Ryanair announced (27-Apr-2011) its rejection of a recent "nonsensical report prepared by 'Icelandic and Danish scientists'" that vindicated the decision by European government and air traffic authorities to close European airspace in Apr-2011 due to the ash cloud. The LCC stated it did not object to the closure of airspace over a limited radius around the Icelandic volcano, where "clearly a safety threat of volcanic ash existed". Ryanair is disputing that there was "no evidence of any volcanic ash over large swathes of the UK, Spain, France, Germany, Portugal or indeed the Canary Islands, which suffered repeated airspace closures because of bureaucratic bungling and political incompetence which unnecessarily disrupted the travel plans of millions of EU citizens." The LCC maintains there remains "no justification for the closure of airspace over locations such as the Canary Islands which was more than 3000 kms removed from the volcanic eruption and where there was no evidence of any volcanic ash whatsoever". [more]
Ryanair rejects recent ash cloud report
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Alitalia: "everyone has to pull in the same direction" – ongoing issues, and viability is at stake.
After Alitalia’s board approved the second phase of its business plan on 22-Dec-2016, CEO Cramer Ball stressed the importance of achieving the support of its workforce. He said, “Everyone has to pull in the same direction to make Alitalia a viable, sustainable success story and help the airline achieve its ambition of long-term growth and profitability”. Alitalia suffered strike action from some flight crew in 2016.
Full details of the plan, which has received the support of Italy's government, have not yet been made public. Alitalia's network strategy includes further long haul growth and a reworking of its short haul operation, with an emphasis on feeding long haul via Rome and Milan. Other elements of the plan include cost-cutting, reduced headcount and possible changes to joint venture agreements. Details are to be presented to Alitalia’s workforce in Jan-2017.
Also on 22-Dec-2016, Alitalia's shareholders approved short-term funding and gave management 60 days to begin negotiations with key stakeholders - lessors, suppliers and distribution companies, in addition to trade unions. Alitalia needs their support for deep cost reduction measures, in order to win the long-term financing needed to secure the airline's future.
Lufthansa folds Brussels Airlines into Eurowings, keeping dual brands. LH has many balls in the air
On 15-Dec-2016 Lufthansa’s Executive Board formally decided to exercise its call option for the 55% of shares it does not already own in the parent company of Brussels Airlines. The deal will close by the beginning of Jan-2017. It had been expected that Lufthansa would fold Brussels Airlines, at least partly, into its Eurowings low cost brand. Lufthansa has now confirmed that the new acquisition will join Eurowings and be fully integrated into the Group as of 2018.
Nevertheless, there are clear differences between Brussels Airlines' business model and that of Eurowings. Brussels Airlines is a network airline (and a Star Alliance member), while Eurowings is primarily a point-to-point airline. Furthermore, Brussels Airlines is not low cost in CASK terms, although, ominously, its unit cost is below Eurowings'.
Strangely, and perhaps tellingly, Brussels Airlines will retain its brand while adding that of Eurowings. This hints at the tension between Lufthansa's urge to expand Eurowings rapidly to compete with LCCs and the necessity to work out exactly how Brussels Airlines can fit into its low cost operation. Perhaps the delay between completion of the Brussels Airlines acquisition and its integration into Eurowings will give time for further refinements to the model. In short, Lufthansa has a lot of balls in the air. Where they will fall will be critical to its future.