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There was a time, earlier in 2020, when there was no news but COVID news.
There was this time when every word of every story of every front-page of every paper either
directly or indirectly dealt with the Coronavirus, but, now, many months on, that is no longer
the case.
The world has awoken in a way that there is more of relevance.
However, in certain circles, in those most dramatically impacted, COVID is still everything.
That is certainly the case in aviation.
Almost nothing they do nowadays is not dictated by the ever-present backdrop of the century’s
first pandemic.
Most of what anyone has been talking about recently, including us, has been on how this
will fundamentally change the industry—on how the airline of 2029 will look markedly
different than that of 2019.
Today, though, in October, 2020, we’re nearing the one-year mark since when SARS-CoV-2 is
believed to have made the jump from animal to human.
With this amount of time behind us, the airline industry has already changed.
The airline of October, 2020 is already different than the airline of October, 2019.
So, to see what’s happened already, we’re going to look at eight flights that, for reasons
either big or small, would have been considered strange, unique, or even unimaginable just
a year ago today, but now, are nothing out of the ordinary.
We’ll start with the end for one aircraft—at least for a while.
On September 25th, Qantas’ VH-OQI, an a380, flew from Dresden, Germany to Victorville,
California—a route that is quite clearly unordinary for an airline based in Australia,
but its not the route that made this notable.
VH-OQI had been flown to Dresden in March for cabin refurbishment.
By September, though, it became clear that not only was the refurbishment unnecessary,
but that the aircraft was too.
airborne until, at least, 2023.
This demonstrates that this is the soonest Qantas believes passenger demand could return
to 2019 levels—when the a380 served as its flagship aircraft.
However, the fact, specifically, that the airline would bother storing the aircraft,
rather than scrapping or selling it, also marks a hint of optimism.
Long-term aircraft storage is not cheap—it involves quite regular maintenance and monitoring—and
so this means that Qantas does truly believe that demand will return to the levels of before—an
opinion not held by all.
Qantas desperately needs every dollar they can get right now, so they would only spend
money on keeping their a380s if they truly believed that there was a significant need
for super-large aircraft in the medium-term future.
Therefore, while its plenty easy to find negative signs for the future of aviation, this flight
does represent a belief that the good times will return for airlines.
This next flight, meanwhile, didn’t, and, in some ways, couldn’t exist a year ago.
On October 8th, Southwest flight 1920 flew from Phoenix, Arizona to San Jose del Cabo,
Mexico.
This certainly looks like a fairly normal flight—just another big city to resort town
route—but the backstory behind it explains its peculiarity.
Mexico is one of the few major countries that has not restricted entry to Americans, so,
when the US emerged from lockdown in May and June, Cabo was one of the first international
destinations added back to Southwest’s network.
This is, without a doubt, due to the fact that it’s both open to Americans and, crucially,
a leisure destination.
Airline demand is traditionally split into leisure and business, and these two segments
have had very different stories of recovery.
Leisure demand picked up quickly and sharply as soon as stay-at-home orders lifted, while
business demand has barely increased at all.
This is no surprise considering that, overwhelmingly, offices are still closed, conferences are
still cancelled, and clients are still cautious.
Therefore, airlines have had to respond by removing capacity from where people travel
for work, and adding it to where people travel for vacation, such as Cabo.
Right now, there’s a huge amount of capacity being dumped into the Florida and Mexico markets.
For example, in the coming winter, there are twenty-four flights a week scheduled between
New York and Cabo, versus just two a week last winter.
Some leisure destinations have not only recovered faster, but have come out ahead versus how
they were before.
This is certainly the case with Cabo, and the October 8th flight from Phoenix represented
the first of many, with Southwest adding this city-pair to their network.
Overall, leisure is winning, business is losing, and therefore airlines that have historically
been more leisure oriented, like Southwest, have fared far better than their more business-oriented
competitors.
One of those more business-oriented competitors is United, which announced this new route
from Milwaukee, Wisconsin to Fort Myers, Florida.
Much like Southwest's flight, this probably doesn’t seem that strange but, for United,
it’s a dramatic deviation from the mean.
You see, like most legacy carriers, United has traditionally been a strict follower of
the hub-and-spoke school of network planning.
Every single flight they fly, with very limited exception, either originates or terminates
in DC, Newark, Chicago, Houston, Denver, Los Angeles, San Francisco, or Guam—their hub
airports.
This flight, though, along with a whole package of others announced at the same time, does
not.
United wouldn’t break from precedent without a good reason, and so this must mean something.
Most likely, it indicates a mix of desperation and innovation—desperation because they’re
now seriously competing on leisure-routes, something they avoided before; and innovation
because United is reinventing its network design and getting a little more creative.
Creativity and innovation is what pushes an industry forward and so, even if it comes
in the form of a route that is just ever so slightly different, it demonstrates a characteristic
that would be welcome once the downturn is over.
Airlines are now willing to find revenue wherever it might be, whereas in the past they might
have only chosen to pursue the most profitable form of revenue, so this flight, UA2861, from
Guam to Singapore on a 787, is another that could never have existed a year ago.
Now, Guam is a United hub, but it’s never had flights to Singapore, definitively never
had these on a 787, and absolutely never operated them without passengers and yet now, four
times a week, they are.
With the current lack in long-haul flights, which traditionally carry freight in their
belly-holds, global cargo capacity is down, meaning prices are up, meaning airlines can
reliably turn a slight profit flying passenger airplanes without passengers.
In a matter of months, United has turned its Guam hub essentially into a mini cargo hub,
with regular flights stopping over from the US, going on to Asian destinations.
Beyond this, globally, United now operates hundreds of cargo-only flights per week, even
though one year ago, it didn’t operate a single one.
Whether it’ll turn Guam into a major passenger hub for the US to Asia market is an unanswerable
question right now, but at the very least, this further demonstrates how airlines will
truly take any revenue they can get, even if it involves turning into a cargo airline
in a matter of months.
Revenue is, of course, half of the equation for profitability, but the other part is,
of course, costs.
Therefore, for weathering this crisis, airlines need to get as much revenue as possible, while
also minimizing cost.
This American Airlines flight from Eagle County Airport to Aspen was not about bringing in
revenue, but rather about reducing costs.
You see, only 29 miles or 46 kilometers separate these two airports, meaning nobody’s really
looking to fly between them.
However, this flight was part of an overall flight that went from Dallas, to Eagle County,
to Aspen, to Montrose, and back to Dallas, meaning a passenger going to Montrose would
have to sit through at least two stops.
Now, a passenger is much more likely to take a one-stop itinerary than a two, so in a time
when American Airlines is fighting for every customer it can get, why would it fly such
a clearly uncompetitive itinerary?
Well, the reason is that American didn’t really care how many people took this flight
because it was always going to be very close to none.
They couldn’t, however, just cancel it because airlines in the US received a package of financial
aid from the government in exchange for, among other things, agreeing to continue serving
every airport they did previously.
American had previously served these three airports which primary act as entry points
for tourist towns—each of which implemented restrictions preventing visitors during their
stay-at-home periods.
This meant demand for travelling to these places was essentially zero—in the case
of Aspen in May, for example, just 7% of American’s seats were filled.
Therefore, instead of operating three different empty flights, they rather operated just one
that stopped at each of the three airports, thereby creating that 29-mile flight which
was, at the time, the shortest commercial flight in America.
Until the CARES act’s expired on October 1st, American and other airlines found ways
to both stay loyal to their new masters in the government, while also minimizing cost
to the lowest level.
But back on the revenue side, on September 25th, Qantas operated QF1570 from Canberra
to Gold Coast Airport in Australia.
Exactly one week earlier, on September 18th, Queensland, the state that the Gold Coast
is in, announced it was opening its borders to the Australian Capital Territory, the territory
that Canberra is in.
That very same day, Qantas announced that it would start a new route between these two
airports one week later.
Now, normally, when airlines announce new routes, they do so months or even years in
advance.
For example, when Qantas announced a new route from Brisbane to Chicago, originally slated
to start in April, 2020 but now pushed back, they did so in July, 2019—a full eight months
in advance.
To shorten this to one week is unprecedented, but with borders opening and closing at a
moment’s notice, predicting demand has become incredibly tough.
So, in this case, Qantas saw that demand for travel to Queensland was going to surge, and
they were able to respond lightning-fast—allowing for them to capture it.
Other airlines around the world have done the same, and the industry, in general, has
become more agile and data-driven.
These will be useful skills for airlines to maintain long into the future as, when there
is demand, a company’s excuse should never be that they couldn’t act fast enough to
capture it.
Sometimes, though, it’s strategic to ignore demand.
On October 6th, American Airlines flew its last flight from Greenville, North Carolina,
for at least a month, but likely longer.
An airline pulling service from a small, regional airport in a time of economic crisis is nothing
unexpected, but this case stands out.
The cut was originally announced as only for a month, from October 7th to November 4th—a
date recognizable for its proximity to the November 3rd US election.
There’s no reason for an airline to believe that the economic conditions that make a route
unprofitable on October 7th would be resolved by November 4th—if anything, they should
get worse as winter nears—so suspending a route for only one month to save money doesn’t
make sense.
In addition, this service suspension was announced along with fourteen others impacting fourteen
small airports in fourteen different states—including Pennsylvania, Iowa, North Carolina, and other
swing states in the 2020 election.
Also, many of the states that American Airlines cut service to have incumbent senators who
polling data indicate might lose on November 3rd.
This includes Thom Tillis who, as happens when small airports lose their only commercial
service, immediately faced pressure from his constituents to bring flights back to Greenville.
American Airlines is essentially playing chicken with the US government.
With CARES act funding having now expired, airlines desperately want more financial aid
from Congress, and with fifteen routes to fifteen states cut, there are now 30 senators
that have to answer for why they haven’t passed an airline relief bill to help save
these small towns’ service.
In the end, three of these suspensions didn’t go through, but most others were extended
another month—thereby ratcheting up the pressure on Congress by signaling that these
temporary suspensions might not be so temporary if they don’t get the relief they say they
need.
While in the US and elsewhere, airlines’ continued survival is increasingly linked
to politics, in other places, it’s always been.
China’s aviation recovery has played a key part in the country’s narrative of overall
recovery which is, at least compared to other places, genuine.
On August 28th, Chengdu Airlines flight 2712 was the first to leave from the airport that,
eight months earlier, undoubtably played a central role in spreading the virus across
the globe—Wuhan Tianhe International.
This flight, though, was the first of hundreds to leave Wuhan that day and that day, in fact,
was the first when the number of flights in the country reached 100% relative to January
1st of the same year.
China’s aviation recovery was fast, in part because China’s virus recovery was fast.
The country’s airlines are not completely back to normal yet—their load factors and
fares are lower than before and their international market is still nearly nonexistent—but China’s
airlines, along with those of New Zealand, Australia, and all the other countries that
have successfully curbed the virus, demonstrate that the economic crisis cannot end until
the public health crisis does and therefore, no matter which one cares about more, the
route to recovery always starts with health.
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likes different things than the average YouTube viewer.
We know what our audience wants, but sometimes that doesn’t line up with the stuff that
the YouTube algorithm will favor.
For example, I wanted to make this video longer, but I had to keep it within the key ten to
fifteen minute length so that performance didn’t tank.
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