Opinion – Are low-cost airlines safe? – Global Times

Logo of Global Times

Logo of Global Times (Photo credit: Wikipedia)

This is an outstanding article from China’s leading newspaper, Global Times. It’s a must read. Check it out!

via Are low-cost airlines safe? – Global Times.

What I particularly liked about this article was the high quality graphical data that was easy to assimilate.

My own view is that the days of the full-service airlines are numbered – as they try to cut costs, like at Lufthansa, then safety will be at risk – all of this is set against dated and ineffective regulation of the air-travel industry.

Simply, budget airlines are the strategically sustainable business model for the future – whereas full-service carriers are doomed, chained by inflexible unions –  the prevailing weakness is airline regulation which is too inclined to protect powerful vested interests, viz. the status quo and not champion consumer interests.

Thoughts?

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?

Thoughts?