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Watch the big European airliners.
Wednesday, 30th September 2015
Source : Joseph Fischer ~ Exclusive for 4Hoteliers.com

Exclusive Views: In two separate interviews last week, the CEO’s of Ryanair and Lufthansa talk about the possibility of cooperation between Legacy carriers and the big Low Cost Carriers of Europe.

Last week, at a news conference held in London, Michael O'Leary, the chief executive of Europe's biggest low-cost airline Ryanair, said that the days are numbered for how much longer national flag-carriers can operate intra-European flights because it was too expensive for them to compete on these point-to-point routes.

“If you go forward in Europe in the next five or ten years, I think the low-cost carriers, mostly ourselves and easyJet will do a lot more feeding of major airlines."

48 hours after Ryanair’s CEO announcement came an interview with the CEO of Lufthansa - Carsten Spohr in the weekly magazine Der Spiegel.

The head of German airline Lufthansa does not rule out possible cooperation between its low-cost arm Eurowings and British rival easyJet.

“I can imagine a possible collaboration between Eurowings and easyJet,”

“EasyJet had frequently expressed interest in working together with the Luftansa group”.

The bottom line is clear: The major European Legacy carriers can not compete with the ongoing success of the European LCC’s headed by Ryanair and Easyjet.

It is not that Lufthansa, BA-Iberia and Air France-KLM did not try…

BA gave it a try with GO and in recent years with Vueling . Air France " KLM is trying with HOP and Transavia and Lufthansa was trying with GermanWings and EuroWings.

By now, the legacy carriers understand that it is impossible to fight the LCC’s. In some major European cities Low Cost airlines volume reaches 50% of the total volume of short-medium haul.  

So, the big European legacy carriers understand that it would be senseless to continue trying to fend-off the competition on the short-haul routes. They would be better off focusing all their efforts fighting the competition from the Gulf based airlines " Emirates and Etihad on the long-haul routes

Cooperating with the LCC’s in Europe will keep the LCC’s focused on European routes and not give reason to Ryanair and Easyjet to look for transatlantic routes.

Very recently, the “Wall Street  Journal” published an article called: “Europe’s Disappearing National Airlines” written by Scott Mccarney .

In that article, the reporter is waiting:

“ In terms of passenger traffic, Europe is roughly the same size as the U.S market. But Europe has some 60 airlines, compared with a dozen in the U.S”

“The European airline turbulence has taken a toll on travelers. Strikes at several big airlines, including Lufthansa and Air France, have left fliers grounded. Flights to some European cities have become less frequent and connections more difficult. Discount airlines often fly to secondary airports that can be hard to reach and impose their own expensive fee structure for luggage”.

What I foresee is that in four to five years from now is that, LCC’s and super-speed trains will dominate the European Routes.

It is clear that the dynamic market of European commercial aviation in going through major changes.

Those changes will be felt by all the customers and throughout the European travel industry.

Flying on short-haul flights within and around Europe will become cheaper but the onboard experience will be different .Customers will have more funds to spend on the holiday experience.

The analogy between the European Aviation and lodging industry

If I try to ‘translate’ this change to the European Lodging Industry, my message to my friends is simple: focus on what you do best.

Don’t try and ‘copy’ successful models of limited service budget hotels. Brands such as Motel One, Citizen M, Generator Hostels and Meininger Hotels.

Stop adding a multitude of sub-brands, ‘soft-brands’ and ‘lifestyle ‘Millennial collections ‘.

If your core brand is a good 4 stars, or upscale business hotels try adopting that brand to your new customers. Make sure that your brand is still relevant and try to join forces with other smaller brands.

The name of the game is economies of scale or niche players .

There isn't much left in the middle …

This is strictly an exclusive feature, reprints of this article in any shape or form without prior written approval from 4Hoteliers.com is not permitted.

Joseph - Yossi - Fischer the CEO of Vision Hospitality & Travel - international lodging & Travel Solutions

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