How long, how deep?

And while not as bad, passenger traffic has been falling faster than GDP promoting Boeing and Airbus to cut production of a variety of models such as the A380, A320 and 777, while airlines ground aircraft at an unprecedented rate with predications that 3000 could be parked by December.

The big question is how deep and how long will the recession be and what shape airlines will be in 12 months time and will they learn anything?

Certainly we have seen hits to the industry in recent times such as Asian Currency Crisis, 9/11 and SARS but none have been as savage and sustained on a global basis.

As Australian Aviation was closing for press in early May there was just a hint that the fall was slowing and in a few instances there were indications of maybe a leveling off and slight upswing.

Regionally industry heavyweights such as Qantas, Singapore Airlines and Cathay Pacific have been badly shaken. The last 12 months as been the worst period in living memory – firstly because of the absurd oil price spike followed by the sickening economic collapse.

For Qantas the toll has been high; over 3000 staff shed including 590 management, effective grounding of 20 aircraft and the deferment of 16, including four A380s.

The numbers have well documented but headline number is sickening – an operating profit slump from $1.4 billion in the 2008 financial year to just $100 million in 2009.

At Singapore Airlines, the numbers are similar with 17 aircraft grounded in January and staff let go, while most have been asked to take unpaid leave as the airline reported a record decline in passengers for February, of 20.2 percent year-on -year plunge to 1.2 million.

The world’s most profitable airline – by profit margin – Cathay Pacific suffered its worst loss ($US1.1 billion) ever in 2008 – and only the second in its history – as fuel and currency hedges went south, along with traffic and yields.

CEO Tony Tyler told media in May that the industry confronted a “toxic combination” of challenges and would meet these with an 8 percent cut in capacity and unpaid leave for staff.

Tyler said that the airline expected an “extremely challenging year in 2009 and a toxic combination of low fares, a big drop in premium travel, weak cargo loads, poor yields and a negative currency impact is making it more important than ever to preserve cash.”

But upbeat is Air New Zealand CEO Rob Fyfe who reasons thus: “In a cross-country race, the best time to pass the guy ahead is on the hill. And we are fighting fit and in great shape and we should look at this time to pass our competitors.”

The reinvention of Air New Zealand after the Ansett debacle and its own ownership travails of late 2001 has left the airline in great shape, while enlightened management continues to lead by example.

Industry leading product innovation continues apace with the airline now working on new designs for business and economy class seats.
Fyfe told Australian Aviation that the airline is “not seeing anything in business and economy that materially moves the industry forward. We see that we can make the biggest step change in economy.”

“In a cross-country race, the best time to pass the guy ahead is on the hill.”

The new seats – to be revealed later this year – will be installed in both 787s and 777-300ERs that will be delivered from 2010 and will be refitted to the balance of the fleet.

It is said that “there is no education like adversity” but what will airlines learn, and more to the point take, from the greatest recession since 1929

Qantas CEO Alan Joyce has already conceded that the airline’s focus on business class is too great, while last year former CEO Geoff Dixon admitted that the airline should have installed premium economy many years ago.

Dixon also conceded last year that he would have loved to have the “777-300ER right now.”

Perhaps the best lesson for Qantas and others is one preached by Charles Darwin who wrote: “It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change.”

And change is finally sweeping through Qantas with Joyce in the right hand seat.

Charles Darwin would be impressed.