Sponsor Message:
Civil Aviation Forum
My Starred Topics | Profile | New Topic | Forum Index | Help | Search 
Effect Of Open Skies On EU And USA Airlines  
User currently offlineDLPMMM From United States of America, joined Apr 2005, 3673 posts, RR: 11
Posted (8 years 6 months 3 weeks 5 days 7 hours ago) and read 3942 times:

There was a recent thread on whether the "time was wrong for Open Skies" that obliquely touched upon what the net effects would be on the USA, EU and other country's airlines. Rather than hijacking that thread (consensus was that it is not a bad time to start Open Skies) I thought I would start a new thread.

Here is my guess at the ramifications of Open Skies on the markets involved.

1. USA Ramifications: There will be very little impact on most of the USA airlines. There will be the opening of LHR to the previously barred USA legacy airlines, but this will have minimal impact except in getting some corporate contracts. There will be the effect of allowing BA and AA to get OW alliance anti-trust immunity to compete with *A and Skyteam on TATL co-operation. While these changes might be noticeable for the USA airlines, they will not be earth-shattering. There might be some consolidation among the USA legacies, but it will not be driven by the Open Skies changes, as most of the EU countries already had open skies agreements with the USA. There might also be a bit more competition from some other large EU airports from other EU airlines, but I don't foresee anything astounding.

2. The big changes will be on the EU side of the equation. I think that there will be much more consolidation by the EU's legacy national carriers. As any EU carrier will be able to fly from any EU airport to any US airport, we will see many of the smaller countries' national carriers that don't have the necessary economies of scale swallowed up by the larger EU carriers and relegated to "Focus Cities" with limited TATL service to large O&D or partner hubs. There are 16 or more legacy type carriers in the EU as compared with 6 in the USA (Similar sizes).

3. The EU consolidation will also be driven by reduced connecting pax revenues, as more points from India and SE Asian countries are able to fly directly to North America without transiting EU airports. The USA airline will not see much difference as the drop in their 5th freedom revenues they will be able to offset by providing the non-stop service. There are no equivalent connections from the EU through the USA to anywhere substantial.

To sum up my view:

1. Open Skies will have minimal impact on the USA airlines other than the increased competition at LHR and perhaps a few other large EU airports.

2. Open Skies will drive a large reduction in the number of EU legacy carriers through consolidation (and perhaps liquidation), turning many of the smaller EU capitols from "Hubs" into "Focus Cities".

Looking at this, the business case for the A380 might be bolstered by Open Skies.

Top Of Page
Forum Index

This topic is archived and can not be replied to any more.

Printer friendly format

Similar topics:More similar topics...
Next Phase Of Open Skies - Mutual Advantage? posted Fri Mar 23 2007 22:12:26 by Kaitak
Virgin Wants BMI As A Result Of Open Skies posted Fri Mar 23 2007 14:15:56 by Concorde001
Effect Of JetBlue BOR On Industry As A Whole posted Thu Feb 22 2007 15:45:03 by Logos
Effect Of Airline Shutdowns On Airports posted Sat Jan 7 2006 21:36:37 by SCEagle
Open Skies Between Europe And US...at Last! posted Mon Nov 21 2005 17:20:50 by SQ773
Effect Of Boeing Strike On 2005 Deliveries? posted Mon Sep 5 2005 10:46:09 by Joni
The Effect Of WW II On Commercial Aviation? posted Tue Mar 8 2005 06:29:00 by Pdxtriple7
Open Skies Between India And Singapore Soon. posted Thu Apr 10 2003 02:58:57 by United777
Thinking Of Just Getting On A Plane And Going! posted Thu Jun 27 2002 18:30:07 by AMSMAN
Effect Of Ryanair Deal On Easyjet Deal? posted Thu Jan 24 2002 17:55:49 by Artsyman