CNBC: Restarting the aviation industry

Thomas Flohr interviewed on CNBC to discuss the long term impacts of Coronavirus on aviation

Hadley Gamble: Thomas Flohr is the CEO of private jet company Vista Global and he joins us now. Thomas thanks so much for making the time today. We are talking about 25 million jobs globally and most would say that’s a conservative estimate, how is this impacting your strategy for this year because obviously you don’t have a crystal ball. Certainly, you are running a company, you have to make some kind of projections.

Thomas Flohr: Good morning, well in our industry we are supporting about 2 million jobs worldwide. We today are still supporting our clients with our floating fleet, 115 aircraft around the world, so there is still some traffic. However as you saw recently we are also supporting governments and medical institutions with some of our Empty Legs, we make those available worldwide to support the world community in these dire times.

HG: In terms of that strategy though, what is 2020 going to look like for you guys? 

TF: We believe that this second quarter is the most critical one. We do see that certain areas of the world are slightly reopening up. We have some traffic in Asia between Australia and South East Asia. We had some repatriation flights back into China. So we see certain pockets of traffic. It’s very difficult to predict the remainder of the year, however we do see some slight hopes of improvement. There is still traffic in the United States to some degree and those pockets are the flights which we are performing. 

Matthew Taylor: How fast do you expect the rebound when it comes to the private jet sector vs what we are seeing on the commercial front? I imagine that the private sector in perhaps a little bit more nimble than some large global carriers.

TF: Yes, to that extent we are preforming flights with 1 passenger, several passengers on it, we don’t need the load factors of airlines and we fly point to point. To that extent it is on demand and it is for the route required, however these are difficult times and the fact that Vista Global owns all of its airplanes, the 115 aircraft, it allows us to move the aircraft to where there is still some traffic and where there is the need for traffic and that’s what we are doing day in day out.

MT: Do you anticipate that you may have to sell some assets or sell some of those aircraft given the downturn to perhaps cut some of the costs in your business going forward?

TF: No that’s not in the plans right now, we believe there will be a significant rebound eventually once borders are slightly starting to open up. People will need to travel and that’s what we are here to support on a global scale.

MT: Walk up through what happens next industry wise in your view, because there has been so many conversations about what is going to happen regarding a global economic bailout. There have been conversations about whether the United States can lead the charge in terms of taking on the economics. When you think about this in regards to the airline industry, who is going to need to take the lead in rebuilding whats happened? 

TF: The problem in on a global scale, so for airlines it’s really where they have their homebase, that’s where governments are helping and that’s where you saw the bailout package in the United States. In Europe it’s a little more difficult, it’s more country by country and what we need to focus on the business aviation world is that we are watching the costs, that we are still having some revenue on some routes and that we are ready for the restart. The restart will come and we believe that to be taking place in the second part of the second quarter, towards end of May, early June. 

MT: How do you think this will change the Global Aviation industry into the future? Of course after the likes of 9-11 we saw massive changes to the global aviation sector, but do you see any big long lasting changes as a result of the COVID-19 virus on aviation?

TF: Well I think it will be difficult for the airlines to restart the logistics to restart this entire global network because initially they will have very low load factors and is it then worthwhile to deploy a Boeing 777 or an Airbus A380 on a route that was obviously profitable when there was a load factor of 80-90%, but how do we actually restart after the disruption we have seen with COVID-19? That I think for the airlines a very difficult thing to do. Hopefully we can help because we just need a few passengers on board and maybe that is where the business aviation world can work closely with the airlines initially so routes that will not be profitable can be performed by smaller aircraft and we are happy to collaborate.

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