Contrails

One CEO complained about the uneven playing field but the stark reality is that the playfield of aviation is more like the Himalayas and always has been-and always will be!

Wherever one looks across the globe we see countries with an enormous home market, while others like Singapore and Dubai have tiny domestic markets.

We see continual government bailouts, we see government owned airlines and we see Chapter 11 where we should see bankruptcy.

We also see countries such as Australia and New Zealand which allow 100 per cent foreign owned airlines to operate domestic routes while the US is arguably one of the most protectionist despite demanding open skies access into other countries.

Some of the European airlines that seek protection from Emirates et al have a history of trying to limit competition and innovation.

It started in earnest in the late 1940s when it took four years of battling IATA for Pan Am to introduce tourist class service across the North Atlantic.

But IATA had very strict rules on what could be offered even down to what passengers would be served, including a limit on the number of dishes, the number of vegetables to accompany the main dish and absurdly the precise definition of what made up a sandwich.

Then Malaysia Singapore Airlines and Cathay Pacific who refused to join IAA had the audacity to introduce free drinks, while the Europeans threatened to ban TWA from landing in Europe if it didn’t charge for the plastic headsets to watch movies.

Next came Laker Airways which ordered DC-10s in 1971, cancelled by All Nippon Airways, to launch his Skytrain service.

Only 2,295-days later it was approved which prompted the Duke of Edinburgh to write:

Freddie Laker,
May be at peace with his Maker,
But he is persona non grata,
With IATA.

Freddie Laker was from the “wrong side” of the airport, had a massive struggle against the traditional “establishment” airlines. It took him $1.5 million in legal fees and eight hearings to get approval to fly the North Atlantic with both the UK and US Governments intervening to finally support the concept.

The approval when it eventually came started a domino effect across the globe.

Laker was charging US$236 for the London-New York round trip, compared to US$562 for economy and US$1,178 for first class on other airlines. Pan Am, British Airways and a host of other airlines dropped fares to try to match Laker and then moved to offer the same level of discounting around the globe.

European airlines were largely driven out of the Australian market in the 1990s because they couldn’t compete with Asian carriers such as Singapore Airlines, just as Qantas withdrew from many European routes for the same reason.

But cost is just one issue. The Asian airlines and now Middle-East airlines are product and IFE innovators and have a massive customer base.

Rather than complain European legacy carriers –and others – should focus on attracting passengers with aggressive innovation just as Air New Zealand has done.

However, the “enemy” is no longer the Middle-East airlines it is “Singapore Lite” and the yet to be named long-haul low-cost off shoot just announced by Singapore Airlines.

With AirAsiaX and Jetstar these airlines potentially pose a far greater threat than Emirates.

Singapore Lite and AirAsia X tap the world’s lowest labour costs with excellent reputation and solid financial backing that will redefine travel just as short-haul LCCs have done over the past 40 years.

That is of course until Emirates launches its own long haul low cost airline using 800-seat A380s from Stanstead to Adelaide via Colombo, mooted a few years back.

It is not possible to hold back gloablisation and liberalisation as passengers will always seek and find the best deal and the finest service

Airlines around the globe need to follow the example of Air New Zealand and focus on inspiring staff and reinventing themselves to attract and keep passengers.