The rise of the Gulf Carriers has become a major talking point in the aviation industry, with many arguments that the big three have an unfair advantage on the European market.
Speaking at the Routes Europe Strategy Summit in Aberdeen, a group of panellists discussed the real issues in the aviation industry in Europe, and whether the ‘big three’ are solely to blame for the downturn in passenger numbers on some European carriers.
Jochen Schnadt, Principal and Managing Director, Latitude Aviation, argued that it is no fault of either the Middle Eastern or low-cost carriers for the decline in capacity numbers on some European carriers.
“Last time I checked, I didn’t see any of the Middle Eastern guys or any of the low-cost guys tying customers up, putting shackles on them and putting them on the aircraft. These are customers that have voted with their feet and have made a conscious decision to fly with carrier ‘A’ as opposed to carrier ‘B’,” he said.
According to Schnadt, the real problem that European carriers face is in terms of customer service: “There are bigger issues in the industry, we haven’t fundamentally changed the way we deal with the customer, the way we engage with the customer and the way we deliver our product. It’s the lack of addressing these issues that is the problem,” he added.
Peter Morris, Chief Economist, Ascend, agreed with the idea that airlines such as British Airways need to improve on their marketing techniques. Some airlines will send marketing emails to promote a new route or a discounted price, but there is never the option to respond in order to speak to someone about it, he said.
“The person doesn’t even exist as an entity, it was a fake name which you couldn’t even track down and it showed to some degree that they don’t want you to come back to them and there is a real danger of that, you’ve got a one way relationship,” he added.
According to Jens Boyd, Group Director, Long Haul Network and Revenue Management, Thomas Cook Airlines Group, European carriers should be following in the footsteps of American carriers.
“Europe should have five or six large airlines in order to reap the scale effects that we need in order to be continuously competitive on the global scale of things,” he said.
The lack of foreign investment is another issue, as Europe has a limit on the amount of investment foreign companies are allowed to have on European Airlines.
“We have some closed rules in Europe when it comes to foreign investment, a limit of 49% by foreign companies in European airlines and no effective control is a source of problems for the future. There’s not a big bunch of people out there wanting to give money to the industry, and the industry needs capital, particularly the airlines,” said Simon McNamara, Director General, European Regions Airlines Association (ERAA).
Middle Eastern Carriers in Europe