Airlines in a Crisis

Pandemic started norwegian airline Flyr had a quick change of CEO yesterday as original CEO Tonje Wikstrøm Frislid surprisingly quit and was replaced by another ex-Norwegian Brede Huser previously CFO of Flyr. Flyr has had a torrid time financially this autumn after commiting to more planes and brand new ones to that, last January. Planes they haven't been able to fill or wetlease out this winter, and no summer profit to boot. They are down to only flying 6 of the 12 planes in the fleet, laying off a number of pilots and other staff.. A failed recapitalisation replaced by a speculative investor lead one, with billions of shares at share price 0.01 nkr, didn't help. Share price has fallen to a fraction of even that leaving litle hope of success for future planned capital repairs. Management mostly consisting of ex-Norwegian leaders laid of during the pandemic and reconstruction of that airline. Speculation is they won't be able to handle a nkr 100 million CO2 tax due to the ...

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...

Soon the Boeing 737 ExMax will be approved for transporting passengers also in Europe, the plane will have got the necessary updates and the airlines will trained their crew. Then comes the question on how to get it back in the air without upsetting to many customers.  Airlines like Ryanair that have high frequency routes like Dublin-London or Norwegian's Oslo-Trondheim can put 1 into a roster of 3-4 aircrafts on the routes and offer anyone nervous to change to a later departure free of charge. Potentially put off by a long queue and without knowing exactly when that departure is some will change their mind. Others will after changing not think its worth the hassle the next time, or the next after that. To minimise agro this should be offered by a single customer service agent at every Max departure so the customer see its available there and then and don't have to return to sample departure hall and do security again. The added bonus is that when people change flight by person...

How to set the pricing strategy for a profitable airline. You start with the costs. It is important to know both the set and variable costs for each leg (city pair) you would potentially fly.  Include everything like cost of plane, crew, maintenance, fuel and taxes. Plus an ad on for other costs like managment, admin and marketing. Hence lowering the costs is alpha and omega for creating a competititive airline that is also profitable. Ceate a pricing strategy fpr eah route that gives you a profit at 80% capacity, or lower if you think you can get away with it in the market. Create several steps in the pricing ladder so you have a low starting price for marketing purposes and the fuller the plane the more you get in. Now you have your base price model. Add on a percentage premium for more poular times of the week, or of the day, and if there are any events scheduled for that market. Add also on a percentage for any premium services you offer, example a 50% add on for middle s...