Is former top airline exec a sucker for punishment?

Here’s a quiz question for you: How do you make a small fortune out of the airline business? The answer, of course, is: Start with a big fortune.

The struggles of the global airline industry are there for all to see. Even before the onset of the pandemic, running an airline was a marginal business unless you had government subsidies to keep you in the air.

Now, as the world tries to come to grips with the economic fallout caused by the pandemic, the airline industry has come close to being a disaster area.

So why start an airline now?

Why then, would someone of supposedly sane mind and with vast experience of business and aviation, want to put their money into starting a new airline?

That’s the question many in South Africa have been pondering since Gidon Novick, former Comair CEO and creator of budget airline Kulula, made it known that he intends to launch into the casualty-strewn battleground of the South African aviation industry.

Novick left Comair in 2011, joined Vitality in a senior executive role and, more recently, founded Lucid Ventures, a venture capital business aiming to disrupt the hotel sector.

New domestic carrier up and running soon

Now, in various media interviews, he has indicated he’ll be up and running with a new domestic airline before the end of the year.

According to Travel Trade, a travel industry news portal, he will be taking advantage of a travel industry that has changed fundamentally due to COVID-19, requiring more efficiency, cost-consciousness and a simpler way of flying.

“With an aviation industry that has been turned upside down, there is an opportunity from a cost viewpoint to create something very efficient relative to what existing airlines are able to do,” he is quoted as saying by Travel Trade.

“Travel is going to change fundamentally post-COVID-19. Business travel will decline and air travel will require efficiency, cost consciousness and simplicity. There is a unique opportunity for a fresh, clean and well-structured airline that can be very competitive.”

Low-cost and unburdened by legacy issues

In an interview published in the Financial Mail, Novick said this particular point in time created an opportunity for a new airline to launch with a low-cost structure unburdened by legacy issues.

This, he noted, was part of the opportunity. “It’s essential to get in at the right cost base. If you buy the wrong aircraft and are indebted, it becomes almost doomed from the start.”

Asked by Travel Trade for his thoughts on entering a cash-strapped, low-demand industry, he noted: “Our capacity will be small and we will not make a major difference to the capacity of the industry, adding that “Timing is critical and we are in no rush … It requires a careful approach and we will take our time and wait until people are comfortable to fly again.”

And will he make a small fortune? He surely hopes not.