Airlines in a Crisis

SAS should as soon as Omicron rumours started to spread been back to seeing how Cargo could save the winter.  But as usual it is all about passengers in their presentations. In the last reported quarter their cargo income rose more than their charter income went down. That is significant. But since they are not highlighting it in their presentations one would assume its not either on top of the mind of their top brass.  Cargo operations is where SAS has a competitive advantage over their Scandinavian, mainly Norwegian, competitors like Norwegian and Flyr. Either of those have any.  Question is did SAS hire a CEO with the right background to get them through a pandemic that could be severe for as long as the post war econmics. Specially combined with litle abaiting environmental pressure, where any suggestion of governmental supports for the sector immediately meat strong opposition from parties that call themselves green. Or did they go for the avaiable CEO that was most ...

All airlines should should take charge of their own destiny now and do their utmost to maximise income now instead of hibernating the pandemic and hope for better times. Arilines have massive set costs in the form of either massive leases or fleets of owned assets that rots fast without regular maintence and use. Always remember airline seats spoils as fast as soft fruit. Todays potential income can't be earned in tomorrow instead. And if you can't fly people there is plenty of other stuff that needs transporting.  A christmas present sent from Irleand to Norway in mid November arrived yesterday the 24'th of February. That is over 3 months in the post. Another one sent the same day from Ireland to Greece came back today after the airline contunously refusing to freight it. That is a complete let down by most airlines of their previous commitments to bring post around contributing to a worldwide organized and fast postal service. Every time I bing Cargo up in diverse forums ...

Virgin Atlantic got going with it already in March 2020 managing 4000 cargo only flights in the year.. And with the panemic continuing into 2021 they are regularising the service offering 33 flights per week. Why haven't Norwegian managed do even 1, instead parking the whole fleet of 787 's resulting in its complete demise. Did they fall foul of internal resources with an all is difficult attitude. That didn't see how the new cargo market differentiated from that of previous.  Why haven't SAS managed to take advantage of the booming cargo only flight market due to the lack of passenger flights to send cargo with. They do have a sizeable cargo division with a precense in many locations and all the wide body containerised capcity that was needed. Even planes that was being retired/scrapped where seats could have been stripped for extra capacity and nobody would care about some extra cosmetic damage. All they lacked was vision, fantasy and a can-do mentality. Both airlines...

Scandinavian Airline Systems have 3 types of long haul aircraft, 2 types of regional and no less than 6 types of short haul medium size aircraf in their fleets. I know SAS has historically been able to sell used aircraft for more than they bought them due to being early on new types and moving on quickly, but that is many years ago now. Low cost competitors have gone for single type and big orders. Ryanair 's fleet of 340 aircraft are all Boeing 737-800's. Even though SAS is a full service (somewhat) network airline of the hub and spoke model a certain reduction in fleet disparity can only be good. Who these days adjust the aircraft used exactly to load instead of adjusting price to fill the seats available.   Let's take long haul first. A330, A340 and A350. Simple choice. Everybody is getting writh of the 4 engine A340. And SAS have now got the last out of operation. If the market is light and SAS could ramp up cargo maybe a couple of cargo conversions could have been in o...

The numbers SAS released in December 2020 reveal only 3/5 cargo income in 2020 compared to 2019. That is 700 million lost and probably a lot more since the potential has shot up.  This is leading one to believe SAS could have done a lot more and that the company haven't taken advantage of what ever they could make money on in the pandemic market. Using the assets they are locked into and are paying for. And this failure of flexibility is ultimately the fault of the CEO Gustafson.  Lack of aggressive local suppliers could be the reason Middle Eastern carriers now is moving into the Scandinavian Cargo market. And once they are in they could be difficult to dislocate. Remember exporters are not as sentimental with what airline they pick as local politicians with their travel expenses refunded by the taxpayer, ref some mayors boycott of Wizz.  One can also see from the numbers how having the actual flying of ones regional network outsourced lead to lack of flexibility in time...

It is disapointing that Norwegian as one of only a few airlines in the world have not made a success of flying cargo with the 787. In these CoVid19 times the demand for cargo flights have been immense and many airlines with belly holds capable of taking air containers have been grabbing the chance to get some hard needed cash into the business. Some have even manually loaded cargo in the seats or temporarily taken the seats out for easier loading of both bagged and palletized cargo. All loaded through the normal aircraft doors. Why not Norwegian. It is not like Norway or the other places it used to fly to and between don't have airfreight needs. All we hear from the company is they can't do it profitably. Have the way they layed off people made it to difficult or expensive to take some back for possibilities. Including also constantly new openings for passenger flights. Is their cargo department to unimaginative when it comes to spotting, utilizing and negotiating deals th...

Over time Norwegian should be split in 2 units under an umbrella managments to purify the single aircraft type principe of a true Low Cost airline. There can be no profitable Low Fares without Low Costs. The short haul (NSH) 737 part should concentratte on servinf te scandi/nordic market where it can capitalize on its namerecognition and customer belongingness. with additional routes from there to sun destinations and other Norwegian long haul hubs. The long haul (NSL) 787 part should be based elshewhere like Dublin or London Gatwick. Together with overall management of both companies. From here it would become the only really independent Low Fares intercontinental airline. All others are just offspring of full service airlines where the core of the company are not really in it 100%. Both parts should initially during the pandemic offer a Sanitized class and a Couldn't Care Less class (see other post) to appeal to the broadest market and get more flying. As time goes on they ...

If smaller single aisle planes are introduced on longer and longer routes post CoVid19, due to preferences for maintaining frequencies even with reduced demand, somebody better convert some more widebodies to dedicated cargo planes pronto.It is not all about passengers and departure conveniency. Containerized or palletized airfreight at scale in a narrow would be a stuffing and  handling nightmare. Of course Amazon is developing a fleet of Prime marked 737 NG dedicated freighters, so we will not totally depend on continued production of widebodies when the current stock of ex passenger aircraft to convert runs out.  However it is not only about the transatlantic Europe to New York market. Other flights are much longer and beyond the reach of even the Aibus 321 XLR.

What is the plan for the lenders new shareholdings in Norwegian. Why did they not just take the planes back and finished with it. A loss is a loss and better be over and done with it and move on. Are they just leaving the Dreamliners there hoping the Norwegian government through unsecured loans to Norwegian will pay for maintenance and parking for them until the market returns. Then take them back only at such a time when existing or new airlines make signals to move on the Transcontintal markets Norwegian left behind. Unless Norwegian's management in the near future quickly turns around and show they have a plan for all those aircrafts one would assume the planes real owners will take them back. In the meantime they can always make some extra cash by selling the billions of new Norwegian shares to upset norwegians. On the other hand would they not be better off getting in a new management with a vision for the company. A vision for how planes could be utilized whatever it take...

The airline have showed impressive adaptability converting some of its currently little needed passenger aircrafts to cargo during the current crisism taking opportunity to make cash out of opportunity. What we expect from a island nation where road freight is not an alternative for international transport. And from a company that is used to take geographical advantage of that one without extra freedoms can legally fly passengers between 2 other countries if one stops over in own country. https://simpleflying.com/icelandair-767-freighter-photos/