- This is the worst year in aviation history.
14 days ago, if you walk on an aeroplane like this,
you wouldn't imagine the whole plane's empty.
But this is the reality.
Today, I'm doing a very serious video
talking about the impact of coronavirus
on the aviation industry as whole.
First thing I'd like to talk about
is the travel ban currently in place,
imposed by the many government
to stop free-flowing and people travelling.
And the U.S. President, Donald Trump,
has recently came out to restrict people
from Euro shangun area to the U.S. for 30 days.
This now also include UK, Ireland as well.
So, lots of country currently require citizens or travellers
to be quarantined if you come from a high-risk area.
We have seen, also, lots of airport fully closed.
This is an unpresented measure to fight the coronavirus.
IATA recently mentioned the whole airline industry
could lose up $113 billion due to the virus.
- [Henry] I think that the IATA number,
as daunting as it was a few weeks ago,
could potentially increase in the size of loses to airlines
if we start to see governments
impose further travel restrictions,
or worse, mandate their airlines to stop flying.
So, if the virus continues into the summer,
or worse, if the virus doesn't subside,
if airlines are being told, "Don't fly,"
if countries are saying, "Don't travel."
You know, the risk of bankruptcy continues
and it increases with time.
(swooshing)
- A tray and tray liner from China Airlines,
'cause so many of these - Oh, tray liner (moans).
- are going unused.
- This is my friend Antony from the desert graveyard.
How does the coronavirus hit the airline industry?
What's your take on this?
- Yeah, so I think just about every day
at every airline around the world,
they're experiencing what I would call
net negative bookings.
Essentially, more cancellations are coming in every day
than new bookings coming in.
And so, at every airline's headquarters,
the network planners and revenue management organisations
are really grappling with three things.
How much capacity do they have to reduce?
Do they actually have to park fleets?
And how much flight schedule they're actually
going to put on the industry?
But for those people who are not afraid of catching the flu,
this is a fantastic moment to take advantage of.
Empty flights means really low fares.
And if there's any destination that is,
still has capacity, even though it might be reduced,
you can get some fantastic bargains right now.
- I know, I'm so tempted.
I saw united has $138 one-way from Las Vegas to Hawaii.
I want to take my mom there.
It's so cheap.
So, I thought about it again and I said like,
"What?
"You know, I can't take this chance.
"My mother's 70 year old.
"I don't want her to catch it, you know?"
You know, there's the trade off between the low price
and also your health, here.
What's more important, really?
- So, Sam, if you think about the industry,
especially in Europe, with so many low-cost carriers there
who rely on revenue streams as part of
their ability to stay afloat,
I think that we're going to see more casualties
in Europe now before any other part of the world.
- We saw the first airline with this casualty
out of the coronavirus.
It's actually Flybe.
It's not unexpected because Flybe
was already in trouble in January.
The UK government and Virgin Atlantic
tried to bail them out,
but they decided not to use the taxpayers money
on some airline who will run big losses.
But we do expect to see more,
right? - Yeah.
- [Sam] 'Cause Italy's been locked down.
- Yeah, you think about Italy's situation.
I mean, Alitalia, as a traditional carrier
in the home country, actually,
hasn't done well even when revenues
were good across the continent.
And so, imagine now, how Alitalia's going to feel.
- Ask gov, I mean, any airline that owns by a government,
they have a better chance to survive it.
- Yeah, so that's a good point.
Any airlines that owned by government,
they are likely to receive cash injection.
- Sam, I feel so sorry for Norwegian.
They've started off with their new services
going on in Argentina.
Then they run into the Max problem,
Now, they've run into the coronavirus problem.
They've let, what 50%, 60% of their people
that work for them go already.
How can they hold on?
- Yeah, they just ground the 14 trip liner
'cause they expanded the long-haul
transatlantic market so quickly,
you know? - We've heard today
that England is now over flying to the United States,
so where do they fly to?
- With the Norwegian problem is, you know,
they were really restructuring hard
and hoping this summer, it's the traditional strong,
revenue month to bring them afloat and alive.
And then now, for this summer,
we just don't see that happening,
that strong travel-booking trend.
- We'll know in the next few weeks
in regards to if they're going to make it or not.
- I think the airline who have their aeroplanes on lease,
they're going to have a harder time than the companies,
the airline who owns their own aeroplanes .
- [Sam] Right, that's a very valid point.
- Yeah, and because they can restructure the loans
versus the leases and all that.
It's going to be really challenging for all of these airlines.
- Yeah, well, shifting from Europe,
there's lots of airline also going to hit hard in Asia,
has already been hit hard.
Like, you got Korean Air,
you got Hainan Air on the verge of collapse,
which Hainan air was lucky because the government in China,
the Hainan province government bailed 'em out.
They haven't even paid the staff a couple months,
they were running behind.
And they cut out every flight
because they had the coronavirus in China.
Korean Air chairman sent out a very strong message
about the company's unlikely to survive.
You would think, typically, this is also
an international carrier, they will cruise over.
But they parked 100 out of 145 aeroplane
on the ground right now.
All the A380s Korean Air has been grounded, you know?
LAX was their strongest station.
Now, they downgrade to triple seven,
and then down to one a day.
- [Henry] The future of the U.S. airlines
will greatly depend on whether or not
the U.S. government provides any kind of
financial assistance to that.
The U.S. airlines have asked for relief
from the federal excise tax and a rebate on that.
That is the tax people pay on the tickets they purchase.
They have asked for government loan guarantees
and no or low interest loans,
and they are asking for cash grants.
So, this is the going in state, of course,
and it's all subject to negotiations
with the White House.
If the government will provide some cash to the airlines,
the no or low interest loans and loan guarantees,
I think that will be sufficient
to help most of these airlines.
In fact, I think, really,
all of the airlines stave off bankruptcy
and continue operating.
- There are three airline that definitely
will be working non-stop again,
which is Qatar Airways, Etihad, and Emirate Airlines.
- [Sam] So, you think
the Middle Eastern are able to survive?
- Definitely, they will be able to survive.
You know, they can just start immediately,
right after, you know, this virus situation is over.
- I actually doubt, because Emirates has
a 130-some A380 in their fleet.
When the economy's good, A380's making lots of money,
kills off all the competition.
But when the thing is, timing's bad,
you might be running 20%, 30% of capacity.
Emirates has been so quiet,
you just don't know how badly they got hurt right now.
They are asking Airbus to defer
the rest of the A380 beyond 2021.
So, we might see they're slowing down,
building the last eight A380 from the manufacturer.
Now, talking about manufacturer,
Boeing and Airbus has been it so hard.
The stock price, I can tell you, Boeing,
I mean watching has fallen from 300 to 150,
halved in a week.
No new owners and also Boeing has the extra pressure
on the 737 Max,
going to solve the Max. - Right.
- [Sam] And also, they have a back load,
300 planes they produced and parked.
They got to resolve that and getting the confident
to travel public back on the Max first.
Now, they got to deal with the coronavirus
because people are saying now
coronavirus could hit Boeing harder
than actually the Max problem.
That is insane.
Imagine the magnitude
of that. - Amazing.
- Thanks to Saudi Arabia,
the overflow with the oil pricing, the output.
And all of a sudden, right now,
there is so much surplus all over the world.
- From an airline perspective, like,
the fuel cost is going to be quite attractive
for the course of the next few months.
Most airlines today built their business models
around $100 a barrel.
And you think about what's happening today,
at roughly $26 to $32 a barrel,
it makes the economics of flying
lots of different aircraft types pretty rational.
And so, you'll probably see the profit of the airline,
once the flu is over, return pretty quickly
because fuel price is so low.
- They're really two school of thoughts
on the low oil price.
Some people think low oil price can induce
the older aeroplanes to stay longer in the fleet.
- [Anthony] That's true.
- So, the MD80s, the, you know, the 757, you know,
can stay longer and that's a good thing for us.
Like, aft geek, right?
- We always want to fly on a queen.
We all want to fly - Oh, yeah, you want to
fly the KLM queen, right? - on a KLM queen.
- We have heard rumours, now,
or maybe it's already a fact that--
- It is a fact that KLM, within the next seven to 10 days,
will be putting their 747s to bed
and saying goodbye to them.
- Now, that's sad man.
We're going to - Very sad.
- [Sam] See them in Mojave, in the aeroplane graveyard,
the KLM 74. - I think,
yeah, I think when the KLM 747,
they're going to be landing in Mojave,
the first person who's going to go up there is Anthony.
And he's going to steal - Of course.
- all their tray liners. - All those tray liners.
- Tray liners.
- Virgin Atlantic as well, the A3, 4600 is done already.
And that's brought ahead a couple months
from the summer to now.
Just lots of old aeroplanes are, you know,
out of the door because there's excess of fleets,
of supply right now.
John Dekker, I know for years.
You are the corporate travel agent.
- I am the air guru, Sam.
I've fallen off a cliff.
It is a disaster as far as sales
are concerned and airline tickets.
It is an absolutely disaster.
It's been going on now for about a month.
Probably go on for another six weeks
and then I expect us to climb out of it.
- How much sales you made
or how much cancellation do you have?
- I've currently had to take about $125,000
out of my pocket personally
and return it to individuals. - Whoa.
- And as far as sales are concerned,
I made $70.39 this week
on commissions from aeroplane tickets.
- You have never seen something like this in your life?
- Never in my life.
9/11 would be bad for us here in the United States.
This is much worse because it covers the entire globe.
- This week's been really tough.
I have lots of friends been calling the airlines
for a couple hours on hold
because they couldn't get a hold of the airline
because the flight's been cancelled,
they need to talk to someone to get refund.
Is there any good advice you can give to these people?
- The best advice I could give to them is
continue to try to go down the ways
you purchased your plane tickets.
But if you come to the end of the line
and there's no way that you can get a hold of somebody,
you can always go back to your credit card company
and explain to them that you're not able to reach out
to the person you purchased the ticket from,
and your credit card company, then,
should credit that back to your credit card.
- Ah, that's the trick.
- That's the trick.
- Captain Talaat, you are the owner of Pan-Am Experience
and you're in the movie industry, Air Hollywood.
So, how have you been fare so far?
- To be honest with you,
this is like the worst experience in our lifetime
as far as the company is concerned.
We literally had to shut down
every production that we have,
including the Disney, Netflix,
Paramount, Sony, all.
The next two months, usually,
we are booked two, three months in advance.
Now, we have zero, nothing is booked.
All productions are shut down.
But we only open for one person and that's Sam.
And that's why we open the studio just for you.
- That's why when you have friends at high places,
you can have the whole aeroplane to film.
And this is filmed on Air Hollywood's premises.
- But it's really, really hard--
- So, Talaat, Talaat, did you see?
Look, I just got this new tray and tray liner from KLM.
It's pretty exciting. - Oh, wow, look at that.
- Look at the logo on there.
- My God, Antony.
- Sam, before you leave the plane,
all of you, you need to wash your hand.
And don't shake other people's hand.
You should learn just like the Japanese, bow.
- [Anthony] No more touching.
- [All] No more touching.
- [Anthony] No more touching.
- Aren't we too close now?
- We, six feet.
How far are you?
- Now, we're like two feet.
- Oh. (Anthony chuckling)
- You know, Sam, I got to tell ya, though,
that we are resilient.
And we're all going to want to travel.
It's not going to stop.
This is just a break.
- The flu will end.
People will stop getting it
and everything will go back to normal.
So, it's a short-lived pain
and we're all just going to have to weather the storm.
But this one will be over soon.
- Absolutely.
I think that humans are resilient
and the aviation industry has
weathered through so many storm.
And there's always a strong comeback.
So, I'm fairly positive we will ride
through this storm together.
I think up for landing.
- I'll fasten my seat belt. - Oh, yes, let's sit down.
- [Anthony] Tray table up.
(swooshing)
(chiming)
(popping)
(aeroplane jets rumbling)