Airline structural change in Europe: a major turning point – if labour allows it

"Short-haul premium will never recover. That part of the business has changed forever and we have to address it." British Airways CEO, Willie Walsh; 9-Feb-2010. Announcing British Airways' response to moribund business travel within Europe, Mr Walsh outlined a plan which reflects the dilemma that now confronts all major European carriers - BA, Air France-KLM and Lufthansa in particular. The issues are basic, but apparently near-insoluble. With new restructuring attempts under way, the three majors are feeling their way through the mire, adopting broadly similar strategies. They really need low cost subsidiaries to help them, but only compromise measures are being proposed. Whether even these are successful will depend on how well managements can convince their labour unions to adopt the new realities.