AirBaltic CEO Martin Gauss gives his account of the actions and measures taken by the Latvian budget carrier as the impact of the COVID-19 pandemic became apparent
Scheduled flights with around 70 per cent no shows were early indication of the impact of the COVID-19 impact according to airBaltic’s CEO Martin Gauss.
Gauss said the airline began to feel the effects of the pandemic before most of Europe went into lockdown with a change in customer habits. The airline had seen record months during January and February 2020 but with the COVID-19 pandemic spreading from China to Europe, the situation was set to change rapidly. “By the end of February we saw some signs that the booking dynamics would slow down,” he said. “Then we formed an action group to address the issue because it had obviously, come from COVID but then we were hit as hard as everybody else with the difference that we had a very early start as we had stopped flying completely on the 17th of March which then gave us time to work out what we would do one day people start flying again.”
Gauss said all airlines across the globe describe the pandemic as the hardest crisis in its history of aviation, with all carriers now facing massive drops in revenue due to the pandemic. “Today, we know we had to stop flying for two months and one day and then we started again with just four aircraft. And now we’re in the ninth week of flying and we are adding in one aircraft per week. But we will have, as an impact of COVID, by the end of this year, of course a very significant reduction in capacity, passengers and revenue – like all others.”
No show rate at 70 per cent
Gauss said the first signs of impending crisis was the increase in the no show rates which preceded the drop in bookings. He said: “We were serving Milan, for example. The no show rate went within weeks up to 70 per cent. So the passengers were just not turning up anymore. That was also the time when we said, ‘it doesn’t make sense to fly’ and Latvia took a very good decision by saying they would stop all international traffic, and that was also us stopping total operations.”
With changing border and quarantine measures, the COVID situation is still changing. Gauss described the early days of the crisis as “very fast, very dramatic”. Although he said
the situation was still developing and there was still uncertainty, airBaltic has taken a gradual approach to restarting operations.
Securing funding was first priority
When the airline stopped flying, its senior team of 11 continued to work at the company’s headquarters taking COVID-19 tests every week. The key questions were what would be needed to restart flying operations. Securing funding became the first priority which resulted in a €250 million funding injection from the airline’s primary shareholder, the Latvian state, which holds 96 per cent of the stock. AirBaltic was involved in repatriation flights enabling the airline to gauge the health and safety measures which would be needed to start flying again.
Gauss described how the airline’s flights have changed: “First of all the aircraft is disinfected, but also we have different procedures for boarding and we issue a face mask and disinfection wipes to every passenger. And we had to change tickets times, the way you book a ticket especially in the low cost world, was that there were tickets available which you couldn’t change. That is something which has changed. We have new tickets types where every ticket, can be changed because passengers just need that day when they fly because there’s so much uncertainty, different countries not opening their borders.”
With initial measures in place enabling airBaltic to resume operations, Gauss said that the airline was now adapting to a new normal of changes and challenges. “Every day and every week once formally we change the schedule, which is also something very unusual for a scheduled airline.”