Lufthansa and Air France-KLM are reportedly looking to limit the costs they will have to pay for carbon emission permits under the EU’s climate change programme, to be launched in 2012 (Bloomberg, 12-Oct-2009). Lufthansa reportedly plans to purchase futures contracts to limit costs by EUR250 million p/a. Lufthansa’s emissions are expected to be around 40% higher than the permitted levels, potentially forcing it to spend between EUR200 million and EUR300 million p/a on permits. Meanwhile, Air France plans to use financial contracts to cap permit costs at approximately EUR100 million p/a.
Lufthansa and Air France-KLM looking to limit costs for carbon emission permits
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Europe's big five airline groups embrace disruption via digital innovation; some more than others
Many of Europe's leading airline groups are acknowledging the importance of establishing dedicated incubator and/or accelerator programmes to innovate in digital technology. On 24-Apr-2017 IAG announced that it had invested in two new technology companies – Esplorio and Vchain Tech. These are the first two investments under its Hangar 51 accelerator programme in partnership with L Marks, an innovation specialist and early stage investor.
IAG's investments followed easyJet's announcement earlier this year that its partnership with the incubator Founders Factory had selected two travel startups for its accelerator programme. The Lufthansa Group established its Innovation Hub in 2014 and started a new partnership with Californian startup investor ‘Plug and Play’ in 2016. While these three groups chose external partners, Ryanair has its inhouse Labs team, set up in 2014. Air France-KLM is alone among Europe's big five airline groups in not having a distinct and dedicated digital incubator/accelerator programme, but it has recognised digital's strategic importance.
Much of the airlines' rhetoric concerning these developments suggests that they are trying to associate themselves with the forces of disruption, but this will take more than rhetoric. CAPA has argued previously that the airline industry has been slow to prepare for disruption, but some are at least making a start.
Vienna Airport: "too expensive" for Ryanair, but Eurowings & easyJet lead LCC driven growth
Passenger numbers at Vienna Airport grew by 2.5% in 2016 – a modest rate, but its highest since 2012. Restructuring by the Lufthansa owned Austrian Airlines, the airport's biggest airline, and a reputation for high fees, have constrained Vienna's passenger growth rate. Ryanair has called the airport "too expensive".
Nevertheless, the growth in traffic in 2016 was mainly driven by LCCs, particularly Eurowings (another Lufthansa Group company) and easyJet, more than offsetting reduction of its presence by the airport's number two airline, NIKI. LCC share at Vienna remains low by European standards, but it is growing.
The restructuring of airberlin, the airport's number three airline and effectively in operational control of NIKI, leads to uncertainty over the capacity plans of these two airlines in 2017.
However, another year of growth looks likely for Vienna, mainly driven by European routes (although the airport has ambitions to develop its long haul offer. Austrian is to return to more significant levels of capacity growth, particularly in Europe, and both Eurowings and easyJet are also planning further increases this year. Eurowings established its first non German base at Vienna only in Oct-2015, and could become the airport's number two carrier in 2017.