Regional airlines could face a five-year period of consolidation as they are out-muscled by bigger rivals. Speaking at the Route Europe 2016 Strategy Summit in Kraków, Poland, Iberia Regional/Air Nostrum network planning and scheduling director Miguel Oliver said in the last 20 years in Spain, the country has lost 20 carriers.
He believes the process will continue over the next five years, adding: “There are also LCCs like Ryanair and they’re going to go for concessions and serving other long-haul carriers (out of key hubs).”
Oliver added the only regional airlines he believed were in with a chance of surviving the challenging conditions were those with 40 or more aircraft.
Enter Air CCO Andrezej Kobielski argued that using larger aircraft on regional routes could finally give the scale required to make the airlines profitable. However, he admitted the cost of maintaining the aircraft, which are designed for long haul travel, could mitigate any economic benefit from such a plan.
Andrew Cornish, the CEO of Liverpool John Lennon Airport, said regional airlines hoping to survive could do so with a greater commitment to regional flying programmes.
Finavia Corporation senior vice president Joni Sundelin added regional airlines that really focused on their market could also hope for a long future.
It was not the first time at the Strategy Summit that a gloomy future was predicted for Europe’s regional airlines. In a morning panel session entitled “What Europe Needs Is…”, European Low Fares Airline Association (ELFAA) secretary general John Hanlon said: “The regional carriers have a problem.”
He argued this would be largely at the hands of regulators tightening existing rules, adding: “It comes back to ownership and control.”
However, JG Aviation Consultants director John Grant said the main squeeze was coming from the low cost carriers.
Meanwhile, Watson Farley & Williams partner Jeremy Robinson argued regional airports could do more to help the hard-pressed airlines, in particular signing up for longer network contracts so ensuring they have a vested interest in the airline’s success too.
Related Content
