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Citing Ongoing COVID-19 Uncertainty, Boeing Reduces Commercial Production Rates
In April, Boeing announced plans to sharply reduce the production of its commercial widebody aircraft and cut its workforce by as much as 10%. Last week, the continuing uncertainty of the times forced the Chicago-based airframer to adjust production rates even further.
The company is facing a second-quarter net loss of $2.4 billion and a 65% reduction in commercial sales due to the large volume of COVID-19-related fleet groundings, delayed or canceled orders, and airline bankruptcies. That led Boeing President and CEO Dave Calhoun to announce plans for deeper cuts across the board.
Among the key changes are:
- Reducing 787 aircraft production to six per month, one less than the seven per month announced in April, and less than half of the 14 per month pre-pandemic rate of production.
- Reducing the combined 777/777X production rate to two per month in 2021—also one unit lower than announced last quarter.
- Continued smaller, phased workforce reductions in the form of voluntary and involuntary layoffs and attrition, to meet Boeing’s previously announced net workforce reduction of 10% for the year.
- A much slower ramp-up in 737 production than previously planned, with an expected increase to 31 aircraft per month by 2022.
- Calhoun also confirmed, in a message to Boeing employees, that production rates for the 747/767 would remain the same for now and that plans to end production of Boeing’s storied 747 in 2022 remain unchanged.
Noting that the reality of the pandemic’s impact on the aviation sector continues to be “severe,” Calhoun nevertheless expressed a hopeful note in his message to Boeing employees. “As we look to the future, we also are focused on not just adapting and recovering but also emerging stronger and more resilient,” said Calhoun. “And while we’re facing challenges, it’s important to remember the good work and innovation underway across our company. Aerospace has always proven to be resilient—and so has Boeing.”
Prominent Flight Attendant Shares Ideas on The Future of Air Travel
What will the experience of air travel feel like in the months, and years, to come?
Sara Nelson, a veteran flight attendant and International President of the Association of Flight Attendants-CWA, AFL-CIO since 2014, recently shared her thoughts about that on Brian Kelly’s Future of Travel webinar series.
According to Nelson, the biggest thing the U.S. government could do for airlines at this moment—beyond emergency financial relief—is a federal mask mandate. Even if airlines have, and enforce, mandatory mask policies, some passengers will still argue against wearing one. Nelson later told the TODAY show she found it “absurd” that the FAA and Department of Transportation have not taken leadership roles on the matter, comparing it with the comparatively swift changes implemented following 9/11. “We absolutely need that backing from our government,” she said.
Beyond masks, Nelson told Kelly on the Future of Travel webinar that several key temporary changes will need to be made to help airlines protect workers and passengers as best as possible from Covid-19 transmission.
The reduction of inflight food and beverage service is second to mask-wearing. Passengers should do their part, she said, by packing food for their flights, bringing hand sanitizer with them, making sure to wash their hands properly and frequently, and being prepared for in-cabin air conditioning by wearing or carrying on some layers.
Nelson said airlines and passengers need to approach flying with a “we’re all in this together” mindset in order to make it through these challenging times.
NYC Area Invests in Touchless Airports
In the face of declining traffic—a 97% decline, in some instances—New York’s JFK, LaGuardia, and Newark airports are getting new upgrades meant to augment the touchless experience.
Rick Cotton, Executive Director for the Port Authority of New York and New Jersey which oversees those three airports, told Condé Nast Traveler: “Even before Covid-19, there was a very strong movement towards touchless technology, being able to move through the airport without the need for a piece of paper. Now, the pandemic will accelerate that trend.”
Some of the changes Cotton mentioned:
- Do-it-yourself baggage drops and check-in kiosks
- Almost entirely touchless restrooms
- Touchless payment options at food vendors inside the airport
- No in-restaurant dining
- Mask vending machines
- Biometric screening with facial recognition software to speed up security
- Wider corridors and larger waiting areas
- Improved air filtration systems
- UV sterilizing lights on high-traffic surfaces
LaGuardia’s Covid-19 overhaul is part of a larger, $8-billion makeover that has been in the works for years. The New York-area airports join other hubs around the world trying out touchless technologies to help reduce the spread of Covid-19.
What do you think of these changes? Tell us on Twitter or LinkedIn.
Will Covid-19 Force More Air Travel Companies to Take the AI Leap?
More and more technologies that could assist airlines in handling the Covid-19 pandemic are coming to the fore, and none are more prominent than the many applications of artificial intelligence.
AI isn’t a solution unto itself, but rather a bucket that contains a multitude of computer-enabled, algorithmic solutions. As Information Age notes, computer vision—a subset of AI—may become more popular with airports, airlines, and national flight security agencies as they look for ways to scan large groups of people quickly to find possible Covid-19 cases.
“We have the ability to have thermal scanners integrated into a central database for immediate response and contact tracing. In addition, video surveillance, combined with thermal scans to tie biometrics with risk identification, can also be utilized,” the publication writes.
If they want to use this technology, airlines and airports will need to make some major technological leaps to get there. A business survey done in 2019 indicated that one in five travel and transport companies in the U.S. and U.K. haven’t yet deployed AI in their business at all.
As Covid-19 continues to change the way travel companies operate, we will surely see the development of new technologies meant to reduce the risk of contagion while ensuring higher capacity.
U.S. Government Mulls How to Reopen International Travel
Just as the European Union pursues plans to bar American tourists from entering the EU for the foreseeable future because of uncontrolled Covid-19 outbreaks, U.S. airlines are meeting with U.S. government officials to discuss re-opening travel.
On June 26, U.S. Vice-President Mike Pence, along with a number of senior government officials, met with executives from major airlines to discuss post-Covid recovery. Executives from United, American, Delta, Southwest, and JetBlue, as well as the CEO of trade association and lobby group Airlines For America, were present, although the full details of the conversation have not yet been reported.
However, a White House statement says those who met “discussed the best path forward for allowing Americans to safely travel internationally again,” which included discussions of contact tracing, temperature checks, face coverings, and travel restrictions.
The Cost of Quarantining Passengers
At the start of the global Covid-19 pandemic lockdown, governments worldwide urged citizens abroad to return home and quarantine for 14 days—many on the government’s dime. As the pandemic wears on, the costs are adding up. One researcher in the UK estimates the cost to British society at 650 million GBP a week.
As more countries consider slowly opening back up to travel, they also have to contend with the potential costs and consequences of 14-day quarantines for travelers and repatriated citizens.
IATA has strongly opposed mandatory quarantine measures for air passengers, saying that these requirements are prohibiting air travel’s ability to recover from the decimation of global tourism.
At the same time, Australia and New Zealand are aiming to open their Trans-Tasman Bubble by September, which would offer travelers between the two countries quarantine-free flights.
The issue of mandatory quarantine for citizens and travelers alike will remain a contentious and evolving issue for many months to come as countries around the world look to restart their tourism sectors in local, regional, and international stages. Watch this blog for more developments.
How Soon Will Airlines And Airports be Able to Test for Covid-19?
You may have heard about a rapid Covid-19 blood test being used at an airport that gives results in “minutes.” Or the laser test, which promises results in “seconds.”
In fact, a continually sprawling marketplace has cropped up around Covid-19 testing, which has led to some confusion among airlines, travelers, and the general public.
As NBC reported, antibody testing has so far not had blockbuster success. But when it comes to the idea of testing for Covid-19 at airports, there are more complex issues at play beyond accuracy. The NBC report raises the question of how testing people for Covid-19 before allowing them to, for instance, board a flight might give some people the feeling they are protected when they may not be. Imagine a scenario in which people get tested prior to boarding a flight, but a number of passengers getting sick anyway because of a faulty test or undetected symptoms. The inherent liability involved is enough to give the industry pause.
Meanwhile, in a report by a Canadian TV station, an aviation marketing agency exec raised another important question: What happens to passengers’ privacy rights when private companies test them for illness at airports, especially without some kind of stringent internationally standardized protocol?
Technology companies, airlines, and governments are rushing to find the winning solution that will enable the billion-dollar air travel industry to take flight once more. Until that becomes a reality, airports and airlines are having to make do with an expanding list of new health and safety measures.
At Panasonic, we understand how deeply the Covid-19 pandemic has touched the airline industry. We knew we couldn’t keep publishing our blog as usual, as if nothing had happened. That’s why we started a section with news highlights —to help centralize information about the airline business and bring together context, information, and new ideas to our industry as it faces the biggest challenge it’s ever faced.
European Commission Issues New Guidelines For Resuming Air Travel
For Europeans, their next flight might include having to ask cabin crew staff for permission to use the toilet.
Other changes will include new processes for check-in, bag drop, and bag pickup which will be redesigned to reduce crowding. And there will be masks—lots of masks.
New guidelines have been set by the European Commission, which on May 13 published a sweeping suite of proposals for re-establishing air travel in post-coronavirus Europe. It is advocating for a “phased and coordinated approach” which will first enable EU member states with similar Covid-19 situations to permit travel.
The EC’s recommendations are non-binding. IATA head Alexandre de Juniac told Reuters he thought they were “a vague recommendation that is quite frankly not helpful to airlines or to consumers because both need clarity.” Globally, IATA estimates airlines will lose more than $300 billion due to Covid-19.
Airlines have been grappling with ways to improve social distancing inside the cabin environment. Recently, Ryanair said it would use the permission system for the toilet to avoid queueing, and would not accept cash for transactions. Other airlines have been selling “socially distanced seating” at premiums.
As Reuters pointed out, however, the EC did not address the elephant in the room: how many passengers can be allowed onto aircraft at once? Those guidelines will come from regulatory bodies in the weeks to come.
The EC guidelines can be viewed here.
With FlightPlan, Inmarsat and APEX ask ‘What’s next?’
Prior to the pandemic, commercial aviation was traveling in a steep upward trajectory as more and more people acquired the taste for travel. It all came crashing down in mid-March, teaching the industry a serious lesson about the value of resiliency in business.
On April 29, Inmarsat Aviation and APEX hosted an online video conference (replay available here) featuring major industry players to consider how the airline business might recover in the years to come, and adapt to prevent the spread of infectious diseases. Check out Panasonic’s contribution to the event, “Digital Innovation in Passenger Experience,” here to find out more about why inflight entertainment systems will be intrinsic elements to the industry’s recovery.
What Will Travel Look Like Once the Pandemic Subsides?
Will passengers and crew be required to wear masks? Will airlines charge premiums for “socially distanced seating”? Are airports going to install mandatory temperature screening equipment?
In short: How will the experience of flying change once travel restrictions around the world ease up? In its What We’re Made Of series, APEX is asking how companies inside of commercial aviation are changing to meet our new reality.
Now that the initial shockwaves of the pandemic are calming down and we’re seeing how the dust might settle, airlines and aviation-related companies may find this moment in time to be an incredible moment to slow down and really reconsider the direction of their businesses. They may consider what they could be doing to be more environmentally friendly, more economically sustainable, more socially responsible—not to mention more efficient, by using more of what they’ve already got more strategically.
Novel Approaches to Cutting the Spread of Infectious Diseases
In a recent newsletter and blog post, SimpliFlying considers several approaches airlines may choose to take for helping to reduce the likelihood of travel-induced spread of diseases like COVID-19. One way, in particular, could be the rise of regional travel bubbles, she writes. Australia and New Zealand’s prime ministers are considering creating a “Trans-Tasman Bubble” once the two leaders are confident the risk of spreading the disease is no longer present.
The idea could be adopted in other parts of the world, as well. SimpliFlying says a similar bubble could feasibly be created in regions of Europe.