Irish leasing company Amedeo announced plans in 2017 to create an ‘airline for hire’ model, using a fleet of Airbus A380s. Now, with the A380 a rare sight in the skies and the types only secondhand operator already giving up, does Amedeo’s idea still have potential? Or will it just be stuck with dozens of sedentary A380s in the coming years?
Amedeo’s airline for hire dreams
Leasing company Amedeo is in a league of its own when it comes to business models. Coming from the Emerald Isle, the lessor resides in the heartland of aircraft leasing businesses. However, unlike its contemporaries like AerCap and Avolon, who between them own hundreds of narrowbody aircraft, Amedeo wants to lease aircraft from the other end of the spectrum.
In 2017, Amedeo revealed plans to launch an airline-for-hire service using a fleet of second hand Airbus A380s. It expected to lease out the aircraft and cabin crew to both traditional airlines and travel companies, including Expedia and Airbnb. CEO Mark Lapidus told the Financial Times at the time that he was seeking an AOC for the service, and expected to begin operations in 2022.
Back then, Amedeo managed 12 A380s, eight of which were in service with Emirates and two with Etihad. A further 20 were on order from Airbus. However, in February 2019, with appetite for the A380 waning and the official cancellation of the program announced, the company canceled its order with Airbus.
Now, with the A380 rapidly falling out of favor with airlines around the world, it looks likely that when the leases expire on its A380s in service, most if not all will come back to the company. It also has agreements in place to access up to 22 A380s at a rate of three to four a year from 2022 onwards. So does its ‘airline for hire’ plan still stack up?
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Would an A380 sharing model work in a post-COVID environment?
The knee jerk reaction to this type of question is absolutely not. The A380 has had its day, and with passenger demand predicted to remain low for some time to come, jets on the ground and airlines struggling for cash, who in their right mind would want to rent an A380 for any purpose?
However, there is another way to look at this. Amedeo has always said 2022 is the window it is planning for launch, which gives it another couple of years to build interest, to secure the flying rights and to define itself as a brand. It also has the time to allow passenger demand to begin building up again, particularly once the vaccine rollout begins to gather pace.
The modern passenger is less brand-focused than perhaps they traditionally were. These days, it’s all too common to book a fare with one airline and to end up flying another. Seats are much of a muchness, particularly in economy, and catering is almost always outsourced. As long as those passengers can accrue the loyalty points from the system they play to, few really care what color the plane is on the outside.
While airlines are likely to have an oversupply of aircraft and an undersupply of passengers in the short term, this could change in the future. Added to this, having a brand-agnostic, high capacity aircraft at their disposal, airlines could use Amedeo to dump in huge amounts of capacity at peak times, such as Christmas and for pilgrimages.
Amedeo believes there will be a market to provide on the spot transportation for large numbers of passengers, potentially from multiple different airlines, on high demand routes where it’s impossible to add capacity otherwise. This could work well in slot constrained environments where no more services can be deployed. Adding companies like Expedia, Google and Airbnb into the mix, and the idea still has some legs, at least on paper.
What do you think about Amedeo’s A380 problem? Will its jets for hire service take off? Let us know in the comments.