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As 2018 draws to a close, it’s time for a customary look back at the year gone by.
It was a year of many airline failures. Some came and went in the UK market very quickly. Others will enter 2019 facing continued uncertainty.
Consolidation In Europe Has Some Way To Go
Over the past 15 years or so, legacy airlines in Europe have consolidated into one of Air France-KLM, International Airlines Group and Lufthansa.
easyJet and Ryanair have become the dominant low cost airlines.
After the failure of Air Berlin and Monarch in 2017, CityJet, once dominant at London City, suspended scheduled flying and now provides wet lease services only. Cobalt Air, Primera Air, and VLM Airlines failed.
Flybe is searching for a new owner. Finnair repeatedly indicates a desire to play its part in consolidation. There is some way to go yet.
Reykjavik Is Not Dubai
Iceland’s WOW air once had an ambition.
If Dubai could capture great swathes of connecting traffic between Europe and Africa and Asia, then why could Reykjavik not do the same across the North Atlantic?
The answer of course is what Emirates did at Dubai to great effect was provide passengers between Europe and Asia and Australia with scores of new one-stop connections that previously required two changes. And all in better comfort.
There are of course ample direct flights between most major European and North American gateways and many connection opportunities at better connected airports.
This did not deter WOW air which embarked on an aggressive expansion plan, launching many new US cities from Reykjavik. This now lays in tatters. It is rapidly shedding itself of aircraft and routes in the hope of securing a new investor.
Low Cost Should Not Mean Low Service
Passengers on Norwegian do not mind the fact that it doesn’t serve free in-flight meals.
At least as far as perception is concerned, this is a reasonable trade-off for what passengers see as Norwegian providing accessible transatlantic fares.
However, as much praise as Norwegian receives when it gets it right, opprobrium is heaped on the airline for delays that can run into 12 hours+ and last minutes substitutions of aircraft operated by HiFly and Wamos. Passengers may be willing to bring their own lunch, but they still expect to reach their destination on time.
Norwegian has proved there is a market for unbundled long-haul travel, which IAG’s LEVEL is also exploiting. However, low cost does not mean low service. Value is about being extremely selective and precise about what it is you do and don’t do, and consistently delivering on your promises.
The Basic Rules Remain The Same
Sir Richard Branson and Willie Walsh may not agree on many things, but there is one thing they do agree on.
Both would say that new airlines need to pursue steady, cautious growth as new routes take years to establish and excess unprofitable capacity is destructive of value.
Norwegian did not do this. Nor did WOW air. Nor did Primera Air which launched four transatlantic routes in one go at Stansted. Primera Air went bust. WOW air is, by its own admission, teetering on the brink of bankruptcy. And Norwegian had to reassure investors of its liquidity position on Christmas Eve. Whatever happens next to Norwegian, the era of rapacious growth is over.
Airlines Should Just Be Airlines
There have been many failures by airlines to create new sub-brands, Ted by United, Song by Delta.
One expected to join the list next year is the offshoot of Air France, Joon.
Ostensibly aimed at millennials and with all the hallmarks of an airline designed by a marketing agency left to its own devices, Joon occupies routes transferred to it by Air France with cabin crew wearing white trainers serving organic smoothies.
It’s not clear what it is about Manchester and Madrid that merits them to be served by an airline for millennials. One of the many curious aspects of Joon is how it claims to be “also an airline”. If truth be told, there are many businesses that can be a better lifestyle brand than an airline.
Getting the basics right day in day out is hard for enough for airlines – as events at Gatwick before Christmas showed – and they should just stick to that.
Progress Is Powerful
Qantas launched the first ever scheduled non-stop service to Perth this year.
The launch generated huge publicity and, by all accounts, the route has been a commercial and operational success.
At a time when it seems there are forces at work to take the world backwards, a sense of progress and the world becoming a smaller place is extremely powerful.
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