Of course, the title of this post is a little misleading in that the airline industry is not the only industry facing extraordinary pressure because of the global pandemic. However, it does provide an interesting case study to show how the pandemic can affect an industry in a number of different ways. Just some of those pressures will be discussed in today’s post. One of the first consequences to the airlines was the detailing of a number of ‘ ghost flights ’ taking place around a number of important hubs. These ghost flights describe the process whereby an airline will fly an empty (or severely reduced capacity) flight in order to maintain a specific slot in an airport’s schedule. A number of slots on high-profile routes can be worth tens-of-millions of dollars to an airline, and a massive secondary market exists for such slots. However, under EU rules as just one example, an airline must use 80% of these allocated slots or risk losing them to a competitor. As the slots are par...

We have covered the story of Boeing and the issues it has bene having since the two airplanes fell from the sky in 2018 and 2019. However, today there was news that there are now even more issues with the same plane that is supposed to being fixed for a new rollout, which begs the question of whether this scandal could really bring a company like Boeing down. Though it is almost unthinkable, there are many components to consider. In this post we shall examine why this case is different to most other scandals and why, potentially, it could be more impactful for Boeing than it thinks. To begin with, it must be said that although it is facing turbulent times, Boeing remains one of the world’s largest companies . It is certainly not facing its downfall any time soon, but its situation is certainly not optimal. We last discussed the situation when we looked at the incredible number of aeroplanes that it has grounded since the demise of the Ethiopian Airlines plane in 2019; so much s...

In today’s business media, the concept of ‘fuel tankering’ has been highlighted, particularly with regards to the practices of British Airways (although, it is an industry-wide practice) so as to bring forward the story that airlines who claim to consider the environmental impact of their business are, in fact, prioritising profits. In this post we will examine the practice, its effects, and what the industry is claiming it will do to respond to the criticism. ‘ Fuel Tankering ’, as a practice, describes when an aircraft will carry more fuel than is required for the flight in order to reduce the amount required, or remove the need to refuel at all, at a destination airport. The reason that an airline would do this is because different airports charge different prices to refuel at their airport. According to industry research, fuel makes up between 17 and 25% of an airline’s operating expenses, and it has been confirmed that airlines will have software packages that calculate w...

Earlier this morning, the saga surrounding the British travel firm Thomas Cook came to an end with the news that ‘ last-minute negotiations aimed at saving the 178 year old holiday firm had failed ’. With the tabloids and social media being flooded with stories of customers stranded abroad, and also with statements from the thousands of employees who have lost their jobs and, apparently, learned of this via the press, it is clear that the saga is far from over. However, a number of issues have arisen from the responses to the collapse this morning, and in this post we will analyse those responses. Thomas Cook had been struggling for quite some time. In the summer it had reported a £1.5 billion loss . Over the year, it had issued 3 separate profit warnings. As a result, it had sought to bring in new investment and reconfigure its debts. The new deal involved the Chinese Group Fosun – a conglomerate that also owns British Football Club Wolverhampton Wanderers – and would see the ...

Today’s post aims to present somewhat of a round-up of a number of pieces of news coming from the Airline industry in recent weeks (and months) because, recently in particular, the divergence between those in the industry doing well and those that are not seems to be growing at a particularly rapid rate. Recently we looked at the trade battle that is developing between Boeing and Bombardier , but in this post the focus will be on the recent collapse of Monarch, Air Berlin, and the troubles at Ryanair, although it will be discussed that not all airlines are feeling the heat in this marketplace, with certain players making significant moves to take advantage of their competitors’ downfall or change in strategy. Firstly, the two stand-out stories from the airline industry are worth analysing because the effect that they are having will be felt for some time. In August of this year, Air Berlin filed for bankruptcy after its leading shareholder, Etihad Airways, withdrew financial su...