How are airlines in Europe responding to a challenging environment and mature market? In my research for the World Low Cost Airlines Congress 2013 speaking with CEOs, COOs and VPs from Airlines I discovered what their main concerns are. Besides the obvious constant fixed issues such as high fuel prices, market austerity and lack of conducive government legislation, I found that as the market is maturing the competition for market share is naturally heating up.
The industry since the recession has been mainly fire fighting and not actually looking forward and adapting to the changes in travel such as the emergence of high speed rail, traditional carrier short haul offshoots and new consumer technologies. So what is going to happen in Europe? are there anymore traffic passengers that can be stimulated and is price still a key stimulation mechanism? Ryanair seem to think so on both counts! they recently announced five new European flights routes from East Midlands Airport and their value proposition seems to be the same.
The question still remains though for more added value airlines such as Easyjet and Vueling if they should focus on improving yields on their current routes or create more routes – are they then spreading themselves a bit thin? Easyjet recently announced that their business passenger revenue went up in 2012 by 9.2% – how did they do this? simply by adding routes where rivals have cut capacity.
So in this very crowded market where low costs face off with legacy carriers and both want to see what the impact will be of HSR, if their enough room for everybody? what are your thoughts on this?
This is something we are focussing on in more detail at the World Low Cost Airlines Congress 2013 where we will have the BBC's Stephen Sackur asking these questions to leading Airline CEOs in our exclusive one on one interview sessions.