Lisbon Lisboa Airport

US carriers to slash fourth quarter trans-Atlantic capacity as Europe's outlook dims

Increasing economic uncertainty in Europe has resulted in US carriers pulling back capacity to the continent later this year to proactively contain losses and a drop-off in traffic that could result from the increasing likelihood of Greece’s exit from the euro zone and the Euro falling to a two-year low against the US dollar. Delta has already stated its goal to reduce capacity 5% across the Atlantic during the fourth quarter, while United has already instituted schedule changes that show a pull-down in secondary European markets. US Airways, which during the last year has enjoyed marked success in its trans-Atlantic business segment, has not declared any plans regarding its capacity to Europe later in the year. But the carrier is launching several seasonal services on the back of its strong performance in the European market.

Trade group Airlines for America (A4A) estimates that during the fourth quarter of this year US carriers will reduce their capacity to Europe by 7.8% as they attempt to better manage seasonality and stave off effects of a recession on the continent. This change is significant as Western Europe is still the largest international market from the US.

LAN-TAM merger opens South American markets to bids from Star, oneworld, SkyTeam; ATI again a factor

This week’s proposed combination of Brazil’s TAM and the multi-hub LAN is making waves across the industry. In creating what will be a world force, it would also create a regional dominance unprecedented in any other geography. The cross-alliance merger of LAN (oneworld) and TAM (Star) also raises major issues for each of the global alliance; and the opportunities for negotiating a powerful position in one of the global alliances could become a key part of the LAN-TAM merger moves. But then the role of anti-trust immunity enters from stage left…

Lufthansa Italia consolidates its position at Milan Malpensa

Lufthansa Italia this month announced plans to launch frequent (up to daily) services from Milan’s Malpensa Airport to Catania (Sicily) and Prague from 01-Nov-2010, using A319s. These are not easy routes on which to win business with considerably more offered on the Catania route from Alitalia’s Air One subsidiary, Windjet and easyJet, and to Prague from CSA and easyJet. Less than two years after Lufthansa’s interest in taking over the ailing Alitalia fizzled out when Air France purchased a stake, prompting Lufthansa to set up its own new brand, Lufthansa Italia, at Milan, what are the prospects now for Lufthansa’s first new airline that it had set up in a foreign market?