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11 August 2022

Opinion from Adrian Leopard & Co

News impacting business from Adrian Leopard & Company - Insolvency Practioners & Mediators

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End of an era as British Airways decide to withdraw their entire fleet of Boeing 747s and half price meals in August may be difficult to find
Adrian Leopard 305

End of an era as British Airways decide to withdraw their entire fleet of Boeing 747s and half price meals in August may be difficult to find

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As the world tries to give itself a kick-start economic problems continue to emerge

Time for retirement – British Airways has brought forward the withdrawal of its entire fleet of 31 jumbo jets. This was originally scheduled for 2024 but the reduction in business due to the pandemic has caused the decision to be taken now, according to announcements made by BA. 747s first flew with British Overseas Airways Corporation in 1971, before that company amalgamated with British European Airways to form British Airways.

There are apparently about 500 747s still in service in the world of which about 30 fly passengers, some 300 fly freight and the rest are “in storage”. BA is not the first airline to take this action; others including Air France have already done so. The problem is quite simply that it is no longer an economical aircraft as there are newer models which cost a lot less to run and, as we know, just at the moment, costs reduction is an important priority.

In addition to aircraft being taken out of service, several hundred orders for the new Boeing 737-MAX have been cancelled recently. Altogether Boeing have had 784 orders cancelled of which 373 were 737-MAX. That represents a very significant chunk of cash!

We mentioned the problems with Pakistan International Airlines the other day. Matters have moved on and now the Federal Aviation Administration of the USA has downgraded the entire nation’s aviation rating to Category 2. This comes after findings that up to a third of the nation’s issued pilot licences could be fraudulent! The downgrade will restrict operations quite considerably but signals that in the opinion of the FAA, the nation’s aviation industry does not meet international standards. If you are planning to fly soon, Pakistan’s airlines are probably best avoided.

Another result of the pandemic now announced is that Qantas, the Australian airline, will no longer be carrying out international flights until March 2021. Passengers wanting to go international will be serviced by partner airlines.

American Airlines, which in June announced that it thought it was over-staffed by some 20000 employees has now announced that the problem is deeper than they thought and now expect up to 25000 staff to be laid off. This is a very substantial reduction in workforce and would include some 9950 flight attendants, about 37%, and 2500 pilots, about 18%. All in all this reflects yet further pessimism in the aviation market.

Although aviation in Britain has started up again, it remains to be seen just how much of the overall business is going to be rescued over what remains of the summer. It is to be hoped that we shall not witness groundings of aircraft leaving citizens stranded overseas again as they were at the beginning of the pandemic.

And what does “in storage” mean for aircraft? Basically once an aircraft is stood down, there are certain deserts in the world which are ideal for storage; huge areas with masses of parking space and no moisture!

Finally, closer to home, it seems that only little over half of restaurants and pubs may be registering to participate in the eat out to help out plan by the chancellor with his gift of up to £10 per head on meals eaten out. Some 58% of operators say they will get involved and of those the larger part will be restaurants rather than pubs. This information has been gleaned following a poll.

This seems a rather disappointing take up. As yet it is not known how the general public will know which businesses are going to participate. Perhaps a placard or sign will be displayed but if the take up is half-hearted, literally, then it may not be so easy to find outlets and apparently even less so if you are in a holiday destination or live in the country!

Will it make a difference? We can only wait and see.

Adrian Leopard 17-07-20

Photo Jonathan Gallegos

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Adrian Leopard & Company is the trading name of Alderney Offshore Ltd, a company registered in Alderney, Channel Islands number 1220.

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Adrian Leopard & Co is represented in the UK by 3CL (UK) Ltd trading as Adrian Leopard Associates.

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