Here in the U.S. we have faced a holiday season of delays and winter storms. Airlines are downsizing, hotels are facing low occupancy rates, the economy is slowing and travelers seem to be cutting back on vacation travel. In Europe the landscape is similar. Sometimes misery loves company.
First: weather. Europe has been through one of its most grueling winters in history. The entire continent has been freezing from Madrid to Rome to Paris. Temperatures have been at record lows and snowfall is record heights. Record numbers of flights have been canceled and record numbers of passengers have been stranded.
Airline consolidation: AirFrance/KLM invests in Alitalia. AirFrance/KLM now has a 25 percent stake in Alitalia. This means that the codesharing the airlines have had will continue and connections from Paris and Amsterdam into Italy will improve. This kind of partnership will also put additional pressure on the airports in Milan and Rome to provide additional and most consistent services. With both Charles DeGaulle and Schipol as strong hubs in the north, either Rome or Milan will emerge as a major hub in the south. Milan is the business center and Rome is the political center — the winner of this hub battle is a toss-up.
AF/KLM presented the “best solution” compared to alternatives offered by Lufthansa and British Airways, AZ CEO Rocco Sabelli said, noting that LH “showed interest in the Italian market but never in a concrete project for a new Alitalia,” while BA never wanted to make a “real investment.” AF/KLM was regarded by most as the natural choice owing to both its membership in SkyTeam and its antitrust immunity with AZ on transatlantic routes. The carriers have partnered on a joint venture on routes between France and Italy since 2002. In 2007, AF/KLM won a bid for the Italian government’s 49.5% stake in AZ but was rebuffed by incoming Prime Minister Silvio Berlusconi.
Trains: More passengers. Eurostar (the under-the-English-Channel train) achieved a 10.9% increase in ticket sales and a 10.3% growth in passenger numbers in 2008, despite the Channel Tunnel fire.
In the first full year of operation of its High Speed 1, the rail operator reached a record level of £664 million in ticket sales and broke the nine million barrier for the first time with 9.1 million travellers carried. It said the results would have been significantly stronger but for the closure of part of the Channel Tunnel following a fire on board a Eurotunnel freight shuttle on September 11.
Low-cost airlines: EasyJet and Ryanair keep growing. Ryanair is continuing its pursuit of Aer Lingus. As the Irish national carrier downsizes and continues to lose money, Ryanair keeps growing and making more profits. Overall, the continued rise of low-cost airlines in Europe has had a positive effect on airports that have embraced these carriers. Geneva Airport has seen record growth over the past year as it becomes a bigger hub for low-cost airlines.
On the downside, Vueling and Clickair have been losing money and will probably merge successfully to provide a strong Spanish-based low-cost carrier presence. Ironically, Iberia will the be the major shareholder.
Charlie Leocha is the President of Travelers United. He has been working in Washington, DC, for the past 14 years with Congress, the Department of Transportation, and industry stakeholders on travel issues. He was the first consumer representative to the Advisory Committee for Aviation Consumer Protections appointed by the Secretary of Transportation from 2012 through 2018.
