Used Cheap Planes and Deep Pockets Facilitate Startups Getting Wings

    Article Overview

    According to Bloomberg News, it is not easy to think of an industry that has been hammered badly by the pandemic and harder than what the aviation industry has undergone. It is believed that there might be losses that can hit as much as the $201 billion mark between 2020 and 2022, depleting earnings over the last nine years. 

    Many carriers, as many as a dozen, have given up, and equally affected is the employment rate with several thousand jobs not existing any longer. However, this scenario has not deterred many entrepreneurs from creating new airlines in the United States, Asia, and Europe. 

    In Hong Kong, for instance, Bill Wong known as a property tycoon is slated to start a carrier, to take on the flagship Cathay Pacific Airways Ltd., which was amidst a political fallout even before the pandemic hit due to the anti-China protests of 2019s. 


    In India, where the industry is regarded as one of the cutthroat aviation markets Rakesh Jhunjhunwala, a billionaire is injecting in money for the newly formed Akasa Air. 

    In the United Kingdom, a trader formerly associated with JPMorgan is starting Flypop airline to fly expatriate Indians to their country and connect London to the secondary cities in India. 

    In the United States, David Neeleman, who already has stints with the airlines business before and founded earlier JetBlue Airways, Canada’s WestJet, and Azul Brazilian Airlines in May started a new venture, the Breeze Air, which is Utah-based, reports Bloomberg News. 

    The optimistic approach stems from the fact that there has been a partial revival in the demand for travel since vaccinations have lifted restrictions on international borders again. Simultaneously, many carriers suffered demise due to the pandemic and these carriers are letting the newer formed airlines recruit pilots that had been laid-off, ground staff, cabin crew at less salaries. Also, the rates for planes that have already been used are enticing as well. 

    In the case of many carriers, they are focusing mainly on the low-cost model so that they can tap into the potentialities existing in the tourism sector. 

    Even though there are employers that still agree to pay for their employers’ business travel expenses, yet to fully resume the trend may take time given the fact that these employers have seen that a lot of business can be done over Zoom video calls instead of incurring expenses on business travel. 

    According to Nino Singh Judge, who formed the U.K’s Flypop believes that the so-called legacy airlines will suffer to a great extent as they bank upon their business class and first-class travelers to extend subsidies to the economy class travelers. Meanwhile, Flypop, which plans to focus on “visiting friends and relatives“, low-cost market has backings of the UK government funds and adequate equity, reports Bloomberg News. 

    However, the airline business is quite tough with “wafer-thin” margins even for those carriers that do not provide frills. But that is not discouraging the newly formed airlines and many in the pipeline. Research reports from the U.K based IBA Consultants indicated that at the beginning of 2021 summer season, around 132 would-be airlines were planning to start flights this year and most of them are planning to fly on routes that have been vacant due to route cuts or if any airlines have stopped operating anymore. 

    The availability of the Boeing Co.’s 737 and Airbus SE’s A320 narrow-body jets well-known for both short flights and regional routes are increasingly becoming available ever since the pandemic and most of the would-be airlines are looking for similar aircraft. The monthly lease rates have dropped by 40% and there are attractive deals on them as well. 

    Another reason why startup airlines are gearing up for their launches is that there is plenty of skilled labor force. Covid-19 can wipe out around 2.3 million existing jobs that are directly related to the aviation industry, manufacturing sector, airports, or air traffic management. A total of 44.6 million jobs associated with the aviation industry is at stake as well as per International Air Transport Association, reports Bloomberg News. 

    Pilots and crew members that Hong Kong’s Greater Bay Airline is recruiting have been earlier associated with Hong Kong Airlines, Dragonair, or Cathay. 

    The global aviation industry it is being anticipated is estimated to lose out as much as $200 billion during the pandemic, yet as many as 132 startups are planning to take to the skies once the pandemic ends.


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