A detailed look at the current state of the European airline industry was presented by Prof Fariba Alamdari of Air Transport Department at Cranfield University to the annual conference of the UK and Ireland Institute of Travel Management.
There were a few crumbs of comfort for the network carriers but in all it did not make good reading for them.
The two bits of good news were that long term traffic and passenger growth looks assured and that the European legacy carriers are doing better than their American counterparts. Considering the state of many US carriers, this may not count for much.
But for the rest the problems that have bedevilled European airlines in the last four year or more are set to stay and probably intensify.
The list of problems facing the industry is familiar: the economic downturn, terrorism and wars, too many regulations, the rise of the low cost carriers and high fuel prices. To these external factors, Prof Alamdari added over-capacity, labour costs, too high business class fares, inefficient hubs, the obsession with market share over profit, ignoring the rise of the low cost carriers and the changing purchasing behaviour of travellers – all of which the airlines are in a better position to remedy.
The solutions proposed were again the need to cut costs. This could be done by cutting staff, re-negotiating contracts, outsourcing, withdrawing from unprofitable routes, reducing aircraft or frequencies, rationalising the fleet.
Low cost carriers' market share in Europe
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