Liftoff: How to launch an airline in a pandemic

In the depths of the Covid pandemic last year, Jonathan Ayache decided he wanted to do something different, he just hadn’t decided what. So after seven years at Uber — as part of the team that launched the ride-sharing business in SA, and later as head of operations for Sub-Saharan Africa — he left his job, intending to reflect on his next move.

Instead, he found himself as CEO of new local airline Lift.

It all started with a meeting with Gidon Novick, founder of low-cost airline Kulula and former Comair CEO. Uber had partnered with Novick’s nonprofit, SA Harvest, to provide food to communities in need during the lockdown. Over a cup of coffee, Novick told Ayache he was considering launching an airline, and asked if he’d like to tag along to his next meeting.

"I have to be honest, initially the idea sounded insane," Ayache says. "But the more he spoke, and the more meetings we had, the more I realised how much sense it made."

Though Covid was devastating for the airline industry, it also opened some windows of opportunity. For one, people with decades of experience in the industry were suddenly without work and willing to try something new. The right aircraft were also more easily available — and it was a good time to negotiate favourable commercial terms and agreements.

First, however, the team had to find the right partners.

Top of that list was Global Aviation, a local company that has been in the leasing and chartering business for 20 years. In particular, Lift wanted to use the fourth-generation Airbus A320 in the Global Aviation fleet — one of the most technologically advanced aircraft in the skies, says Ayache.

Lift also brought in speciality coffee retailer Vida e Caffè for catering, and its evening flights have featured wine and gin tastings — though these have been put on hold due to the government’s latest travel regulations.

The key to successful partnerships, says Ayache, is making everyone feel like an owner in the business. It’s a lesson he learnt from his time at Uber.

Another is that very little is actually impossible.

"Being part of Uber’s hypergrowth story from so early on changed my perspective on scale," he tells the FM. "The thought that we’d be doing millions of trips on the continent seemed crazy. In the early days, I was worried about how we’d get the next driver and rider to sign up. It’s incredible what’s possible when you bring together a great product, talented people and the drive to succeed."

The trick, when you’re faced with a challenge, he says, is to ask: "How am I going to solve this?" rather than "Is this even possible?"

With Lift, Novick and Ayache are looking to do things differently — starting with the way air travel has been commoditised.

"Everyone’s trying to make extra money by charging extras every step of the way, whether changing the name [on your ticket], your flight or extra baggage," says Ayache.

There’s also "absolutely no reason" travellers should be penalised for changing flights — particularly if they give more than 24 hours’ notice.

As a result, Lift allows each ticket to be changed or cancelled, online and at no additional cost, as long as it is with more than 24 hours’ warning.

Another pushback against standard industry practice has been Lift’s decision not to have a call centre.

"It was a controversial idea from my side, and certainly something I learnt about during my time at Uber," Ayache says.

His colleagues have had reservations, but his thinking seems sound: as long as you get back to people quickly and offer a helpful response, customers will be happy. "Call centres, in my view, are inefficient and expensive, and [they] bring more challenges than they solve," he says.

In addition to online communication, the company is in the process of adding a WhatsApp channel. "We’ll do whatever works to make the process smoother for our passengers."

Lift first took to the skies on December 10 — just in time for the summer holidays — offering flights between Joburg and Cape Town, and Joburg and George. It was a good month, with 30,000 travellers buying passage on the new airline.

But no sooner had things got going, than the government put new restrictions in place in a bid to contain the second wave of the pandemic. With the Garden Route declared a hot spot, demand for the Joburg-George flight fell off a cliff.

"We had to make the hard decision to pull that route off ... and re-accommodate passengers on other flights," says Ayache. "This was a really big decision for us because pulling a route so early could definitely have affected our brand negatively."

There was also increasing competition, as other airlines resumed their local operations. It’s something Lift had always factored in.

"We were always very realistic," says Ayache. "And they [the other airlines] have come back in an incredibly aggressive way."

But he’s not convinced the other airlines’ operations, as they’re running at present, are sustainable, as they seem to be operating below cost.

"I know our operating costs, and ours are 30%-40% lower than the others because we’ve had the opportunity to set up the business during Covid," he says.

Things are starting to look up after a tough January and February. With the move to level 1 and the reduction in Covid cases, demand is starting to return. It’s something Ayache and Novick are watching closely, as it will determine what routes they add, and when.