European Airlines: LCC Vs Flag Carriers

Do you expect the LCCs to gain market share, over the flag carriers, globally, in both the US and Europe?

In the US, it’s a little bit different because the presidents of LCCs have different positioning. But in Europe, I think they are very strong already. Ryanair is the strongest European airline, as far as short haul is concerned. I think, yes, there is definitely an opportunity for them to be even stronger and take market share, on point to point, in Europe.

Flag carriers have always struggled with the domestic market and short-haul markets. It’s definitely difficult for the same organization, even if they are trying to have different airlines in the group, to make sure that, at a cost-competitive level, you can store a culture that that is all about cost and, in the same group, you have another organization that is more about product. It’s a difficult mix and you also need to be very careful when you have to explain what the culture of the company is. Complex messages are very difficult to explain so if it’s all about service and it’s all about product, it’s difficult to say that it’s all about cost. When you’re working with Wizz Air or Ryanair, the first KPI you look at it is cost per available seat kilometer, before anything else. You want to be competitive on that first measure and that’s an obsession for both organizations.

You’re saying that in Air France or the big flag carriers, it’s more about service, quality, product offering and serving the nation, really?

I think it’s the DNA of these organizations and it’s good, because there is definitely a market for this type of product. It’s very different from a Ryanair product. Nobody would expect Ryanair to work on service, like nobody would expect Wizz Air to work on service, but it’s a different market.