Lufthansa, Air France-KLM, IAG adopt short haul initiatives to combat LCCs: Airlines in transition

The rise and rise of low-cost carriers in Europe has been rapid and, it seems, irreversible. The result has been to transform Europe's short haul market. There is nothing new about that, but the three big legacy 'flag carrier' groups in Europe - Air France-KLM, IAG and Lufthansa - have only recently dedicated serious attention to new initiatives to combat this continued onslaught on their short haul operations.

In 2012, IAG established Iberia Express to operate short haul feed into the Madrid hub and also bid for the 54% of Vueling that is not already owned by Iberia. Also in 2012, Lufthansa announced plans to transfer non-hub European traffic (ie outside Frankfurt and Munich) to LCC subsidiary Germanwings. Only last week, on 28-Jan-2013, Air France-KLM announced a new regional carrier, Hop, bringing together group regional airlines Brit Air, Regional and Airlinair in a further stage of its short and medium haul restructuring that has also brought efficiency measures at its French provincial bases.