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BA’s Gatwick plan reflects wider challenges for network carriers
9 September 2021
Flight Global
In the understandable desperation to see the airline industry recover, it is all too easy to view that process as a journey back to how things were in 2019.
But with the 20th anniversary of 9/11 this week, there are more reasons to usual to remember the fundamental impact large crises can have on the industry.
There was a sense that 9/11 and what followed essentially supercharged the transformation of airline sector, with existing players restructuring alongside the rise of new operators, mostly in the shape of low-cost carriers.
Given Covid-19 is a crisis that will probably be comfortably into its third year before any airline dare suggest it is over, similar upheaval might reasonably be expected this time around.
A key question is whether pre-Covid business models will be appropriate in a post-pandemic normal. We heard this week that the answer for some airlines – particularly network carriers – is often “not entirely”.
In markets that are operating, the current unpredictability of pricing and changes in what travellers want from an airline – amid a big tilt towards towards leisure and VFR travellers and away from high-spending corporate passengers – might mean there are “incredible deals out there” for customers, but will ultimately “force many operators to have to rethink their business models”, in the view of Etihad Aviation Group chief executive Tony Douglas.
“The trick is to make sure that one has a blend of propositions that give choice to the marketplace,” Douglas says.
That is certainly the thinking at British Airways, whose chief executive Sean Doyle said this week that the airline must be “honest” in assessing how it can compete at London Gatwick airport as talks continue on establishing a new lower-cost operation.
Douglas and Doyle are certainly not alone among chief executives of network airlines, as they consider how to adapt their business models to a new demand reality coming out of the crisis. All will reach a point where the retrenchment that has kept their carriers alive during the pandemic meets a pressing need to find a sustainable path to growth again.