The Blue Swan Daily brings you a roundup of the most thought-provoking and interesting comments from those industry leaders in the know.
Association of Asia Pacific Airlines (AAPA) director general Andrew Herdman stated profitability has been “patchy” for Asian carriers in the past five years, while US carriers have captured half of global profitability. “To enjoy future growth you have to survive current competition today”, Mr Herdman stated, noting the region hasn’t witnessed the “same number of failures as we have seen in Europe”, with “a lot of appetite” apparent to set up new carriers and the financing to do so.
LEVEL CEO Vincent Hodder said the carrier is “evolving our models constantly” to achieve lower costs and a customer centric, technologically available airline which “hopefully will revolutionise the industry”. He described the carrier as more an evolution from a traditional carrier to a “horizontally stacked architecture”, rather than a virtual carrier.
airBaltic chairman and CEO Martin Gauss said the carrier immediately implemented full service business class parallel with ultra low cost (ULCC) seats in its economy section. “We had to have that product” in order to compete with LCCs, he continued. “In times where there is demand” for business class revenues improve, he argued, whereas in times of low business demand the carrier has the flexibility to fall back on ultra low cost seats.
Germania MD Johannes Klinsmann commented on the carrier’s activity during the demise of airberlin, stating it was “never our strategy to buy assets” from other companies due to cost sensitivities. The carrier was more focused on boosting capacity, opening new routes and investing “into” the company, Mr Klinsmann said, with the risk of acquiring other assets “too high for us”.
Boeing Commercial Airplanes director market forecasting Wendy Sowers said it has only taken four years to add one billion air travellers globally. Ms Sowers said 11% growth in emerging markets in the past five years reflects growth and demographics changes allowing improved access to air travel. She noted rising propensity for travel in emerging markets such as India, China and Brazil driven by increasing individual income level.
Deutsche Lufthansa AG chairman and CEO Carsten Spohr stated Lufthansa Group is no longer a German group but a European airline group, connecting the continent with 4000 services daily. Mr Spohr said Lufthansa’s success has only been possible with the European regulatory framework as its home market.
IATA chief economist Brian Pearce said the most important issue facing the aviation industry is higher costs and the ability to pass them on rather than increasing oil prices. He argued airlines were improving financial performance during the global financial crisis, despite increased fuel costs, with demand for travel still growing during the period.