LARA editor Mark Thomas summarises the latest happenings across the low-fare and regional aviation industry.
Going it alone can sometimes work exceptionally well, with bold decisions and enterprising ventures occasionally reaping big rewards for those investors involved.
Unfortunately, it’s more often the case that these ventures fall down as commercial reality bites, and nowhere is this more applicable than in the ultra-competitive European regional aviation sector.
The past week has seen two carriers go into liquidation, with Belgium’s SHS Antwerp Aviation (VLM) and Switzerland’s SkyWork Airlines both ceasing operations for economic reasons, and also significantly impacting their respective hub airports at Antwerp and Bern. SkyWork’s collapse, for example, represents 60% of all flights serving the Swiss capital while VLM Airlines was responsible for 45% of the capacity offered from Antwerp Flanders International Airport.
It’s clear evidence of the difficulty in making commercial aviation operations with thin margins work as a sustainable business, and perhaps illustrates that it is usually better to approach them with like-minded partners and deeper shared pockets.
It’s unsurprising, therefore, to see even more sizeable airlines like Finnair strategically sell off stakes in their regional subsidiaries. The Finnish carrier has sold 60% of its regional subsidiary Nordic Regional Airlines (NORRA) to Denmark’s Danish Air Transport (DAT), with the latter having long and proven experience of how to make such regional traffic operations work.
Austrian low-fare airline Laudamotion, meanwhile, saw the completion of Ryanair’s acquisition of 75% of the company. The carrier says this will enable it to grow passenger numbers by at least 20% in 2019 and double the size of its Airbus A320 fleet from nine to 18 aircraft by next summer. CEO Andreas Gruber said: “Laudamotion now faces the future with great confidence, backed by the enormous financial strength of Ryanair… Laudamotion has already achieved load factors over 90% in its first summer season.”
On a smaller scale, Ireland’s Aer Lingus and CityJet sealed a wet lease deal to operate a pair of Avro RJ85 aircraft between London City Airport and Dublin, which will help Aer Lingus – which currently flies to Heathrow and Gatwick – up its services between the two capitals to 50 flights daily.
Going ‘all in’ can sometimes be a glorious path to take, but in European regional aviation it’s the shared approach that is proving the wiser course.
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