As spring approaches the world of LCC‘s remains as buoyant and full of life as ever.
Ryanair has just been rebuffed by the European Commission in its third attempt to acquire a majority stake in Aer Lingus. Knowing the determination of Michael O’Leary this is far from the end of the line & a legal appeal is set to be launched. Undoubtedly a talking point at this year’s Congress.
Over at easyJet the company has survived the latest conflicts with Stelios, very much to the fore at its AGM.
The key is that they have to order new aircraft sometime soon though he is very much against it. They need to keep the fleet young to avoid heavier maintenance costs & increase average aircraft capacity to keep seat production costs low. At the same time they have to take steps to buy into the next generation of aircraft which bring operating cost efficiency to an altogether different level. It’s not a foregone conclusion that easyJet will stick with Airbus so there’s all to play for by Boeing and Bombardier. One to watch as we move through 2013 and likely a few more sparks yet to come between the Board and Stelios.
Elsewhere Air France KLM has announced a new brand for its regional French services “Hop!”, as it struggles with increased LCC competition . This is an amalgam of its 3 current regional carriers, Airlinair, Britair and Regional. However it still has much higher costs than true LCC’s & a very mixed fleet of smaller regional jets and turbo props. Not ideal to fend off the LCC big boys. Watch this space to see how it fares
Meanwhile IAG, the parent of British Airways & Iberia, is grappling with the need to turnaround loss making Iberia. Strikes are taking place as unions resist the restructuring that is needed. Iberia Express, set up last year to deliver lower cost feed to the Madrid hub is already profitable but needs to grow. In tandem we await IAG’s bid for successful LCC Vueling, led by Alex Cruz, a regular at the Congress
A busy start to the LCC year & that’s just Europe!
Let us know what you think about the LCC outlook for 2013.
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This article was contributed by John Strickland, Director at JLS Consulting. John has held senior positions with a number of airlines including British Caledonian, British Airways, KLMuk and Buzz. His 30 years of experience have exposed him to the business models of regional, global, legacy and low cost carriers. Find out more at www.jlsconsulting.co.uk