Guy Leitch - ATTITUDE FOR ALTITUDE

Each year I try hand out light-hearted Oscar awards for the best and worst actors and performances in aviation over the past year. But 2021 was for many just a re-run of the 2020 nightmare. I reckon we as an industry, and indeed the whole world, are the walking wounded from the Covid-19 pandemic.

THE HUMOUR THAT I TRY inject into this column is hard to find or make, as the longawaited recovery has tested everyone’s fortitude. This column is therefore a more sober assessment of what the new normal is that we are having to come to terms with.

The Airline Industry

The much hoped for recovery of the aviation industry has been patchy at best. Incredibly, some airlines have done well out of Covid. In Africa, Ethiopian deftly switched to cargo flying and this got it through the worst of the protracted, and repeated, lockdowns. In South Africa, Airlink has done amazingly well, newly emancipated from its odious and toxic SAA licence agreement. This is largely due to two things: First: Airlink management’s prudent commitment to investing

in building a strong balance sheet during the good times. Second: management’s use of its strong balance sheet to take advantage of the gaps in the market created by the failure of the weaker airlines, most notably SAA, Comair/ kulula and Mango. It is a clear indication of how inefficient the other SA domestic airlines had become that Airlink can the aviation successfully operate its smallgauge Embraer E190s on the industry leads low-cost carrier routes. a recession and lags its recovery CemAir too is to be commended for surviving a sustained and attack from the CAA which seemed determined to drive it into bankruptcy. But instead, SA Express failed and CemAir is being allowed to get on with being a great little airline. Like Airlink, it is growing well on the strength of solid management and good decision making. For the African air transport industry as a whole, 2021 was also just a long drawn-out

continuation of the agony of 2020. The bald numbers are scary, but still hide the shocking hardships of thousands of high value job losses. IATA calculates that African airline seat demand (RPKs) was 66.6% down in 2020. In 2021 it recovered a bit, but to a still disastrous 57.7% down. IATA says that it is expected that African carriers will see a very slow pace of recovery from a $1.9 billion loss in 2021 to a $1.5 billion loss in 2022.

IATA reckons that low vaccination rates across the continent are expected to severely dampen demand throughout 2022. An expected slight improvement is built on the expectation of some recovery in intra-Africa travel and travel to those tourist destinations with relatively higher vaccination rates.

The retarded recovery has had a widespread impact. The consequences of the breakdown in air connectivity are severe: five million African jobs are at risk and aviation-supported GDP could fall by as much as U$37 billion, which is a 58% drop.

Still, it’s not all doom and gloom. If you look hard enough you can always find a few silver linings. The air freight industry has done well, simply because, without passenger airliners flying there has been a chronic lack of belly space for cargo. This has meant that there has been more than enough demand to keep the pure cargo operators happy – and indeed, making super profits (except SAA Cargo of course).

Both Airbus and Boeing have taken great financial strain, but Boeing in particular has had a torrid time. The bad news just never seems to end, and Boeing's revenue has shrunk by 19% on average each year over the past three years.

There has been an ongoing struggle to get the airlines to take delivery of their 737 Max orders. They are barely delivering 30 new aircraft a month, whereas they had geared-up to produce 57 each month. But at least there seems to be very little resistance from passengers to flying the Max. Boeing is also having big problems with 787 Dreamliner production. Boeing’s much hoped for certification of the 777X has still not happened, but the 777X did at least put on a spectacular display at Dubai.

General Aviation

Big news was that the long-awaited first flight of Textron’s Beechcraft Denali finally happened – on 23 November. The first flight of an allnew airframe with an all-new engine is hugely

significant. Much is hoped for from this ambitious project which has the categorydominating Pilatus PC-12 firmly in its sights. Some months ago I earned the ire of Textron by pointing out the challenges faced by the Denali in taking on the PC-12. I await with interest the results of the flight tests – to see whether it will improve on Beechcraft’s projected performance numbers.

The biz-jet operators are doing pretty well. Those who can afford not to have to mix with the germ-infested lumpen proletariat have used biz-jets to lord it above the hoi polloi. This has meant biz-jet pilots being stretched to flying the full 1,0000 hours allowed in a year.

Interestingly, the glut of experienced pilots that should have been available from the collapse of airlines such as SAA and Mango has not been of much use to general aviation. It costs more than half a million Rand to convert an Airbus Captain onto a business jet. And perhaps surprisingly, many seem to battle to cope with the extra workload of flying smaller jets. The unexpected realisation is that airline pilots are spoiled in that they have a flight operations department behind them to do the grind work, such as calculate weight and balance, file flight plans and get over-flight clearances and book hotels and arrange ground transport. So, the much-vaunted SAA pilots have been by and large a disappointment for the rest of the industry.

Perhaps surprisingly, many of the better Aircraft Maintenance Organisations also report good business. It would seem that aircraft owners have taken the opportunity to get expensive new avionics installed, longstanding maintenance snags addressed, and new interiors and paint jobs.

Another surprise is that the price of old general aviation aircraft seems to be skyrocketing. A rough guess seems to indicate that owners are now asking as much as 33% to 50% more for their planes than they were BC (Before Covid). If the sellers are getting their prices, some people must have done well out of the pandemic. Perhaps they had shares in Pfizer or J&J.

But these are the exceptions – and it’s worth restating what I have said before: the aviation industry leads a recession and lags its recovery. It will therefore take longer than the rest of the economy to recover. For the operators of the high-end game lodges, international tourism is not expected to recover much for the 2021 yearend. A significant recovery in 2022 assumes that the major sources of overseas tourists can agree the elaborate two-step dance required to comply with both origin and destination health protocols.

The hugely important and long awaited first flight of the Denali - with an all new engine and airframe.

Recreational Aviation

In 2020 in general aviation (GA) we saw evidence that flying a light aircraft is actually not that easy and that it takes practice to stay current. As people stated flying again in the second half of 2020 the accident rate shot up. This year the accident rate seems to be back to more normal levels. And good news – at least for industry watchers – is that, after a twenty year wait, the CAA has finally produced figures for accident rates – that is per hundred thousand hours flown.

Recreational aviation within South Africa was dealt a further blow by the continued impoverishment of South Africans through the weakness of the Rand, thanks to a full tri-fecta of junk status ratings. Once again, new aircraft have become all but unaffordable and a review of Ray Watts’ Register Review shows far more aircraft leaving the country than new ones arriving. Thus, the fleet of GA aircraft within South Africa continues to both shrink and age.

The splendid Sling Aircraft company is one of the few beneficiaries of the weakening Rand. The company rather belatedly changed its name from the anodyne ‘The Airplane Factory’ to just ‘Sling Aircraft’. This change recognises that the Sling has become a worldwide success story as a brand. 85% of all its new sales are made outside South Africa, with half to the USA – which is a notoriously tough market to crack. As a side note I was personally very chuffed that the huge Plane & Pilot magazine ran my Sling High Wing report plus Bruce Perkins’ great air to air pictures as a key cover feature. And then, based on that report, they made the Sling High Wing a ‘Plane of the Year’. It made up for the unaccustomed inability of the Sling boys to pull off another of their world-shrinking flights to the Oshkosh Airventure; not due to any shortage of commitment on their part, but due to the impossibility of timeously arranging Covid clearances through the many Caribbean states they would have to stage through. Good progress was made with electric planes, although personally I remain deeply sceptical about their real ability to compete with fossil fuel burners. As a publicity stunt, Rolls Royce put a 550 hp electric motor on the front of a tiny Formula 1 racer and claimed it to be the fastest all-electric vehicle ever – at 387 mph. Even Sling Aircraft have an all-electric Sling 4 being developed by ETH University in Switzerland as well as a Hydrogen Fuel cell version being developed by Delft University in Holland.

SAA

I would love not to have to say anything about the protracted death of South African Airways as it is unspeakably tragic. But, like a slowly unfolding horror movie, SAA holds a morbid fascination for all South Africans.

The double-whammy of both Covid-19 and the maladministration of SAA has taken a huge toll on personal lives. I know of pilots’ wives