miaintl
Topic Author
Posts: 756
Joined: Thu Jun 17, 2010 8:31 pm

The Future Of AB?

Mon Jul 23, 2012 1:57 am

Now that AB has joined the oneworld camp what will it's plans going forward be? Will finally become a mainline carrier with a hub and spoke system or will continue to cater to point to point holiday traffic? Also can we see it starting service to LHR, CDG, AMS, BRU and countless of important destinations missing from it's network?
 
Ps76
Posts: 1015
Joined: Tue Jun 01, 2004 7:52 pm

RE: The Future Of AB?

Mon Jul 23, 2012 12:23 pm

Hi!

Although I don't know much about the route systems of LCC vs mainline airlines, pricewise I haven't found Air Berlin to be LCC at all recently and they are pretty much the same as a mainline carrier. For example just had a look on their website and found the following fares:

London Stansted to Dusseldorf in August: £130 rtn.
Berlin to NY in August: £700 rtn.

These are pretty much exaclty the same kind of prices that BA, Lufthansa etc. offer.

Here's another article I found which was quite interesting:

http://airobserver.wordpress.com/201...rlin-no-longer-a-low-cost-airline/

I agree it is very hard to define exactly just what kind of carrier Air Berlin is! They seem to be doing pretty well though.

Many thanks.

Pierre
 
FlyingHollander
Posts: 307
Joined: Sun Jul 31, 2011 3:50 pm

RE: The Future Of AB?

Mon Jul 23, 2012 1:07 pm

I believe AirBerlin is already a mainline carrier. However you are right that they aren't as focused on their hubs compared to airlines like KL and LH. If this is earning them money why change that? However, I do believe most of the future growth will be at DUS and BER which will make the hub and spoke system more important.

Service wise I found AB to be as good as or maybe even better than BA, AF and KL (I can't compare with LH).

Regarding a route to AMS. A route to DUS would have to be 100% connecting traffic as the airport is only a 2 hour drive away from AMS and even less from most of the country. The proximity already means there are quite a few Dutch people who use DUS as there originating airport. BER would be a better fit because of the O&D, however KL, HV and EZY have this well covered already. Besides that there aren't many destinations that you can reach with AB but not on another airline with one stop from the Netherlands. My guess is that AB will have to develop the BER hub more, especially to Eastern Europe, before we start seeing them serve AMS.
If it ain't Dutch, it ain't much.
 
finnishway
Posts: 440
Joined: Sat Jul 14, 2012 5:17 pm

RE: The Future Of AB?

Mon Jul 23, 2012 1:15 pm

Quoting Ps76 (Reply 1):
I agree it is very hard to define exactly just what kind of carrier Air Berlin is!

Air Berlin calls itself "as the only European airline to operate as a hybrid carrier". That quotation is from their website.
 
Ps76
Posts: 1015
Joined: Tue Jun 01, 2004 7:52 pm

RE: The Future Of AB?

Mon Jul 23, 2012 1:22 pm

Hi!

Quoting finnishway (Reply 3):
Air Berlin calls itself "as the only European airline to operate as a hybrid carrier". That quotation is from their website.

They are definitely hybrid in London because you have to travel to Stansted yet still have to pay full fare!   

But seriously though I do like them as an airline and would like to fly them one day. They even used to have their inflight magazine on a rack at their Stansted ticket desks for free which I always used to pick up. I wish more airlines would do things like that.

Many thanks.

Pierre
 
Pe@rson
Posts: 16015
Joined: Sat Jan 13, 2001 6:29 pm

RE: The Future Of AB?

Mon Jul 23, 2012 1:30 pm

AB is absolutely a stuck-in-the-middle airline strategy-wise. It is renowned for this, and it's about time they decide what precisely they wish to be.

Quoting Ps76 (Reply 4):
They are definitely hybrid in London because you have to travel to Stansted yet still have to pay full fare!

A few years ago I flew them on STN-TXL-MUC-DUS-STN in a day for less than £100 all-in. Not bad and a great experience.

Quoting Ps76 (Reply 1):
They seem to be doing pretty well though.

No they are not: they are a heavily loss-making airline. E.g. in its 2011 FY they made an operating loss of €247m. Since 2004 they have earned operating profit four years, with 2009 the highest with €28m. However, between 2004 and 2011 they generated a collective operating loss of €156m.
"Everyone writing for the Telegraph knows that the way to grab eyeballs is with Ryanair and/or sex."
 
Ps76
Posts: 1015
Joined: Tue Jun 01, 2004 7:52 pm

RE: The Future Of AB?

Mon Jul 23, 2012 1:58 pm

Hi!

Quoting Pe@rson (Reply 5):
A few years ago I flew them on STN-TXL-MUC-DUS-STN in a day for less than £100 all-in. Not bad and a great experience.

That is an incredible price for that many flights. The glory days of LCC flying in Europe! I actually used to prefer their old livery too with the darker red.

Many thanks.

Pierre
 
EddieDude
Posts: 6239
Joined: Fri Nov 14, 2003 10:19 am

RE: The Future Of AB?

Mon Jul 23, 2012 3:23 pm

Quoting Ps76 (Reply 1):
Although I don't know much about the route systems of LCC vs mainline airlines, pricewise I haven't found Air Berlin to be LCC at all recently and they are pretty much the same as a mainline carrier. For example just had a look on their website and found the following fares:

London Stansted to Dusseldorf in August: £130 rtn.
Berlin to NY in August: £700 rtn.

These are pretty much exaclty the same kind of prices that BA, Lufthansa etc. offer.

Low-cost does not mean low-fare. Low-cost simply means that the airline's costs are lower than traditional "legacy" carriers for a number of reasons: they might not have a frequent flyer program, they may have few or zero partnerships with other carriers, they might try to operate to alternate airports, the terms and conditions of their workers' employment are less onerous than at standard carriers, etc. This may translate into lower fares but not necessarily.
Next flights: MEX-LAX AM 738, LAX-PVG DL 77L, SHA-PEK CA 789, PEK-PVG CA A332, PVG-ORD MU 77W, ORD-MEX AM 738
 
JU068
Posts: 2094
Joined: Thu Aug 20, 2009 8:23 am

RE: The Future Of AB?

Mon Jul 23, 2012 4:20 pm

Quoting finnishway (Reply 3):

I thought airBaltic advertized themselves as a hybrid carrier before Air Berlin did. I guess someone didn't do their homework.
 
Ps76
Posts: 1015
Joined: Tue Jun 01, 2004 7:52 pm

RE: The Future Of AB?

Mon Jul 23, 2012 4:37 pm

Hi!

Quoting ju068 (Reply 8):
I thought airBaltic advertized themselves as a hybrid carrier before Air Berlin did. I guess someone didn't do their homework.

I just had a look at AirBaltic out of curiosity and put in London-Riga return on 21/23 August. Total price: 335 Euros! With no luggage included either! And underneath there's a little cartoon pricetag saying "Lowest fare garaunteed"!

Suprisingly Lufthansa was the cheapest option for those dates/route at £128 rtn (although via FRA).
Next was Ryanair at £179 rtn (direct).

Anyway am getting very off topic. Sorry.

Many thanks.

Pierre

[Edited 2012-07-23 09:40:59]
 
LAXintl
Posts: 20183
Joined: Wed May 24, 2000 12:12 pm

RE: The Future Of AB?

Mon Jul 23, 2012 4:51 pm

Air Berlin needs to first figure out how to financially breakeven after years of loses.

Unless they turn things around they will became a name from the past.

Quoting Pe@rson (Reply 5):
AB is absolutely a stuck-in-the-middle airline strategy-wise. It is renowned for this, and it's about time they decide what precisely they wish to be.

   And this is the problem.
From the desert to the sea, to all of Southern California
 
User avatar
SQ22
Crew
Posts: 345
Joined: Sat Feb 25, 2012 9:29 am

RE: The Future Of AB?

Mon Jul 23, 2012 6:06 pm

They are still optimizing their network and cutting costs. Last week there was an announcement to cut flights from Hamburg.

http://www.bloomberg.com/news/2012-0...ons-from-hamburg-airport-says.html

I am wondering about the rumours regarding EY and AF/KL. Wouldn't AB be affected, too? Leaving OW and joining ST? What do you think?
 
miaintl
Topic Author
Posts: 756
Joined: Thu Jun 17, 2010 8:31 pm

RE: The Future Of AB?

Mon Jul 23, 2012 10:24 pm

Well if AB has no plans to change or evolve into a hub carrier then they have no buisness being in oneworld or any alliance. The lowcost model is not appropriate for oneworld or any alliance and I personally think it was a mistake to let AB into oneworld they just don't seem ready yet for such a big step. One of the reasons why AB was chosen for oneworld membership is because oneworld has a gapping hole in it's European network especially since malev's demise. Oneworld saw potential in AB to fill in the void left by Malev but AB is not living up to that potential.
 
r2rho
Posts: 2441
Joined: Tue Feb 27, 2007 10:13 pm

RE: The Future Of AB?

Tue Jul 24, 2012 8:28 am

AB is losing money but I think that now with EY involvement, restructuring, OW integration, and the opening of BER hopefully someday, they will be able to turn the situation around. Beyond that, AB needs to make an extensive brand communication strategy: too many people, even on a knowledgeable forum as a.net, still see them as a LCC, owing to its past but not its present. They offer, at least in Y, as good or better service than the legacies. But as long as people see them as a LCC they will not recognize the added value and won't be willing to pay AB's legacy-level fares.

As for flying to many holiday destinations, I see no problem with keeping that as long as they make money. There are too many flights between the hubs anyway, getting in there would only bleed more money. There is however growth potential in more p2p flights or linking up underserved secondary destinations.
 
miaintl
Topic Author
Posts: 756
Joined: Thu Jun 17, 2010 8:31 pm

RE: The Future Of AB?

Tue Jul 24, 2012 4:09 pm

Quoting r2rho (Reply 13):

If AB is losing money and has a weak hub struture then why did they enter the oneworld alliance? What benefits do they bring to the table? How will they help strengthen the alliance?
 
smbukas
Posts: 289
Joined: Tue Feb 17, 2009 9:17 am

RE: The Future Of AB?

Wed Jul 25, 2012 12:27 am

Quoting r2rho (Reply 13):
AB is losing money but I think that now with EY involvement, restructuring, OW integration, and the opening of BER hopefully someday, they will be able to turn the situation around.

AB made good actions in last year, but still it is totally unclear what their strategy is. I think nobody can succeed without a strategy. EY investment and "cash-in" is very positive in restructuring and development. Entering the oneworld is also a good step forward differentiating from the LCCs and opportunity for forward integration. But it is still unclear how they benefit from both actions.
 
AirframeAS
Posts: 9811
Joined: Thu Feb 05, 2004 3:56 pm

RE: The Future Of AB?

Wed Jul 25, 2012 12:33 am

Quoting Ps76 (Reply 1):
Although I don't know much about the route systems of LCC vs mainline airlines, pricewise I haven't found Air Berlin to be LCC at all recently and they are pretty much the same as a mainline carrier.

You know the difference between a LCC vs. a LFC, right?? They are not the same thing.
A Safe Flight Begins With Quality Maintenance On The Ground.
 
LAXintl
Posts: 20183
Joined: Wed May 24, 2000 12:12 pm

RE: The Future Of AB?

Wed Jul 25, 2012 12:39 am

Quoting r2rho (Reply 13):
AB needs to make an extensive brand communication strategy: too many people, even on a knowledgeable forum as a.net, still see them as a LCC, owing to its past but not its present.

Yes agreed they have an image problem, but its much of their own doing.

After all - how would the public define an airline business model that has the following activity components? (per 2011 annual report)

- Intercontinental
- Europe
- Domestic
- Charter (47% of revenues)
- Package Tour Sales

Their mission statement says they aim to focus and positioning Air Berlin as the choice for "vacation travelers, families, business passengers, and private individuals." They will provide "best value for money in the market".

Sounds like a huge task to me. Sure maybe they can do each one very well, however combining them creates brand confusion, cost in added operational complexity, and having to make less than ideal sacrifices in each segment to help the other. (eg seat configurations).


Seems like goulash to me....

Quoting miaintl (Reply 14):
If AB is losing money and has a weak hub struture then why did they enter the oneworld alliance? What benefits do they bring to the table? How will they help strengthen the alliance?

I think OW was so desperate to get a partner in Germany, and AB was about the only potential choice.

Think about it – After BA/IB, OW really has no real European network. AY is a small airline in the far North, and Malev is dead. Having something in more in the heart of Europe in its largest economy was important for OW.
From the desert to the sea, to all of Southern California
 
miaintl
Topic Author
Posts: 756
Joined: Thu Jun 17, 2010 8:31 pm

RE: The Future Of AB?

Wed Jul 25, 2012 12:56 am

Quoting LAXintl (Reply 17):

If it was simply a move of desperation then it has the potential to backfire big time on ow and they will end up regreting making such a stupid descision.
 
flyguy89
Posts: 1948
Joined: Tue Feb 24, 2009 6:43 pm

RE: The Future Of AB?

Wed Jul 25, 2012 5:52 am

Quoting smbukas (Reply 15):
EY investment and "cash-in" is very positive in restructuring and development.

Agreed, and I think their entrance into OW will help them to further define themselves in taking a firm step in the direction of being more premium/elite-catering than previous.

Quoting miaintl (Thread starter):
Also can we see it starting service to LHR, CDG, AMS, BRU and countless of important destinations missing from it's network?

I could definitely see LHR at some point, being the massive OW hub that it is.

Quoting miaintl (Reply 18):

If it was simply a move of desperation then it has the potential to backfire big time on ow and they will end up regreting making such a stupid descision.

I don't really see how it could backfire unless AB suddenly turns into an airline with crappy customer service that will scare OW customers away. The worst thing that will happen is AB leaving OW (either voluntarily or through BK).
 
point2point
Posts: 2080
Joined: Fri Mar 19, 2010 10:54 pm

RE: The Future Of AB?

Wed Jul 25, 2012 9:40 am

I would think that at some point going forward, AB could develop flights to/from BER into Central and Eastern Europe and then into a lot of the former Soviet Union, along with the Mideast and Indian subcontinent. I would think also that there could be some good amount of given O&D here, as well as providing natural connection opportunities for OW from the U.S. that could rival LHR, AMS, CDG, and FRA/MUC into those areas.

A least that's my    as to how best utilize AB and the new future airport in Berlin.

 
 
miaintl
Topic Author
Posts: 756
Joined: Thu Jun 17, 2010 8:31 pm

RE: The Future Of AB?

Wed Jul 25, 2012 9:50 am

Quoting point2point (Reply 20):

I agree that BER could develop into a major hub to the former block states and even the fareast but someting tells me LH will never allow this to happen. LH hates competition and loves having a monopoly in the German air market and it will stamp out any growth coming from AB.
 
point2point
Posts: 2080
Joined: Fri Mar 19, 2010 10:54 pm

RE: The Future Of AB?

Wed Jul 25, 2012 10:22 am

Quoting miaintl (Reply 21):
I agree that BER could develop into a major hub to the former block states and even the fareast but someting tells me LH will never allow this to happen. LH hates competition and loves having a monopoly in the German air market and it will stamp out any growth coming from AB.

I can see your point here.

Yes, if it would be mostly connects, I would agree with you.

However, on the other hand, if a good base of O&D could develop to/from BER, then it could be a different story, unless it would be LH that would jump into these routes from BER.

So I think that we can agree that it would depend on a couple of things happening and that is.... first, enough O&D has to be generated to/from BER..... and then IF that happens, does LH want to step in there itself, yes? And we have to start with the O&D that is either there or that can be generated, because if that's not there, then......


  
 
jumpjets
Posts: 1122
Joined: Tue Apr 10, 2012 2:17 pm

RE: The Future Of AB?

Wed Jul 25, 2012 11:10 am

There has been much debate elsewhere on whether EY or QR will join Oneworld. With EY holding a significant stake in AB and Oneworld's perceived need to maintain a robust presence in central Europe does AB in effect become a trump card for EY [if indeed it does want to join Oneworld]? If QR is preferred to EY there must be a real danger that EY will take AB off to Skyteam and leave Oneworld high and dry.

AB may not seem to be the logical fit for a global full service alliance, but it may prove to be able to punch above its weight because of its strategic importance.
 
Sheridan125
Posts: 24
Joined: Sat Jun 30, 2012 5:54 pm

RE: The Future Of AB?

Wed Jul 25, 2012 11:36 am

Air Berlin is a very difficult airline to assess. It is hybrid formed out of several mergers. Those mergers have brought their own baggage with them is terms of aircraft, routes, costs and cultures. It is not a low cost airline in the image of ,say, Ryanair or Southwest. Only new start-ups can generate the disciplines of the ruthless styles of coat management that the real LOCOs enjoy. AB operates charter flights on a substantial scale. These have no value to Oneworld or any other alliance. Joining an alliance always puts up costs, for example on systems integration. When bmi joined Star it was widely believed in that company that their annual costs rose by £6 million per year. AB has no great records of mfinancial success. Why Etihad bought into it is impossible to fathom. They will never be able to buy a controlling interest because EU ownership rules make that impossible. AS AB's finances have been so weak it is unlikely that Etihad will get any reasonable dividends.
If Air Berlin turns itself into a scheduled airline only (for example as Monarch has done) it may have a strategic role in Oneworld but until then it will just be a small feeder into some Oneworld hubs.
 
User avatar
Semaex
Posts: 734
Joined: Mon Nov 23, 2009 4:17 pm

RE: The Future Of AB?

Wed Jul 25, 2012 11:39 am

Quoting Ps76 (Reply 1):
I agree it is very hard to define exactly just what kind of carrier Air Berlin is! They seem to be doing pretty well though.
Quoting FlyingHollander (Reply 2):
However you are right that they aren't as focused on their hubs compared to airlines like KL and LH. If this is earning them money why change that?

Nope, still heavily burdened by big red numbers.

Quoting LAXintl (Reply 10):
Air Berlin needs to first figure out how to financially breakeven after years of loses.

This is where EY comes into the equation. I think it's a real blessing that the Arabs stepped in. It will make AB more competitive, guarantee them transiting BER traffic (at least to some degree), give them means to expand their network portfolio to the East via AUH and to the Americas on their own metal, but most of all it will shift market distribution away from LH, which will in the end be better for the paying pax.

Quoting EddieDude (Reply 7):
Low-cost does not mean low-fare. Low-cost simply means that the airline's costs are lower than traditional "legacy" carriers for a number of reasons: they might not have a frequent flyer program, they may have few or zero partnerships with other carriers, they might try to operate to alternate airports, the terms and conditions of their workers' employment are less onerous than at standard carriers, etc. This may translate into lower fares but not necessarily.

These are the exact reasons why I believe that AB is not an LCC.
They have a FF program, partnerships with OW and EY, they operate to major airports (albeit not all which are important in Europe) and crew salary is almost on par with any other major european airline.

AB is less of an LCC that people think it is, but it is also less of a business carier than they want to be. It will take them ages to get rid of their "Mallorca flag carrier" image, but I believe they're getting there.
// You know you're an aviation enthusiast when you look at your neighbour's cars and think about fleet commonality.
 
TW741
Posts: 339
Joined: Thu Sep 09, 2004 11:04 pm

RE: The Future Of AB?

Wed Jul 25, 2012 12:21 pm

Quoting Semaex (Reply 25):
Quoting LAXintl (Reply 10):
Air Berlin needs to first figure out how to financially breakeven after years of loses.

This is where EY comes into the equation. I think it's a real blessing that the Arabs stepped in. It will make AB more competitive, guarantee them transiting BER traffic (at least to some degree), give them means to expand their network portfolio to the East via AUH and to the Americas on their own metal, but most of all it will shift market distribution away from LH, which will in the end be better for the paying pax.

For EY it means to have a feeder for their hub. For AB it means to fly pro-rate passengers with hardly any income for the airline.

There was a good analyses about a week ago which, in short, said - AB (or Mr Mehdorn) just don't have the guts to resize in a proper way - shrinking flights and seatmiles by 3 or 4% is not enough - it would have to be 20%. But this would require to reduce the staff by 1.500 employees. Which costs money - and there is no money left with AB.

In 2010 AB lost roughly € 2,89/passenger flown, in 2011 the loss per passenger rose to € 5,67/passenger flown although "shape and size" was already in place.
Not too much - just raise the fares by € 6 and the loss is gone.... The loss would even increase by doing so as a lot of people wouldnt fly on AB anymore with such a fare increase - it is those people just flying for the sake of getting a cheap deal. AB has too many of those passengers and too few money making business travellers.

Another problem is just going to come up and will hurt AB even more this year - the economic situation in Spain and Greece. July through September are the money making months. But with the extensive Spanish network from and to the hub of PMI and the decline in of 25% in tourists going to Greece this year I doubt that AB will be able to make a profit. recently (in the middle of the high season) AB cancelled a bunch of flights to the Canaries and Greece out of Paderborn airport although the flights had been booked quite well. Reason unknown.

Further problems will arise when AB cuts back the smaller aircraft fleet - E190s at HG or (rumoured) all Dash-8's - the smallest aircraft would be the B737-700 in their fleet then. Too large for routes like NUE-BER or VIE-BEG or VIE-FLR.
Just having A320/321 and B738 is possibly a bit too much capacity for a lot of routes....

There is a lot of work to do for AB ...
TWA - we showed you how good we have been!
 
User avatar
Semaex
Posts: 734
Joined: Mon Nov 23, 2009 4:17 pm

RE: The Future Of AB?

Wed Jul 25, 2012 4:26 pm

Quoting TW741 (Reply 26):
Another problem is just going to come up and will hurt AB even more this year - the economic situation in Spain and Greece. July through September are the money making months. But with the extensive Spanish network from and to the hub of PMI and the decline in of 25% in tourists going to Greece this year I doubt that AB will be able to make a profit. recently (in the middle of the high season) AB cancelled a bunch of flights to the Canaries and Greece out of Paderborn airport although the flights had been booked quite well. Reason unknown.

There must be other reasons to this than desinterest in the southern european markets, as you mention. Usually when the economy of one country declines that means that prices for holidays in such a country are becoming cheaper, and I seem to recall having read that Condor is doing rather well to Greece for example.

Quoting TW741 (Reply 26):
Further problems will arise when AB cuts back the smaller aircraft fleet - E190s at HG or (rumoured) all Dash-8's - the smallest aircraft would be the B737-700 in their fleet then. Too large for routes like NUE-BER or VIE-BEG or VIE-FLR.
Just having A320/321 and B738 is possibly a bit too much capacity for a lot of routes....

I don't think such romours are true. The niki fleet (and inflight service in general) is miles ahead of the rest of AirBerlin, so I can imagine this subsidiary being a true money maker for AB, and no restructuring is required. In fact, it's not too long ago that AB aquired the majority over HG, so there must be some strategy behind it. From my own experience I also don't think that AB can simply swallow HG and put their own metal on the austrian routes, since austrians are a proud people, and they need a carrier like niki more than another german conglomerate.
And I totally agree that a 737 or A319 would be too much of an aircraft for some routes. Keep in mind also that the Dashs are not actually owned or operated by AB, but by LGW, which has the benefit of keeping the costs for staff below the AB-internal agreements.
// You know you're an aviation enthusiast when you look at your neighbour's cars and think about fleet commonality.
 
r2rho
Posts: 2441
Joined: Tue Feb 27, 2007 10:13 pm

RE: The Future Of AB?

Thu Jul 26, 2012 11:29 am

Quoting LAXintl (Reply 17):
After all - how would the public define an airline business model that has the following activity components? (per 2011 annual report)

- Intercontinental
- Europe
- Domestic
- Charter (47% of revenues)
- Package Tour Sales

Their mission statement says they aim to focus and positioning Air Berlin as the choice for "vacation travelers, families, business passengers, and private individuals." They will provide "best value for money in the market".

Sounds like a huge task to me. Sure maybe they can do each one very well, however combining them creates brand confusion, cost in added operational complexity, and having to make less than ideal sacrifices in each segment to help the other. (eg seat configurations).

Seems like goulash to me....

Agree. And assuming that all operations could be profitably maintained, perhaps a split into 2 brand names - one for sun&beach travelers, one for business - could make sense? (from a pure marketing point of view, as it would remain an integrated group in all other aspects). Maybe a setup like IB has with Vueling & IB Express.

Quoting TW741 (Reply 26):
Further problems will arise when AB cuts back the smaller aircraft fleet - E190s at HG or (rumoured) all Dash-8's - the smallest aircraft would be the B737-700 in their fleet then.

I agree that E190's could help with thinner routes, or to serve routes with higher frequency (=more business friendly). Flying p2p on relatively large aircraft limits you to low frequencies if you want to maintain load factors. The CSeries could also be a very good aircraft for them.
 
columba
Posts: 5045
Joined: Fri Dec 10, 2004 10:12 pm

RE: The Future Of AB?

Thu Jul 26, 2012 12:16 pm

A part of AB future will be that all to be delivered A32x will receive Sharklets, this news was announced a few days ago

Edit Source
http://www.traveldailynews.com/pages...uip-its-new-Airbus-A320A321-fleet-

[Edited 2012-07-26 05:17:47]
It will forever be a McDonnell Douglas MD 80 , Boeing MD 80 sounds so wrong
 
vv701
Posts: 5781
Joined: Fri Aug 19, 2005 10:54 am

RE: The Future Of AB?

Thu Jul 26, 2012 1:22 pm

Quoting Semaex (Reply 27):
Usually when the economy of one country declines that means that prices for holidays in such a country are becoming cheaper,

But is that not because until now a country with a weak econony also has a weak currency? Greece's problem is that it has the same currency as the majority of visiting holiday makers. So their numbers are not increasing because of the better value of Greek holidays. to potential customers. A Euro is a Euro (and not a Drachma) however strong or weak the Euro mifght be to other currencies.

There has been a lot of talk here about AB and the EY investment and what that might mean for AB and one world.. That investment is proportionally smaller than that of SQ in VS. But today, over 12 years later, VS seems to be no closer to joining SQ in Star than it did back in the Spring of 2000 when SQ took their 49 per cent stake.
 
LAXintl
Posts: 20183
Joined: Wed May 24, 2000 12:12 pm

RE: The Future Of AB?

Thu Jul 26, 2012 2:48 pm

Quoting r2rho (Reply 28):
Agree. And assuming that all operations could be profitably maintained, perhaps a split into 2 brand names - one for sun&beach travelers, one for business - could make sense? (from a pure marketing point of view, as it would remain an integrated group in all other aspects).

  . They should bring back LTU name, and make them the leisure section.

But I believe its even more complex then that.

Within each of the components of the business things are very different. For instance in the intercontinental section, a flight to Punta Cana is different than a new Berlin-Chicago service to feed OW partner AA. They basically need two cabin version, two different service levels, etc.
Same with Europe - even though its a scheduled flight, PMI is very different clientele and market then compared to one lets say London.

Basically you are almost talking about having the complexity of two separate airline again, which begs the question why did they merge to begin with?


Ultimately, I think the path for AB, is going to have to define itself in one niche and stick to it. I just don't believe all the various segments can be successfully serviced under a single organization or brand. It creates too much consumer confusion, creates lots of internal complexity, and obviously to date has not been financially viable either.

So AB needs to choose if its either - 1) European LCC, 2) European network carrier including longhaul section or 3) Holiday leisure operator with a tour company
From the desert to the sea, to all of Southern California

Who is online

Users browsing this forum: Andy33, atal17, Bing [Bot], blink182, Coal, deltacto, Google [Bot], grbauc, IslandRob, lammified, mavml, Miguel1982, n729pa, Noise, philvardon, rocketPower, thomasphoto60, UA735WL, Vctony, wstakl, yashk, YYJTurk and 269 guests