The airline industry in the Asia-Pacific is witnessing tremendous growth driven by increasing demand for air travel, and as European airlines face tough competition from state-backed Asian carriers (which offer lower fares and more connectivity), many carriers are now have. to reduce the route to Asia.
We have seen major airlines, such as Lufthansa, Air France-KLM, and Virgin Atlantic stop or reduce direct flights to many major Asian economies, and if we take German carriers as an example, we will see that direct flights to Asia. has reduced from 14 to only 2 destinations – Singapore and Bangkok. Earlier this summer, Lufthansa even called on the European Union to take action, stressing that European airlines face unequal competition from Chinese airlines as well as in the Gulf and the Bosphorus.
To call in the public sector is a must, however, we can not sit and wait for a new industrial policy to take place. Developments in the Asia-Pacific aviation landscape will certainly not wait, and the private sector must be bolder when looking for alternatives, otherwise many airlines risk losing market share in a promising, competitive and exciting region.
Addressing Unequal Competition
Although many costs (such as fuel and aircraft ownership) do not vary by region, European operators continue to face challenges such as increased taxes and fees, high regulatory requirements, additional climate policy requirements, and inadequate infrastructure. Sweden, for example, paved the way in Europe for better regulation by eliminating the country’s aviation tax, but most of Europe is still struggling with other political conditions that are undermining the international competitiveness of European airlines.
China, for example, is a country that has played an important role in changing the global aviation industry. As the country’s local operators have not yet faced strict sanctions or a ban on overflying Russian airspace, many foreign operators have lost market share to China as they have had to curtail their operations in the country.
In the past, foreign airlines held the majority of international capacity, reaching a peak of 60% in June 2009. However, there is a transition, Chinese airlines now hold a dominant 62% market share, while foreign operators have experienced. reducing its market share to 38% (Source: Cirium).
Another major player is India, which expects an increase in air passenger traffic in the coming years, placing the country as the third largest civil aviation market. With an emerging market estimated to be worth $40 billion by 2027, and Indian consumers becoming more aspirational in terms of spending patterns, the country offers lucrative growth prospects that many aviation stakeholders are already aware of. German airline Lufthansa recently announced that it will work on a metal-neutral joint venture with Air India on routes between India and Europe, among other initiatives to secure a strategic advantage in the region, showing that it knows what is at stake.
“There is indeed an imbalance that increases international competition to the detriment of European carriers in Asia, which causes many to be thrown out of the game – before they get a chance to play. We cannot wait for changes in regulatory policies. Airline operators must change their mindset to survive ,” said Espen Høiby, CEO at AAP Aviation.
When trying to enter a challenging market, other factors in the equation – along with those mentioned above in this piece – are operational resources, local expertise, and labor costs. In a market where the end customer really sees value for money and expects the best value-for-money service, maintaining key routes while ensuring the highest standards at competitive prices, seems almost impossible. But we dare say otherwise.
Create New Opportunities Instead of Fighting the Existing Ones
Large European carriers are actively responding to the challenges in the Asia-Pacific by trying to adjust their operations mainly through the implementation of partnerships with other airlines, an approach that allows the situation to shape the strategy and bind it to the environment. .
This is because at the same time partnering with other airlines (competitors) can be a quick way-out to get some online through the surface, it can also represent a risk when it comes to preserving the brand identity, service concept and company standards. Maintaining all aspects of the airline in a country like India (with a population of 1.4 billion, 28 states and 8 union territories, and thousands of spoken languages) means having access to real local expertise, with professionals who not only know the country. multicultural background but also has experience from international airlines, to be able to do it with natural respect for the concept of airline services and cultural expectations in the country.
This is a difficult aspect when working with your competitors, but an opportunity that can be offered to clients through the Total Crew Managementâ„¢ model – which allows airlines to reverse traffic using local bases in different countries in the Asia-Pacific, and access various -various talent pools around the world.
Since 2013, we have been encouraging the industry to re-evaluate traditional operational models and move to more sustainable and cost-effective practices, as we see the need to offer airlines new ways to engage, engage and empower crew members, while unlocking new opportunities. opportunities for growth, efficiency, and competitiveness in a dynamic aviation landscape.
As the market in Asia-Pacific continues to grow, this raises a critical question: Is using a crew management solution the best way for airlines aiming to remain competitive? The evidence shows that those who anticipate and adapt can reap significant benefits in this demanding, evolving, and exciting market.
