Bloomberg Businessweek: Europe’s Big Airlines No Longer Want to Fly in Europe
Sep 12, 2014, 2:26 am
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Bloomberg Businessweek: Europe’s Big Airlines No Longer Want to Fly in Europe
From this article by Justin Bachman in Bloomberg Businessweek:
...and meanwhile, some airlines based in the United States are recording record profits...
The biggest airlines across Europe are finding it tricky to make money in their own backyards. Air France-KLM (AF:FP) said on Thursday it will transfer a major portion of its European flights to Transavia, a low-cost airline acquired by KLM 11 years ago, as part of a major restructuring aimed at reversing losses on short flights. The same strategy has been adopted in Germany with Lufthansa’s (LHA:GR) steady shift since 2012 of its European flying from Frankfurt and Munich to its lower-cost Germanwings unit.
The shunning of European routes by the global flag carriers reflects the cutthroat nature of fare competition in the continent, where airlines such as EasyJet (EZJ:LN), Ryanair (RYAAY), and Wizz Air dominate the short-flight market. Those carriers’ labor costs are substantially lower than at Lufthansa, Air France, and British Airways, which also have routes that don’t touch their hubs.
The shunning of European routes by the global flag carriers reflects the cutthroat nature of fare competition in the continent, where airlines such as EasyJet (EZJ:LN), Ryanair (RYAAY), and Wizz Air dominate the short-flight market. Those carriers’ labor costs are substantially lower than at Lufthansa, Air France, and British Airways, which also have routes that don’t touch their hubs.
Sep 12, 2014, 2:37 am
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What's the point of your post?
It's fairly obvious that both labor and airline "markets" in Europe and the US are quite different. For a start the European airlines lack the ability to go bust every few year, sticking their employees and suppliers with their debt.
It's fairly obvious that both labor and airline "markets" in Europe and the US are quite different. For a start the European airlines lack the ability to go bust every few year, sticking their employees and suppliers with their debt.
Sep 12, 2014, 8:54 am
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The European airline industry certainly doesn't lack the history of going bust and sticking it to others too with a shell game of sorts. Swiss and Belgian carriers come to mind, but there are others too.
Stuffing more flights into supposedly LCC units is just another form of shell game. Doesn't it stick it to employees and customers too?
Sep 13, 2014, 9:40 am
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Meanwhile, some of us in the USA have short memories, and don't remember when TED's SONG would fly you around the USA.
However, that wasn't nearly as effective as the big boys simply contracting out to other airlines on 30 minute to 3 hour hops on RJs, sometimes flown by pilots with too-few flight hours, who haven't slept because they need another job just to pay the rent.
However, that wasn't nearly as effective as the big boys simply contracting out to other airlines on 30 minute to 3 hour hops on RJs, sometimes flown by pilots with too-few flight hours, who haven't slept because they need another job just to pay the rent.
