Has there been a better time to start an airline?

In one foul swoop, in March-April 2020, every major airline was knocked of its pedestal. Never in the field of aviation history has so much been reduced to so few.

The giants of the last twenty years, from IAG to Delta, to AirFrance and United, American and Emirates, Qatar and Lufthansa. The wannabes of Etihad, Norwegian, Virgin, you name it, they’ve all been kicked back down the road and many of them haven’t got a shred of an idea how its all going to pan out in the next three months, never mind the next three years. There have never been so many variables.

This isn’t like the last great recession of 2008-10. Back then the problem was entirely financial. A gargantuan debt balloon, based on dubious ‘facts’ and devious risks, hyper-risky mortgages, complicated financial instruments that nobody really understood, piled billions upon billions into a black hole that simply vanished. The money that had been lent either couldn’t be paid back or had been wasted away in risky bonds or over priced stocks that lost their value. Put simply, the money vanished. Nobody had any, not the banks, not the businesses, not the hedge funds and none of the investors. What they had was gone.

Because of that nobody had any money to rebuild business, to prop it up, fund it, there was no credit, nothing to seed the future growth of the economy. Until the governments almost literally printed money and gave it to the banks to restart the lending process. The banks then gave that to big business who used it not to invest, but buy back their shares to pay their investors and inflate their value. That’s why the recession went on so long. Only places like Germany, China, Australia, managed to use the money well, for sustained investment.

Meanwhile hiding behind bankruptcy laws and downsizing, airlines dug there way out, largely by shafting anyone who supplied them or worked for them.

It was to the benefit of the Low Cost Carrier, and the Ultra Low Cost Carrier really came into its own.

Once the monetary tap re-opened, with interest rates at rock bottom – a situation that hasn’t changed in ten years, airlines like Norwegian tapped into the market for reasonably priced travel and could borrow pretty much what they wanted whenever they wanted it. Airlines never had it so good. They really, really haven’t had it so good. Just look at the profits being made by the US airlines, the vast growth of Emirates, Qatar, the Chinese groups like Hainan and China Southern.

Yet even when they did have it so good, others were still screwing things up. AirFrance was a virtual basket case. Nobody wanted Alitalia at all, because it came with too much baggage. Now its about to be relaunched with the same old problems remaining unaddressed, for what, the fifth time?

Lufthansa Group has had to take a hard look in the mirror at its debt gearing – because thats what brought it down, whereas airlines like BA owned by IAG which owed relatively little have decided to take on their staff in a final showdown over contracts, pay and standards.

Norwegian, which spent its way into the limelight like a drunken cabin crew on layover with a no-limit company credit card, has basically switched itself off and gone into hibernation for as long as 18 months. Its a quite bizarre thing to do but it makes so much sense now, I doubt it will have been the right strategy in two years time.

These airlines have been able to do this for one reason, this time there IS plenty of money. This recession and downturn is like an artificially induced coma, designed to knock out the patient while he recovers from an existential emergency. The patient wakes up, and while he might have to take it easy for a while, he really just wants to get on with his life. And the money in the bank is still there. And governments have pushed vast, truly vast amounts of it into the system, so it can be spent and used when the patient goes back to his daily routine.

And if ever there was a time for a new airline that could start right now from scratch, with a new way of doing things , in a way thats totally in line with how peoples feelings and views have changed from the traumatic experience they’ve been through, this is it.

There is a wedge of money, and we know it’s true. Private investors, pensions and hedge funds are tripping over themselves to spend these trillions, borrowing almost free cash to buy into viable businesses, propping up stock values and share holdings. Why? because they know this whole thing is only temporary.

This is a time for existing or a new airline to seize the day and take the future by storm. And some are already champing at the bit to do just that.

Two that come to mind are AirBaltic and Wizz – they have modern aircraft, smart business leaders, loyal staff and motivation to do what needs to be done. They’re the first in the air, the first to do what others seem reluctant to do.

In Taiwan, Starlux has a chance to take its aborted start and streak ahead of slower neighbours, Zipair in Japan is ready and waiting to seize the initiative, while the legacy carriers amble along.

KLM has almost never stopped flying, its kept its city links going almost regardless. Some days its been the only civil airliner going in and out of BHX, and it’ll be one of the first out of the gate.

There has never been more cash available for financing the right business, and fuel prices haven’t been this low in decades. The labour market is full of cabin crew and wannabes. The aviation business can only grow again, and it’s an ideal world for a startup to grow with it.

This is a time to re-shape airlines, airports and the aviation business in away that’s never before been possible. All it takes is an idea, cash and some willing backers. But please, let it be viable, sensible, greener, fairer, and ethical, and well lead.