Airlines in a Crisis

So far the new Boeing CEO is not standing out as a problem solver. His first couple of months has more been a deepening of the Boeing rut. Maybe his immediate and well announced (partial) relocation to Seattle was not such a smart move after all. It certainly have given the machinists the guts to demand back stuff they gave up 10 years ago because Boeing then threatened to move more production away from the area. He needs to be careful with letting his division leutenants run the show by playing hardball with the unions at a time when Boeing needs to ramp up production, not let it grind to a halt altogether. They may have more experience from within Boeing and been seen by the previous CEO as leading lights but it is time for a new regime. The previous one created and proeeded with more trouble than it was worth for both customers and the company itself. Boeing might be too critical to the for all practical purposes duopoly in passenger plane making in the western world, but that deepl...

Norse have again announced that they need another capital injection. This time it might be different because last time they needed money the ceo and large owner Larsen said that it was the last time he injected more from own funds. Thi reminds me of the endgame ein Flyr where major investor Braathen said something similar in the autumn. When they agin needed money the following Januar nobody came forward and that was the end for an airline that could have been saved after the October refill with some major mangement changes that could have implemented even stricter cost savings, found income immediately and not paid out cash  immediately for possible charter incomes in the future. If Norse turns to more subleasing out of planes or charters they need to ensure that there will be upfront payments because it will mean upfront costs. Difficuolt concept for underfinanced charterers but rquired for an airline on the brink. Norse management also need to be based closer to where the action...

Sometimes outsourced computer infrastructure fails but then at lest the companies can blame 3'rd parties and say they can do nothing about it. /As if that is a positive. The truth is that it is still their responsibility and top bosses shouldn't accept such feeble excuses from their management team. The different departments made thier choice and when it fails, even if its a third party fail, they need to still own it. when you outource the running and key parts of your infrastructure to sample Microsoft Azure it will still be you customers problem when it fails, and therefore yours.  Large serverfarms are often remote from key personell. And the more of it there is the less personell there are per server. Do you trust them to test upgrades thoroughly before mass rollout. Do you thrust them to only mass rollout to a part of the network so that those can be isolated and other parts still function if mistakes are done. Did you check that this is the case, always. Are you sure you...

Helpfull for airline pricing teams, actually just one person needed now, FareAutoCalc is an Android app that helps you set prices to rech profit on all your routes.  In its simplest form you enter the costs per flight, number of seats, how many fare classes (different price levels) you would like and at what load in percent you want to break even. Then it calculates the prices for each fareclass and the number of seats in same. You can manually enter the price rise scale for how much in percent you want the fare to rise between each fare clas. Or the app can do this for you using an even step in percent scale. It also has a Cost Detail page where you can enter detailed costs. This allows you to enter a number of set costs that could be the same for all flights, and some variable costs that varies by example flight distance. In principle its for a low cost carrier that don't have different seat classses and only differs in fare classes with different price levels where the price go...

The preliminary accident investigation report has come up with a picture taken after closing the plug door that afterwards departed from a Alaska 737 MAx 9 in the air. It shows it being held down by a a cable tie. THere is speculation that this would be enough to stop the door from sliding up and being able to eject for a number of flights sine there woud be litle presure on it as oon as the plane takes off and outside air pressure locks it onto its stopping pads. It could also be that the cable tie held the bag of roller stopper bolts that was to be installed by a later shift but that the last part never happened. There is a case for ripping out the floor of that particular Alaska 737 Max9 and see if anything that the investigation has so far not found have slipped down along the wall and is now laying in a hidden area that can't be checked otherwise.  Another worrying picture is of a stopper bolt installed but with 2 washers. This is proably so the castelated nut can lign up with...

 Another retired armed forces top brass have been added to Boeing mgmt. This time a retired admiral. Yes I'm sure his nuclear bacground have made him very pedantic but do Boeing really need nuclear pedantry for its civilian airdraft production. Sounds expensive, not very productive and not something that would have a lasting effect. And not is there any actual nuclear apect to their civilian aircraft production program either. Another thing is that to reach the grade of admiral he has had to always toe the "company" line. That is not something you as a user of its products want in Boeings executive suite at this point in time. You would want somebody to shake things up a bit. Somebody with some diverging opinions and not just another yes man. Sounds like a press release friendly apointee thought out by finance people and lawyers and not what a engineering based top management would have been looking for. What Boeing need is somebody with a multilevel experience. and not o...

When its a set screw A set screw is fully threaded while a bolt is only partially threaded. (And yes a set screw has a head. If no head its called a grub screw.) This means a bolt fits better and thighter in its holes than a set screw does. A set screw only have the sideways or bending strength of a bolt 1 size down.  A bolt can only be thigthened to a certain point because it runs out of threads. Who knows if Spirit used set screws securing the plugs on a couple of planes because they ran out of the correctly sized bolts and expected Boeing to redo them anyway. Impossible to see/inspect unless you draw/remove the item in question. Or the head is stamped with a part number and you can see the head. Should Boeing have overengineered it so that a bolt also was covered by a sleeve that double secured the bolt wasn't overtightened and drew the frames closer, weakening them in the progress. A sleeve would also protect the bolt from the roller pins it was supposed to keep in place consta...

 What on the overwing exits stop them physically from being opened by a passenger with poor survival instincts during flight and did Boeing design engineers remove this safety mechanism from instructions for when installing a plug instead of a door. What other safety features did they omit on the grounds of cost saving in the design for using a door plug instead of a real emergency exit.  Normal cabin doors can't be opened during flight by design since they swing forward into the wind. There are few comments around on how this door (when installed) pivots. Is it up like the overwing exits or is it down since with such a small door there are probably no self inflating slide like the normal cabin doors. Or is it left or right. On the 737-200 the emergency exit overwing door came out loose and into the cabin. On the 737-NG-800 they swing up and out of the way. I doubt it just is pushed out and fall down because that could damage it during testing / maintenance. Would the overwing...

Further investigation points to that Spirit the maker of the 737 airframes do ship it with this blank in place but only temporarily fastened. Boeing then take the blank out to load the interior and then reinstall it.  The blank is like a door with a larger window and no manual opening mechnism and is being held in place by a frame rail with lugs but instead of movable pins and a handle like a normal door it is held in place with bolts and castelated nuts that should have split pins in them. As long as they are in place the doorblank can not be moved upwards (some say downwards and some later pictures of a locking bolt seems to support this) to a position where it can be opened / taken out. Again, regular inspection of these bolts have been made inpossible by having a complete panel on the inside. Questions remains over if split pins where installed. Bolted on parts can have the nuts unwinding themselves due to vibration. And the exact torque required to prevent this can be difficul...

On Max 9 an extra emergency exit door is replaced with a blank if you don't want it instead of not cutting the hole for it in the first place. And it was mechanically fastened instead of welded in place. And since the inner panel is just a normal panel making it impossible to do frequent checks on the blank, of course it eventually fell out taking the inner panel with it. And in this case after only 147 flights. That is less than 1 year in use.  On the other hand larger (in the hundreds) and original Max orders like the one from Ryanair get its own no mentioning of Max version number (737-8200) and  just uses a easily inspected normal door as it was originally designed for. This hole covered by a blank must be a financial quick fix to avoid producing 2 different versions of the airframe (with or without a door hole) and not something engineers recommended. And with it came a number of uncertainties, lets call them risks, that for the economists was a case of numbercrunchi...

SAS went out to 200 potential investors and all but a small handfull turned them down. They where eventually grouped into 2 constellations and the one chosen consisted of one airline with no money and pretty much no profit plus a couple of financiers offering loans on bad terms.  One day it could come out that the only ones ponying up actual cash for refinancing SAS is the danish state, that was investing no matter who else was in the buying group. That percentage of the upfront cash should leave the danes feeling very shortchanged when it comes to what they get in percentage of ownership. The problems with the consortium chosen came to the surface pretty much on day 1 when they wanted 3 million to flow the wrong way for SAS.  Anybody that asks for 3 million to consider coffing up 5 billion is as unserious as it gets. The actual buying airline Air France KLM comes up with no cash and the rest of the winning bidders group are just loan givers on generous terms for themselves. O...

In Norway we have several examples on this. Norwegian was/is hq'd at Fornebyu that haven't been an airport for over 20 years. Flyr was hq'd in the overexpensive Oslo city center. And Norse hq'd in Arendal, a town without an airport and even further from Oslo airport than Oslo itself. The train connections from hq to airport might be frequent and only take halve to an hour but its not the same as a 10 minute walk to oversee where your real operations happens. The place where your customers experience your service and most of your critical costs are spent. But also the costs most easily squeezable. Closenes let you reduce the costs before they occur rather than just financially overseeing the bills in accounts after they have happened. That makes a difference when it comes to reducing costs through strict control.  And low costs are the most important for being able to underprise your competitors. Something all the beforementioned airlines tried and tries because they see...

SAS has again proven that they despite all their renegotiated deals with staff and suppliers can't make money with the current debth mountain. Which they probably ain't paying on anyway these days. Question is how then will that change when/if they come out of chapter 11. Another negative month was announced by SAS. Quarter of a billion swedish krona they losst in September after -638 million in August. That is better on approx the same income but still a way to go. And another reduction in liquid cash. Wonder if the winning bidder let SAS management ringfence some of that for ch11 exit bonuses.  From this month income will reduce even more into the winter season. Question is will the outgoings reduce accordingly. Doubtfull since almost all airlines loose money in the winter season, meaning their outgoings don't reduce as much as the downfall in their income. That SAS should do better is beyond even the fantasies of the largest optimists.  What SAS need is some more concent...

Now instead of receiving money from the winning bidders SAS want to pay them 3 million dollars with no guarantee of the money in the winning bid ever materialising.  Isn't this the way all scams starts. You are promised a high sum but there is some administrative costs that have to be paid up front and for some reason they who sit on the millions, or in this case billions, they have promised you can't afford to pay this so you have to. There is certainly a lot of money flowing from SAS to new prioritised creditors like lawyers and consultants these days. What do other creditors feel about that. Hopefully the ch11 judge will stop this particular scam on behest from Apollo who have provided the financing for getting SAS through the process but did not get their bid for the company approved as the winner by the SAS management. The winning bidders have neither signed a binding agreement nor provided a chapter 11 plan. There seeems to be so many exceptions and other limitations from...

He didn't after all manage to save SAS as SAS. Instead he sold out to Air France KLM, possibly in hope of a top position in his home country Holland.  I suggested already before he was hired that SAS needed a Scandinavian to be saved because only a local would understand SAS within the Scandinavian market and just as importantly be comitted to save it as SAS and not just a disappearing part of a bigger concern. But few in Sweden and nobody in Norway saw the value of a dedicated airline competitor in the Scandinavian market. Norway have now this year alone lost 3 of its 4 independent airlines. And the ticket prices have skyrocketed accordingly. A few low cost airlines in and south of Oslo is not going to solve that problem. And with a slow moving and bureaucratic Avinor tht think the solution for lost income is piling even more taxes onto prices, has obviously never learned the business basics about how increasing prices reduces demand and therebye income at a certain stage of the c...

The national head offices structure of SAS has overstayed its usefullnes. SAS norwegian national hq came short again in implementing its rules and stopping another negative article about it's service.being pitifull. Followed by a rash of excuses from after the fact on how this was not how managment had thought it should work or that the meomos to that effet had not been followed. Pathetic. No wonder since the management is housed near an airport that was closed more than 20 years ago. SAS management in Norway is simply placed to far from where its planes are and where its passengers are having daily problems. The managements instructions is either not reaching its staff or they feel free to ignore them since there is not high enough brass visible often enough and/or at the right times. This time it was a family that was unseremoniously and without explanation denied boarding due to overbooking on a plane they saw their luggage being loaded on to. And then underage children where sc...

Latest they accounted as income nearly 500 million nkr worth of unused and expired bonus points they had booked as expenses when customers earned them before the pandemic and before old Norwegian went bust. This comes in addition to the couple of billion nkr of future discounts Boeing gave them as repatriation for earlier problems old Norwegian had with the Boeing planes. New Norwegian also booked this in as income for 2022. In quarter 4 with twice as much income as the year before they managed to only loose about the same as the year before. Is that good, bad, nah or neither. It does point to that they still have problem with growing in a profitable way. Then we come to the the 7,8 billion nkr they say they have in cash. How much of this is unearned payments from future customers. The current CEO Karlsen used to count that as cash when he was just chief of finance in old Norwegian. That went bad in 2020 when they couldn't fly those customers, they all wanted refunds and no new mon...

Of course not. Flyr could have been saved at many stages trough its short life. By getting in top management that new what to concentrate on and what was not important during startup. And who had experience in which functions are needed and how many are needed in each function at each stage of fleet expansion. The main blame lies with the Chairman who got in the wrong people to lead the company. People without any experience from the startup and/or growth of a profitable airline. Even though they are few and far between in Norway. First a spender that let themselves be blended by the role, went for to many fripperies and lured into to rapid sudden expansion and associated expences when there where at that stage not enough passengers to pay for it.  Then replacing that ceo with a person that had been there and had influence on the process the whole time and think that would make a difference. A person that stuck to the plan that hadn't worked so far, just with a few added token savi...

SAS new route announcements seems to be more of the same. More flights from airports in Sweden to the US. More airports around New York. They have added flights from Gothenburg and Jylland which is ok I guess since the hop via Arlanda or Copenhagen is a bit of an iritation. Specially with the troubles due to staffing Arlanda had last summer. They have added JFK in addition to Newark for New York. Big wup regarding destination. And more costs for SAS to a more expensive airport. Unless they would want to become just a longhaul and swedish connections airline they should rather go for more direct connecting within Europe. SAS closed a lot of them during the pandemic and they don't seem to be coming back. There are now no diret SAS Oslo to Dublin flights. That is no direct connection between a Scandinavian capital city and another capital city in Europe.  And there is still no direct flight whatsoever between Dublin and Trondheim. Connecting via Copenhagen or Arlanda will cost you a w...

Norwegian is stacking up with even more planes for the summer months taking on Flyr's 6 737-ExMax that will probably be parked again for next winter.  Last September Norwegian flew 1.9 million passengers with their planes. In January they flew 1.1 million with the same fleet and with a fill of nearly the ssame as in September. That means they winter parked about 40% of their fleet and/or possibly some of the left over capacity was used for flying longer routes. And now they are taking on even more planes that most likely also will be parked when winter again arrives. The litle drip Norwegian get of passengers from the demise of Flyr will be almost unnoticable. Not either helped by that 3/4 of the Flyr fleet was parked anyway. 186 seat planes are to large for high frequency trafic in and around Norway for 80% of the year. And if you have less than 100 planes you should not park more than max 10% of them during low-season.. Lets hope that Norwegian drop some of their older 737-800 wh...