Association of European Airlines
- Daily Departures
The Association of European Airlines (AEA) brings together over 30 major airlines, representing the voice of the European full service airline sector for over 50 years. AEA works in partnership with the institutions of the European Union and other stakeholders in the value chain, “to ensure the sustainable growth of the European airline industry in a global context.
AEA provides its members support by following all aeropolitical issues, analysing their impact, recommending strategies, networking with all relevant stakeholders and influencing the legislative process. It also maintains extensive data and economics publishing activities.
735 total articles
66 total articles
Ryanair CEO Michael O’Leary’s recent musings about a possible low-cost transatlantic project indicate that he believes any such operation would need average fares below EUR100.
This raises the question of just what is a sustainable fare in this market?
Until recently the exclusive preserve of legacy full service carriers, the North Atlantic has seen the entry of LCC Norwegian over the past year.
However, it was always possible to find relatively low fares and Norwegian’s pricing, while lower than that of premium airlines such as British Airways, does not appear to be substantially lower than the average all-inclusive economy fare of Association of European Airlines (AEA) member airlines between Europe and North America.
This report explores some of the key factors in establishing viable pricing for this model.
European airlines face overcapacity & resurgent labour. Recent profit warnings make alarm bells ring
A recent bout of profit warnings from a number of European airlines are ringing alarm bells and providing a reminder of the fragility of profitability in the industry. Airlines of different sizes, shapes and geographies have been prompted to announce a lower outlook for 2014 earnings, including Lufthansa, Finnair, Aer Lingus and Icelandair. Notably, these are all legacy carriers.
Although the details differ in each case, two broad themes emerge from these announcements. The first relates to signs of overcapacity in some markets, leading to revenue weakness. This is also linked with the growing competitive threat posed by alternative business models to Europe's legacy carriers, whether by LCCs on short-haul or Gulf carriers on long-haul.
The second theme is the impact that labour has on profitability, whether damaging it through industrial action, or assisting it through cost savings.
National carriers in countries of the former Yugoslavia are struggling to survive in the current economic environment as operating costs rise and they face competition from large network carriers and expanding low-cost carriers. The former Yugoslavian nations of Bosnia and Herzegovina, Croatia, Montenegro, Serbia and Slovenia all have national airlines but are struggling to become profitable, while the national carriers of Kosovo and Macedonia have already failed and have not been revived.
Association of European Airlines (AEA) secretary general Ulrich Schulte Strathaus recently told Slovenian newspaper Dnevnik that national carriers in the former Yugoslavia need to unite into a single carrier in order to survive. Mr Strathaus stated, “the once single Yugoslav market is now fragmented and a regional solution is necessary. The region needs an airline that would cover local needs and connect with global hubs.”
The main airlines in the region are Bosnia and Herzegovina’s B&H Airlines, Croatia’s Croatia Airlines, Montenegro’s Montenegro Airlines, Serbia’s Jat Airways and Slovenia’s Adria Airways.
There are few subjects that Europe’s airlines can agree on, but the lamentable state of the European air traffic control system is one of them. This week, industry bodies representing all sectors of the European air transport market blasted the efforts of European member states and their air navigation service providers (ANSPs) on reducing costs and increasing efficiency for falling short of where they should be.
Air traffic inefficiency and the high costs associated with Europe’s patchwork air traffic management (ATM) system are estimated to cost the European aviation industry between EUR4 billion and EUR5 billion p/a. The delays and inefficient routings punish both passengers and airlines, increasing flight times and distances and driving up fuel burn and greenhouse gas emissions, a particularly galling situation given the entry of aviation into the EU Emissions Trading Scheme next year.
The European Union’s Emissions Trading Scheme (ETS) was a hotly debated topic at the 2011 IATA AGM, with the deeply unpopular scheme attracting strong objections from governments, aviation bodies, airports and airlines around the world. In the eyes of these airlines and bodies, the EU in taking unilateral action, is over reaching its authority and jurisdiction, in contravention of international treaties and bilateral aviation agreements. Critique has also come from stakeholders within the EU, which fear the inclusion of the aviation industry in the scheme will lead to retaliation in the form of trade wars.
Association of European Airlines, ACI Europe and EUROCONTROL this month reported trends of continued traffic growth in 2011, although an imbalance between capacity and traffic growth has been noted, having a negative impact on load factors and likely also yields.