Low-cost long-haul to replace alliances?

IAG and Emirates chief executives mention Norwegian
More LCCs may soon crack the long-haul model while airline alliances could soon be a thing of the past, the bosses of two of the world’s biggest airlines think.
Speaking as part of the WTM aviation program on Monday, Emirates’ president Sir Tim Clark and International Airlines Group’s chief executive Willie Walsh predicted a number of changes for the next decade.
Chief among them is an airline making the low-cost model work on long-haul routes, which they believe is just around the corner.
“With the long-haul low-cost model we are just on the brink of something fairly new coming in,” Clark said.
The airlines that tried and failed to implement the model in the 1990s are not of the same calibre as Norwegian, Scoot and Air Asia X, which are enjoying more success today.
“Once they have sorted themselves out on the business model then we are beginning to see the beginning of an inflexion point. I think that is where we will see something come along that is quite different in the next five years.”
Walsh said: “We need to define what success looks like and I think success will be a long-haul, low-cost carrier that makes money.
He added: “There will be lots of long-haul low costs that will set up but which will never make a penny, just as there are lots of short-haul low-cost airlines that don’t.”
Both Walsh and Clark urged Europe to maintain open skies agreements in the event of a final Brexit departure by the UK, while Clark also urged the US to reconsider its ongoing fight with the Gulf’s big three carriers.
However, both also said we could see the end of airline alliances within the next decade. “The bedrock of thinking about the alliance concept has been changed in the last few years,” said Clark, who called them “anachronistic”: “This was 70s and 80s thinking and in my view it’ll change in the next five to 10 years.”
Walsh added: “They do add value today but I think we will have to ask whether they will add value in the future.” He said that models like IAG’s, where individual airlines like Aer Lingus maintain their own distinct brands and strategies while benefiting from pooled resources, could be the future.
TTG Digital


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