Berlin Tegel Airport

Rapidly expanding Kenya Airways charts growth with plan to serve every inhabited continent by 2017

Kenya Airways plans to launch its first services to North America, South America and Australia by 2017, making it one of the few carriers to serve every inhabited continent. While these three continents will give Africa's currently fifth-largest airline by seats a global presence, its future is pegged on Asia, with the carrier over the next 10 years planning to launch seven new routes into China, six in the Indian Subcontinent and three across North and Southeast Asia as well as having a growing presence in Europe and the Middle East. It is poised to become Africa's largest carrier.

Growth will be fuelled by Africa's status as a burgeoning market, as well as reliance on partners: Kenya Airways will open routes to SkyTeam member hubs in Xiamen (Xiamen Airlines), Hanoi (Vietnam Airlines), Seoul (Korean Air), Moscow (Aeroflot) and Prague (Czech Airlines). The intercontinental focus follows Kenya's strong emphasis on regional Africa, with the carrier aiming to serve every African nation by the end of 2013. 

airberlin makes no apologies for Etihad alliance after joining oneworld

airberlin this week proclaimed it would “take off for a shared future” with oneworld, but the carrier’s medium-term future is not with the global alliance but rather its new strategic partner Etihad Airways.

In the driver’s seat is airberlin CEO Hartmut Mehdorn, who after the carrier’s joining event in Berlin this week gave a frank assessment of the situation. “Of course,” Mr Mehdorn said of British Airways preferring to receive airberlin’s feed instead of Etihad. But conversely, few oneworld carriers serve airberlin’s namesake hub. “And we would prefer a flight to Berlin. It’s a give and it’s a take.”

airberlin can extract from oneworld only as much as member airlines fly to Berlin, which the majority do not do. The Berlin Government is working to incentivise companies to make Germany’s largest and capital city their home. From there more flights can flow, but this ambition has a long lead time. It is not irrelevant to ask if airberlin, knowing an Etihad alliance would eventuate, would have proceeded with oneworld membership.

airberlin joins oneworld alliance, but its full potential will not be immediately realised

The oneworld alliance on 20-Mar-2012 is welcoming airberlin as its 11th member, but the carrier's full potential will not be immediately realised.

airberlin's advantage is a continental European base, which oneworld lacks and barely had prior to the Feb-2012 collapse of Hungary's Malev. But the hub can only be utilised if oneworld carriers serve it, and so far they have been coy about adding services, preferring instead the country's –  and one of the world's – leading financial centres, Frankfurt, much to the disappointment of airberlin.

From airberlin's accession, oneworld will gain market share, but not only are SkyTeam and Star Alliance expanding as well, they are adding members in key growth markets. airberlin this week brings 38 new destinations to oneworld's network, although they are primarily leisure points and not the corporate destinations that bolster airline yields. The airline has evolved, with additional costs, from a low-cost carrier to a hybrid one targeting the corporate sector, but has yet to see a yield uptick.

British Airways/IAG with bmi looks to re-establish world leadership – and long term survival

It can be a fine line between survival and success, just as the blowtorch of a threatened existence provides a powerful motive to pursue ambitious goals.

Last month’s International Airlines Group (IAG)/British Airways move on bmi is only one more piece in the strategic kaleidoscope opening out in front of the Group Chairman, Willie Walsh. The world is his oyster at present. Answering a question following the bmi purchase announcement, Mr Walsh said that despite the uncertain economic environment that Europe’s politicians have created, this was a time of opportunity. His airline is well placed now to capitalise and, as bad news for others spells bargains in the marketplace, the time could well be ripe. In the process, London Heathrow Airport is firmly in the spotlight as Virgin Atlantic also remains a sale possibility. Yet for BA and all of its major rivals, the elephant in the room remains how to service shorthaul network connections profitably.

German airlines adjust strategies as outlook darkens

Germany’s two largest airline groups, Lufthansa and Air Berlin, have announced wide-ranging measures to either preserve profitability, in the case of the former, or restore profitability, as they grapple with a gloomy regional economic outlook. Air Berlin, sandwiched between the low-cost and full-service space, will reduce its exposure to the struggling German leisure segment, which has been on a downward spiral all year.

Germany, the de facto leader of the European Union and a major underwriter of the bailout packages as a large holder of European sovereign debt, has been hit with renewed, and increasing, recession fears. German investor confidence fell to its lowest in more than 2.5 years in Sep-2011, the ZEW Center for European Economic Research said on 20-Sep-2011.

Intra-Europe traffic trends in the right direction, but outlook darkens for Europe’s carriers

European airlines continued to report positive passenger traffic results in Aug-2011, the final month of the summer peak travel period, when European airlines make the bulk of their revenue. Almost all of the major airlines reported year-on-year increases in load factor and passenger numbers, despite the increasingly worrying economic backdrop affecting business and consumer confidence across the region. If such uncertainty continues, European carriers may be in for a bumpy end to 2011.