JetAirways return, KLM premium economy, United MAX deliveries, Norwegian saga, Heathrow R3?

JetAirways

Indian carrier JetAirways has said its due to restart operations in the summer of 2021.

A UAE businessman and a London based investment company, Kalrok Capital, say they hope to restart operations provided the airline can get permission from the Indian Authorities.

The airline expects to operate domestic flights and international, based out of its hubs at Delhi, Mumbai and Bengaluru. It plans on making secondary airport bases for domestic travel.

There are also longer term plans for a domestic cargo service.

India doesn’t have a bankruptcy process or anything like it, and the Bank Of India ended up as the controlling shareholder of what amounts to a paperwork airline. However with the bank and the investment consortium behind it, provided the authorities agree (and the bank is state owned so has every incentive to want to get the airline going again), a functioning airline with its debts paid off by the new consortium at an agreed reduced rate, looks set to return.

Internationally the demise of JetAirways was a major bonus for AirIndia whose flights to London were almost alway sold out and in permanent high demand. JetAirways offered nearly 2 million seats a year to London alone. If it can get its slots back from the Indian Government and Heathrow, it will once again return to its most profitable route. The question is, can it compete with the new generation of Indian low cost carriers who were largely responsible for its demise in the first place, and have now also moved into the international market.

KLM to go premium economy

Finally, KLM has finally decided to join the Premium Economy club, something that’s now really only ignored by SAS and Finnair.

KLM has been under huge pressure to adopt a PE offering from AirFrance and Delta, as both of them and Virgin Atlantic (who invented it as Mid-class back in the early 1990’s) operate their own versions. Not having it on KLM has meant it was difficult to sell through travel in that class, and provided an inconsistent approach in the airline partnership they have, never mind as party of the wider Skyteam alliance.

Lufthansa more recently adopted the class after considerable resistance, and it proved highly successful. KLM’s objection was that it offered a competitive business class pricing (much as Finnair does) that was so close to Premium Economy they didn’t want business class passengers going down a notch, and deter economy passengers from the extra legroom seats by attracting them upward.

However Both Delta and Virgin Atlantic had proven that Economy, Economy Plus, Premium, and Business can all survive if properly priced and correctly marketed.

One of the most encouraging aspects of this is that airlines are making plans for the recovery now, and it starting to look like things will slowly improve during 2021. The first aircraft fitted will be the 16 777-300ER’s in late 2021 and then the 787-9 & -10’s, starting in early 2022.

United Max 9

United Airlines has started to take delivery of new-build and refinished 737 Max aircraft. Boeing 737-9 N1800B which became N27519 (msn 43459) (above) was handed over by Boeing on December 8 and the airliner repositioned from Boeing Field (BFI) to Seattle-Tacoma International Airport (SEA) as flight UA 2703 on the same day.

Norwegian gets a lifeline form Norway’s courts

The agonising case of Norwegians rolling fiscal woes were played out in Norways bankruptcy protection court this week, which, unsurprisingly, bearing in mind how much various Norwegian state, banking and investment funds had put into the essentially bankrupt airline, gave them another chance.

Now this is NOT the same as the Irish bankruptcy case, which deals only with some of the Norwegian Groups sprawling fiscal dustbin of mismanagement. This is essentially about the original Norwegian, that still operates domestic flights in a limited capacity but is legally a Norwegian company, the rest are EU based companies.

Norwegian used a set of ‘flags of convenience’ to hire staff to get around pay and labour laws that made it too expensive to operate to the US under Norwegian rules (Norway is not in the EU). The UK and Irish companies were legal means of keeping within rules and paying staff less to do the job. This was much of the basis of the US airlines argument when they tried to stop the USDoT and FAA from letting them fly there under the Open Skies agreements.

What’s left of Norwegian in Norway is a low key domestic service, though it could return to service if it can prove it can restructure and refinance under court protection. Norway doesn’t want to see 6,500 job losses – especially when the countries entire population is only 5.42 million (by comparison the State of New Jersey is 8.8m).

Norwegian has plans to return to short-haul flying from Norway but is said to have no interest in resuming long haul. So that means they’ll be flying it before the end of next year, because when have they ever done what they say they will?

The whole saga with Norwegian is these shell companies and barmy structures that have no integrity or unified strength, creating a fiscal mess and a management nightmare.

Heathrow’s Runway 3 in ever growing doubt

Heathrow Airport is being challenged constantly, but voices are rising about the real need for a third runway in a post-covid world. London has gone from being the most connected city in the world to the eighth in a year, with dozens of airlines not planning a return any time soon. The problem is lack of likely profitability on the routes in the foreseeable future.

And that is the problem. London is uniquely attractive in ways other places are not for hundreds of complex reasons, and that’s why it was always the worlds most connected city. There is o reason to think that post-covid, it won’t return to being so within a couple of years.

If that’s so then the runway will be a lifeline, as the airport was literally bursting at the seams in 2019. To stop it now would be a major long term fail, as the likelihood is it will now last far longer and aid in London’s recovery, and that of the UK. On top of that it will bring plenty of low cost competition to airlines excluded until now. Its also the only way that IAG will have its death grip over the airport loosened and allow real competition in.