Airlines in a Crisis

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...

SAS monthly traffic numbers for August show low utilization of fleet and no growth. Werf says he see positive results in forward bookings but don't verify it with any numbers. And it certainly don't show in the publicised actual traffic numbers. SAS should say something monthly about freight because that is one of the things that diffferentiate it from its Scandinavian competition and other European low costs. The freight market has been booming but SAS is consistently keeping mum about it. Since they went into Chapter11 I assume they haven't been  coining it from freight and instead have missed out on this massive opportunity. Despite me pushing it for 2 years now in both articles and comments. The announcement of reducing the offer on SAS Plus to a single food item and a single drink also do not point to a future of an upmarket offer for passengers either. The inevitable slimming down of its fleet will lower its stance as a netwrok airline and without it's real premiu...

An actual Chapter 11 because it was done in the US so they could continue flying with their subsidiaries and operate their bonus program. The cash situation in SAS must have been worse than previously announced because they have put all cabin crew on leave and are already scrambling to find a loan of 700 million dollars to help them through the reconstruction process. This must mean that most of the earlier announced 8 billion krona cash available was in reality prepayments from customers that is now running out fast as repayments for cancelled flights, and compensation because the non-flying wheren't notified 14 days in advance. How company management can prefer this process to a slower but still fully flying cost saving exercise is baffling. Or have they looked to much to what happened with Norwegian. Then they have forgotten that the Norwegian process happened in the middle of a pandemic where sources of refinancing where available from many sides and leasing companies where des...

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 ...

We are now a year into the pandemic and its time to better organise the loading of freight into the cabins of passenger aircraft. There needs to be developed a container that can get in through the passenger door, or the emergency exit door opposite. Preferably in a bit less than 1/2 cabin width size, leaving space for passage down the middle. After all every airport have the equipment to load such containers, daily in use to load the wheeled carts that contains food, drink and duty free to be consumed and sold onboard. In practice they could be seen as small containers. One could also do with a track system that would be fastened to the mounting points normally used for seats, to easily move around and lock in place the cargo.  Maximum weight would be 5 passengers at 70kg each plus the weight of the seat lets say 50 kg wich give a maximum weight for each container of 400 kg. for a 3+4+3 seat width plane and 2 container wide. sample a 787 or A330. That should leave at least 350 kg ...

Accepting the plan for the future Norwegian maangment announced today 14/1-2021 is something creditors and leaseowners should think more than twice about. The key is in the details and the plan for 50 planes now but a rapid expansion to 70 already in 2022 is akin to a landgrab by management and a an asembled consortium of larger new shareholders. Meaning they under-size now before the vaccines has nullified the pandemic and then expand rapidly with significantly better lease deals as the markets recover. Another key sign is that only a very small amount of new shares are available to existing shareholders. If it awas all above board wouldn't they be given a fare share. The difference now is that its not up for another shareowner vote so in reality its a free for all for managment and whoever they are mixed in with. Next year, if profitable, and I can't see why covering maybe a 80% market with a 50% fleetsize, its time for big bonuses to top management and a rapid rice for the s...

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...

Gustafson in SAS has taken his hat and gone, to a different kind of business all together.  He has been controversial in recent years, How he received significant bonuses after getting other employes to reduce their renumeration packages in recent crisis did not help SAS when pilots went on strike a couple of years ago.  Maybe his greed got the better of him and he foresaw that for the coming years his performance bonuses would not mount up to much. Specially since most airline have negotiated multiyear CoVid19 reductions in the pay of staff and therefore will have problems restoring senior managment perks faster or significantly higher in this period. His share options and other renumeration schemes is also probably solidly underwater after the refinancing SAS went through in 2020. Resulting in any financial loss by leaving would be minimized.   What should SAS look for in their next leader.  First someone who can him/herself show moderation and not only demand...

The rescue plan leeks seem to be pretty consistant on that the future of Norwegian will contain shorthaul within  and to/from the Scandinavian market. Question is what about 787 LH. Norwegian seem to historically have used a small profit margin created from its original and core business of the domestic and Scandinavian plus sun hollidays for same market, to subsidise an expansion into transcontinental including transatlantic flights. Without the latter beeing documented as anything else than a loss making business. Resulting in the whole company using a lot of red ink for its accounts. There is a possibility for LH low fares business but one have to have the discipline for low cost operations that must go with it. The 787 proved a problematic choice for the company and maybe now one of the never narrowbody planes with la larger range would be a better option. Partially because the Scandinavian to sample US market is very small even from the capital cities, and most routes gain by ...

Norwegian did not spend the time well since the last injection of government loans. Too much concentration on finding finance too little on what makes an airline a viable business.  They could have gone for doing more cargo. If they by now transported halve of the Norwegian international post and a large portion of its exportable airfreight products if would have given the Norwegian government a reason for why the company needed saving.  They could have marked them out as bringing something extra to the CoVid19 table by, as the only airline in Europe, offering to transport the nervous in a socially distancing environment by at least offering the option of middle seat free in parts of the cabin. For 50% extra on the ticketprice off course. Then the politicians could have said look what Norwegian brings to the table, we need that, lets give them a helping hand.  Instead they decided to spend all their effort and most of their time in scouring for finance. Not easy to ...

There are reports that some airlines have been light on aircraft maintenance during the CoVId19 lockdowns. This specially goes for they who have outsourced that maintenance and have done a light touch follow up. Since airfreight is still massively behind some airlines like, EasyJet, have found that parts are hard to come by now when everybody are ramping up their flying and all need the same parts at the same time. The situation isn't helped by that freight and especially airfreight is far behind normal operation. This has led to some airlines having to use their less fuel efficient planes insted of the newer and greener ones. Even if they have extras of the others in stock they just haven't been maintained to the standard required for an immediate return to service. Or even not so immediate since most airlines have had 2 to 3 weeks between announcing its uprated schedule to actually going live with it. It is ironic that planes can't get back in the air because planes ...

Most startups place their HQ at or near their main airport to keep a close eye on operations. It can also give combined advantages. Sample the DUB based flight crews used to meet up at the Ryanair hq and transport in a van directly to the planes, needing no extra office space within the terminal. Ryanair management used to walk or drive up to the airport complex frequently and many of their top management where known to be very hands on. Sample during the baggage handler strike of 98 they where all handling suitcases. In fact every male employee in the White House (nick name for then Ryanair HQ) was. And most of hq staff had airport airside passes hither and tither. Even after the move to larger premises the DUB airport main terminal is less than a 5 minute drive away. Airlines like Norwegian on the other hand seem to have missed that the Oslo airport have moved from Fornebu to Gardermoen at the opposit end of the city. Not only that but they are paying rent at what is rumoured to g...

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...

Hibernation is not the right path for any airline. Neither planes nor crew nor admin or financials benefits from it. They should: Start to rotate planes so all of them get an airing on a regular basis. Utilize freight opportunities so also 787's can get flight time. Start to rotate pilots so they are all ajour with license requirements and up to date on their flying skills. Negotiate with government for flexible utilization of percentage return to work schemes for all employees. Flexibly add additional later departures for those departures that fill up quickly. It is not like they don't have neither slots, planes or crew available an mass. Look for near future opportunities in other scandinavian countries where governments may not keep their travel advice for foreign travel as restrictive aw Norway. Prepare their spanish bases for Scandinavia to the sun as soon as that and other med countries opens up for summer seasonal travel. This would also placate possible lawsuits l...

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.

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/

The company have been busy reorganizing it's finance side with converting parts of loans and leases to shares to save the company, selling out the existing shareholders in the process. What have been missing is some operational management and ideas. One would think that with only 7 out of 160 planes in the air they would be on top of things, but no. Daily we read new articles about why they can't keep to in Norway mandated social distancing with middle seat free, and ecuses why. Do not say much for either management nor their IT systems or their control on the aircrafts. Since the newish CEO came in we have been waiting for when his operational plan for how Norwegian should be run would be announced. One certainly can't say he hit the ground running in that department. So far everything new is financial and under the former tempe CEO's remit Norwegian could doo so much more out of this crisis. They have 787's that can take air-containerized freight, but have sho...

It is not only ppe. I have som packages with tracking on the way from China to Ireland. Anything non medical related just get trurned back by security at the airport in China, goes back to the bus station, gets sent to the airport and same again and again. With a 10 day waiting at each step. 3 times now in 3 months, and not going anywhere. 4 other small packages all medical related just goes missing either in China or on destination airports in Europe. Probably stolen because its something covid related you could use at home and people in the system see what it is due to the declaration description. Or sits at airports in Europe for days and weeks awaiting further handling. Earlier packages often went from China to Europe via Russia. This seems to have stopped completely. And it is not only Cina. A postcard took nearly 2 months from Ireland to Norway, My easter greeting arrived yesterday. There is obviously no effective alternative organized for post even within Europe when planes ha...