European airlines' labour productivity. Oxymoron for some, Vueling and Ryanair excel on costs

Historically, labour was the biggest operating cost for airlines, before the oil price hikes of the early 2000s pushed up fuel costs. Even now, labour remains the biggest cost for many carriers and is probably the most important 'controllable' cost for all. At the same time, labour is the main agent for service delivery in any service industry and airlines must balance labour cost reduction with maximising the output of labour.

This tension remains a key dynamic for European airlines, whether they are legacy carriers looking to restructure in the face of unions' foot dragging, or low-cost carriers looking to maintain their advantage based on greater labour mobility and flexibility across the continent.

CAPA's analysis of the labour productivity of 14 European airlines reveals a wide range of levels of performance, pointing to what could be an irreconcilable gap between those that will succeed and those that may disappear. It again highlights the success of the low-cost model, particularly Ryanair and easyJet, and the significant challenge faced by legacy flag carriers, who, in some cases, still need dramatic - not just incremental - improvements in productivity.