A Squeeze of Orange?

The European aviation scene is an interesting one at the moment with a lot of movement between the big players. There are those who are going to miss out, and those which could potentially make large capacity gains, leaving just three of four groups.

With the ever increasing attempt of creating a more ‘upmarket’ image Ryanair are really the ones to watch. They have an extraordinary amount of aircraft on order, not just to replace the current fleet, but to add it making it the largest carrier in Europe. The assault at going upmarket is going to spill over into serving primary airports, something their business plan has avoided over the last 20 years.

We have already seen this happen in some markets, they already have some slots at Amsterdam, as well as Barcelona El Prat, Madrid, Brussels, Copenhagen, Milan Malpensa, Rome Fiumicino, Athens and Lisbon. It is not co-insidental that easyJet also operate from all of those airports and have bases in the majority of them. This challenge is only ever going to increase from Ryanair, but its not just them, there is also some serious challenges now by IAG owned Vueling, who are also muscling in on historically easyJet bases.

easyJet have always been strong in the UK market. They first set up camp at Luton airport in the mid-90’s, and then expended to Gatwick, before buying Go which gave them other bases at Stansted, East Midlands and Bristol. Another purchase, this time BA franchise partner GB Airways gave them a stronger hold at Gatwick and Manchester, with FlyBe slots at Gatwick enhansing their portfolio. So, yes, easyJet have a strong position in the UK, especially at Luton and Gatwick.

Abroad, easyJet has had mixed sucess. They have long held their base at Geneva which is very sucessful, as is Paris. There have however been some failures: Madrid was closed as a base, so was Rome recently and East Midlands which was a difficult market.

The recent base closure of Rome is an interesting one, where both Vueling and Ryanair deceded upon them forcing easyJet out. It also saw the end of the much heralded at the time Linate to Fiumicino shuttle which they won rights for, only to be closed shortly afterwards. Making the case that the aircraft were better off at new bases Venice, Naples and at their historic Italian base in Milan Malpensa it isnt going to be an ‘easy’ ride there either – especially at Milan, where Ryanair is trying hard to compete head to head.

It is not just abroad though where the challenges are being felt. You just have to look at the first ever easyJet base at Luton. They really do have the upper hand at the airport, complimenting Wizzair who operate to eastern Europe extensively. With a low cost wing opening, Copenhagen had been hoping it would attract low cost carriers to the airport with incentives to fly there. It worked and both Ryaniar and easyJet set up a Luton to Copenhagen schedule – from nothing to a crazy 8 flights per day between them. The fares are extremely low and seem to be attracting passengers, although it cant do anything for the yield for either airline, sometimes you can get seats for £20 return.

Despite going up against Monarch on some sunshine routes from the beginning, it is now Vueling who are getting in on the act up against easyJet coming to their home turf. Not only that, but the three routes already announced are all going toe for toe against the orange airline. This summer IAG-backed Vueling will operate twice a day to Amsterdam and Barcelona, with a six time a week service to Zurich. One would assume further routes are planned to link their bases – maybe Rome or Madrid could be on the cards for the winter. Air France and KLM backed Transavia will be operating Luton to Paris Orly this summer, going up against easyJet’s Charles de Gaulle service.

It is going to be tough for easyJet where they don’t already have the upper hand to compete with the ever unstoppable Ryanair, and Vueling – the newcomers on the scene with big backers. It doesnt have the cost per seat advantage Ryanair has to have low prices, doesnt have the same number of aircraft on order, and doesnt have the distribution channel IAG can provide Vueling.

Gatwick will remain strong given their slot position, although a number of routes have already been dropped given competition from other London airports – notably in Germany including Cologne and Strasbourg.

At airports like Milan Malpensa, Amsterdam, Lisbon and Zurich, they are a lot more exposed to advansing airlines.

It is going to be an interesting couple of years, but surely a lack of ambition won’t derail one of the most iconic airlines in European aviation.


Backwards is the new Forwards

We are heading into a new cycle in travel, it was once all about the internet and ‘low cost airlines’ flying to places you didn’t really want to go. That is changing though, and not really for the reasons which most people think.

Yes, the internet and low cost airlines are not going anywhere, in fact they continue to thrive, but what we are seeing is a revolution, a revolution which sees the customer as king once again which a revisit to the motto ‘The customer is always right’.

We can trace this back somewhat to the change of CEO at easyJet. When Andy Harrison left the company was in trouble. It was beginning to pick up a reputation for lateness, along with indifferent product which had been ridiculed by the customer, especially in the UK after the famous Airline programme on ITV followed their earlier beginnings. With Carolyn McCall onboard hot from the media industry, the customer was put right at the heart of what the company does.

Although still keeping the low cost structure elements which customers had been crying out for were slowly introduced.  Allocated seating was the big one, and at the time a big step being the largest low cost airline in Europe to introduce it. There were question marks if doing this would have an impact on turnaround times, but after a trial it was rolled out network wide. It now also adds revenue to the bottom line that to a higher take up of people purchasing seats than people taking up the ‘Speedy Boarding’ offer.

More recent changes have included a ‘beefed up’ business offering for regular flyers, and the introduction of a more generous two cabin bag allowance for easyJet Plus customers. The constant creation of routes from primary airports have really helped the business market, along with a more business-like and professional branding.

So well received has this new, more ‘premium’ push by easyJet that Ryanair has started copying those features. Under the ‘Always Getting Better’ plan they aim to shed themselves of the cheap and nasty airline of old to one which is cheap and cheerful. Like easyJet, Ryanair has reintroduced allocated seating on all its flights, and has a two cabin bag allowance throughout the aircraft, although the larger bags are limited to 90 per flight.

Following a change of philosophy through the winter, Ryanair started flying more through the usually unpopular winter months. These were not new routes, but beefing up schedules on routes which may appeal to business like London to Madrid, Barcelona, Rome, Milan and Athens. A push into primary airports like Barcelona El Prat, Rome Fiumicino, Brussels and Cologne have shown the commitment to this. A better website and digital offering is set to revolutionise how we book air travel bringing Ryanair back to the fore once again.

That takes us to the kings of central Europe, Wizzair. Today, the 19th May is their 11th anniversary which signals a new direction for the airline which brings them now in line with the two dominates in European point to point air travel. Wizzair has really grown with the migration within Europe since the borders have been relaxed, especially within Poland, Romania and Hungary.

Wizzair has long been the poor relation to the two, having only been created 11 years ago, well behind the curve of the established low cost carriers. It really went along the lines of the Ryanair model, connecting secondary or even teriarty airport, with a very low cost model often referred to as the ‘ULCC – Ultra Low Cost Airline’. It has even started charging for taking luggage onboard the aircraft, following the model seen in America by Sprint.

The 11th birthday is also a watershed moment for the airline, adopting some of the policies from easyJet and Ryanair, along with new branding which reflects a more professional approach.

In a press statement today, the airline said, “In its first 11 years, the airline has carried 90 million passengers, grown from a new airline platform to 59 aircraft with more than 380 routes in 38 countries. Focused on customer care since the outset, Wizz Air is also announcing a range of new enhancements aiming for a better customer experience.

“WIZZ undertook an initiative to rejuvenate its brand over the last few months and the launch of today’s refreshed brand and livery demonstrates the airlines’ continued commitment to provide a positive experience for its customers. The WIZZ brand now has a fresh, more vibrant, sophisticated look and feel and some of the initiatives being implemented.

József Váradi, Wizz Air Chief Executive, said: Over the course of the last decade, Wizz Air has had significant success in revolutionising an entire industry, and we have exceededour ambition to make reliable and affordable air travel available to everyone in Central and Eastern Europe as we extended operations all across Europe and beyond. The launch of our refreshed brand is another one of our many measures to constantly improve passengers’ travel experience. We are very excited to launch our new livery on both the A320 and our new A321. We remain focused on developing our pan-European network of routes and look forward to welcoming returning and new customers on board.”

On the other hand we have seen the larger, what we would now describe as legacy carriers going the other way. British Airways has taken the hold bag off its cheaper European fares, along with charging for seats across its entire network, unless you check in 24 hours before departure. Lufthansa is in the depths of relaunching their low-cost airline as Eurowings, which will see them also compete in the low-cost long haul market along with Condor in Germany, and also Norwegian and Thomas Cook in other markets in Europe.

A good old fashioned message of giving the customer what they want at a decent price is always going to win over the even sharpest of critics, and sometimes revisiting the past is key to success in the future.

Image via Bjorn