March 6, 2019 / 8:52 PM / 16 days ago

Airline bosses, asked to trade places, reveal tensions of the industry

BRUSSELS (Reuters) - Airline chiefs from the top five operators in Europe on Wednesday were asked a simple question: If they could trade places with one of their rivals for a week, who would they choose?

FILE PHOTO: Ryanair CEO Michael O'Leary holds a news conference in Machelen near Brussels, Belgium October 9, 2018. REUTERS/Francois Lenoir

Their answers were light-hearted, provocative, and revealing about the state of the airline industry in Europe.

The panel of the bosses of IAG, easyJet, Lufthansa, Ryanair and KLM were asked the question while they were sitting alongside each other at an Airlines for Europe (A4E) summit.

Although they joined forces to create A4E as a lobbying group to pressurize the European Commission on aviation policy, the stark contrasts between its members was apparent during the day-long event in Brussels.

The bosses of KLM and Lufthansa traded barbs with Ryanair’s Michael O’Leary, chief of the pioneering low-cost carrier which has shaken up the market with its cheap fares and given traditional flag-carriers a headache.

“I would take Ryanair, and I would show customers that they can really have an enjoyable journey if they paid (a bit more),” KLM’s Pieter Elbers said in answer to the question.

O’Leary said Elbers’ answer had made him change his mind, and he used the opportunity to poke fun at Elbers, who had resisted answering questions about the Dutch government’s stake in Air France-KLM for much of the day.

“I was going to say Lufthansa, so I could feel what it’s like to own Germany and Austria,” he said, “I’ve changed at the last minute Pieter, so I could encourage the Dutch government to buy more of the shares.”

IAG boss Willie Walsh also chose KLM, and stirred the pot by introducing an M&A aspect to the session.

“I would pick KLM and I would spend that time convincing them that the should be part of IAG,” Walsh said.

Lufthansa chief Carsten Spohr said he would run IAG-owned British Airways, as he was “jealous” of London as a home hub.

EasyJet’s Johan Lundgren noted that none of his peers had chosen easyJet, meaning he must be doing a good job.

“It’s a massive compliment,” he said.

Despite the tensions between the airlines, all have ultimately been able to thus far navigate the treacherous European airline market, which has seen the likes of Alitalia, Air Berlin and Monarch need rescues or go bust.

Slideshow (4 Images)

And one thing they were able to agree on Wednesday was that more weaker airlines would fail in the coming year. Even if they might not agree on everything, the A4E airline bosses could end up needing to deal with each other for a while longer.

“Five major airline groups in the next five years will control 80 percent of the traffic across Europe,” O’Leary said.

“It’s moving... that way, and I think that will be good for Europe.”

Reporting by Alistair Smout; Editing by Hugh Lawson

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