The risks of recovery

When aviation ground to an unprecedented halt during the pandemic, many of us wondered if some airlines would find the pressures of ramping up networks tougher than hunkering down. We have seen carriers, particularly in Europe, that a year ago were longing for passengers to return now cancelling flights because they cannot cope with the surge in demand. Others face deeper-rooted financial challenges that are only now coming to a head in the absence of government support.

One of the latter may be SAS. The Scandinavian operator has gone into Chapter 11 bankruptcy in the USA, a legal process that allows it to continue to fly and pay wages, but hold back debt repayments to lessors as it restructures. Several US airlines did the same after 9/11, some taking years to exit. This week, SAS chief executive Anko van der Werff blamed a recent pilot strike, saying that, while it did not directly trigger the Chapter 11 filing, it accelerated the decision to seek court protection.

While SAS tries to sort out its money problems, another European airline that has seemingly always been on a precarious financial footing is expanding. The UK’s Virgin Atlantic is making the most of a buoyant transatlantic market – including sun-seeking or business-travelling Brits bound for Florida – by adding its third route to the state. London Heathrow-Tampa will join four daily flights to Orlando and a double-daily frequency to Miami.

Parts of the Asia-Pacific market have also fully wakened from their Covid-19 slumber, including Vietnam, where local carrier Bamboo has stated that that it wants to triple its fleet to 100 aircraft by 2028. Similarly, in Indonesia, Cebu Pacific says that it is now operating 88% of its pre-pandemic capacity, with domestic demand already 9% ahead of 2019 levels. The airline puts it down simply to “more people confidently flying again”.

When Airbus introduced a new Beluga fleet as the core of its internal outsize logistics operation, some doubted its plan to market the cargo capabilities of its redundant A300-600STs under a spin-off called Airbus Beluga Transport would get off the ground. However, sanctions on Russia have reduced the availability of the only other super-freighter, the Antonov An-124. Rolls-Royce is one of those talking to ABT about the possibility of using the whale-shaped aircraft to transport its engines.

Russia, meanwhile, is developing an An-124 successor, possibly with winglets and a redesigned hull to increase its range and capacity. A prototype has been undergoing wind-tunnel tests. The Soviet-designed An-124 is a unique and ingenious transporter – albeit with a limited market. However, while there are still some countries friendly to Moscow, the prospects of exporting any Russian aircraft to much of the world will be impossible while President Putin remains in power.

Airline alliances have been around for decades, but, for the first time, one of them now has a non-airline member. German railway Deutsche Bahn is joining Lufthansa- and United Airlines-led Star Alliance to offer passengers surface connections. Star Alliance chief executive Jeffrey Goh says the partnership “opens the doors” of the alliance “beyond the airline world” and allows carriers to offer interchanges with the rail network through a single ticket.

There is a trend in Europe to encourage travelers onto a more environmentally friendly form of transport, with France banning short-haul domestic flights where there is a train or bus alternative taking less than 2.5h. The problem is that, while switching from ground to air is great in theory, even in forward-thinking Europe it can be a struggle, with many airports lacking railway stations, and, where they do, timetables rarely aligning, and no system to transfer luggage to end destinations.

The problem is that most major cities have developed organically, with major train stations downtown and airports on the perimeter. Anyone who has flown, say, long haul to Paris Charles de Gaulle with a view to continue their journey on the Eurostar express train to London – an experience involving locating airport shuttle bus and RER train, followed by a baffling, multi-level odyssey through Gare du Nord – may have a firm view on the ease of intermodal transportation.