The Year in Passenger Aviation 2014

As 2014 draws to a close, passenger aviation has experienced much of the same as previous years: Continuing challenges to the cost restructuring of the legacy carriers including debilitating strike action by pilots for Air France and Lufthansa that effectively wiped out their profits for the year. The service upgrading strategies of low-cost Carriers as direct threats […]

IAG profits rise strongly…in contrast to Air France/KLM and Lufthansa Group

In stark contrast to financial results for Air France/KLM and Lufthansa Group, IAG (British Airways, BMI, Iberia and Vueling) posted strong financials at the end of Q3 2014. The table below shows a comparative between the three European legacy groups (source: CAPA and company reports) So how has IAG managed to improve its […]

Brief Update: Etihad-Alitalia Alliance

The EU Commission will make a final decision on the proposed 49% equity stake acquisition by Etihad in the struggling Italian national carrier, Alitalia. According to Reuters, the EU Commission may accept concessions from Etihad/Alitalia such as slots on Rome to Belgrade (Etihad has a stake in Air Serbia) and Rome-New York. In August, Abu Dhabi’s Etihad […]

More of the Same…Lufthansa Group moderates its financial outlook for 2015

Citing a series of unrelated events and factors including the Ukraine conflict, Ebola, pilot strikes and weak revenue conditions, Lufthansa Group remained cautious about the prospects for 2015. The Passenger Airline division, which produced more than 75 percent of Lufthansa Group’s revenue in first 9 months of 2014, posted a 1% decline in revenue and a 41 million euro fall […]

“The only thing that’s different is you have the sea under you” – Norwegian Shuttle’s quest to operate low-cost Transatlantic

The battle is on. Norwegian Shuttle – Norway and Scandinavia’s newest and fastest growing airline – is pressing ahead with the its LCC transatlantic service. It offers all economy class (with some “premium economy” seats at the front of the plane) on their 787-8 and 787-9 Dreamliners. CEO of Norwegian Air International (NAI) (the holding company operating the […]

Lufthansa’s struggles with Germanwings

Two recent declarations from European passenger aviation’s biggest companies paint an interesting contrast. First Lufthansa CEO Carsten Spohr declared: “We don’t want to be driven by change in the aviation sector: we want to be among the drivers of it. But doing so demands bold steps forward: our market is no place for half-measures.” He […]

Update on Austrian Airlines Saga

Senior management at Austrian Airlines and representatives of the employees’ union have reached agreement on a new labour agreement. While the details are yet to be disclosed, the key point is that one option: that of Austrian Airlines becoming an LCC has been avoided. Austrian Airlines CEO Jaan Albrecht stated: “I am relieved. The agreement […]

Can airlines find their Sweet Spot?

With the ongoing convergence of passenger airline business models, it’s worth remembering the fact that despite this convergence, there are distinct differences between the intended positioning of the airlines related to on the ‘front-end’ product and service mix on the one hand and the ‘back-end’ cost structures that the airlines exhibit. The diagram below breakouts […]

Future Options for Austrian Airlines Management

The severe blow dealt by the European Court of Justice’s ruling to management at Austrian Airlines (Tyrolean) – a fully-owned subsidiary of Lufthansa Group – that they cannot negotiate an agreement with the works council on the basis of a Tyrolean deal (rather than the more generous old Austrian Airlines one) means that the management have […]

The Worst Stock Photo Ever Used to Sell An Awful Product – LOT Polish Airlines

This has to be the worst stock photo ever used by an airline to sell a useless product by a very poor airline. The value proposition? Pay us more money to sit at the front of the plane where we will serve you poor food (that 5 years ago we would have served in economy […]