If you haven’t noticed, aviation is in dire straights. The northern summer was supposed to see around 30% more in terms of flights and passengers. Rolling quarantines switched on and off with barely 60 hours notice, spikes in the virus, customer reticence and massive airline fleets nobody can use, are draining the cash from every airline on the planet.
This time around, the bigger you are the harder it seems to be to stay aloft.
Singapore Airlines admitted yesterday its already eaten its way through US$3.2 billion of the $6.4 billion it raised to tide it over. It said it wasn’t overly concerned, but believe me, they’re seriously bothered. They know that unless they do something and do something really soon, like slashing the fleet and upcoming orders, they might not get through this.
Qantas had a sharp setback less than two weeks ago when its expected $700m right issue barely managed 10% of its target. That was a message airlines execs around the world all heard and slumped back in their chairs with an “oh crap”, ringing in their ears. That told everyone willing to hear it that investing in airlines right now isn’t something sensible money wants to do.
Every vaccine free day that goes by is one more nail in the coffins of airlines already on life support. If this goes on through the winter into the next Northern Summer season at the end of March 2021, some airlines are going under. And they know it.
Today marks another important day for a small but disproportionately impactful airline. Virgin Atlantic will receive legal approval for its bailout worth a relatively paltry in airline times, $1.5 billion.
And what have they done to encourage people back on their aircraft and to get flying again? All the usual things like big bonus miles – but everyone is doing that. Prices are rock bottom – again, the same applies to almost all airlines. But yesterday they truly innovated, being the first airline in the world to offer Covid-19 Travel Insurance FREE OF CHARGE, on top of your normal travel insurance.
It wasn’t some low gesture either, its a seriously meaty policy, worth up to £500,000, covering quarantine accommodation costs, travel expenses, re-bookings, the works. Its a serious effort to tell everyone thinking of flying that Virgin Atlantic has your back – in the unlikely event of you getting caught up in or infected with Covid-19, you’ll have the no-quibble insurance to support you. Expect others to copy this sharp innovation.
The fact is that other airline are only doing what they have to – real innovation right now, well its just not happening. If they think free re-bookings and flexible ticketing is innovation, it’s what we should really be expecting all of the time, not just when it suits airlines to do it.
Marketing wise, some innovation is happening, but its limited to what for airlines is near desperation. Cargolux as one of the big air freight carriers, innovated with their brilliant 747 Mask livery – but is all imagery and not substantive.
Future aviation needs are going to very different – and once airlines get up and running again, those that survive that is – which will unquestionably be in a smaller less environmentally impactful way, its the ones who innovate that will win.
New aircraft types are already on the cards. Hybrid Air Vehicles already has orders for 26 of its new airships, investors right now are funnelling millions to its latest investment round, (me included), and while using lower impact diesel engines initially – 95% reductions in emissions over a typical intercity journey for example – later in the decade they can be swapped for efficient electrical motors. 90-200 passengers can be accommodated and pricing is around 66% of an airline ticket.
Overall journey times are slower, but on many intercity link pairs like London-Amsterdam, they could take off from London Docklands – they can land on water – and arrive in Central Amsterdam in around three-four hours. Eurostar is no quicker. The options for global cargo are vast.
Hydrogen engines are due in the mid 2030’s on jet aircraft generally, and they will offer zero emissions too. It will take investment, but the bar is being lifted and investors are chomping at the bit to get involved.
Another thing airlines must look towards is the Qantas dream of Project Sunrise.
Ultra Long Haul travel is going to become a thing. There are places and routes planet-wide that will make it viable. Europe to Australasia, India to the the Americas, South America to North East Asia or the Middle East, Southern Africa to the Western North Americas and Far East. These are all places mostly out of reach with long connecting flights, and new markets and opportunities are what airlines will be looking for.
The vital importance of tourism is now appreciated by everyone everywhere. Most people don’t consider themselves tourists, even when they are actively engaged in just that. But we have all learnt how much we miss travel, new things, rest and relaxation, not just us going to wherever, but the number of people, even from our states and countries, who visit our own home towns and cities.
Travel by air is essential, but we will have to face that it has been changed forever, and the way forward is not what we once thought. And that’s a good thing. It often takes a crisis to force innovation past barriers it might not always overcome.
Aviation is no longer just about commercial aircraft as we know them. We’re about to enter a really different age. In the year 2000 the long haul twin engine was just arriving on the scene. Twenty years later you can hardly find a four engine jet anywhere, their numbers are now less than 3% of the worlds total aircraft, down from 33% and still falling. The last commercial 4 engine jet will be the 748F for UPS. If you include Air Force One, they will be the last ones to ever enter service.
Electric engines are coming, on short haul certainly, but hydrogen fuel is too, and that will be a milestone. Airships are coming back, this time with modern technology transforming their capabilities. Supersonic is making a return, but very different from the age of Concorde. In 20 years Air Travel will be as different as to us as it was 60 years ago.
Welcome to a world of change!