terms of earning £1,000 a year because if you could earn £1,000 a year you were a made man.” The only way to do that would be to get a degree. “I did not have a degree so I went to college at night and did a B Comm. Cathal Mullan, who was a year or so ahead of me in Aer Lingus reservations, also did it. Because it was your way out. A basic degree was the equivalent of a masters now or even a PhD.” He worked in reservations in O’Connell St but then got a transfer to a job with a uniform,

and that was very important in 1958. “I passed on up the road to Cathal Brugha St, which was the city air terminus. That provided a full check in service and a bus to the airport. People did not go to the airport to check in unless they had cars. They could not afford taxis. “They checked in just around the corner from the Gresham Hotel. I think it is a family planning service or something now quite close to the college in Cathal Brugha St. “ “There customers had your bag weighed, and you were trained to look at the ticket and address the customer by their surname, Mr Horgan, and people were quite impressed by that because everybody likes to hear their own name. “This rather gruff guy walked in one day with a big set of golf clubs and threw them on the weighing scales, and I looked at the ticket and said Mr O’Connor, those golf clubs are very heavy, you are seriously over weight. “It was Christy at the peak of his endeavours. He almost broke the counter with his fist:

Aer Lingus never did anything for me.” “Of course he was not charged, but it was our job to collect the excess baggage fine, which was calculated at 1pc of the one way first class fare, per kilo. It was quite severe. You had your 20 kilos anything above that cost more. “People with that much luggage generally could afford it. I remember a man coming around from the Gresham one day. A porter from the Gresham accompanied him with his luggage. He gave the porter a ten shilling note tip. I nearly fell off my seat. “He was a well dressed English man. Dublin was a big destination for the English, especially for shopping. It was so much cheaper than England at the time.“

reland’s first package holiday went on sale in 1854, a pilgrimage to Paray Le Monial. Con was not around for that, but the industry he entered in 1958 was still built around pilgrimages.

Clockwise: Golfing with Tony Collins of Topflight and Brian Garland,, with Enda Corneille at ITAA conference 2006, postcard of the Ryan group hotels, and a Ryan’s travel photograph with John O’Donoghue, later founding partner at Abbey Travel and later of Apex Travel, and Eamonn Kane and unidentified staff member.

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CON HORGAN AT 80 “The numbers of people flying were tiny until 1958. That was breakthrough year, not because Aer Lingus started the trans Atlantic service, but because it was the anniversary of Lourdes. I would say somebody from every parish in Ireland visited Lourdes that year. We had charter flights going out, starting at 5am in the morning, through the day. “Not alone did they go out from Dublin, they went out from regional airports. I remember Aer Lingus flights going out from Ballykelly RAF base in Co Derry, and Shannon. Cork was not built yet. “That’s what got people into the air and that is where the late Michael Walsh became the big name in travel. He did not have the Lourdes market as a monopoly but he almost did.” “Michael did extremely well. His first pilgrimage was to Rome in 1950 for the holy year, when he was in his early twenties. Then he chartered a DC3. He must have made a lot of money in 1958, but he did not pursue the business. He was much more kind of a trail blazer pilgrimage man rather than a travel man. He was not that commercially driven. He had the whole thing sewn up. He did not pursue it.” Eventually Michael Walsh sold his business to Aer Lingus and that became Cara holidays. Instead, Joe Walsh came in and seamlessly stepped in to his shoes. Joe’s first charters were to the Holy land, then of course, Rome and Lourdes, and the rest is history.

here was a man called Sean O’Scanlon who had a travel agency at 4 Lower Abbey St, which is where subsequently the Ryan’s office was that I ran. “Sean O’Scanlon’s main business was in peddling sweepstake tickets to the USA. He went through travel managers like snuff at a wake. He had one great traction, he paid £1,000 a year. “Joe Walsh come back from London from Thomas cook and he lasted kissing time. He

Con Horgan and Des Abbott en route to the annual conference of the Irish Travel Agents Association in Cordoba, October 16, 2019

had the travel experience, so he decided to start up elsewhere. He went out to work for Michael Broderick in Universal Travel Agency in Dun Laoghaire. It was from there he made the jump to tour operating in his own right. “Joe started off with pilgrimages to the Holy Land with Middle East airlines, which was a Lebanese carrier. Joe had the entrepreneurial flair and the name Walsh did not do him any harm. The guaranteed pilgrimage traffic also meant that Aer Lingus could build up a network of routes to European cities that were all served through Lourdes. There was a guaranteed market to Lourdes, so the Barcelona service, Rome service, were run via Lourdes. Pilgrimage traffic, and traffic for religious reasons, was the main reason for travel and then people started to go down to Sitges. Aer Lingus staff were great pioneers of developing places like Sitges,

which was the first beach resort that became known in the Irish market.”

on had moved to Lep travel at that stage. “Cahir O’Docherty had come from the Michael Walsh stable and ran Lep travel. They were very big in the freight forwarding business and were big in corporate travel. “Travel agency work is very pressurised, making it difficult to study at the same time. I remember handing a touring group with the St Joan play. It was just after the Dublin theatre festival. They were going to nine European destinations, literally one night stands, and Let whom I worked for at the time, were responsible for moving the props and the people. We had Micheál MacLiammóir, Siobhan McKenna, Laurie Morton, David Kelly, all the top people in theatre. .

Clockwise: George O’Reilly and Bing Crosby in Dublin. Con with Bob Power MD of Ryan’s Rentacar and three unidentified staff members, with Martin Dempsey of Dempsey Travel, Con Horgan and Terry Murphy of Terra Travel. at the Amadeus golf event for the travel trade at Knightsbrook Co Meath, Sept 21 2017 and with Eileen Penrose and Audrey Headon

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CON HORGAN AT 80

Former presidents of the ITAA Martin Skelly of Navan Travel, Michael Doorley of Shandon Travel, Con Horgan, Pat Dawson CEO of the ITAA and current president Cormac Meehan of Meehan Travel Bundoran at the Irish Travel Agents Association annual conference in Porto October 13 2017 “ It was a who’s who of the theatrical business in Ireland. Mike Murphy, later of RTE, was assistant stage manager. “Because I was too young to go to college, I had to do an exam, the Diploma in Public Administration, which gives you a year’s exemption from the B Comm, I was doing the exam the same day as I had to do the tickets for the St Joan group. doing a nine stage ticket in those days was not an easy task. You had to get three four base tickets, conjunction tickets and numbers and fares as many times as there were passengers on the flight. Nowadays you press a button. This would have been a task that would have taken a couple of hours. I would have literally had to leave the maths exam before I was satisfied that I had done the best possible job, to get back to the office and finish the tickets. Bing Crosby was arriving in Ireland that night. He had never been to Ireland despite the fact he had sung so much about Ireland. George O’Reilly from Tara Records in Dublin, and manager of the Crystal Ballroom, had

invited all the Lep travel staff to the airport to meet Bing Crosby. I thought this was a great way of ending the day, especially the crap day that I had. So I ended up in the VIP lounge at Dublin airport, waiting for Bing Crosby to arrive. I was a very inexperience drinker at that stage. I asked what I should drink. Somebody suggested the most expensive thing here is brandy. And I drank brandy. Bing Crosby’s flight was delayed, so I drank more brandy. When he did arrive he was whisked through to avoid all these travel people who were pissed, and we ended up going to the Shamrock bar at the airport and I was very thirsty. I drank lager. I had very little drinking experience at this stage, resulting in me getting very ill around the airport that night, and eventually getting the last bus into town to get the last bus out to Raheny. My mother opened the door and asked: how did the exam go?”

he guys in my class they were in banks, they were in county councils, they were in places that gave them time off for study and everything else. I thought travel was too stressful for a degree at night at the same time, and I just started to look for another job. The other job that came along was the job in Iberia. Iberia advertised a job in 1962. Con was interviewed in the Gresham Hotel by the general manager Britain and Ireland. “They paid me £1,000 a year. He told me I would have to be fluent in Spanish in six months which of course promised faithfully I would be, and which I wasn’t. “I did not see the need to do any further education after that, I had achieved my goal. Not that it was any easier. I got the £1,000 a year, £64/12/4/, paid 13 times a year, not tax deducted, paid into your pocket. I was 24 when my boss, Paco Grande who was from Madrid, was promoted to general manger Copenhagen. The position in Dublin was not a general managership, it was a branch

Clockwise: Con speaking at ITAA conference in 2006, Charlotte Spink of Trailfinders, Con Horgan ex Iberia and Abbey Travel and Pat Dawson CEO of the ITAA at an event in the Imperial Hotel in Cork to promote Iberia Express’s new 2w service from Cork to Madrid, March 31 2016, Con Horgan, Spanish ambassador Javier Garrigues and Gonzalo Ceballos of the Spanish Tourist Board at the ITOS event in Dublin, Dec 12 2013, with Rebecca Kelly then of MSC Cruises and Joe Tully of Tully’s Travel at the Etihad event to celebrate ten years on the Dublin-Abu Dhabi route, July 14 2017

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CON HORGAN AT 80

Gonzalo Ceballos of the SpanishTourist Board who appointed Con Horgan to head up a Spain-focussed group of key travel agents and tour operators. of the London operation. As a precious 24-year old I said to him, if I don’t get the job I will be looking around for another job. They said: Mr Horgan your time will come. But they gave me the job and I actually became country manager, or DSM, District Sales Manager.

hen I started off as a rep for Iberia on the road, apart from the cities which was Waterford, Cork, Limerick and Galway, where there were agencies. There were few other places that had full time travel agents, Frank Tully in Carlow (he had a draper’s shop as well but ran it as a separate entity), and Tom Manning in Kilkenny. Ted Greene came on the scene in Drogheda. We had part time travel agents who also ran everything from undertakers, insurance companies and butcher’s shops, you name it. All of the passenger shipping agents shops were

all along the west coast because of emigration. Every town had a shipping agent, as they were called, because of emigration. There were ten travel agencies in Dublin. Roy Kirk of Thomas Cook and Jock McGregor of American Express ruled. Airline reps shuddered going into those shops. Roy Kirk would bring you down for coffee and you ended up in Jammet’s restaurant on 27 St Andrew Street, because it was the only place you could get a drink during the holy hour, 2.30 to 3.30. You would fall out of the place on your ear at 4pm in the afternoon. There was Norman Hewitt’s travel, Leslie Harris travel in Wicklow St, Sadlier Travel on Grafton St, Meehan Travel on Aston Quay, Lep Travel in Tara St where I had worked, Twohig’s Travel off Burgh Quay, Michael Walsh’s place pre 1960 on Parnell Street nd later D’Olier Street. and Thomas Francis Chisholm (“Chizzy”), of the Irish Travel Agency.

t the age of 28, Con Horgan was head hunted by Ryan’s, and spent 11 years with the company until 1978. “My years in Ryan’s were away from travel to a large extent. I went in as general manager of Ryan’s travel agency but they were developing into the hotel business. “In 1968 they opened their first hotel in Killarney. They then developed three more hotels along the western seaboard, Limerick, Galway, Sligo, and then in 1971 they built the London Ryan hotel, and it became public company. “I moved up the ladder in the management structure of Ryan’s from being their travel manager to being managing director of a public company during that 11-year period. The travel agency side of it was important but it was managed by fellows like John O’Donohue, Bernard Healy, all of whom subsequently jumped ship and came with me into Abbey, many years later.

ll the Ryan’s hotels were successful from the outset. London was the most profitable. Galway, which had 100 rooms then, had a strong business. Limerick, built from the old Ardhú Hotel and known as the Ardhú Ryan for a while, was the biggest with 200 bedrooms. Killarney had 168 bedrooms. The McEnniff group now owns the hotel in Sligo. “Ryan’s was where I learned everything. Working in Iberia you gained knowledge but it was narrow, in the sense that it was airline stuff. You were called a manager but you weren’t in management as such, you didn’t make any decisions. Everything was in a manual. You had a job, you did it well, and that was it. “Ryan’s was an extraordinary company. Dermot Ryan was a bit of a genius. A bit of a

Clockwise: Con Horgan and Bernie Colgan in Fatima during ITAA group trip to Central Portugal, October 2017, with carol Anne O’Neill of Worldchoice at the ITIA awards 2019, Qantas group trip in March 1984. Bob Beatty from Thomas Cook, Declan Finucane of Aer Lingus, Mary from Club Travel, unidentified with glasses, Con Horgan, Tom Leech of Neenan Travel, Susan Kiernan of Ask Susan, Bernadette Wogan Henderson from Galway, Mary Murphy from Qantas (front), two unidentified, Pauline Thompson of Abbey Travel. Mary Murphy was the Qantas manager in Ireland at the time. With Marian Benton, long time colleague at Abbey travel and Olwen McKinney of Amadeus, Tigs captain of 2020.

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CON HORGAN AT 80

Con prepares to tee off at the TIGS captain’s Day at Bray Golf Course sponsored by Travelport, Sept 4 2014 mad genius in many respects. A bit of a Howard Hughes. Pat McCann of Dalata hotels, worked for me as the food and beverage manager in the Galway Ryan hotel. If you ask Pat McCann about me he will say I taught that guy everything he knows about the hotel business. “I worked my way up through the ranks, but I was always on the sales and marketing side of the business. At a certain point in time I was appointed group general manager, which meant that the hotel managers reported directly to me. I knew very little about the nuts and bolts of running a hotel. In fact I still do not.

could run people who run hotels but I could not run a hotel myself. I did try. I managed the Gresham for a while under Ryan’s ownership. “I decided to go down to the Galway Ryan hotel and apprentice myself to the food and beverage manager for a week and learn all about kitchen percentages, bar stock controls, all of this stuff, that was a bit gobbledygook to

me, and hotel managers could easily blind me with science. I would not know what they were talking about. Who was the food and beverage manager only Pat McCann? By Thursday I knew it all. Pat went on to London, rose the ranks in Ryan’s and the rest is history. Danny Bowe who now manages my hotel in Killarney was restaurant manager in the Yeats Country Ryan, in those days they were called head waiters, when Ryan’s bought it in 1968.

he troubles were, to say the least, a setback. He was in New York promoting Ireland on Bloody Sunday. “I remember it only too well, coming back to the hotel that night, and watching the television about people being shot in Derry. When I arrived back in Dublin a couple of days later, and I remember Eamonn O’Carroll the guy who ran Ryanair’s car rental, because we were car rental as well, telling me that a crowd had just burnt the embassy in Dublin

We were doing very well in the British market at that time. We had launched Ryan’s “Go as you Please” holidays in Ireland, we had a good network of distribution, we had offices in Bond St. “The north became a no go area. I don’t think I was in Belfast for something like 15 years. The business did not dry up completely. But certainly it changed an awful lot. “That was the closest comparison I can think of to what is going on at the moment. It was a question of battening down the hatches. The French and the Germans replaced the British business.”

hen he started Abbey Travel in 1978, Con says it was the strength of the team that ensured its survival. “Colm McCarthy who was the chairman and chief executive of the Ryan group, had no time for travel. He did not see the benefit the travel side of the business was bringing to the hotels. “When I left, I suppose I gave a certain

Clockwise: Con and Liam Lonergan at ITAA 2015 conference, with Jim Tobin and Jim McGonigle, with Kathryn MacDonnell of the Spanish Tourist Board, with the late John O’Donohue, Con’s long standing colleague at Abbey Travel Marian Benton and Shay Mitchell, ex Aer Lingus.

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CON HORGAN AT 80 amount of leadership to the people on the travel side, and when I decided I was going to set up in the travel agency business, a lot of people were interested in coming to join me. Something in the order of ten people jumped ship from Ryan’s to follow me, and with them a lot of contacts, personal and corporate. McCarthy let them go. “Starting in business was difficult. Starting in business when the economy was not booming was more difficult. Very difficult. We had to grab a share, a bigger share of a smaller pot. Some of the interesting things we did in the 1980s; We opened as a retail travel agent and started tour operating. In 1982 we chartered our first aircraft. We did Majorca, Ibiza, the Canary Islands. “Although there may have been an economic recession in the 1980s, through it all travel was growing.

on Horgan was manager of Abbey Travel when he was elected president of the Irish Travel Agents Association for 1986-88. “We generally had an election in those days. The president was a hard fought battle, me, Liam Lonergan, and Martin Ryan from Thurles, a former civil servant who set up Martin’s travel in Thurles. The ITAA conferences were huge affairs, the highlight of the social calendar in the industry. The gala dinner was the annual Christmas party for many agencies because everything was sponsored. People brought their staff along. The gala dinner was attended by 800 people. Very few places were big enough to host it. “Stena sponsored the golf day on Thursday and B&I sponsored the dinner. The conference started on Friday. Aer Lingus sponsored the dinner on Friday night. Irish Continental Line sponsored a magnificent French themed lunch on Friday. “Dublin airport sponsored a black tie ball on Saturday night. British Airways sponsored the Sunday morning brunch. Before that, there

Con Horgan speaking at the 2011 ITAA Conference in Seville, November 19 2011, on the platform are suppliers Lorenzo Diamantini of MSC Cruises, Tayfun Gokpinar of Wings Abroad and Clem Walshe, then of Low Cost Beds. was mass for the deceased. Can you imagine?” “Ryanair was founded at that time and started out really pro travel agent. Eugene O’Neill came to me and asked how much it would be to buy Aer Lingus out of the Friday night dinner. Ryanair were prepared to pay money to move in to the Friday night slot.“

on sold the corporate and leisure wings of Abbey travel separately over the past ten years, and has effectively retired, but is a keen observer and welcome presence at travel events. “I survived an awful lot of obstacles. I would not be seen as someone who survived a recession. I don’t think that the Abbey travel I sold to Liam Lonergan, which was subsequent to the corporate side I sold to Flight centre, that company would survive. It did not have a strong enough balance sheet. I don’t know how a lot of the businesses that are out there will survive then.

“My advice is make the hard decision. Sometimes the hard decisions are cruel decisions. Batten down the hatches. But it is the survival of the business that is important. “At the hotel, I have done a cash flow to the end of March 2021 assuming that we will not open at all. You have to take the worst possible scenario and build up from that. Now we can take a budget, and build up from that. “What I have done now is looked at the worst possible situation and said, at least I can survive that. It hopefully won’t get that bad. But you know, if I was in the travel business, you might have some cash in the bank but it is not your cash. We had a call from CIE Tours International yesterday in the hotel asking us would we cut our rates back 20pc to kick start the market. We told them where to go. “Confidence will be the big thing. This virus is going to hang around for a long time and people are still going to be scared of getting it in a year’s time.

Clockwise: Con with the Tower Hotel team at Holiday World 2002, Con Horgan with Peter O’Hanlon of Travelfinders and John Spollen of John Cassidy Travel at the British Airways function for the trade, Westbury Hotel, January 10 2012 , with Deirdre Sweeny of Sunway and Des Abbott of Des Abbott travel at the ITAA 2016 conference on board Uniworld Antoinette, with Paddy Dignam at TIGS outing in 2006, with Volker Lorenz of Amadeus and Ann Marie Dalton of Turkish.

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TRAVEL AGENT’S VIEW

From the battlefield

Mike Shinnors records the questions and the ‘no answers’ of Travel Agency life in March and April 2020

o be honest, I noticed something was “off” coming close to the end of February. The week of the midterm break is generally the first “down time” for agents since we would have returned in the New year. It was just that little bit quieter. I was all set up for the madness of the holiday booking season to kick back on February 22/23 but it never really lifted. Of course, things were kicking off in Italy but even at that stage I was like ah sure media hype making things worse than they actually are. Moving on to early March the enquiries were starting to come in. What if? At first it was a drop, then a trickle then a stream and finally the tsunami hit and when I say hit. It hit hard. To say I was side swiped was an understatement. Everything and I mean every rule, every law, everything I was so sure of the week before was literally thrown out the window. Example on the 17th March if your flight home from say Thailand was cancelled. You could say with absolute certainty Yes, the airline will rebook you on the next available flight. Yes, they will cover you for any out of pocket expenses. Yes, you will receive accommodation until the new flight operates. Yes, you will be able to secure compensation. A few days later this was NOT the case. Nothing was set in stone, nothing was definite.

nd, worst of all, you could not make contact with an airline to get a definite answer or even guidance. Here is how one conversation went with a very established airline after I think 12 hours of holding on a premium rate number to talk to a “real person” Me, to the airline: Hi, It’s Mike here from Holiday experts. I have clients in Thailand at the minute and their return flights has been cancelled. When can you get them back? Airline to me: All our flights are cancelled indefinitely. We cannot help you. Me to the airline. But you rebooked them to come home later in the week as their original flights was cancelled. Airline to me There is nothing we can do. Me to the airline. Ok - If I secure flights with another carrier can you transfer the unused ticket over to that

Mike Shinnors

carrier? Airline to me. No. Me to the airline Can you process a refund then for the unused portion of their ticket and that can go towards the cost of the new tickets? Airline to me. No. They can change the return date free of amendment fee, but they will still have to pay a fare difference if there is one. Me to the airline. Ok so when can we change it to? Airline to me. Our flights at present are cancelled at present up to mid-April (that’s 3 weeks away) but we can’t guarantee we will be back flying at that stage. Me to the airline So, what do you expect me to tell our mutual clients? Airline to me. Exactly that. I must now terminate this call as I have other calls to answer. And then the hang up! It shocked me to the core that I and my clients were left in limbo with no one to turn to. Just to finish up this story, I eventually got the clients rebooked with another carrier and paid for the new tickets. All settled they

were coming home the following day. The following day this airline refused to check in the clients due to the airport they were flying through very swiftly and without warning closing their transit area so clients could not transit. Eventually after three sleepless nights very stressful days and 1000’s of Euros later the clients made it back to Ireland. Airline 2 then said they were not offering refunds only travel credit. So, we had 2 sets of one ways tickets back from Thailand, that could only be used as travel credit - no refunds allowed by either airline. This is just one example of the many situations travel agents have had to deal with.

oving on, you booked a tailor-made package with flights and accommodation (not a tour operator). First off agents will need to see if there is a cancellation fee with the accommodation supplier. The closer you are to travel date the higher the cancellation fee. To be fair most (not all) accommodation suppliers were very fair with I would say 80% moving quickly and decisively cancelling upcoming accommodations free of charge. Airlines however are a different animal. Until they cancel the flight, as agents we can

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TRAVEL AGENT’S VIEW

Dublin airport derserted arrivals ariea during Cornoavirus

do nothing. Hence the reason most agents told people do not contact us unless you are travelling in the next 10 days. There is no point in asking us if your flights to Lanzarote is going to go ahead in August, we don’t know and until the airline makes a decision, we cannot advise you. Majority of the airlines are only cancelling flights 10-14 days before departure. Yes, you are reading that right 10 -14 days in advance. So, flights as far as the airlines are concerned are operating as normal in June – now the dog on the street knows that is not happening but until the flight has been cancelled by the airlines nothing can be done in relation to this. Another factor to consider is not all flights are cancelled. From Ireland there are still flights going to the US, UK and mainland Europe and have not been cancelled at any stage through this pandemic. Let’s say you are booked to travel on one of these flights and the airline do not cancel the flight if you decide not to travel then to put it bluntly – that’s your decision and your loss. The airline has no obligation to do anything for you. True - YES, the right thing to do – NO. But it’s a fact. Another interesting point is flying to the US. As Irish passport holders you will not be allowed to enter the US but if the flights are operating and you do not travel then again it is your loss. Do I think this is right? ABSOLUTELY NOT. Eventually we received some guidance form the airlines regarding forward booking with some of them allowing you to cancel your flight and receive a voucher or credit - some with an added bonus, getting rid of change fees etc. Again, this took quite a while to set up and the lead in time was very short. At first with a

particular airline if you were booked to travel up to 31 May you could cancel your flight and apply for the voucher or change your flight. But if you were booked to fly on the 01 June it was your standard terms and conditions. It was early May before this was extended to cover June flights. At the time of writing there is nothing confirmed for anything later then 30th June.

alances due were the next bone of contention. Most tour operators require full payment to be with them 12 weeks before you are due to depart so from March balances were due for clients travelling in June. Again some were flexible and reduced down the balance due time to maybe 4/5 weeks before departure which gave everyone some breathing room. Others however did not. If you were booked to travel in June and your balance was due then you either paid your balance as normal or you cancelled and lost your deposit. That’s the rule. After lots of pressure they allowed you to change to a later travel date without amendment fee but again you would have to pay the difference if the new holiday was more expensive. Some clients moved to later in the summer like July/Aug and of course the price was more expensive. Now with the way things are, these clients may again have to go through this exact same process. Some changed to 2021 which again took the immediate pressure off everyone. But again, as I write balances for August bookings are still the 12 weeks out. You then have the whole mess with refunds, travel credit, vouchers and credit notes. I am in the industry over 20 years I deal with travel all day every day and I like to think I am up to date with all developments but I will admit

I found this totally confusing. I can only imagine the confusion it caused to the normal travelling public. To make matters worse, the amount of misinformation going around through social media, print media and indeed radio and TV is shocking. In these uncertain times people need certainty and definitive information Not hearsay, speculation or opinions. This only adds to people’s stress and confusion levels.

he most interesting one came where one airline says it will operate 40pc of its flights in July. People picked up on this straight away and ran with it, without getting all the facts. Yes, I would love to see it happening but do you think it is realistic? There is still too much uncertainty around everything. Before we even begin to think about social distancing requirement on the flight how about getting to the airport? Stage 4 is when you can travel more then 20km form your home – very little of us live within 20km of an airport. How about checking in a bag at the airport? How long would that take to be done? How about going through security? How about boarding a plane? Some guestimates are that the queue to board an aircraft could be up to 1km long if social distancing is to be observed. On top of that you need all things to be good here with coved 19 but also in your destination. Will the borders be open? Will the bars/restaurants, shops, beaches be open and accessible? Will you have to quarantine on arrival? Will you have to quarantine when you return?

JULY 2020 PAGE 41

TRAVEL AGENT’S VIEW

Happier times, Mike and friends on the Emirates/Ifonly fam to India in 2014, Nicola Allan If Only, Yvonne Collins Freedom Travel, Mike Shinnors, Jane Masterson of Emirates, Carolyn Davis of Liberty Travel, Michael Bowe of Bowe Travel, Martin Penrose of If Only, Maria Boyle of Lee Travel, Martin Skelly of Navan Travel, Mark Clifford of O’Hanrahan Travel, Aaron Bolt of Selective Travel While I realise these are all valid concerns no matter when we decide to return to, I cannot see a detailed plan being in place for this by July which is only a little over six weeks away?

eeing as I mentioned refunds earlier let me just give you an example of the process. I will keep this on an easy booking. For example, a tailormade holiday to Spain with flights, transfers and hotel booked through our own Bed bank The flights are cancelled and there is no cancellation fess on the hotel or transfer as I said as easy as possible. 1. Email our bed bank provider to cancel the hotel and apply for a refund. 2. Our bed bank then emails / cancels with their supplier. 3. This supplier then emails/cancels with their local ground handler. 4. The local ground handler then emails / cancels the hotel. 5. The hotel passes on the notification of refund due to their accounts department. 6. The accounts department processes the refund to the ground handler. 7. The ground handler processes the refund to the supplier. 8. This supplier processes the refund back to our Bed bank. Bear with me this is just the accommodation. The same routine happens with the transfers. Regarding the flights. 1. Once the airline cancels the flight I apply for the refund. 2. I receive an automated reply to say the refund has been processed and is in a queue.

3. Within a few days I receive and email to say the refund request has been received and will be processed with 20 working days. 4. After 20 working days you receive another email to apologise for the delay but it may take a further 8-10 working days. 5. 8-10 working days later you receive an email giving you a VOUCHER for the value for your flights. (I didn’t want a voucher I applied for a refund) 6. Embedded very deep in that email is a tiny link where you can apply for a cash refund. 7. You go through this link and are then told various ways how you can use your voucher. 8. Eventually you keep powering through to be put in a queue to speak to a chatbot. 9. After waiting for anything up to 3 hours you get timed out. 10. Repeat from step 6-8 11. Finally you get to chat to a human who advises you are in the refund queue and that they will start to process refunds based on date of travel “once the covid 19 pandemics has passed” 12. That could be 2021. When I pushed on this, I was advised off the record that they will start processing refunds 31 July 2020 and they will start with March bookings? That’s 4 months. So, when people ask “Where is my refund? It has been 6 weeks since my flights were cancelled” this may explain a little. Now this example above is a very easy holiday to process. Long-haul, cruising, car hire, holidays with all different rules, regulations, components and suppliers will take considerably longer.

o the general public. This is NOT a pity post or a cry from the “poor travel agent” it was written to try and explain the actual day to day activities all agents are going through since this episode started. We have the same thoughts, fears and frustrations as yourselves and we are well aware of them all. From our own health to our family’s health and of course our livelihoods. There is no need to send us screen shots of EU/261, CAR, online posts. Believe me we know, we have seen them, we have read them and we are very aware of them. We don’t need to be told that XYZ was on XYZ’s radio show and he said XYX – we know we heard it. There is no need to threaten us with legal action. There is no need to scream or get abusive at us. There is no need to tell us how valuable a client you are to us. We know you are our bread and butter and that without you we have nothing. There is no need to tell us you will never book with us again. We are aware that we will not please everyone to their satisfaction and we can’t, but we are doing our best. If you decide you will not deal with us in the future that is your choice. There is no need call to our front doors demanding you refund. There is no need to smash our car windows in because we don’t have your refund. All we ask for is patience and understanding. It is that simple. Patience and understanding.

JULY 2020 PAGE 42

EOGHAN O’MARA WALSH

Measuring the storm

The view from the Irish Travel Industry Confederation bunker

he Irish Tourism industry confederation issued its headline guidance to the impact of Coronavirus in mid-April. In the fifth bulletin to the industry, ITIC predicted a €3.52bn wallop for Ireland’s tourist industry, down 60pc in Q1, 85% in Q2, 70% in Q3 and 50% in Q4. A month later, that looked optimistic. O’Mara Walsh starts with the upside: “in Ireland we are lucky that we have Ryanair and Aer Lingus as legacy carriers. They have the big cash pile. They will survive. they will be massively diminished. The number of routes will be diminished. But they will survive.” Beyond access, there is little to pick from the rubble. “The economic impact of Covid19 on its own is horrific. A lot of it comes down to government support. There needs to be a Marshall if plan for tourism and travel otherwise the sector is royally goosed.” “Even when Covid passes there is going to be a long period when the consumer is nervous, the economy is in dire straits, the demand levels will not be there, it is not like we can turn a tap back on. So much of this is going to land at government, and supranational, EU level, interventions to support airlines or carriers or industry on the ground, while we have an industry still in existence when Covid finally passes.“

Eoghan O’Mara Walsh speaking at the Irish Self Catering Federation conference limit out-goings so they’re in some sort of shape to reopen.

to ensure that there is only half the n number of people in the building that you normally have, your re running at a loss. The thing about tourism is that 75pc of the tourism economy in Ireland is overseas visitation. So only 25pc is the domestic market. Please God, the domestic market will respond and will bounce back quickly. But it will never get anywhere close to compensating for the devastation in the international market. And we will not get any inter-national visitation in 2020. we all accept that. In 2021 it is going to be very soft.

he Confederation has a membership of here is a lot of frustration that there is 36 major stakeholders and speaks as a not a sector specific support for tourism voice for hundreds of small businesses. and hospitality and also a lot of frusO’Mara quantifies the members worries in two tration that we do not have the generosity of words: business survival. the enterprise grants and so on that the likes “This kicked off at the end of February and of enterprise Ireland have for their client base. beginning of March when the Tourism and hospitality companies cash reserves are historically cannot avail of those and at the moESTIMATES low because it is in the summer Q1 Down 60% ment the government is not putting sea-son that you make your profQ2 Down-85% together the type of package that is its. The danger is that the cash \Q3 Down 70%) needed for our reserve has run out, and finally, Q4 Down 50% sector. That is when restrictions are lifted or the big frustrawhen Covid has passed, you do tion for them. not have a business to reopen. Hotels and restau“Their doors are closed. They are closed rants are only allowed for public health reasons. If the farmers were open if social distannot allowed to work, they would be compencing was adhered to. sated for it. Tourism and travel operators are How do you run a not allowed trade but are incurring costs while restaurant or a tourist the doors are closed, whether that is local auattraction or a hotel thority rates, or commercial water rates, or if you have to limit the 30pc they have to stump up for the wage your capacity? So you subsidy scheme. there are a lot of costs still incur all your costs as going out. soon as you open the That is the biggest worry that they have. door. When the business is being mothballed and And yet, if you have they are in hibernation mode, how can they Maurice Pratt, Willie Walsh and Eoghan O’Mara Walsh

JULY 2020 PAGE 43

EOGHAN O’MARA WALSH

Mark Henry of Tourism Ireland, Olivia O’Leary, Paul Kelly CEO of Failte Ireland and Eoghan O’Mara Walsh CEO of ITIC, And that is going to be subject to there being a widespread vaccination available. You are talking about two or three really fallow years. What businesses hope to be able to do is at least come out the other end when hopefully demand has picked up and there is some sort of normality of business and they can start trading again. But these two or three years are the really worrying ones

n our projections at the beginning of March we said Q2 would be down 85pc. Now Q2 is down 100pc. Q3 was down 870pc. That is going to be minus 90pc. The whole of 2020 is going to be a disastrous write off. The consumer is wounded and damaged overseas in terms of travel and tourism. It is only the intrepid traveller who will be jumping on an aircraft on January 1 next year and flying to Europe. there will be a lot of nervousness out there. we are going to have to live with this or the consequences of it for some time. When restrictions are lifted, the first market to respond will be the domestic market. People will still be wary, so can the government do some sort of incentive scheme or voucher scheme where there is a voucher

against an Irish tourism product for every household in the country to encourage or to stimulate the domestic market bouncing back. There is a lot of stuff that could happen and should happen but will re-quire political will. because all we can do is make the argument. We can all analyse how horrific things are, but really all we need is constructive solutions or a road map to how we might come out of this because this is nine-eleven, and foot and mouth, and SARS, and ash cloud multiplied by fifty. It is the long term consequences of this that matter. this is not just one of those external shocks that is a blip, and we recover after three months. There is going to be a long term lingering impact.

efunds are an issue. All of our hotels, golf course, and tour companies are facing demands for refunds. The punter is looking for the money back. We were trying to push the Department here to introduce a voucher instead and honour it if the business goes best. The government will honour it. Refunds is the equivalent of cash out of our business. The business interruption cover that hotels

Eoghan O’Mara Walsh and Maurice Pratt launching the ITIC report.

and restaurants thought that they had are not being honoured because Covid is not in your policy, even if they had pandemic cover, because Covid was not name checked. If the insurance companies honour policies and stumped up their sup-port, at least that would help individual businesses ride out the storm. That is a massive frustration. That is just dispiriting. This idea of a stamp of hygiene or certificate of approval in Portugal is interesting. It would give the punter confidence that hotel in Athlone or wherever is a seared and secure place to go.

ne in ten jobs in the country are in tourism and hospitality. It is the biggest regional employer by far. you go to parts of the Wild Atlantic Way, whether it is Killarney or Dingle or Bundoran and there is not show in town but for tourism and hospitality. if tourism hospitality is devastated, in those parts of the country, there will be no regional economic activity. It is scary stuff. Industry will do its bit. The agencies will do their bit. Ultimately it comes back to the macro governmental picture and really sector specific stuff is needed. You need tourism thought of as an economic portfolio. And you need a minister of serious capability. We did have Leo and Paschal before, they brought in things like VAT at 9pc and the gathering. But if you have a passive minister or a minister who is interested in stuff other than tourism, then the danger is you just get drift and dither. We just cannot afford that at the moment. A lot of this comes down to politics and a new programme for government, and we really think that tourism has to be central to that. We have come up with nine areas that need to be addressed urgently and immediately. The VAT rate has to be down to 5pc because that’s comparable with the other indigenous industry, agriculture. These needs to happen immediately or there won’t be an industry left.

JULY 2020 PAGE 44

NIALL GIBBONS INTERVIEW

Britain is best hope

Tourism Ireland believes that North America will not return until 2021

Tourism ireland I wil return video

ourism Irelandâ&#x20AC;&#x2122;s response to the Covid19 crisis is to use the time for extensive research into the scale and shape of the recovery, accoridng to CEO Niall Gibbons. â&#x20AC;&#x153;The first thing we need to do is find out what is the mindset fo the consumer moving forward. This raises more questions than answers. We are trying to narrow this down to a few big issues as opposed to having them scattered al over the plac Will people travel internationally? Will they be happy to get on an aircraft? The first thing we need to do is go into the marketplace with an international survey on consumer opinion. Tourism ireland has put out the tender for a major international post Covid survey. The first element of that iiil be a cover tracker which will be going in to the market place in May, assessing what the sentiment on consumers is towards international travel in the top four markets, Britain, USA, France and Germany. The survey will go on over the next twelve months, so when all this is done, it will inform what markets we go in to, when, what level of investment, who we talk to, and what the message is. That is a significant piece of work and that will determine what is recoverable from the markets in 2020. The second big factor that is out there as well is what happens to air access.

econdly, we are trying to map our what the recovery will look like on the air access front. That will determine the picture on the short and medium term for us. Thirdly, what shape will our industry be in when we come out of this pandemic. If this pandemic had happened in October, and the industry had to shut down for three months, 90pc plus would have tried veered and opened their doors in early march and healed the wounds, We have a situation where there is

not going to be much left in the season. Some of them will open until early march and can they even recover. We are going to need a strong recovery platform for industry, particularly those who do not operate in the international space. They are the three big factors we have identified to ministers moving forward, consumer opinion, air access and the tourism industry. I am engaging with all of our trade and international markets on a series of calls.

Niall Gibbons launching the Global greedning campaignjust prior to lockdown

JULY 2020 PAGE 45

NIALL GIBBONS INTERVIEW

Irish dancers feature on Colm Crummeyâ&#x20AC;&#x2122;s lockdown video for Tourism ireland

hat is starting to emerge form our perspective, is given the government roll back that was announced last Friday, we have postponed all our paid activity out to the end of August. I do not think there is the prospect of any international business coming in this summer. Tourism Ireland are out in the market place. A tender has gone out to do research in our top markets that will inform our re-entry strategy. acmes sis a key component part of what we do. We are working very closely with the airport and the airlines in

MARKETS IN 2019 (estimated) (Thousands) Britain 4,796 England 3,799 Scotland 832 Wales 164 N America 2,318 USA 2,042 Canada 277 Europe 3,831 France 571 Germany 819 Italy 401 Spain 442 Netherlands 258 Scandinavia 257 Austria 59 Switz 86 Poland 148 Other 831 Australia 245 Total 11,823

that respect. we are doing a lot of work in evaluating where every market is in the cycle at the moment. We are having conversations on a daily basis with all our overseas providers and overseas media as well to assess when might be the right time and at what level. A key thing will be who will we talk to and what message will be given. We have not switched off the lights. We have repositioned our digital forums, everything form culinary, the arts, literature, poetry reading, all that kind of stuff. They are getting great reaction. Our traction on digital now is higher than it was a year ago. Videos like â&#x20AC;&#x153;I will returnâ&#x20AC;? are getting amazing traction. It is all touching in to the emotions and the senses that people have in relation to ireland. It is not the hard sell. that is all being toned down. We are dealing with people like

Philip King on the arts side. We are dealing with content that is creative. We have 5m followers on social media around the world and we have immense reach.

he earliest market we see recovering now is probably Britain. That is important because 40pc of the British visitors come in Q4 and Q1. So we see the prospect of short breaks over the coming winter and spring. For Germany and North America it is looking like 2021 in earnest. The encouraging part for us is between 50pc and 95pc of German tour operators are saying people are postponing their trip as opposed to looking for refunds. On the American side it is a reasonably similar strong proportion postponing into 2021 as well. Long haul is now looking out to late 2021 or 2022 before we start

to see the recovery there. A top line assessment indicates there is no summer recovery for international business It is really into autumn and winter. we re looking at travel bubbles. They have only started a conversation on that, nobody has thought it through. New Zealand are not expecting any international business for a long time, certainly from 12 to 18 months. It is very hard to be confident when you are in the middle of a crisis. the conversations I am having in North America suggest there will be a quick rebound in business; But I temper that with the view that there is not going to be a V-shaped recovery. People are talking about air access taking two to three years to come back. this is a ten year recovery. If 2019 is the high water mark, I think you are going to be looking at least at 2025 to 2029.

lenny Abrahamson, director fo Normal people, on the behind the scenes Tourism ireland video

JULY 2020 PAGE 46

CRUISE & FERRY REFUNDS MSC Cruises has updated its policy to offer refunds after 120 days. Royal Caribbean said refunds could take 45 days. Others, including Carnival do not give a date. Princess Cruises, which had multiple ships with coronavirus cases, said the process is taking an average of 60 days, The process to enact a refund is not automated, Princess Cruises wrote on their website.

Six months

Norwegian CEO optimistic on return to sea

IRELAND has temporarily designated five strategic maritime routes as PSO routes for a period of three months. The government allocated an emergency provision of up to €15 million towards the costs involved in the continued operation of services on these routes. EXPLORER of the Seas s $100m

Royal Amplification refit this spring has been postponed. It was due to return to shipyard in Brest, France, just as the coronavirus pandemic stranded ships and shut down shipyards. In addition to an overall refresh, Explorer of the Seas was to receive Royal Caribbean’s new Perfect Strom racer slides, a redesigned pool deck featuring The Lime & Coconut bar, and other enhancements.

CELEBRITY Infinity’s major overhaul has also been put on hold. Celebrity is currently assessing when the work can be completed, but has not yet announced new dates for work to proceed. LANDBLAD Expeditions’ new polar expedition ship, National Geographic Endurance, completed its first sea trials in Norway, near the entrance to the country’s famed Geirangerfjord.

AMADEUS River Cruises will build a new riverboat set to debut in 2021 along the Danube and the Rhine in Europe.

MSC Cruises introduced custom, accessible shore excursions designed for passengers with all types of mobility in 20 destinations including 11 ports in the Caribbean and nine ports to come in the Mediterranean. ALLURE

of the Seas refurb which began May 2020, has been reduced in scope. Work was scheduled to proceed to drydock in Cadiz, in March for its Royal Amplification refit, which would have refitted the vessel with the Ultimate Abyss slide; the Perfect Storm waterslides; the first Giovanni’s Italian Kitchen; and the popular Music Hall venue. The ship’s Adventure Ocean kids and teen centers were to have been redesigned as well.

CELEBRITY

Cruises cut steel on

the third of its Edge-class ships at a ceremony in France with Celebrity’s president and CEO Lisa Lutoff-Perlo and Royal Caribbean Cruises Ltd.’s chairman and CEO Richard Fain

HAL Holland America Line laid the keel for their next new cruise ship, Ryndam, at Fincantieri’s Marghera shipyard in Venice

Norwegian Encore: Cruise line plans to relaunch five ships a month orwegian is hoping to enter a new era months. Del Rio plans to relaunch roughly of cruising when it gets back out to five ships per month, said more sailings will be added until the operations are fully back sea. CEO Frank Del Rio told an earnings call to normal. he wants to do “everything humanly possible Consumer demand won’t drive the timewithin the bounds of what technology offers line, Del Rio said; rather, the focus will be today” to be able to look his family members on the company’s capability to resume operin the eyes and tell them that Norwegian’s ations. cruise ships are safe to board. Del Rio said that cruise ship passengers He said when operations start to resume, may have to wear masks, see fewer tables in it will be a gradual process that takes several the dining room and fewer fellow passengers months. “We expect sailings to restart with a aboard when they eventually return to sea. handful of vessels.” “All the basic elements cruising will alNorwegian expects its entire fleet will be ways be there: the great value, the multiple able to resume full operations in five to six destinations, the great dining,”

CRUISE LINES RETURN DATES

* A-ROSA: June 17 * AIDA: Aug 1 * Amadeus: July 1 * AmaWaterways: July 1 * Arena: Sept 1 * Avalon : Sept 1 * Azamara: Aug 1 * Blue Lagoon: July 1 * Carnival: July 31 * Celebrity: Aug 1 * Celestyal: June 29 * Costa: Aug 1 * CroisiEurope: July 1 * CMV: July 1 * Crystal Rivers: Aug 1 * Crystal Ocean: June 1, * Cunard: August 1

* Disney: July 31 * Emerald :Sept 1 * Fred Olsen: no fixed date * Hapag-Lloyd: July 1 * Holland America : Nov * Hurtigruten Coast June 16 * Hurtigruten Exp July 1 * Majestic Line: May 30 * Marella: Aug 1 * MSC: July 11 * Norwegian: Aug 1 * Oceania: Aug 1 * P&O: July 31 * Paul Gauguin: no date * Ponant: June * Poseidon: May 1 * Princess: November

* Quarl September 20 * Regent Seven Seas: Aug 1 * Riviera Travel June 1 * Royal Caribbean: Aug 1 * Saga: July 1 * Scenic: Sept 1 * Seabourn: Oct 14 * Silversea: July 16 * Star Clippers: July 4 * Tauck: July 1 * Titan May 1 * TUI River: Nov 26 * UnCruise: June 1 * Uniworld: July 1 * Viking: Sept 1 * Virgin Voyages: Oct 17 * Windstar: July 5

Bye to buffets Cruise ship buffet unlikely to ever return

JULY 2020 PAGE 47

CRUISE & FERRY

IRISH Ferries say they hope to maintain its schedule over the coming weeks for essential travel and freight. Customers with bookings up to 31 May can amend their booking to a later travel date anytime up to 18 December 2020 with no amendment fees. Fare difference will apply where applicable. Customers who wish to cancel their booking for travel up to May 31 can do so, and any applicable cancellation fee due will be refunded as a credit linked to the original booking reference for use on a future booking for travel up to the end of 2021 on either the Ireland France or Irish Sea routes. STENA

The famous Windjammer bugffet will be repurposed “I think the key focus on dining is making hat staple of cruise lines, the self-serve sure that our guests have plenty of choices. buffet will likely be history. Norwegian CEO Frank Del Rio “That choice has to be put through the lens of confirmed tis demise at an earnings call. distancing, and safety and health.” Royal Caribbean CEO Michael Bayley Royal Caribbean already had hand saniconceded that the hygiene changes that will tising stations on every vessel outside the go into effect will likely prohibit the stan- Windjammer buffet, and some ships had full-service handwashing stations located at dard buffet offering. “I think in the beginning, there will not be each entrance. a buffet…that’s how I see it. “We will utilise During periods when norovirus was a danthe space, we will utilize the Windjammer, ger, the line had employees stationed outside but in all probability, it won’t be a classical the Windjammer with large containers of buffet. It will be something more akin to a sanitiser, making sure everyone used it before going in. restaurant.”

Virtual launch

No fireworks for completed Apex

elebrity Cruises Executives accepted official command of Celebrity Apex, via video conference with officials from Chantiers de l’Atlantique shipyard. Celebrity Cruises CEO and part-time Cork resident Lisa Lutoff Perlo, said “I look forward to calmer waters when we can welcome guests aboard the newest addition to our fleet. I have great anticipation for her first sailing out of Barcelona on May 20th.” Among Apex innovations will be a movable deck cantilevered off the side of the ship, known as “the Magic Carpet”; cabins with “infinite” balconies designed to blend indoors and outdoors with frosted bi-fold doors and retractable windows; and a Resort

Deck, which features a large pool flanked by sculptural trees and two “Martini glass” Jacuzzis that overlook the deck below. New menu items have been created for Raw on 5, Magic Carpet, Fine Cut Steakhouse, Rooftop Garden Grill, and the four Main Restaurants: Cosmopolitan, Cyprus, Normandie and Tuscan. As on Edge, the line has done away with a single main dining room and opted for the four MDRs, all serving broadly the same menu but with regional dishes. The quirky “Le Petit Chef”, which includes animation, also has a different menu, reflecting the seasons.

Line says it will continue to operate its UK and Ireland sailing schedules as normal,. Stephen Bryden of Stena Line says: “given the now daily changes in prevailing circumstances and Government advice, sailing schedules are naturally under constant review. In the last few weeks Stena Line’s European business has been impacted significantly by COVID-19, but despite crippling trading circumstances, the biggest ferry company in Europe remains resolute in its determination to keep services going in strict adherence to Government guidelines on travel, as well as the very latest medical advice on helping to reduce the risk of spreading COVID-19. Stena Line is asking customers to adhere to Government travel guidelines and the firm has put a host of measures in place to keep its customers and employees safe when travelling on its vessels. To assist passengers, Stena Line has also committed to waiving amendment fees for all travel bookings, until 30th April 2020.”

BRITTANY Ferries is to cease its weekly rotation connecting Roscoff in France with Rosslare in Ireland. Kerry will however continue two rotations per week, carrying freight between Rosslare and Bilbao in Spain. From Brittany ferries: We are systematically contacting all affected customers by telephone, email and SMS but there is enormous pressure on our contact centre staff. The speed of response may not be up to its usual standard for which Brittany Ferries apologises in advance. Passengers are being asked not to contact us by telephone but to visit the website

CELEBRITY Constellation’s refurbishment has been put on hold. it was due to head into drydock in April for a total overhaul of the ship’s passenger staterooms, which were to be stripped to the steel and completely redesigned. The ship was also scheduled to have the décor in the Main Dining Room updated with a lighter color palette; the transformation of Michael’s Club into the Retreat Lounge for suite passengers; and a new Retreat Sundeck added. Updates to the ship’s spa and dining venues were also planned. HAL Bookings have opened for Holland

America’s new Ryndam cruise ship, currently under construction at Fincantieri’s Marghera shipyard in Italy to join the fleet in May 2021.

JULY 2020 PAGE 48

THE FLYING COLUMN AIR CANADA is to reopened Dub-

lin-Toronto on July2 using a Boeing 787-900 on the route for the first time.

MALTA has approved entry for Irish

citizens. Ryanair will restore flights 3w from Dublin up to 5w in August, September, October and 2w from Cork from July 1.

MIAMI will be dropped from Aer Lingus summer schedule in 2021.

CSO Air and Sea Travel Statistics for April indicate there were 1,100 arrivals and 500 departures on transatlantic flights, about 50 passengers per day spread over 2 to 3 round trips, so about 10-15 passengers per flight.

AER LINGUS and Ryanair have

clarified that the facial coverings they are expecting passengers and crew to wear inflight in order to ensure protection from infection as Enda Corneille, Jane Masterson and Anita Thomas at Ranelagh night market January a result of Covid-19 will not be aligned with official EU guidelines. They can be homemade rather than be medical face masks.

AER LINGUS on OAG shows a

‘Rock stars’

substantial transatlantic operation in Jun on all of last year’s transatlantic routes, except Dublin-Miami and Dublin-Toronto, but this has only a passing resemblance to the Aer Lingus on-line timetable, which has a full transatlantic argo are now the new rockstars of long schedule from early May, or the booking enhaul aviation, Enda Corneille, who gine which has no flights at all on some of the heads up Emirates airlines operation routes up to by end Jun. in Ireland says. . “Cargo has always been important. We LUFTHANSA schedule has removed would have operated double daily flights, and listings for A380s on/after 15Jun20. Preliminary listing sees A380 service at Frankfurt and in the belly of each aircraft we would have Munich being replaced by B747-8 and A350- carried 25 tonnes of cargo. “This month we have started a bi-weekly 900XWB aircraft cargo operation each carrying 35 tonnes of MINNEAPOLIS airport spokesman Irish produce to Dubai, Asia, Australia and Patrick Hogan confirmed that Aer Lingus has then reporting PPE mainly from Japan.” decided to cut Dublin-MS) flights indefinitely, “This is encouraging first step ahead of paswith no certain plans to return. “Every airline senger services resuming.” is retrenching now. The question is when are He says there will not be a quick return to they going to put it back on the map.” Hogan its normal passenger operations at Dublin Airsaid the airport hopes Aer Lingus could reverse port.“I would like to see us getting the opercourse and resume flights as soon as 2021, but ation underway in Dublin. that’s up in the air. “We certainly will not be starting back with a double daily, We may not even start with STOBART Air, which operates the a daily. If you were to offer me four or five Aer Lingus Regional service, is selling seats for flights across its network starting on July 1 but cannot confirm whether all its staff will be working to operate the services.

25 tonnes of cargo keeps Emirates flying

WIZZ Air announced new bases at Milan Malpensa (5 aircraft), Larnaca (2), Lviv (1) and Tirana (3) with new routes beginning mostly in July.

IBERIA has announced plans to increase

short and medium-haul flights from July 1, with over 50 destinations in Spain and Europe set to be served by August, incl Madrid-Dublin from August.

IBERIA and Vueling will both resume

operations in July 2020 with the focus on the domestic market.

‘If you were to offer me 4 or 5 flights a week at this stage I would take them’

flights a week at this stage, I would take them and then we’d build traffic and demand.” “While carriers will want to follow expert medical advice, there is also national government requirements, and national and international aviation authorities. “If you look at Dublin Airport, pre-COVID this is a 30m passenger airport. “Can you imagine if each of those 30m passengers had to be two metres apart at all times? “This is not easy, I think a well planned and cautious approach is really going to get us back flying, but it will be very, very gradual. individual countries will handle the situation differently, with some markets moving at a different pace”. The bi-weekly cargo flights are providing much needed revenue as passenger flights remain grounded. Passenger services are tentatively coming back internationally, with Emirates set to operate services to and from lLondon Heathrow, Paris and Chicago. “A number of these flights had been operating on a pure repatriation basis - bringing people home. This is the first commercial operation. Demand is going to be light, let’s be honest about it but it’s really about getting aircraft flying.” Travel restrictions will need to be lifted in key markets and people will want to feel safe when they fly. At the moment, this is a step by step process. “I am a realist but I’m also an optimist. That genie will not be put back in the bottle, people will want to travel. Will it come back this year, will it be 18 months? Nobody can answer that.”

JULY 2020 PAGE 49

THE FLYING COLUMN STOBART Air has uploaded a full

schedule to the Aer Lingus website, with flights now bookable on routes from Dublin and Cork to destinations across Britain.

RYANAIR was refused leave to cross-examine witnesses and expert accounting witnesses in the long-running case involving a pilot Paul Clements concerning insurability. LAUDA CEO Andreas Gruber. said the future of the airline, Austria’s second largest behind Austrian Airlines, could be in the wetlease business. A large part of the Lauda fleet has been flown from Vienna to Stansted for return to lessors, and to the Stuttgart base. AER LINGUS cancelled its contract

Johan Lundgren, Carsten Spohr, Willie Walsh and Ben Smith at Airlines4Europe

A4E: ‘AIR FILTERS ARE THE ANSWER TO PAX FEARS’

irlines for Europe are insisting air travel is safe for passengers, arguing the air filters on modern aircraft limit the risks of Covid-19 transmission in flight. The group argues the high efficiency particulate air filters in use on modern aircraft “clean cabin air to operating theatre quality”. A4E has also called for additional safety measures, including temperature checks on passengers and crew, and suggested: “Passengers should bring and wear their own face masks throughout the journey”.

The group wants “a global approach to ensure consistent standards across the sector”. A4E insisted social distancing on aircraft, “including leaving middle seats free, is unnecessary and ineffective, given the efficient air filtration and clean cabin environment”. Some carriers, including easyJet, have said they will leave middle seats empty on flights when services resume to encourage confidence among passengers. Ryanair and IAG have said their airlines won’t fly with middle seats empty.

‘IT TOOK 65 DAYS TO GO BACK TO 65 YEARS AGO’

ufthansa Group executive board chairman and CEO Carsten Spohr told the company’s 2020 AGM that it took less than 65 days for Lufthansa to recede to the level of 65 years ago in terms of traffic volume, He expects global travel demand to return to pre-coronavirus levels by 2023 but this will result in a significantly smaller Lufthansa Group structure. “The world is facing one of the worst financial crises since the 1930s and global aviation is facing the worst crisis in its history. The Lufthansa Group’s first objective is to emerge from the COVID-19 crisis intact as a single airline group without a breakup s. Carsten Spohr said only the current group structure will allow its individual airlines to compete against global carriers including Emirates, Qatar Airways and Turkish Airlines. Lufthansa in the second half of May 2020 plans to resume selected European routes,

with Cityjet which had been providing flights on Aer Lingus’ behalf on routes, mainly between Dublin and London City Airports.

SWISS is to resume Geneva-Dublin service from June 15 with the Lufthansa Group operating a total of 11 weekly frequencies.

AIR CANADA is seeking govern-

ment approval to add Dublin among five destinations to its air freight network starting June 1, using 4 Boeing 777-300ER aircraft and 3 Airbus A330-300s that have been converted to carry cargo in passenger cabins.

EGYPTAIR delayed their Cairo-Dublin A320neo, 4w route to 25 October.

CRIX has quashed speculation that it could increase its 30pc stake in Avolon Holding where it is a minority owner alongside HNA Group, the cash-strapped Chinese conglomerate. The framework agreement between the two Avolon shareholders limits dividends to 50pc of net income, sets certain corporate governance parameters and provides Orix with veto rights. The agreement is vital to support Avolon’s credit ratings with the top three global rating agencies.

EASYJET has confirmed the resumption of further flights from Belfast International Airport from June 15 to destinations including London Gatwick and Edinburgh, as well as Faro in Portugal.

BELFAST International Airport has an-

which brings total number of routes offered to 34. A total of 80 aircraft will be reactivated with the “June timetable”. This means that a total of 106 destinations can be served in the coming month. From 01Jun, 160 aircraft will be in service with the Group’s passenger airlines. The previously valid repatriation flight schedule was calculated to be flown with only 80 aircraft.

nounced plans to cut a quarter of its workforce. MD Graham Keddie has said it will be “years” before air travel returns to normal from the impact of Covid-19. He confirmed that around 45 employees are set to lose their jobs from its workforce of 195.

EASA published a list of airports located in affected areas with high risk of transmission of the CoViD-19 infection. No Irish airport is included. Belgian airports, the Paris area, Northern Italy, Amsterdam, Porto, Lisbon, Catalonia and Madrid, Stockholm, many English airports, Glasgow, main Russian airports, Singapore, South Africa, UAE & Qatar, most US States are included.

JULY 2020 PAGE 50

TRAVEL TRADE TRAVEL COUNSELLORS

2020 conference will be rescheduled for the Druids Glen Hotel, Co Wicklow, with a new date to be confirmed shortly, likely to be September. Travel Counsellors Ireland’s 2020 annual conference was due to take place on 26 and 27 March. Travel Counsellors say the postponement will ensure the 84 Travel Counsellors operating across the country can remain readily available for their customers during the Covid-19 public health situation over the coming weeks. The decision is also to assist Travel Counsellors’ supplier partners due to attend the company’s annual conference, enabling them to continue to focus on their work with Travel Counsellors, mutual customers, and their own clients.

ITAA Michael Doorley becomes the first

person to become president of the Irish travel Agents Association for a third term when he is sworn in as president on June 15. The proprietor of Shandon Travel served previously as president of the Association in 1982-834 and 2004-06.

TRAVEL COUNSELLORS

has launched a welfare fund as an extension of its existing benevolent fund to help business owners suffering financial stress, part of the TC Support Package to homeworkers, which also includes a dedicated coronavirus information hub, which has been live for over a month, to deliver ‘factual, verified and trusted information’ on the virus’ impact on travel and includes FAQs, the latest airline and cruise updates, supplier policies and booking guides, as well as direct links to the World Health Organisation and country updates.

TUI

Group (Germany) received the approval of the German government for a bridging loan of US$2.0 bn from KfW (Germany), which is to be used to increase TUI’s existing credit line with its banks amounting to $1.95bn.

IF ONLY is closing the phone lines of its

after-sales and ticketing departments

IPW US Travel organisers of IPW say

“while IPW is scheduled to open in eight weeks, we advises against delegates taking further steps associated with participation

TRAVEL COUNSELLORS

Lorna O’Brien has been appointed new Business Development Executives joining the head office team in Cork. Lorna has 15 years of experience in the sales and travel industry, including 10 years in Tour America’s Cork branch as a travel consultant and sales team leader, Lorna’s new role will support the company’s growth through the management of new business opportunities.

EUROPCAR The Atlas Travel team have won Europcar’s €500 One4All booking incentive.

Ciaran Mullligan and Geraldine McFadden: Launching new competition

Bright sparks Ciaran & Geraldine launch covid competition

iaran Mulligan of Blue Insurance and Geraldine McFadden of Aquasuites 4 Star Hotel in Lanzarote tare offering the Travel Trade in Ireland the chance to win a 7 night holiday for two o Lanzarote, “in celebration of new travel agent licences recently being issued and as a big cheer up to our friends in the travel trade.” Members of the travel trade are asked to nominate a fellow travel trade member who

brightened up their Covid-19 lockdown or did something special who is worthy of the holiday prize. Entries from Tuesday 2nd of June, with four finalists to be announced on Monday 8th June, 15th June, 22nd June and 29th June. The overall winner will then be selected by a panel of judges and announced by Blue Insurance’s soon to be announced new travel trade sales manager on Tuesday 30th June.

Voucher doubt

Department solution postpones problem

ix month credit notes are to be signed in to law by a department of transport directive, under a compromise with consumer activists demanding that Eu261 be retained. Twelve EU companies introduced modifications of Eu261 and the Package Holiday Directive to prevent widespread bankruptcies through the trade. The Irish Travel Agents Association lobbied that the period be extended to 18 months to allow travel trade collect refunds form their suppliers but this was not included in the final documents. “The six months has to move further,” Maura Fahy says. “I cannot refund a client who is awaiting money from Ryanair and

Aer Lingus. Emirates flight tickets, money is going to be tied for more than a year. That puts us in a very precarious position” There is no real value in it, Ciara Mooney of freedom travel says. They re still entitled to their money back whether they offer a voucher for not. “We have to go in September or October to have that extended,’ Michael Doorley, incoming president of the ITAA says. “we have to go in at September or October and ask for an extension. because if a consumer gets the voucher now, for six months, and wants the money in six months time, it is going to hit travel agents when they re traditionally low in having money in bank accounts.

Zoom sellers Tour America tries tech sales device

JULY 2020 PAGE 51

TRAVEL TRADE PLANET Travel in Kells became the

third travel agency to fail since the start of the Coronavirus crisis. Flyaway Travel in Ballina ceased trading before the May Round of licensing. USIT went into liquidation (reported on this page), the second coming of the original student travel body which was founded by Gordon Colleary. The Commission of Aviation Regulation received notice that PJ Gannon’s East West Travel Limited is unable to fulfil its obligations to its customers on March 16. James Malone’s Rathgar Travel had ceased trading at the stat of the month.

TIGS The first two dates on the Travel

Industry Golf Society calendar have been postponed. Other dates are now provisional .Postponed: n Thursday 9th April – Portmarnock Links (Dublin) n Thursday 7th May – The Heritage (Killenard) – Overnight Still pending on the programme: n Wednesday 17th Jun – Druids Glen (Wicklow) – Captain’s day n Friday 17th Jul – Castleknock Golf Club (Dublin) – BBQ n Thursday 10th Sep – Royal Dublin) – President’s day n Thursday 22nd Oct – The Castle (Dublin)

Mary McKenna of Tour America

our America & Cruise Holidays launched a new brand, Zoom Travel, “ In light of the way we are currently living, and doing business.” According to Mary McKenna “this facility has been set up for our customers so they can continue to interact with our sales team through virtual travel from their homes, ensuring they get to book the best holiday.” “Tour America, and Cruise Holidays, has recognised that with these unprecedented times for both staff, and customers, they had to adapt to a new way of planning customers’ holidays. Tour America has always prided itself on the incredible interaction it has between our sales team and our customer. The holidays we provide can sometimes have many elements attached to them, and can be complex and detailed for the customers to organise themselves.

TRAVELPORT Riona McGrath has We need to spend a lot of time with them, giving them the best advice and options available, and of course the best price. We have tested Zoom Holidays with a number of customers to date and have had amazing customer feedback. We are able to show them videos, images, quotations, airline choices etc. all on their own screen. The customers like to interact face to face with the sales person and this is our opportunity to show them that they are truly listened too. Tour America’s commitment to deliver the latest product updates in one convenient installment is why Zoom Holidays was launched. Zoom Holidays is now available, full details can be found on our www.touramerica.ie or www.cruiseholidays.ie. Founded in 1995 Tour America offers travel to the USA, Mexico, Canada and Cruises Worldwide in Ireland. Tour America is van Irish owned company.

TUI SEEKS TO CUT COSTS

UI is seeking to pare costs by 30pc and offer more local breaks in the hope of encouraging a revival in tourism before the end of summer. Chief Executive Fritz Joussen said TUI need to reinvent its portfolio to adapt to realities including changed travel seasons, with new destinations and more local offerings. The company’s Chinese unit has already

restarted with trips and flights within the country. The first German hotels are set to reopen in coming days, and European destinations are ready to welcome holidaymakers, he said, TUI reported an underlying second-quarter loss before interest and tax, depreciation and amortisation of €540m, versus a loss of €106m a year earlier.

reassured the trade that Travelport’s teams are still all on the ground ready to support where needed and are committed to supporting our customers as best we can. The supplier has launched a microsite offering;: n Airline Policy tracker: An ongoing update of each new policy by airline to save you having to find information from a number of different sources. n Agency Features: A guide on how to best utilize some of your existing capabilities during this time. n Industry Analysis: We have added new reports, including IATA’s analysis of the impact of previous disease outbreaks like SARS on aviation. Similar materials will be added on a regular basis in the days and weeks ahead. n Customer Service Updates: In order to support the most immediate customer and traveler needs, including servicing passengers traveling within the next 48 hours, the majority of our customer support has moved online. The microsite provides a link to MyTravelport, which will be continuously updated as the situation evolves.

COMMISSION of Aviation regulation has advised travel agents that they can contact them for guidance on bond renewals.

TURKISH Jennifer O’Brien of Travel Counsellors was the inner of the VIP tIckets to the Script with Turkish Airlines. WORLDCHOICE conference is

scheduled for November 7.

JULY 2020 PAGE 52

DESTINATIONS & meditations

View to Seefeld from Hohe Munde

nfections and factions seem a long away from the vantage point of the 2,662-metre-high (8,734 ft) Hohe Munde mountain at the eastern end of Miemings in Tyrol. Bernadette Stauder of Seefeld tourism brought us to the top of the mountain and to explain how the 650km of walking routes through these mountains have transformed the summer tourism product. Access is from Munich airport and off you go.

There are packages for the walkers, three day winter hikes, no snow shoes required, and six day summer hikes. the luggage is transferred and all you have to do is lace the boots and prepare to strain the thighs. more outdoor and socially distanced you could not find. In the evening we drank beer and listened to the lore of local hero, 1930s ski world champion Anton “Toni” Seelos, who invented the parallel turn. A place in heaven for him.

A prospect to make a queen leap on horseback t is easy to see why Siurana was the last Moorish stronghold in Catalonia. It fell at last in 1153 after the more important bastions of Lleida and Tortosa had fallen. To say it was difficult to capture is an understatement. Think of an assault on O’Brien’s tower on the Cliffs of Moher from below the seagull line. For centuries the only visitors here were goat herders and mountain climbers who kept the secret of the stunning views to themselves, as well as the spot where Abdelazaia, the Moorish Queen, allegedly decided to jump off the cliff on horseback to avoid falling on the hands of the Christian conquerors. Leamaneh of the sierra. Someone built a paved road up the zig zag to the ruined fortress and Romanesque church, built, according to knowledgeable tour guide Gerard Amorós for Berenguer IV’s troops who conquered Siurana, but for all the world it looks like an Irish

monastic site before the Normans arrived. Daniel entering the lion’s den on the tympanum looks for all the world like he is being attacked by wolves. René van den Berghe, or Erik the Belgian as he was known, “acquired” the Romanesque Madonna that was stolen from here in the 1980s. The original is now recovered and in safe keeping, a replica serves occasional religious rites in the isolated mountain church. In thrall to the modern pilgrims, Siurana has added a campsite, small hotel, restaurant and refuge for the climbers who devote their energies to Siuranella twin rock, the Salto de la Reina Mora or la Trona, and the cliffs of Arbolí, validating Toni Arbones’ opinion that this is the best in Europe. It is an amazing uphill drive, and mind the cyclists. There are lots of them sharing the narrow road, enough to make a queen jump.

JULY 2020 PAGE 53

DESTINATIONS & meditations

The height of sub continental bliss: The Palace Hotel in Chail o paraphrase RL Stevenson, it was NOT better to journey hopefully than to arrive. On the windy roller coaster road up the mountain we met a bus coming the other way, driver honking and wrestling with his wheel as it went screaming by. With impeccable timing, a head popped out the window and spewed yellow vomit down the side of the bus. And that was just the road. It was a relief to arrive at Chail on a hilltop, 2250 metres. The Palace Hotel only had four foreigners since November (it was now May), one an Irish UNESCO official from ten miles from where I came in Kildare. It was easy to see what a relief this was for the plains people, greenery and cedar clear air, and Himalayas wrapped around the background like a blanket.

A man brought wood to light the fire in our room. At dusk thunder and lightning electrified the Himalayas beyond Shimla’s lights glimmering on a distant hill. We woke at 6.30 to find Chail lush and looking like it had been washed. I walked alone through the little wooden village with what they claimed was the world’s highest cricket pitch. There was still lightning flash and thunder crash, this time directly overhead, as men having morning drinks invited us to join them for one. Clouds loitered on the hills way below. The journey back downhill brought us out of the clarity into fog and schoolbound children carrying umbrellas.

Southern Ocean Lodge disguised as a cliff e cannot be sure if Southern Ocean Lodge can live up to its reputation as the most stunning hotel on the earth. But it helps that everywhere you turn you get the sense that it is at the end of that earth. It blends into the rocky clifftop with the southern ocean below and the unforgiving bush behind, in December 2019 fires raged across Kangaroo Island’s landscape and closed the hotel. It seems to sit on the shrubbery, on a cliff top, like a wave cast it there and abandoned it. The tropical beach resorts with the azure sea are all very

well for the destination magazine covers but this is different. The lodge’s beach is a distant hike, and the first beach you encounter is too rocky to swim). Since it opened ten years ago the Lodge has been all about nature and customer care, not necessarily in that order. The view across the Antarctic Ocean from the glass walled walkway between the public areas of Southern Ocean Lodge and your room are spectacular and ever-changing, in that west of Ireland sense. “We are a product but also a destination,” said hotel general manager John Hird.

JULY 2020 PAGE 54

UPDATE: COPING WITH COVID

Peter McMinn, Julie Magill and Roberto Comsa of Travel Solutions, in the Bulgarian ski resort Borovets

‘A slow process” Peter McMinn of Travel Solutions on crisis and recovery

ike most travel companies, Travel Solutions closed their office mid-March, and with the assistance of the UK governments job retention scheme furloughed approx. 75% of their team. It took us around two weeks to come to terms with what was happening to our business and there is no doubt we struggled to cope initially, and that was reflective in the messages we were sending out to both customers and agents. However, we quickly assessed the situation and put plans in place to ensure we offered the best service we could under extreme circumstances. fter a slow start we are now extremely active in refunding to those customers who have requested refunds. In many cases, we are refunding from our own funds where our airline and cruise suppliers have been slow. We are clear on our commitment to operate within the PTR legislation, although do we find it impossible to meet the fourteen day refund rule due to the level of refunds being processed. Moving forward, our team have been extremely successful in re-protecting customers holidays and from April we have re-activated our social media presence with an encouraging level of success reflected in new bookings.

A ‘We have accepted that we will have no meaningful income until January.’

hilst it is important that we continue to service those customers who want a refund, it is vitally important that we look to the future. As a company, we have accepted that we will have no meaningful income until January, but we do need new business from then onwards if we want to return close to where we were when we closed the office in March. It is clear that customers will book if you can offer great value and our April and May ‘new bookings’ have shown us where we need to be focusing. Providing there is no change to UK government guidance, we are returning to our offices on the 1st June – albeit with a greatly reduced team. However, we do have plans to ratchet up our marketing activity and introduce new product for 2021 and if our expectations are met, we have plans to bring further team members off ‘furlough’ as we move through the summer.

his will be a slow process, but we need to be positive and we need our travel agency partners to be positive also. There is light at the end of the tunnel, and we need to be constantly moving towards it to survive.

JULY 2020 PAGE 55

AER LINGUS NEW UNIFORM

Aer Lingus Cabin Crew members (l to r) Oisin Leong, Guest Experience Instructor; Aoife Costello, Cabin Service Manager; Eszter Dornfeld, Cabin Crew; Vicoria Elmore, Senior Cabin Crew; David Rodgers, Senior Cabin Crew and Byron Kumbula, Senior Cabin Crew pictured at the unveiling of Aer Lingus’ new look uniform designed by Louise Kennedy. The new design reflects Aer Lingus’ status as a modern international airline with a proud Irish heritage and is the final stage in the airline’s brand refresh which commenced in early 2019. Guests flying with Aer Lingus in the coming months can expect to still see the iconic green, now dubbed ‘Kenmare Green’, as well as a greater inclusion of navy colour ‘Midnight’ throughout. Photograph: Leon Farrell / Photocall Ireland

Byron Kumbula, Eszter Dornfeld, David Rodgers, Vicoria Elmore, Aoife Costello, and Oisin Leong,

Eszter Dornfeld, Aoife Costello and Victoria Elmore

Designer Louise Kennedy pictured with Aer Lingus cabin crew (left to right) David Rodgers, Byron Kumbula and Oisin Leong

Designer Louise Kennedy pictured with Aer Lingus cabin crew Aoife Costello, Cabin Service Manager, at the unveiling of the new look Aer Lingus uniform.

Designer Louise Kennedy pictured with Byron Kumbula, Eszter Dornfeld, Cabin Crew; Aoife Costello and Vicoria Elmore,

JULY 2020 PAGE 56

TRAVEL WRITERS

Bespoke traveller Celebrating the tradition of Irish travel writing with Dervla Murphy

ost travel writers who succeed do so by recognising their limitations Dervla Murphy’s extraordinary travel-writing career began with a journey from her home in County Waterford to New Delhi. Alone. By bicycle. She cycled through Persia Turkey Iraq and Pakistan. How different an age it was is indicated by the fact that between Istanbul and Peshawar, she met precisely two other European, Western travellers. “It doesn’t take courage, it takes curiosity, “ she later reflected. The first book is still held up as one of the finest and last examples of the intrepid solo travellers. her ability to enthral and baffle readers at the same time has transferred to other intrepidisms, travels to Asia, Africa, Europe, the Americas, Cuba and Gaza. When she wrote about South Africa in 1998, one reviewer commented: ‘her apparent battiness helped protect her from harm.” Dervla grew up as an only child and attended secondary school at the Ursuline Convent in Waterford but left at age 14 to take care of her disabled mother. She was 20 when she first left Ireland, on short trips to Wales and England and then Spain in 1954 and 1956. her father died in 1961 and her mother in 1962, freeing her for the travels that became the kernel of Full Tilt, published in 1963, ,first and most famous of 24 books. For my tenth birthday my parents gave me a second-hand bicycle and Pappa [her grandfather] sent me a second-hand atlas. Already I was an enthusiastic cyclist, though I had never before owned a bicycle, and soon after my birthday I resolved to cycle to India one day. I have never forgotten the exact spot, on a steep hill near Lismore, where this decision was made. Half-way up I rather proudly looked at my legs, slowly pushing the pedals around, and the thought came “If I went on doing this for long enough I could get to India. Murphy packed a pistol along with other equipment aboard her Armstrong Cadet men’s bicycle (named Rozinante in allusion to Don Quixote’s steed, and always known as Roz), she passed through Europe during one of the worst winters in years. In Yugoslavia, Mur-

‘It doesn’t take courage. It takes curiosity.’

Dervla Murphy in Tibet in 1965. Insets Barcelona on a bike 1954, and Hindu Kush

phy began to write a journal instead of mailing letters. In Iran she used her gun to frighten off a group of thieves, and “used unprintable tactics” to escape from an attempted rapist at a police station. The book was a critical and sales success and was followed by further adventures, In Ethiopia with a mule, (her fourth book, 1968), Eight Feet in the Andes (tenth 1983), Muddling through in Madagascar (eleventh 1985), and the entrancing South from the Limpopo: (18th, 1998), The world has changed, but her burning sense of injustice has not. She carried it on her bicycle like a badge. The western, economically developed world holds no interest to her. Prosperity squeezes out people’s traditional way of doing things.

The hardships and poverty of my youth had been a good apprenticeship for this form of travel. I had been brought up to understand that material possessions and physical comfort should never be confused with success, achievement and security. She chose to bring her daughter up alone in 1970s daughter, confronting conventions art home as much as she did abroad. “Disapproval comes in proportion to the extent to which you are prepared for it. If you don’t give a damn about what people think, they just don’t bother disapproving,” she told us in a 2013 interview. Most travel writers who succeed do so by recognising their limitations. Astride her saddle, Dervla Murphy just pedalled and let the wheels carry her through them.

JULY 2020 PAGE 57

TRAVEL WRITERS Small

roads lead to Rome

Jim Murty remembers some of his best travel headlines

rees release me, let me go… ‘cause I don’t love you sycamore’ Thirty years after a headline writer brought my story about a neighbourhood garden dispute to life.. and this appropriation of Engelbert Humperdink’s classic song is still my gold standard. And it lit a fire under me to attempt the same I confess here that I would send Irish Daily Mail Travel writers to a destination because I had a headline in mind… Bahamian Rhapsody for a Caribbean piece at the time the Queen movie was out, or Sharjah the Light Brigade for a UAE piece. Some cities and countries have provided bigger challenges. The French Evolution may have worked in 1789 but not now. But I’d never seen Le Boat D’Azur for Cannes so tried that. We’ve probably all twisted a version of this phrase into a Rome piece and my offering for a pilgrimage into the Italian capital ‘Small roads lead to Rome’ sneaked into the paper. There are few more humorous languages than German and it is perfect for wordplay: Bauhaus in the middle of our street. Thanks Madness! And I couldn’t keep Hamburgers and Ships to myself. There are some destinations that just scream to you and the headline for a skiing trip to Austria with my wife wrote itself… Söll Mates. While drinking uisce beatha in the Ice Bar

Jim Murty on the big screen, Second day of IPW 2018 in Denver, May 21 2018 up the Swiss Alps inspired me to pen Swhisskey on the rocks. Sometimes a holiday activity is made for a headline and racing with goats in the Caribbean gave me On your marks, get set, goat… in Tobago, my favourite until the next one.

Sometimes the best headings you self-censor for taste. And the editor I submitted my Lourdes piece to had to shelf the best Travel headline that never was: There’s something about Mary

Clockwise: With cheer leaders at IPW, with onur Gul in Istanbul, with Tom Sweeney and ITAA presdient John Spollen at ireland v Scotland in the Aviva, with Bladhana Richardson and Dee Burdock at IPW, tasting the finery

JULY 2020 PAGE 58

OBITUARY: CHRIS KANE

Remembering Chris Stalwart of toruism and Bord Failte London office in difficult times

hris Kane, former marketing and corporate affairs director of Bord Fáilte pioneered the transition of Ireland’s inbound industry from the 1970s to the 2000s and Bord Fáilte evolved to Fáilte Ireland, In the process he served as an unofficial ambassador for Ireland in London, when anti-Irish sentiment in England was at a peak. Bord Fáilte staff in their uniforms were abused in the street and the office was vandalised and besieged on occasions by hooligans and zealots, revved up by the British Army’s campaign in Northern Ireland. Keeping the show on the road was down to a small team of individuals, including Chris, Jim Deegan and John Lahiffe. Throughout it all Bord Failte kept up their public profile, remained patient and calm in the face of the hostility,and continuing to promote Ireland. It paid off. Tourism numbers continued to grow through troubled times. Chris was behind the campaign to use golf to unlock the vast American market in the mid 1990s, culminating in the hosting of the Ryder Cup of 2006. Tournaments targetted and won 9in a tourism sense) included the Solheim Cup, Ladies Irish Open, Seve Ballesteros Trophy and American Express Tournament. he was on the development committees of Croke Park and Aviva Stadiums. A keen sportsman, he had won an All Ireland medal with Dublin in 1963 and was a selector between 1995 and 1997 with manager Mickey Whelan, with whom he won a Dublin senior football medal with Clanna Gael in 1968. In his youth he won a 1958 Leinster Colleges Gaelic Football Final win with Westland Row CBS, and National League in 1963 and 1964. In his youth, Chris played with Peadar Mackens and then with Clanna Gael. He was President of the ICSA World Wide (Institute of Chartered Secretaries), Secretary to the Board of Bord Fáilte and Irish Representative on ABTA, the Association of British Travel Agents). He served as member or officer with Car Rental Council, Irish Film Board, Fáilte Tuite, Irish Tourism Industry Confederation, Irish Restaurant Owners Association, Victim Support for Overseas Tourists, Town & Country Homes Association. GAA Museum, Eurovision Steering Committee, European Tour and SKAL He was a legend in tourism and carved a way for so many in their career development. he was a great companion, a fun colleague and a very proud Ambassador for Irish Tourism.

Chris Kane, and (below) attending a tourism event with joe Byrne.

JULY 2020 PAGE 59

REMEMBERING PETER DOLAN

Limerick travel agent Peter Dolan contracted Coronavirus on board the MS Zaandam and subsequently sadly died in hospital in Florida. He was a popular figure at travel events and sporting occasions, a great Munster fan and will be missed by friends and colleagues in the trade. Picture shows the Creation Travel group at the 2013 Worldchoice conference.

Peter Dolan and Caroline Oâ&#x20AC;&#x2122;Connor of Creation Travel at the Travel Centres conference in the Killashee Hotel, Naas, Nov 8-9 2013.

Peter Dolan of Creation Travel and Jeff Collins of Globe/Best4travel at the Travel Centres Conference in Lyrath, Kilkenny, December 4 2015, Jeff Collins bought out the Creation busi-

Volker Lorenz and Peter Dolan at the 2012 Irish travel Indus try Awards,

Audre Headon of WTC, Gonzalo Ceballos of the Spanish Tourist Board and Peter Dolan of Creation Travel among a travel trade group hosted by Amadeus at the Munster-Toulouse match, April 4 2014.

Peter Dolan from Creation Travel, Lee Mannion, of Tom Mannion Travel, Ennis and Pat Reede from United Airlines. at the Great Lakes/United Airlines event in Limerick Apr 4 2013

Eileen Tuite of Corrib Travel, Caroline Oâ&#x20AC;&#x2122;Connor of Creation Travel and Peter Dolan of Creation Travel at the Travel Centres conference in the Killashee Hotel, Naas, Nov 7-8 2013.

JULY 2020 PAGE 60

OBITUARY: TOM O’DONOHOE

Remembering Tom T

Doyen of great Wexford travel family who ran Strand travel

om O’Donohoe was laid to rest at his birthplace in Monamolin outside Gorey. It was here he was born in March 1961 and began his journey through the travel industry. Most of the family are involved in travel. His sister Moira is in Avondale family in Arklow. His sister Yvonne has O’Donohue travel in Gorey. It was his aunt Mary O’Donohoe that originally set up Strand Travel. His sister Catherine, who died in 2003, bought Strand Travel from the family and set up Strand Travel Waterford in 1974. It was here that Tom set up his business and helped it grow from a small agency to one of the largest agencies in the south east. Derek Pheasey joined in 1994 as general manager and started looking after the corporate side of the business. Tom came from an accounting background and with the strength of his personalist built up a great relationship with suppliers and tairlines. He was a familiar figure at Dublin events, and a member of the Irish golf team that played against the north in the annual United Cup event. He was a member of Waterford Castle golf club. He leaves head two sons, Thomas who was travel business, another son son Jason and a daughter Aisling, his partner is Susan and his wife Miriam. He like to travel himself. Morocco was his latest discovery on his journeys through the middle east, far east, Africa and all over Europe.

Yvonne O’Donohoe of O’Donohue Travel Gorey and Tom O’Donohue of Strand Travel in Waterford at Worldchoice 2016 conference in Seafield, Co Wexford

The winning Irish team, Brian Flanagan of DAA, Tony Collins of Topflight, Tom O’Donohue of Strand Travel, Martina Coogan of United Airlines (front), Niamh Byrne (back), team captain Stephen McKenna of Atlas/Gohop, Michael Doorley of Shandon Travel, Tryphavana Cross of Las Vegas CVA, John Cassidy of Cassidy Travel (back), Philip Airey of Sunway(front), Dave Hayeem of Trailfinders, John Spollen of Cassidy Travel, Aoife Gregg of United and Martin Skelly of Navan Travel after the United Cup Ireland v Northern Ireland travel industry golf match at Carton, September 28 2017

A4E@METROPOLE HOTEL, BRUSSELS

Michael O’Leary CEO of Ryanair, Johan Lundgren CEO of Easyjet, Carsten Spohr CEO of Lufthansa, Willie Walsh CEO of IAG, Ben Smith CEO of Air France/KLM and Thomas Reynaert of A4E, Airlines4Europe Aviation Summit, Metropole Hotel, Brussels.

Clara de la Torre EU Deputy Commissioner Climate Action and Deirdre Clune MEP for Munster, at Airlines4Europe Aviation Summit, The Metropole Hotel, Brussels.

Willie Walsh CEO of IAG speaking at Airlines4Europe Aviation Summit, The Metropole Hotel, Brussels.

Michael O’Leary CEO of Ryanair, Carsten Spohr CEO of Lufthansa and Willie Walsh CEO of IAG at Airlines4Europe Aviation Summit, The Metropole Hotel, Brussels.

Michael O’Leary CEO of Ryanair interviewed at Airlines4Europe Aviation Summit, The Metropole Hotel, Brussels.

A selfie with Ben Smith CEO of Air France/KLM at Airlines4Europe Aviation Summit, The Metropole Hotel, Brussels.

AMNADEUS @PEPLOE’S

Team Amadeus Matthew Lampey Olwen McKinney, , Sean O’Kelly and Claudio Santos, Amadeus appreciation night for the trade

John Galligan of John Galligan Travel, Sharon Menzies of Club Travel and Niall McDonnell of Classic Collection, Amadeus appreciation night for the trade

Martin Skelly of Navan Travel and Jim Vaughan of Justsplit, Amadeus appreciation night for the trade

John Spollen of Cassidy Travel president of the ITAA, Aidan Coughlan of WTC and Sean O’Kelly of Amadeus, Amadeus appreciation night for the trade

Ray Scully of American Holidays and Eimear Hannon of Eimear Hannon Travel, Amadeus appreciation night for the trade

Jackie Herssons of Travelopia, Ken Masterson of Skytours and Carol Anne O’Neill of Worldchoice Ireland, Amadeus appreciation night for the trade

Olwen McKinney of Amadeus and David O’Hagan of Donabate Travel, Amadeus appreciation night for the trade

TOURISMNI@CHRISTCHURCH

TourismNi Seamus Heaney event at Christchurch Cathedral,

Martin Kearney chair of Mid Ulster District Council, Fiona Cunningham of TourismNI and John Kelly of RTE, TourismNi Seamus Heaney event at Christchurch Cathedral,

Mary and Dan Heaney with Eoghan Corry, TourismNi Seamus Heaney event at Christchurch Cathedral,

Cathy Chjauhan of River Bann Tours, and Eimear Kearney of Lough Neagh tourism with Suzanne McCoy and Sarah Heaney of Heaney Brewery,

Martin Bowles of Invest NI, Marian O’Sulivan of the IPA and Sean McEvoy of Ardtara, TourismNi Seamus Heaney event at Christchurch Cathedral,

Johno Crotty of EI Travel with Estelle Thomas and Adele Keane of Irish Horizons, TourismNi Seamus Heaney event at Christchurch Cathedral,

Martin O’Halloran of the IPA and Austin Spivey of WIA, TourismNi Seamus Heaney event at Christchurch Cathedral,

JULY 2020 PAGE 64

ESCAPING THE PLAGUE

Venue for passion play at Oberammergau

Andrea Kemmler tour guide and Passion play participant Jonas Konsek,

The passion and the play

arlow travel agent Joe Tully had arranged a programme to the German village of Oberammergau. Amidst all the cancellations of the past two month,heI thought one thing was rather ironic. “One of our programmes is to the passion play at Oberammergau, which was set

up in 1634 to give thanks for the village escaping the plague, “ “The 2020 performance has been postponed. But it has been moved out not one, but two years. Which I thought was rather strange. Do they know something we don’t?

Dressing room, Oberammergau

Example of Lüftlmalerei commemorating first passion play in 1634 on house near original staging scene, the graveyard in Oberammergau

Martin Skelly of Navan Travel and Anton Preisinger of Alte Post Hotel, Oberammergau where key Irish travel media and trade were hosted,

Passion play participant Jonas Konsek,