The Good the Bad and the Ugly – The Airline Business in 2017

The Good the Bad and the Ugly – The Airline Business in 2017

What a year 2017 is turning out to be for the airline business. It’s been good, it’s been bad & sure as heck it’s been ugly!

Good for airlines that fuel prices have remained low and demand has been buoyant. Good for consumers too, who have enjoyed more choice from different airline business models. On the other side of the coin, in markets where competition has increased, like the North Atlantic and short haul to the Western Mediterranean, it’s been tough for airlines as much of the saving in fuel costs has been given back in lower fares.

It’s been a bad year as airlines have wrestled with the impacts of terror attacks and had to move capacity around. For airlines operating in the European Union, political uncertainties created by Brexit are causing sleepless nights.  While negotiations are underway, there is no clarity yet on the outcome. As the pound has weakened many airlines have seen costs rising with fuel and aircraft leases dollar denominated. Big questions still remain about ownership and licensing. Some airlines with many UK shareholders could find themselves defined as non-EU carriers in a post Brexit world, bringing into question their traffic rights. It’s essential for airlines and for customers that politicians secure an agreement to leave intact the Open Skies accord under which all majority EU owned airlines can fly freely between any two EU states with no capacity or pricing restrictions. This has brought enormous benefit to both economic life and tourism throughout Europe.

There have been some ugly bits to the year too. It was shocking to see a United Airlines customer being dragged from a flight on which he was already seated. The social media outcry didn’t do the airline any favours! British Airways went through an ugly time too when a contractor inadvertently switched off a key IT system on a busy May holiday weekend throwing its global operations into chaos, ruining travel plans for hundreds of thousands of customers and creating a media backlash.  Only recently Ryanair, normally an airline which runs with military efficiency, had its own ugly moment acknowledging its own failure in the planning of pilot duty and leave rosters resulting in the cancellation of thousands of flights. You could say these were self-inflicted wounds and definitely experiences from which the airlines in question will want to learn from and move on.

With all this going on there is plenty to discuss with our airline guests in ‘WOW-An Icelandic airline revolution’ and ‘British Airways – A year of mixed fortunes’ at WTM London on 6th November. I’ll be talking with Skuli Mogensen, founder and CEO of WOW! Based in Iceland and offering flights to Europe and the U.S. the airline is an industry disrupter and its founder, a man from the tech sector, is bringing a new approach to the airline business. My other guest, in a WTM’s exclusive will be British Airways CEO Alex Cruz in his first major interview since taking the role. He’s shaking up the status quo at BA in ways, which for some are controversial, but which are designed to propel the airline to a still more successful future. Both should make for enlightening discussions so don’t miss them and be sure to get there early!

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Director, John Strickland, is a graduate of the University of York and has held senior positions with a number of airlines including British Caledonian, British Airways, KLMuk and Buzz. John was instrumental in the decision by KLM to establish the low cost operator Buzz and in its selection of new routes. His 40 years of experience have exposed him to the business models of regional, global, legacy and low cost carriers. JLS Consulting was established in 2003 and now serves a growing range of clients including airports, airlines, investors and those whose businesses require strategic insight on and advisory services concerning the air transport sector. John regularly devises and chairs panel discussions and interviews senior executives at industry conferences and events. Media work is undertaken for numerous global media organisations including the BBC, CNN, Sky, Al Jazeera, and business specialists Bloomberg and CNBC. John also contributes to a wide range of respected written publications including the Financial Times, Wall Street Journal/Dow Jones Newswires, Business Week, The New York Times, Gulf News, Reuters and AFP.

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