orbitmic

To be honest, I do not think any airline is feeling like being lavish for the sake of it at the moment, regardless of the support measures that they have negotiated, none of them come any close to the cash they are bleeding. As rightly mentioned by Prospero, IAG has also received some significant cash support including both the £300 million loan from the UK (Coronavirus corporate finance facility) but also €1.1 billion in loans from the Spanish state.

It is also worth pointing out that what airlines are getting in terms of support is never without strings attached. For instance, the main source of support that AF have received is not state fund, but the state offering to be named as guarantor on a private loan that AF has been contracting with banks. The second part is a loan from the French state as shareholder rather than as state. This actually makes a very significant difference and is a fairly common mechanism (whereby a company is facing difficult times and borrows from shareholders). At the same time, it is also worth pointing out that support received often comes with strings attached. For instance, in return for the French government's package, AF are being forced to close down some very lucrative domestic routes as well as a reduction of 50% of the airlines' CO2 emissions, which is not really most airlines' priority at the moment.

LH is actually expected to get the largest support of the three main groups, with about €9 million, but whilst €3 billion are for a loan, the other €6 billion in the package are costing the group because they come in the form of the German stake taking a very significant equity in the group (I can't remember if it is 20% or 25%).

In other words, it's a bit easy for BA to give lessons to others in terms of bailout, because they are actually accepting bailout money which is less than others but not negligible and is 1) without losing equity unilke LH, 2) without borrowing from their shareholders unlike AF, 3) without stringent network and environmental conditions unlike AF.

So I don't think that AF or LX are giving better food because they are feeling generous or are just nice, and their regulations are no different from what is imposed to BA either. Instead, I suspect that it is different ways for different airlines to resolve the same equation:

- we are bleeding cash
- the air passenger market in general and business travel market in particular are at an all time low and will stay so for months and maybe years
- Covid safe meal service are significantly more expensive to prepare and unions are worried about implications for staff's safety

So what do we do?

BA's and TK's answer seems to have largely been along the lines of: "the only people currently flying are those who absolutely have no choice anyway, so quite frankly, whether you offer them a chicken sandwich or caviar and lobster will make no difference whatsoever quite frankly, so we might as well try and limit our expenses to avoid precipitating something that would look like bankruptcy and count on our passengers' fortitude, as most will realise that food and service is simply not the priority right now"

By contrast, I'd say that AF's and LX's answer seems to have largely been along the lines of: "right, for the next few months or years, we are all playing musical chairs - where there was enough custom for 3 big groups and a few free electrons in Europe, there might at most be a third of that left so we'll need to fight extremely hard to pick as many of what's left as possible, plus there are so many routes due to collapse that many people will have to connect anyway as the time of "niche" routes is over for a long, long, time, which means that most premium passengers will be to compete for, so we'd better freaking impress them or they will go to BA, EK or whoever"

I honestly cannot say which answer is right. Chances are that it will depend on what happens in coming months which none of us know anyway, but I think that both answers are potentially coherent (even though I clearly know which one i prefer as a customer). So to me, this thread is putting way too much emphasis on supply factors, regulations, and even costs (no airline, BA or otherwise would just "cut cost" if it felt it would disproportionately cut income) and what not and is missing what I believe to be the real story here, which is different ways of reading the market for the next few years. I think all airlines agree in terms of expectations of crisis, low demand, changed habits, etc, but they do not actually agree on what all that will do to customers' competitive behaviour.