[AMcWhirter]

Latest news is that Lufthansa is calling on the EU to block the Etihad-Alitalia tie-up saying that it amounts to unfair competition.

http://www.reuters.com/article/2014/02/03/us-etihad-alitalia-lufthansa-idUSBREA120SO20140203

[AMcWhirter]

Latest news is that Lufthansa is calling on the EU to block the Etihad-Alitalia tie-up saying that it amounts to unfair competition.

http://www.reuters.com/article/2014/02/03/us-etihad-alitalia-lufthansa-idUSBREA120SO20140203

[BigDog.]

I agree with the Italian transport minister, if a European body is not prepared to stump up to save a flag carrier then by all means have a non-European do it.

Neither IAG nor LH (nor AFKLM) should whinge as they do not wish to buy. It is reminiscent of Branson and BA over BMI.

The European legacy carriers need competition to up their game, else we will be stuck with a cartel and low standards which is demonstrated by quality/standards of carriers flying mainly eastward from Europe being far higher than westward.

As to the unfairness, too long have the legacy carriers especially IAG/BA luxuriated and milked their home base (eg fortress LHR) and relatively captive client pool.

The ME carriers have certainly injected more competition and better offerings which from a customer perspective is a good thing. BA/IAG AF LH need to up their game . Protectionism is bad for trade.

[LuganoPirate]

For too long LH played the patriotism card. They thought they could forever milk their public who would be happy to pay up despite BA mediocre service. Germans are however wising up and if necessary will fly via MXP, AMS or with other carriers in order to save their heavily taxed €’s.

LH with its very high cost base, and the protection afforded to its staff, mean it must charge these high fares in order to stay afloat. However it’s become so high even large German corporates are thinking twice and sending their staff with QR etc.

Just as LH is pressuring banks not to fund Istanbul’s new airport, allowing for a big expansion of Turkish, so they are trying to block this move.

Watch for the rise of the big Italian finger towards the Germans!

[Swissdiver]

Those unfair practices are unfortunately too common. Few among you will remember SWA (LP, may-be). Swiss World Airways was an airline created in Geneva in the 90s when Swissair decided to concentrate intercontinental flights in Zurich. The latter did everything to delay the first flight until October (the first of the two low season months). Swissair succeeded and SWA ceased operations before Christmas.

[LuganoPirate]

I’d completely forgotten about SWA till you mentioned them Swissdiver. From memory they started flights to New York with support from the Canton. Swissair raised many objections at a bilateral level including court injunctions in Switzerland and refused to sell through tickets starting in ZRH. Swissair acted disgracefully in this matter!

[canucklad]

Although I have no sympathy with LH , whinging like a bully that finally gets their comeuppance , I do agree that they have a point about trying to manage a business with one hand tied behind their back due to the interference of governments, that should ironically be on the side of their own home companies who employ thousands of tax contributors’

These same politicians don’t seem to “get” the dynamics of the global economy !.

[transtraxman]

I am confused. LH is Lufthansa or London Heathrow? – I presume the latter.
Is it not better to refer to Heathrow as LHR?

[canucklad]

Hi Transtaxsman

In the context of this topic, LH = lufthansa

[transtraxman]

Ta.

edited:(09.56) “Ta” as in “Thank You”. A colloquial form from the North of England.

[Swissdiver]

Tata?

[Swissdiver]

Canucklad,

The questions (to which I don’t have a definite answer) is whether LH’s behaviour is fair or not (in the SR (Swissair) example above, it wasn’t probably, because they played the Flag). The UK played by the book over the past years which brought deep changes in the industrial and ownership structures. As a comparison, the Italian didn’t. Many business are still owned and run by locals, not always to the best. Now of course the country is facing a double seism: Fiat Chrisler and Alitalia. The political interference is therefore more pronounced.

Back to LH, they could for a long time count on Germans’ faithfulness and played them offering poor products. These times are over, forcing LH to improve their service. In the meantime, the company does politics. When it is to defend their own market, I am more or less OK. But interfering in Italia is a bit far fetch, in my view.

At a higher level, I actually don’t believe in full competition when it comes to a public transportation system (to which airlines belong in larger countries), because operators (all together – cross means of transportations) should cover all the country, not only the most profitable routes. Now it has to make sense (which in obviously not the case with Alitalia). But giving governments some power do make sense to me. And the possibility to subsidised internal routes, even if it does not please the EU gremlins in their towers in Bruxelles.

[KSHaggag]

The airline business is becoming a cut throat competition field …legacy airlines are suffering from LCCs plus GCC based carriers syphooning off lucrative traffic from Europe to Asia via their hubs ,playing on prices and higher standards of service (sometimes) in the premium cabins .
Not to forget TK that has been playing the same role but very discreetely until LH discovered that much traffic from its home base was diverted via IST in favor of TK …in short ,challenges are numerous …amidst all this ,I have no doubt that AZ has little chances to survive under these circumstances ,add to it the internal obstacles they face …no doubt that AF wants to put AZ on it’s knees then start to buy the debris for peanuts .
I personally seen other way for AZ to survive other than EY coming to the rescue with cash although I would have preferred a European solution to the issue but hey AF believes it is playing smart …pity to see the AZ AF partnership interrupted in favor of a GCC imported solution .
AZ is a great brand of value and if given thx right cir umstances to operate they can deliver superbly well and develop a decent longhaul network.I have no doubts nevertheless that EY will do a good job and turn it into a profitable operation capitalizing on Italy s fAntastic location and by making AZ bring traffic to the Abu Dhabi hub of EY ..
AZ hS great assets like the Italian sophistication ,taste and elegance…come on AZ get things sorted ,do the necessary painful concessions and you will bloom soon .
Currently the Magnifica longhaul product is among the best in Europe …

[BigDog.]

Italy has a population that is well distributed throughout the country.

Region(City): Milan 5.5m(1.3m); Naples 5.8m(1m); Rome 5.5m (2.7m); Palermo 5m (0.5m); Venezia 4.9m; Bologna 4.4m; Turin 4.3m.

Similar to Germany, this means much of the population need to take connecting flights to a hub. Clearly the hub need not be in their country.

Contrast with Greater London (pop 10m) and a further 8m in the south east region which has a far higher population. This means BA does not need to support a countrywide infrastructure as London and South East make a very sizable captive audience within a car or train trip of the Hub already.

[SergeantMajor]

It’s less about numbers, and more about where wealth is concentrated.

I’d imagine Italy’s wealth generating capability (such as it is) which actually flies regularly is located near Milan and the North, rather than the impoverished South.

[Author]

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