Airlines get inventive to stay airborne

You know and I know airlines are having the worst time in their history. Nothing has even come close to what Covid has done to airlines around the world. In order to keep themselves with some sort of income they’ll pretty much try anything, and that’s exactly what many are doing.

Qantas may begin offering parts of 744’s as furniture – they won’t be the first

The big money raise traditions go on

The more conservative approaches about raising money are fairly traditional, everything from the sale of owned aircraft outright, or to a leasing company who will pay them cash and let them rent the aircraft back in a good old sale-and-leaseback scheme. However airlines are finding that harder to do. Lease companies only want the best aircraft, the youngest aircraft and desperate airlines will take below market price if it means cash in the bank. And used aircraft prices right now are dire, because there’s such a glut.

Some, as Ryan Air have just done (successfully) and Qantas failed miserably at, have sold more shares. Ryan Air Group aimed for and sold US$400m, Qantas aimed for a similar USD amount and managed to raise just $50m.

Others have gone down the investment capital route, such as Virgin Australia and indeed Virgin Atlantic, quite separately.

G-VBIG being broken up in May 2020 – scrap is low value but its still cash for desperate airlines

Scrap

The outright scrapping of aircraft now seen as beyond use – BA’s 744’s, AA’s 767, 757, Delta and BA’s 777-200’s, A380’s, A340’s and so on, also means cash in the bank, though it has to be said that’s fairly minimal. Its made worse by so many turning up at the scrapper at once, flooding the market with scrap metals and parts for aircraft nobody is much flying.

Cargo

The biggest current contributor to airline well being is cargo. The need to strap it into every seat as the world wide emergency recently required for PPE has rather gone, but the bulk of long haul travel – easily 95% of it is at present, actually passenger airlines carrying cargo. Some 55% of the worlds cargo was already belly freight and it continues to be so. Rates and demand are high enough that if you can actually get a handful of passengers on board, they’re more the icing on the cake.

Route Innovation

Airlines are taking advantage of the weakness of others. Virgin Atlantic last week opened bookings for flights to Pakistan – with its US operation barred by Trumps March decree stopping all but a small number of passengers from Europe flying to the US, US passengers face 14 days in quarantine on arrival in the UK or Europe, that route is dead, possibly until next spring and a new administration.

PIA’s pilot disaster – the fact that many may not actually have been qualified as pilots, it’s been banned almost globally, meant new markets to exploit. Airlines are doing whatever it takes. And there are dozens of examples of new and novel routes from airlines around the world, though many are months from being actually flown.

Qantas night wear

Not quite an eBay fire sale…

Qantas has also sold off a stockpile of 10,000 pairs of pyjamas – they went in hours apparently. They also started selling off their amenity packs for US$25. They contained tea bags, a chocolate, toothpaste, pen and a toothbrush, eye mask and socks.

Qantas is also looking at selling parts of their 747’s as furniture and memorabilia. That’s actually not so unusual, Lufthansa began doing that several years ago and is doing it now.

Canada’s Air North is selling in-flight meals at home. Cheesecake selections for CA$13 and a beef pot pie for CA$9, all delivered to your home needing refrigeration or microwaving.

Thai Airways has opened a full Bangkok restaurant fitted out with airline seats and offering aircraft catering at its HQ building.

A Qantas care pack

Air New Zealand is scaling back its office space and renting out parts of its buildings.

Air Asia Group has started an Amazon style fresh fruit and vegetables delivery service, using its new Ourfarm e-commerce platform. By using its cargo and supply logistics services it hopes to use the airline’s cargo capacity to get farm-fresh produce to Malaysian homes.

In China, China Eastern has begun offering unlimited weekend flights for a year for the upfront cost of US$487! Its been so effective that over 15,000 passes were sold in the first weekend.

We’re on a flight to nowhere…

Flights to well, nowhere actually, have been adopted by ANA. They picked 300 passengers from a paid for lottery and flew them on an Hawaiian Experience. Crew wore Hawaiian shirts and served exotic cocktails on 90 minute flight to and from Tokyo.

There is more novelty. Qantas has started sight-seeing flights with one of its 787-9’s flying over Antartica. Its a 12-14 hour flight with a business seat costing USD$5,850 for the journey. Desperate Aussies wanting to fly have been flocking to the flights by all accounts.

New startup Starlux Airlines introduced a “pretending to go abroad” flight piloted by its chairman on August 7th, and 188 tickets for the trip along Taiwan’s east coast were snapped up in 30 seconds, according to Focus Taiwan.

CEO as pilot no the right…

Starlux did another flight for employees and paying customers on August 16, also flown by its chairman. Tickets cost $4,221 New Taiwan dollars (US$144) each.

EVA Airways Corp. filled all 309 seats on a special Father’s Day flight on August 8.

So that’s just an example of some of the things airlines are doing – anything for cash, brand awareness and to make sure we, the travelling public know they’re still alive, if not kicking. Some smack of desperation, others have real innovation and potential behind them. The question remains though, how long will some of them be able to keep going? This pandemic is nowhere near being over yet.