Airlines in a Crisis

An unprecedented amount of planes having been stored for 3 or more months some wiht minimal serviceing, have led to issues coming to the fore as planes are being taken out of storae and put bsck into service. It could be a risky business at the beginning as new and earlier unforseeen problems are cropping up. The most is the air check valve which due to corrosion might stick in the open position resulting in compressor stalls, double engine failure and inability to restert either engine. Airlines might have been better circulating all their planes into service regularly, sample a different plane each day, than parking most and only actively utilizing the same select few, like Norwegian. Or at least flying the unused for passenger service planes regularly on small test, like Ryanair. Pennies (relatively) saved can quickly become dollars needed, or worse. There is a reason planes are stored long term in desert like conditions and not just on any airport that is cheap and have space....

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...

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 ...

The first European airline to fail in the very beginning of CoVid19 was Connect Airways or FlyBe as most like to call it. Was that necessary. From a pure financial standpoint it certainly looked that way. Running constant losses and with owners tired of constantly refilling it with money. I say money because it wasn't really cash but more promises of such. As an airline it had some things going fore it. A good AOC for a multiple of types of aircraft that made it a vendor in a market of its own. Large enough but not a direct threat to the likes of easyJet and Ryanair. And for the network airlines it was more a supplier than a competitor. However for many years it had leaders and management that took it in to many directions spending money on costly rebranding and too many different types of aircrafts. Many thinks it would be better as a regional with the smallest of aircrafts but those kind of routes are better left to even smaller niche players. It could have carved out a mar...

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...