Airliner World 2010

RE: Airliner World 2010

Without wishing to unfairly criticise Argentine accounting standards, perhaps their version of “profit” is a little different to what we might expect in the UK.

The sheer weakness of Argentina’s economy (and their incompetent government) does not indicate much in the way of hope for AA.

RE: Airliner World 2010

Ok thanks for the information.

Just another airline that has intrigued me,Aerolineas Argentina. From the mentions of it so far it seems to suggest it is doomed yet I am sceptical about it. I am drawn to think that it will not survive because of its long loss making history and with the state of the South American economy especially in its home country Argentina, it seems that bankruptcy would be inevitable . But then again was it not the only airline in South America to make a profit last year? Also their strategy especially in Europe interests me. I think that they are seriously planning for the future and have improved their efficiency overall compared to the days before they went bankrupt and with aircraft orders and also further expansion it seems to me that maybe we should not just shrug this carrier off as a definite failure.

RE: Airliner World 2010

Agree with what mongu and Stephen said…..Frankfurt is used alot as a hub for eg. between USA and Asia.

RE: Airliner World 2010

I think that a lot of people use Frankfurt as a hub, especially under STAR. People connecting to eastern Europe from the United States and Canada, even to western cities. Frankfurt is very well positioned.

RE: Airliner World 2010

[updated:LAST EDITED ON 11-02-03 AT 07:31 PM (GMT)]A bit of both I would say.

They have always been a big player on South African routes and offer some good South American routes, albeit not to the extent of Iberia.

Also, they have good access to LHR and pax arriving there for connections, often find that taking their next long flight on LH via say, FRA or MUC is the same price or even cheaper than BA.

RE: Airliner World 2010

Just a question, if BA’s major market is the North American routes, AF’s the African and Iberia South America (with smaller carriers like SNBA, TAP all having smaller markets based on history), where does Lufthansa come in as being such a hefty airline? Is it wholly based on Germanys initial size, economy and pivotal role in the world or do Lufthansa have a sort of niche market in which they have always been lucrative?

RE: Airliner World 2010

The thorn in the side of state aid to AC is EU sanctions.

RE: Airliner World 2010

I agree with a lot of your comments Binx re: AC; however, governments do change, and, if a non-liberal government, or even change of Prime Minister (Mr. Martin) come into power, Air Canada’s ties the liberal party may not be so strong. A lot can happen in seven to ten years. Also, I think AC needs a new CEO. It’s time for a change. If it proved cheaper for Air Canada to merge with a US carrier, or have open skies, I think that Canadians would back this. People seem unhappy with the monopoly. I also doubt that David Collinette (spelling -sorry) will continue to be Minister of Transportation after the cabinet shuffle with Martin, he is a Chretien supporter.

RE: Airliner World 2010

Just a brief comment on Air Canada.
I believe that Air Canada will continue to be around for a very long time. Regardless of a cabotage agreement with the US, the Canadian government has made it very clear as of late that they will not be willing to allow the flag carrier to fail. The Canadian government forced Air Canada to step in and save Canadian Airlines just a few years ago and it would be rather ridiculous if that decision was made irrelevent by allowing Air Canada to fail. Also, let’s not forget that just over ten years ago, Air Canada was a crown corporation and the pet project of many Members of Parliment that have now risen to influencial positions. (it’s interesting to note that the MP that proposed the name change from Trans Canada Airlines to Air Canada is none other than the current Prime Minister, Jean Chretien). Further proof can be seen in recent remarks by the Minister of Transport who has said the government will explore the possability of loan guarentees to Air Canada, reducing a security surcharge on tickets and working with the Minster of Industry to revise a program that offers foreign airlines cheap deals on Bombardier regional jets that isn’t currently available to domestic airlines. (right now it’s substantially cheaper for a foreign carrier to purchase the jets than a Canadian airline to purchase Canadian jets that helps to create more Canadian jobs for both companies). The only question that remains is in what form will Air Canada survive, the more common belief being that Air Canada will only serve as an international flag carrier with very limited domestic service.

Cheers,
Binx

RE: Airliner World 2010

>Thanks for the response Kabir. I suppose China will be one
>to watch for some time as its market becomes stronger
>(especially with the Olympics in the offing).
>
>I would assume that Air India will also increase its
>position, how can one not with such a large population to
>resource and strong links throughout the world.
>
>I’m not sure of the history, but did Air India stay out of
>Canada after the bombing in the eighties? I’m assuming that
>it had to hurt their bookings. Or, is competition from Air
>Canada keeping them out?

Air India will have to…for 1 billion people they operate 29 aircraft is shameful. Air India is not an easy airlines when you say competition. Air India operated there own flight and was in code-share with Air Canada in the eighties. It was the Kanishka accident and bad per seat revenue that made them pull out of Canada.

RE: Airliner World 2010

I just don’t think a lot of the US carriers (bar Southwest) have the management or cost structure to be efficient. Whichever 2 of the majors last the longest will ultimately survive.

BA has actually made quite healthy profits, and by concentrating on their strengths this is only going to improve. They are still too reliant on the North American (who am I kidding – I meant LHR-JFK!) market. However they have gradually downsized the fleet in that area: B747 Classics retired, a fair few B744 flights replaced by B772. The surplus B744 aircraft either being stored or used to operate other markets.

Their next big mark will be Australia I think. They work very closely with Qantas and let’s face it, they are 2 of only a handful of profitable airlines these days. I see BA increasing their ownership stake in QF, though only by a few %. Maybe QF will do likewise, and each company will buy 5% of the other.

Iberia will be safe and will even grow, on account of the very weak competition on South American routes. But it will not expand beyond this niche. Therefore they will integrate more closely with Oneworld partners.

LH will be annihilated in the German domestic market and will suffer in European sectors too. However they will retain some big ‘uns, like FRA-CDG and FRA-LHR. Long haul should continue to be profitable.

AF could go either way…no one really knows who fit they are, because AF = French government. On their own…who knows. They’ll probably do OK.

RE: Airliner World 2010

1-Heathrow
2-CDG
3-Frankfurt
4-Amsterdam
5-Madrid

I think the huge control of the Europe to Latin America is one of the reasons Madrid ranks so highly in Europe, hence reinforcing my idea about Iberia surviving because of its large control of that area of the market.

RE: Airliner World 2010

I agree with the Iberia assessment upon reflection. Isn’t Madrid the 5th or 6th largest airport in Europe? That alone should secure some sort of future placing for Iberia.

RE: Airliner World 2010

I saw that, BA reports a very heffty profit. I was only going by the news that I had seen reported so much, that war would put the airline under.

Cheers Saab. 🙂

RE: Airliner World 2010

[updated:LAST EDITED ON 10-02-03 AT 06:47 PM (GMT)]My reasoning as to why I added Iberia to the list is because it is very predominate position in Europe with it being the major airline connecting Latin America with Europe. No other airline comes close to its frequency and service when it comes to South America. Thus with no other airline really offering any major competition it would seem Iberia has a niche market, suggesting to me that it could be one of the larger carriers in Europe. Just like BA with the USA and Air France with Africa.
Also, Spain’s high population and popularity amongst travellers it would also lead me to think it could be a survivor. How it is financially I do not know. Iberia may not be in the same category as BA,AF,LH etc in the future and will probably have a smaller and more efficient status but I think it will survive the next 10 years.
Maybe Keltic could give us some details?

Just a note, BA posted a 13 Million Q3 profit today adding to my judgement as to why BA will not disappear.

RE: Airliner World 2010

Thanks for the response Kabir. I suppose China will be one to watch for some time as its market becomes stronger (especially with the Olympics in the offing).

I would assume that Air India will also increase its position, how can one not with such a large population to resource and strong links throughout the world.

I’m not sure of the history, but did Air India stay out of Canada after the bombing in the eighties? I’m assuming that it had to hurt their bookings. Or, is competition from Air Canada keeping them out?

RE: Airliner World 2010

>Kabir, what, if any, consoidation could happen in Asia? I
>have heard for years that JAL is in trouble, like UA, AA and
>AC, too labour heavy, and the government apparently gave a
>number of slots at Narita to foreign airlines (a while back
>now). For example, would both Malaysian and Singapore
>survive, both ANA and JAL, Korean and Asiana?

Stephen SIA and ANA are not facing any types of problems currently…both are moving on in the Asian aviation industry in rock solid spirit. Malaysian is slowly gaining popularity and most important of all profits, a new CEO has recently taken over Malaysian.

You have heard right, JAL is not in a very good condition. JAL is getting aid from the government for past 3 years and like Air India JAL has a problem of over-staffing. JAL operates around 250 people per aircraft. SIA and Thai already work in collaboration for only South East Asia. I dont see any major Consodation in this area but i do know that Asiana is bleeding within. Its in a poor financial state and is continuing to deplete. On the other hand Korean Air is doing well and gaining profits, specialy from the Cargo sector. I wont be surprised in future seeing Korean Air gobble Asiana. In my opinion Asiana’s management staff is not upto the mark, they are taking out routes that are not that profitable, while they should first concentrate on improving there financial status not adding more lines on there route map. Actualy there present strategy is gaining more from trans-pacific routes. hence it operates to countries like India where there is a huge market for USA bound travelers. Also Asiana is cheaper than many other airlines, if you want to goto USA its cheaper that AI from here. That is why Asiana’s most profit making sectors are to the States.

Also we have growing airlines in Asia which include Air India, PIA and Vietnam Airlines who have strategies to expand there current route network by 50%…specialy AI and PK. Vietnam also is steadly increasing its fleet capacity with Airbus for short haul and Boeing for long haul. Of coourse the Boeing deal is part of an aid pact to Vietnam by USA.

Also not forgetting likes of SriLankan, who are famous more on the European routes rather than Asian ones.

Also taking China in….none airliens are in any sort of major colaboation with any other airline, although China Eastern does have with Air india, its a different story it goes half empty.

RE: Airliner World 2010

[updated:LAST EDITED ON 10-02-03 AT 03:48 PM (GMT)]Kabir, what, if any, consoidation could happen in Asia? I have heard for years that JAL is in trouble, like UA, AA and AC, too labour heavy, and the government apparently gave a number of slots at Narita to foreign airlines (a while back now). For example, would both Malaysian and Singapore survive, both ANA and JAL, Korean and Asiana?

Your thoughts…

RE: Airliner World 2010

>I think that at some point North America will have an open
>skies agreement (if the current economic climate continues)
>and at that point Air Canada may join a partner. Otherwise,
>the government likely wouldn’t let them disappear. Also,
>within the United States I believe that there will be a
>consolodation of airlines, perhaps the Delta, Continental
>and Northwest codeshare is the first sign of that. If they
>merged outright they would have an impressive network. I am
>not sure if both UA and AA will survive, but Southwest will
>definitely be around for a long while. However, the US will
>definitely need a long distance carrier and that is why two
>of the majors will stick around (competition).

AA doesent look so solid at present but we have to remember all these are powerful airlines and there resistence has to be admired. Southwest is making profits and enjoying itself so no chance of that.

>I agree that British Airways will not be allowed to go
>under. BA is a powerful corporate (and British) logo around
>the world. Also, as long as London stays in the forefront
>of ports of entry to Europe BA will survive. I agree that
>LH and AF will also survive, but I’m not sure why Iberia is
>also included with this group. I didn’t realize they were
>that strong force in Europe.

Agreed again, BA is to well equiped in all terms to go down, AF and LH…no way. LH is the only airline with Air India with profits through and after Sept. 11. I think Iberia is in a stable condition….Keltic will be able to answer this better.

>Agreed that Air New Zealand will disappear into Qantas.
>However, i could also see an Asian carrier taking up a
>sizeable share of the Oceanic market. Perhaps BA and QF
>could become stronger partners yet in an effort to compete
>on routes through Asia?

Yes ANZ will dissapear into QF….about BA, QF partnership….interesting idea.

>Star will deminish; however, I recall Airliner World’s
>special on the alliances and I was struck that SkyTeam has
>far fewer members, but has an amazing number of cities
>served. Perhaps they will survive.

Actualy dont count Star to be out by 2010 or near that. the AW report you are talking about was long back i think, and at that time Star wasent this big. Indeed, Star’s route-map is huge and they are expanding, we just have to see how the members of Star cope with each other.

RE: Airliner World 2010

First, one of the best discussion topics in a long while. Good job Mongu.

I think that at some point North America will have an open skies agreement (if the current economic climate continues) and at that point Air Canada may join a partner. Otherwise, the government likely wouldn’t let them disappear. Also, within the United States I believe that there will be a consolodation of airlines, perhaps the Delta, Continental and Northwest codeshare is the first sign of that. If they merged outright they would have an impressive network. I am not sure if both UA and AA will survive, but Southwest will definitely be around for a long while. However, the US will definitely need a long distance carrier and that is why two of the majors will stick around (competition).

I agree that British Airways will not be allowed to go under. BA is a powerful corporate (and British) logo around the world. Also, as long as London stays in the forefront of ports of entry to Europe BA will survive. I agree that LH and AF will also survive, but I’m not sure why Iberia is also included with this group. I didn’t realize they were that strong force in Europe.

Agreed that Air New Zealand will disappear into Qantas. However, i could also see an Asian carrier taking up a sizeable share of the Oceanic market. Perhaps BA and QF could become stronger partners yet in an effort to compete on routes through Asia?

Star will deminish; however, I recall Airliner World’s special on the alliances and I was struck that SkyTeam has far fewer members, but has an amazing number of cities served. Perhaps they will survive.