COVID-19 — Coronavirus

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kevin horlocks wand said:
The professor in charge of testing was saying they should have a reliable antibody test ready in late May or June which they want to roll out, I think we are creating our own. I imagine society will then split into 3 groups

group A : old and vulnerable who will have to stay in their house until a vaccine is found or they pass the antibody test

group B : who will live like we are living now. Working from home and allowed out once a day for exercise or food until they pass.

group C : who pass the antibody test who get some sort of ID confirming this and then basically live their lives like it’s a combination of the swinging 60s and 90s , shagging and raving like it’s 1999.

the people in group b will think should I take my chances......
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Put me down for C
 
hampshireblue said:
Apologies as I've not read all of this thread but there's an interesting view on a site called Head for Points that shows how reduced seats on an aircraft may pan out. i hope this formats OK:

Why cheap air travel is NOT going away, despite what you may read
Is social distancing on aircraft going to mean the end of cheap air travel? If you believe certain travel and media figures in recent days, the answer is undoubtedly yes.

We shouldn’t necessary expect travel or indeed newspaper professionals to have a strong grounding in economics. However, some recent thinking has shown that even concepts such as supply and demand seem to have passed them by.

This applies even at the top. Welcome Alexandre de Juniac, CEO of airline body the International Air Transport Association (IATA).

“If social distancing is imposed, cheap travel is over. Voila” he announced in a well publicised media briefing on Monday.

He bases this on two factors:

  • the need to ‘neutralise’ a third of seats on short and medium haul aircraft
  • a break-even level of 70-72% seats sold
Let’s ignore the most obvious point here. If break-even at current fare levels is 70-72% and for a couple of years you can only sell 66% of seats, you’re nearly there already.

Break-even isn’t the same as making huge profits, of course, but I think most airlines will settle for a couple of years of break-even.

Let’s also ignore the fact that keeping the middle seat empty isn’t going to make much difference, based on the SARS case I wrote about yesterday that led to five deaths from a single flight. Michael O’Leary of Ryanair agrees on this point.

IATA-350x198.jpg


There is a fundamental failure to understand airline economics
The following example is how most people are thinking about the airline industry. These numbers are roughly accurate – the average easyJet one way fare is £50 plus ancilliary revenue:

‘easyJet sells 171 seats per flight (92% load factor) at an average of £75 each including baggage and seat fees, for a total of £12,825. If it cannot sell the middle seat, revenue will fall to £9,300 (124 seats x £75) and this is not profitable. Fares will therefore rise to (£12,825 / 124) £103 to compensate.’

This is how the world of selling a ‘one price’ product works, and even then it only applies when selling something which people must buy and cannot substitute for a cheaper alternative.

In the real world, there are very few products like this. It certainly isn’t how airline seats work.

In reality, easyJet would sell its flights like this, assuming 180 seats sold:

  • 30 seats sold at £35
  • 30 seats sold at £45
  • 30 seats sold at £60
  • 30 seats sold at £75
  • 30 seats sold at £105
  • 30 seats sold at £130
…. for an average fare of £75.

With 60 seats removed from sale, it is the cheapest 60 seats which disappear. easyJet will start selling the flight at £60 including ancilliaries and not at £35. The 60 people who are not prepared to pay £60 will no longer be flying.

Let’s look at the revenue again.

With all 180 seats sold using the distribution above, revenue is £13,500.

If you don’t sell the 30 seats @ £35 and the 30 seats @ £45, to keep occupancy to 120 seats, your revenue is still £11,100.

You have emptied 33% of your seats but only sacrificed 18% of your revenue.

British-Airways-BA-World-Traveller-thumbnail-350x129.jpg


Supply and demand works both ways
As you can see above, you can empty 1/3rd of your seats without losing 1/3rd of your revenue. You also are not putting up prices for anyone except the 60 people who previously expected to pay £35 or £45 all-in and will now choose not to fly.

For 2/3rd of passengers, fares have not gone up.

Let’s look at another reason why fares won’t go up.

Aircraft are a fixed cost. You are paying the lease, or the loan, irrespective of whether it flies or not.

Irrespective of your fixed costs, you operate the asset as long as your marginal costs are covered. Let’s assume the apportioned lease cost for an aircraft for a flight is 100 units and the marginal costs of crew, fuel, airport charges etc are 35 units.

You might think at first that is isn’t worth flying unless you get 135 units in fare revenue. Not true. Because you are paying 100 units for the aircraft regardless of whether it flies or not, airlines will operate aircraft as long as the fare revenue is higher than 35 units.

As long as enough tickets are sold to pay for the VARIABLE costs of fuel (Brent Crude is now $20 vs $65 for most of last year), crew etc, then it makes sense to put more aircraft in the air. The flight is at least making a small contribution to the 100 units fixed costs of the aircraft, and so reducing losses. This means that airlines will put as many aircraft back in the skies as quickly as they can, and the more aircraft that are in the air, the lower fares will be.

We will, of course, see some airlines scrapping older aircraft such as Virgin’s A340s and BA’s Boeing 747s. This is only a small percentage of their fleets, however, and these aircraft are already depreciated. The aircraft that remain are newer, far more likely to have leases or debt attached to them, and so need to be in the air.

In the medium term, planes will come to the end of their leases and more capacity could be taken out of the market. By this point, however, we should be back to 2019 levels of travel and it won’t be necessary.

Is ‘cheap’ travel over?
Not when you look at the numbers like this.

Of course, if by ‘cheap’ you mean the £5 Ryanair flight I took to Porto in February then, yes, that’s over. Ryanair won’t be selling £5 seats now to guarantee that it fills every seat because – despite the Michael O’Leary quote above – it won’t want to. It is more likely that Ryanair adds an option to guarantee an empty seat next to you, for an additional fee of course.

Similarly, those £35 and £45 easyJet seats in our example above are gone.

This isn’t ‘cheap’ travel though. This is just seat-filling promotional activity.

If it turns out that easyJet won’t be selling any seats for less than £60 one-way in the future, I don’t call that the end of ‘cheap’ travel. £125 return to fly to Europe – on a $42 million aircraft, which is what easyJet is paying for its next batch of deliveries – is not, by any stretch of the imagination, expensive.

When I was growing up, even flying to Paris was outside the dreams of my parents. For a family of four, very much on the average British wage, it simply wasn’t even a consideration in the late 1970s and early 1980s, pre easyJet.

It’s worth remember that it has always cost £2,000 for four economy seats to a European ski resort over February half term, and anyone who has flown to European beach resorts in August will know that you were paying similar silly prices. This wasn’t ‘cheap’ travel in the first place and I don’t see those prices getting much higher.

If we end up back at a point where a family of four has to pay £2,000 to fly to Berlin for a weekend break in rainy November then I will happily admit that we are the end of ‘cheap’ air travel. I don’t see that happening, however, and I think the economists would agree with me.
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I still don’t see how just removing the middle seat occupant is going to ensure social distancing. The aisle is pretty narrow so hardly any space between the two people sat in those aisle seats. What do they do about toilet visits? There is almost always a queue. How do they manage the airport numbers and security checks- could take hours to go through. Maybe they could ban cabin baggage completely and only items bought at the airport allowed on? All cases must be in the hold?

I think a lot of people will be prepared to pay more for a holiday if that is the only option they have, but I’m not sure who it would work on the other points.

In addition, I can’t see what is going to change re getting insurance. What if the companies won’t cover this. It’s a huge risk travelling without any insurance for this currently. It would also force people who are sick to try and get home quickly, meaning more people who are positive travelling on that plane.

Lots of questions. Not sure about the solutions.
 
Saddleworth2 said:
B

Better tell Oxford University to stop the human trials and stand down AstroZenica then mate. Silly buggers wasting all that effort.
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That is a rather silly post and the sarcasm isn't warranted.

If its a success and i sincerely hope it is as ive posted elsewhere this morning then to manufacture, distribute and vaccinate nearly 70M will take one hell of an effort and a hell of a long time so the reality for many is it is a long way off.

Thats before the entire world wants it.
 
blueinsa said:
That is a rather silly post and the sarcasm isn't warranted.

If its a success and i sincerely hope it is as ive posted elsewhere this morning then to manufacture, distribute and vaccinate nearly 70M will take one hell of an effort and a hell of a long time so the reality for many is it is a long way off.

Thats before the entire world wants it.
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I think they have started to manufacture it already on the hope the trial works so they can go straiht away as quickly as possible . If it fails they will dispose of the vaccines produced . However from what I understand they are starting production already
 
George Hannah said:
Just watched a BBC News interview with Phil from Cardiff about death of his mum in a care home. Their pandemic coverage is like a continuous Vox Pop totally bereft of editorial control or context. Obviously he was upset but much of what was said about the intermediate assessment process being changed because of the Covid crisis was highly inaccurate and some serious and totally unsubstantiated allegations were made about the integrity of those involved in testing.

Great care is needed when letting people like him give their opinions and version of events live. The process through which such individuals are selected by the BBC for interview far too often appears to encourage alarmist perspectives and soundbites.

These sort of raw ranting accusations will certainly damage the confidence of those with loved ones in care and homes and hospitals – like yesterday’s interview with a care home proprietor talking about the ‘virus spreading like a Tsunami’ - is their aim to do this?

This terrible crisis is made worse by repeatedly broadcasting such irresponsible and unsupported opinions and remarks – a clear anti-government agenda is continuously in play - the national broadcaster has become an Opinion News channel.
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What did he say? My bosses mum died from it in a care home a couple of weeks ago
 
kevin horlocks wand said:
The professor in charge of testing was saying they should have a reliable antibody test ready in late May or June which they want to roll out, I think we are creating our own. I imagine society will then split into 3 groups

group A : old and vulnerable who will have to stay in their house until a vaccine is found or they pass the antibody test

group B : who will live like we are living now. Working from home and allowed out once a day for exercise or food until they pass.

group C : who pass the antibody test who get some sort of ID confirming this and then basically live their lives like it’s a combination of the swinging 60s and 90s , shagging and raving like it’s 1999.

the people in group b will think should I take my chances......
Click to expand...
Anyone else see the massive flaw in this argument?
 
kevin horlocks wand said:
I think they have started to manufacture it already on the hope the trial works so they can go straiht away as quickly as possible . If it fails they will dispose of the vaccines produced . However from what I understand they are starting production already
Click to expand...

They are absolutely - AstraZenica gone into partnership with Oxford University.
 
blueinsa said:
That is a rather silly post and the sarcasm isn't warranted.

If its a success and i sincerely hope it is as ive posted elsewhere this morning then to manufacture, distribute and vaccinate nearly 70M will take one hell of an effort and a hell of a long time so the reality for many is it is a long way off.

Thats before the entire world wants it.
Click to expand...
Not silly mate. Your pessimistic posts are not reflective of what science is saying at the moment. Oxford are saying hopefully but not certainly Autumn. Mass produce by Spring next year. Why not reflect that rather than sometime never. As soon as one works the knowledge will be shared and the entire bio industry will start producing it worldwide. Christ things are gloomy enough without overplaying it. We all have our mental health to look after mate. And I wasn’t trying to offend you, sorry if I did.
 
kevin horlocks wand said:
I think they have started to manufacture it already on the hope the trial works so they can go straiht away as quickly as possible . If it fails they will dispose of the vaccines produced . However from what I understand they are starting production already
Click to expand...

They have. i read and said last week they are confident and they have started to manufacture 1 million doses. The point i make though is lets say 1 million doses a week are manufactured after the trial is successful. They have to be made and distributed and then given. lets say we do 1 million a week its still nearly 70 weeks to do the entire population. For the vast majority it is a long way off.
 
denislawsbackheel said:
Anyone else see the massive flaw in this argument?
Click to expand...

it’s hardly an argument ,it’s a post in jest mainly pointing out that those who pass an antibody test will no doubt enjoy themselves for a while.

but crack on with the misery . We are all going to die !!!! Die I tell you , it’s the end of the fucking world . Is that better for you?
 
Saddleworth2 said:
Not silly mate. Your pessimistic posts are not reflective of what science is saying at the moment. Oxford are saying hopefully but not certainly Autumn. Mass produce by Spring next year. Why not reflect that rather than sometime never. As soon as one works the knowledge will be shared and the entire bio industry will start producing it worldwide. Christ things are gloomy enough without overplaying it. We all have our mental health to look after mate. And I wasn’t trying to offend you, sorry if I did.
Click to expand...

Saying it might not be a success isn't being pessimistic its the truth unfortunately.

I hope it does work but as ive said, manufacturing and giving it to the entire population isnt a quick job, hence my saying for the vast many of us we are a long way off getting a vaccine personally.
 
I cant help thinking we're fucked with this, i can see us being under restrictions for at least 18 months.
 
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