Airline consolidation in Europe: worrying times for the industry
Airline consolidation in Europe: current situation
Let’s come back to 2019: what is the current situation like for the market in Europe?
For starters, there are a lot of less independent airlines than previously. Let us go back to 2003, just a few months after the ECJ’s decision to overrule independent open-sky treaties.
Looking at the German-speaking market, Lufthansa (LHAB) (LHA) was independent, just like Austrian Airlines, Brussels Airlines, Eurowings and Swiss International Air Lines. British Airways did not belong to International Airlines Group (IAG) – neither did Aer Lingus, Iberia, Vueling or LEVEL – the latter did not even exist. Ryanair was just Ryanair and not a group with several other airlines.
Wizz Air was just starting out, just like Norwegian Air Shuttle was. easyJet was in the middle of switching between Airbus and Boeing aircraft, a complicated and expensive process. At the time it was a relatively small company in terms of scale compared to its fleet size today.
And then we jump back to 2019 once again:
Lufthansa (LHAB) (LHA) and its group form a five-airline company, all based around Germany and its neighbors. International Airlines Group (IAG) controls the flag carriers of Britain, Ireland and Spain, as well as two low-cost brands, namely Vueling and LEVEL. It is in the process of purchasing another Spanish brand, Air Europa – the deal is pending approval by the European regulators. Ryanair has four brands under its name: Ryanair, Buzz, Laudamotion and Malta Air.
Wizz Air has grown into a 120 aircraft-strong airline, while easyJet fleet is the triple the size of that – 334 aircraft. Norwegian Air Shuttle has disrupted the transatlantic market, a stronghold for many of the carriers mentioned previously, including British Airways. Norwegian has a base in London-Gatwick (LGW), butting heads for market share on routes between Europe and North America.
At the same time, massive growth has also resulted in massive airline bankruptcies.
Throughout 2018 and 2019, we saw such airlines as WOW Air, Air Berlin (AB1) (2017), Primera Air, Monarch Airlines, Germania, Flybmi, Thomas Cook, Aigle Azur, Adria Airways and XL Airways collapse. All of them were operating under different business models: from long-haul low-cost carriers to primarily charter/tour airlines. Seemingly, nobody is safe in the current environment in Europe.
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