Opinion – Crash piles pressure on Lufthansa CEO Spohr – Hurriyet News

This Associated Press article, published by leading Turkish newspaper, Hurrijat News, is a must read. Check it out!

via Crash piles pressure on Lufthansa CEO Spohr – Hurriyet News.

Earlier in the week, I commented that “sorry” will be of little comfort to the grieving families of the Lufthansa disaster. The Associated Press (AP) article argues that the CEO should be safe, as he’s said all the right things.

The AP article also highlights that CEO Spohr is responsible for cost-cutting policies at Lufthansa. For me this article touches on a bigger problem. Lufthansa is a victim of the strategic weakness of the full-service airlines (FSAs), namely they are not cost competitive, compared to the budget airlines (BAs) . Part of the problem concerns the power of organized labor (unions) in the FSAs; indeed Lufthansa had major strike issues prior to the crash.

Apart from the strategic weakness of the FSAs, there’s a need to probe the effectiveness of international airline regulation and the role of airports in an industry that is also heavily regulated.

For me, the future is with BAs, like award-winning Air Asia. Up until now, the BA model has not been fully transferable to inter-continental flights – but Air Asia is now competing effectively in the Australia/Asia market.

FSAs are still trying to create differentiation with their more expensive ‘Club’ and ‘First Class’ seats. Once the BAs are able to offer premium quality seats, with related service on long-haul flights, then the FSAs will be doomed to bankruptcy.

This context provides a potentially dangerous situation for passengers. In this heavily regulated industry, where the FSAs are like dinosaurs, how can consumers (passengers) be sure that passenger safety is given the appropriate priority? Surely, there’s no place for ‘austerity‘ in airline safety?

Let me ask an open question:

Is it time to overhaul the international regulation of the airline industry, including airlines, airports, with stronger representation of consumers as stakeholders?




Why do Russians love Cyprus, even after a banking crisis? The latest Business Daily podcast

Ahead of Russia’s President Putin‘s visit to Cyprus, listen to  this BBC podcast explaining why Russians love Cyprus.

via Why do Russians love Cyprus, even after a banking crisis? The latest Business Daily podcast.

Despite sanctions, I continue to hear stories of Russians investing in Cyprus.

It will be interesting to see what comes out of President Putin’s visit?