Big airlines will strengthen grip on European market, expert predicts
Market consolidation will see smaller airlines fold, Dr Frankie O’Connell says
Ryanair and Aer Lingus-owner IAG will strengthen their respective grips on the European air travel market, an expert has said. Photograph: Niall Carson/PA Wire
According to Irish academic, Dr Frankie O’Connell, reader in air transport at the University of Surrey, five big airlines – Ryanair, IAG, Lufthansa, Easyjet and Air France-KLM – share 51 per cent of the European market.
“There will be more and more consolidation in Europe, ” he said. “More airlines will go out of business.” He added that this would see the big five dominate the market.
Dr O’Connell referenced the high-profile failures of Air Berlin and Monarch last year. “There is too much capacity in the market. That’s putting pressure on everything, including fares,” he explained.
At the same time, Dr O’Connell forecast that low-cost, long-haul players, such as the Irish-registered Norwegian Air International, could shake up the air transport market. He said its approach was still evolving, and it had yet to hit on a formula that made money. However, the arrival of new, cheaper-to-run craft such as the Airbus A321LR could aid Norwegian in this.
Aer Lingus has ordered nine of these narrow-body craft, which weigh around one third of the wide-bodied planes traditionally used for long journeys, and allow airlines to cut fuel bills and other costs.
He noted that the A321LR would allow the Irish carrier to offer more flights from the Republic to a greater range of destinations in the US, enabling it to take more feeder traffic from UK regional airports on to its transatlantic services.
Dr O’Connell said that this business is shifting to Dublin from European hubs such as Amsterdam Schiphol, which traditionally took passengers from UK regional gateways, such as Manchester Airport, that were transferring to transatlantic flights.
“Aer Lingus could become a really prominent European carrier,” he said, adding that this would not have been possible had IAG not bought the Irish airline.
Workshop organiser, Jim Deegan, economist and professor of tourism studies at University of Limerick, said that while visitor numbers to Ireland had grown from two million in the mid-1980s to about 10 million this year, this was not “massively ahead” of world trends.
He noted that the number of tourists worldwide had grown from around 25 million in the 1950s to 1.3 billion now. “The numbers are growing exponentially,” he said.
Prof Deegan argued that a key challenge facing the industry would be managing tourists as much as attracting them, and suggested that technology could play a key role in this. He also said businesses needed to cater for the many older people who were now regular leisure travellers as a result of changing demographics in developed markets.