Speaking at the Routes Strategy Summit in Aberdeen, Jochen Schnadt, Principal and Managing Director, Latitude Aviation, put the UK aviation landscape under the microscope, and highlighted what he thought was wrong with the UK aviation strategy.
Obviously, geography is the one thing that cannot be changed, airlines can copy the strategy of other carriers, but fundamentally the one thing that cannot be copied is geography.
“If you take countries like Singapore, Panama, the Middle Eastern countries, Iceland and Ireland, they all have one thing in common, and what they actually have in common is an aviation strategy . This country (UK) for instance is a complete shambles,” said Jochen.
The UK has a huge economy, and the single biggest domestic aviation market in Europe, but according to Schnadt, the element that the UK is missing is an aviation strategy.
“There are countries out there that have seen that aviation and creating connectivity is a way to create business activity and this can create jobs, which creates tax and all the good things that come with it,”
“There is a complete failure to realise that other people have taken a much broader strategic view on what they want to achieve and connectivity is a critical tool to make that happen,” he said.
To put it into perspective, Schnadt used the example of Alitalia pulling its routes out of Milan. A certain “not-to-be-named” national European carrier tried to make Milan routes work for them, but it didn’t so they pulled out again, “so how can somebody say that these carriers should be allowed to fail because there is no money,” he said.
He then used Budapest Airport as an example – their numbers today are no different prior to the Malev disappearance. There may be certain gaps in the market, but if there is a genuine demand, it will be addressed, he said.
Simon McNamara, Director General, European Regions Airline Association (ERAA) said that the Middle Eastern carriers are playing the game right, because they are not unionised.
“The Middle Eastern carriers are non-unionised, so well done the Middle East for not being unionised, because they’re not saddled with all the problems that we have in Europe and North America and it gives them the edge,” he said.
“Is there any industry in the world that historically or to the present day, acts on a completely level playing field for reasons of geography and all the rest of it? No,” said Jeremy Robinson, Legal Director, Hill Dickinson.
“We have a number of airlines who have a shockingly high cost base, but they have an enormous revenue so the world is not just about low-cost. If you can find a niche and if you can exploit that and keep the competition out, then you’re going to make money,” added McNamara.
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