The ever changing airline industry

The ever changing airline industry

As summer draws to a close and the pace picks up for autumn, it certainly hasn’t been a quiet time for the airline industry. Apart from being the peak season for travel there has been a lot going on.

The biggest piece of recent news is the acquisition of Aer Lingus by IAG, the parent group of British Airways and Iberia.

Why is this significant? Because it marks another step in the consolidation of the airline industry. Gone are the days that each country can justify having its own airline, most small ones are loss making, some have gone bankrupt. Aer Lingus is the exception. It is a smaller airline but a profitable one. It has a strong position in its Irish home market and across the North Atlantic. The Irish Government has agreed to sell its remaining share in the company to IAG as has Ryanair.

IAG is now the leading “network” airline group in Europe and is delivering healthy profits. It has already acquired bmi and Spanish Low Cost carrier Vueling. Like Aer Lingus it has a strong position in the North Atlantic market, primarily from its Heathrow hub.

By adding Aer Lingus to the stable,  IAG can leverage the strengths of both companies to increase its share of this profitable but highly competed market.  Specifically, backed by the marketing power of IAG and the strength of its Avios loyality programme, Aer Lingus will strengthen its position in the UK regions to attract more customers to travel to the US and Canada via its Dublin hub.  Similarly, it will gain additional feed passengers on its Ireland-Heathrow services from connections to British Airways African, Middle Eastern and Asian services.

This is an important change in the airline competitive landscape and will certainly be a topic for discussion with our WTM panellists this autumn.

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Director, John Strickland, is a graduate of the University of York and has held senior positions with a number of airlines including British Caledonian, British Airways, KLMuk and Buzz. John was instrumental in the decision by KLM to establish the low cost operator Buzz and in its selection of new routes. His 33 years of experience have exposed him to the business models of regional, global, legacy and low cost carriers. JLS Consulting was established in 2003 and now serves a growing range of clients including airports, airlines, investors and those whose businesses require strategic insight on and advisory services concerning the air transport sector. John regularly devises and chairs panel discussions and interviews senior executives at industry conferences and events. Media work is undertaken for numerous global media organisations including the BBC, CNN, Sky, Al Jazeera, and business specialists Bloomberg and CNBC. John also contributes to a wide range of respected written publications including the Financial Times, Wall Street Journal/Dow Jones Newswires, Business Week, The New York Times, Gulf News, Reuters and AFP.

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  1. Pingback: » Daily Aviation Brief – 21/09/2015

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