There are two measures to recover the airline industry to pre-covid heights. First, data shows that the 1.1bn seats on sale worldwide in July and August were only marginally lower than levels in 2019. Seasonal observers focus on a second, more subjective measure: the number of announcements new or resurrected airlines with unlikely, dubious owners. questionable business models or niche channels. Entrepreneurs are being drawn back to an industry that has long provided the glamor and excitement of seeing an elm in a flame.
Applying a fresh coat of paint to a defunct brand is one way to shine. On August 20, Monarch Airlines, a British carrier that went bankrupt in 2017, said it would resume carrying passengers in 2024, although details of its plans are scarce. The government of Ghana, whose flag carrier collapsed in 2010, is also relaunching a national airline. It is doing so in partnership with Ashanti Airlines, a firm hardly used to running such a service on a continent whose carriers have lost an alarming $3.5bn between them over the past three years.
In an industry where most businesses are struggling to make a profit, new entrants and managers with a proven track record may have an advantage. But the Mexican government recently announced that Mexicana, another carrier that went bankrupt in 2010, will resume services later this year – under the management of the Mexican military, an organization with little experience in the field except for operating an air force. Global Airlines, founded by James Asquith, a British social media influencer and former banker, bought four second-hand a380 superjumbos at market prices, promising to make transatlantic passengers feel like a million dollars, even in economy class. struggle: used a380s are in plentiful supply as other airlines prefer newer, smaller, cheaper-to-run long-haul jets.
Other ventures operating in niche channels may be equally difficult to sustain. This month Bermudair will begin business-class only flights between its island home and the United States. Later this year Beyond plans to begin rapid expansion by taking passengers between its base in the Maldives and Dubai and Delhi, with a “private jet” experience on retrofitted narrow aircraft. one-class services. Only La Compagnie, which flies between America, Europe and the Caribbean, survived.
Red Way, a startup based in Lincoln, Nebraska, may be a warning. It launched in June using the novel but misguided idea of outsourcing the marketing, ticket sales and baggage check handling while the flight was outsourced to a charter airline. It ceased operations on 31 August. In June, iata, an industry body based in Switzerland, doubled its forecast for net profits for the world’s airlines in 2023 to $9.8bn. But, he notes, this is equivalent to $2.20 per passenger, or half a cup of coffee in Geneva. For new airlines it’s a question of whether that cup is half full or half empty.
© 2023, The Economist Newspaper Limited. All rights reserved. From The Economist, published under license. The original content can be found at www.economist.com
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Updated: 06 November 2023, 06:14 PM IST
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