Towards an impasse

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As every year, the ranking of the best airlines in the world carried out by the London-based Skytrax organization is closely scrutinized. It must be said that this rating is not disputed by anyone and that it has been refined over time, since it began in 1999, a quarter of a century ago. This is more than enough to ensure its credibility. A few lessons remain to be learned.

First of all, the supremacy of the Gulf airlines, to which we can add Turkish Airlines, whose base in Istanbul is in the same geographical area. Well, this zone, which includes only about twenty regular companies out of the 1200 registered in the world, achieves the performance of placing 3 in the top ten places and 5 in the Top 20. We can also notice the great stability in this ranking since we find the same in 2023. Let us pay tribute to Qatar Airways, Emirates and Turkish Airlines, the latter of which has made tremendous progress in the last 10 years

American airlines, yet the giants of air transport, are conspicuous by their absence. No carrier appears in the top 20 and only 3 emerge in the list of 50, with the first Delta Air Lines in the modest 21st place. It was not until the 100 nominees were nominated that 14 carriers registered in the United States and Canada were found. This proves that just because a company is big doesn’t mean it’s beautiful and attractive. Admittedly, the American domestic market is undoubtedly less demanding than that of other continents, but it is still surprising that the mega carriers of the United States still manage to impose themselves in international competition while their quality of service leaves so much to be desired.

The Asian continent takes the lion’s share of this ranking. It represents half of the top 10 companies and almost as many of the top 50: 24 out of 50. On closer inspection, the carriers of this huge continent have imposed a level of quality much higher than that of other parts of the world, but they are also the ones who will drive the growth of future air transport if we are to believe the huge order book they hold with the two major world manufacturers. For the moment, states do not seem to be very concerned by the search for carbon neutrality, they are rather in the position of using this mode of transport to strengthen their economic growth.

European airlines are gradually regaining ground. It must be said that they had fallen very low under the governance of the famous “cost killers” and “Yield Management”. Gradually we see them return to the places they should never have left. Let’s welcome the arrival of Air France for the second year in a row and Swiss International Airlines in the top 10 airlines. The Europeans managed to place 6 carriers in the Top 20 with the progress of British Airways and Lufthansa. This proves that when Europeans want to make a quality product, they quickly reach the top of the ranking. They had to go down very low before returning to the level they had in the 1970s. We can only encourage them to continue on the same path.

Two continents are still lagging behind. Latin America only appears in the second part of the Top 50 with the 43rd position of LATAM and only 5 carriers are in the top 100 worldwide. There is still much to be done in this area for which air transport is so vital. The same can be said of Africa, which only places Ethiopian Airlines in the top 50 carriers in 36th place and only 7 companies in the top 100, including Royal Air Maroc in 55th place.

We can criticize this type of ranking at will, which necessarily retains a certain subjectivity even if it is built on a large number of criteria. Nevertheless, it is of great interest not only to high-rated companies or those that are moving up the list, but also to customers for whom it remains a criterion of choice, even if it is not the only one. And then it encourages carriers to continue their efforts to improve and, if only for that, the Skytrax ranking is very useful to air transport.

Air transport is 80 years old

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This is false, you will tell me, and you will be right. The first commercial flight took place in Florida in… 1914 and before the Second World War, major companies such as Pan Am, Air France, Imperial Airways, and others were already crisscrossing the skies and had traced important international networks. Pan Am, for example, crossed the Pacific with giant seaplanes, and European operators went as far as Australia and many Asian and African countries. So why date air transport to 1944?

On December 7, 1944, in Chicago, the representatives of 52 countries signed the real renaissance of air transport by laying down the rules that would make it prosperous. This required the creation of an entity responsible for the development of regulations and their enforcement. To tell the truth, the ICAO (International Civil Aviation Organization) only took its current title on April 4, 1947, after the ratification of the majority of the founding countries, i.e., 26, since decisions are taken by a simple majority.

To be honest, I’m still surprised by the vision of the founders. Let us remember that in December 1944, the world was really on fire. The war had reached a savagery never known in the past, and little by little, the alliance against the totalitarian countries—Germany, Japan, and their affiliates—was gaining the upper hand. At that point, there was no longer any doubt as to the winners. However, the members of this constituent assembly have laid down as a principle of future air transport that it will be managed with the same rules in each signatory country and that they will apply even to defeated countries. It was not easy, and it is the greatness of the participants in the creation of ICAO, to have understood the importance of air transport for the recovery of the planet and its future prosperity.

To date, 193 countries are members of ICAO, the same number as the participants in the UN. They are represented in this body by an ambassador. That is to say that air transport has a global governance that works rather well despite the low number of permanent civil servants, around 1,000. Many other international organizations would do well to adopt a similar system of governance.

This works well because the ICAO has mandated each of the member states to apply the rules laid down by the organization. But the Civil Aviation Directorates of each state are themselves audited by delegates from the head office, and if the inspection shows significant dysfunctions, the country in question is simply removed from the ICAO until its inspection shows that it has returned to good practices. This means that “blacklisted” countries can no longer issue navigation certificates to their airlines and that the latter can no longer operate international flights. This is probably the best way to avoid the effects of corruption that would have the effect of reducing the security of the airlines of these states. Several countries have been in such a position in the past, such as Nigeria and the Philippines. This has forced the governments concerned to review the entire organization of their own civil aviation. They did so and once again joined global air travel.

Let us keep in mind that this unique system has allowed a fantastic development of world trade while forcing air transport to become safer and more environmentally friendly. In 1983, the ICAO created a Committee for the Protection of the Environment. As a result of the standards enacted, aircraft noise has decreased by 75% since 1970 and fuel consumption by 80%. Admittedly, it seems difficult, if not impossible, to achieve carbon neutrality by 2025, which is the objective of global air transport, but the constant pressure put on all players will certainly have a very beneficial effect on the ecological impact of this sector of activity.

The ICAO only issues standards for all aspects of air transport, from radio frequencies and the standardization of diplomas to major safety rules, and they apply to all players: from manufacturers to airports and, of course, carriers. It may not seem like much, but it is thanks to these standards that air transport has reached an incomparable level of development while improving its safety to the point where we are approaching excellence.

Happy birthday to ICAO and happy birthday to modern air transport. May it continue for a long time in the same way.

Air transport, stop punitive ecology!

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It’s a done deal: the total decarbonisation of air transport by 2050 will not be possible. Indeed, the 14,000 or so aircraft currently on order will be delivered between 2025 and 2035 and they have a lifespan of at least 30 years. However, they are built with a technology that still generates CO² and the production of SAF (Sustainable Aviation Fuel) will be largely insufficient to ensure carbon-free air transport.

Is this a reason to do nothing? Certainly not. The airline industry has been tackling the problem head-on for at least a good twenty years. Today’s aircraft are much less fuel-hungry and less energy-intensive. Despite the cries of outrage from some apostles of ecology, air transport has not waited for them to work on this issue, if only because it is profitable. The less fossil fuel the appliances consume, the more profitable the sector is.

But the ecological revolution will not happen with a wave of a magic wand. Several hundred billion dollars will have to be devoted to research, and it will have to cover the entire spectrum of this activity. And first of all, the manufacture of engines, because this is the major factor of pollution. Designing new machines that consume very little fuel is a long-term task. Imagining new systems to provide sufficient power for the take-off of 400-tonne aircraft is not currently conceivable, at least in the current state of research. And it will also be necessary to gain in decarbonization in the assembly of aircraft, but also – and this is undoubtedly the first progress to be made in the reorganization of airspace in order to shorten distances and consequently travel times. Much remains to be done in this area and we know, at least in Europe, how to proceed with the implementation of SESAR (Single European Sky ATM Research), in other words, the management of European airspace in a single entity and not fragmented into 43 control centres as is the case now. Everything is ready, all that remains is to convince the states and the air traffic controllers’ unions and this is perhaps the most difficult.

In short, we will have to put money, a lot of money into research. The subject is exciting. Creating carbon-free aviation is great, especially since air transport is essential to the survival of the planet and the prosperity of peoples. So why does he have to suffer the vindictiveness of political leaders? The latter, at least in some European countries, including France in the first place, but this is also the case in the Netherlands, Germany and even in the Nordic countries, are determined to put the brakes on airlines and, when this is not possible, to tax the air sector in favour of land transport. I am thinking mainly of rail transport. Do we seriously believe that subsidizing the train by taking money from the plane is the right solution to bring air transport to be decarbonized? How can we reasonably divert a so-called Chirac tax, the purpose of which was to provide the means to vaccinate the populations that are in dire need of it, to the benefit of a general budget that no one seems to be able to control anymore?

What kind of jealousy or demagogy drives the deputies to tax the users of the plane on the pretext that they must be able to pay? Of course, the enormous financial needs necessary for research will have to be paid for by someone, and it will certainly not be the states that will always have other priorities. So, of course, these hundreds of billions of dollars will inevitably have to be provided by air transport itself, and first and foremost by consumers. But everyone will have to get involved, whether it’s passengers, manufacturers, engine manufacturers and even airports. And instead of working in a dispersed manner, it would be wise for the collection of money to be centralized with a global organization, why not the ICAO (International Civil Aviation Organization) which could set the main lines of research and distribute the necessary funds in a balanced way with a single goal: the decarbonization of global air transport.

We should listen more often to Bertrand Piccard, the founder and director of Solar Impulse. He talks about the future without blaming the present. He talks about real technological leaps that are not only the improvement of current processes but real innovations, which means that we don’t know about them nowadays. For him, ecology is not a constraint but a real progress that cannot be achieved by destroying the present. I can well imagine him at the head of the huge investment fund that I ardently hope will be created.

How do companies differentiate their product?

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Recently, a senior executive of a major airline asked me what I think differentiates the product from carriers in order to guide customer choices. I admit that I suggested a moment of reflection and here are some avenues.

First of all, we will only talk about the major carriers, the only ones to compete fiercely, and their survival is at stake. The slightest failure can come at a high price, especially with business customers who, with less than 50% of passengers, account for more than 2/3 of the companies’ turnover. Very large operators are characterized by fleets of several hundred aircraft, networks of more than 100 destinations, more than 30 million annual passengers and a turnover of at least $20 billion. Suffice to say that these are very large companies, which are often grouped into even larger groups with many subsidiaries or associated carriers such as the Lufthansa Group, Air France/KLM or IAG in Europe, Delta Airlines, United Airlines and American Airlines in the United States, or Latam resulting from the merger between Lan Chile and the Brazilian TAM. Other very powerful airlines have not found the need to partner with anyone, the Gulf carriers, for example, or Ethiopian Airlines in Africa and Qantas, Cathay Pacific, Singapore Airlines and the other major Asian carriers that are reluctant to mix with others.

So what differentiates one company from another? First of all, its network is obvious. No carrier claims to go to all points of the planet, even if, with alliances, companies try to capture the clientele of mega companies that have global transport needs. For the rest, the fundamentals are strangely similar. The major airlines operate the same aircraft from only two manufacturers: Airbus and Boeing, which are eerily similar in terms of standard cabin layouts. These aircraft fly at the same speed, have comparable ranges and operate to the same major airports. So how can you differentiate yourself from your competitors? And finally, why would the passenger choose this or that carrier? On the transatlantic route alone, more than 20 airlines operate hundreds of flights every day. All major operators use the same model of transfer platforms commonly known as “hubs”.

Going into a little more detail, there are still some factors that can tip the balance for this or that company. First of all, its customization. Airlines are the true ambassadors of their country and each one reflects the personality of its origin. You can’t go wrong when you enter an aircraft between an Asian carrier and an American, a European or an African one. This is reflected in the cabin crews’ uniforms. I’m not talking about the pilots, all dressed in the same way regardless of their country of origin. So if the customer prefers a French atmosphere, he will choose Air France and if he prefers the American style, he will take Delta Air Lines or American to make the same trip. The experience of the flight will be different, if only by the language commonly spoken on board. We do not understand why air transport invented code-sharing, which consists of selling a product other than the one purchased by the customer. It’s a deception because you have to call things by their name, except that it’s legal. Who knows why!

And then there is the reputation of the companies. In this sense, respect for schedules and regularity of operation is decisive between two close competitors. In its time, the Belgian company SABENA has had the bitter experience of this. For the front classes: Business and Premiere, ground service is also a differentiating element. Trade fairs where you spend a lot of time ultimately lead to certain choices. However, the same type of product must be available in all destinations, and this is almost never the case, except for the two major Gulf carriers: Emirates and Qatar Airways, Emirates having shown originality to the point of a higher level of on-board equipment with the massive use of the A380s. The quality of the services provided is also appreciated by those used to long-haul flights, as is the electronic equipment.

The major argument remains: loyalty programs. Customers are ultimately very loyal to the carriers with which they can earn their miles, even if only 40% is actually consumed.

I’m not talking about the rates, which are so important, but they fluctuate so much at the whim of the Yield Managers that they cannot be analysed objectively.

Of course, the differences are much more noticeable for long-haul flights. As far as medium and short-haul flights are concerned, the airlines’ services are all converging towards the low-cost model, which has undoubtedly won the game.

How to make African air transport prices affordable

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ECOWAS (Economic Community of West African States) is a place where exchanges can lead to concrete measures. Admittedly, the organization created in Lagos on May 29, 1975 is currently in a bit of difficulty with the pseudo exclusion of 4 states located in the middle of this geographical area: Burkina Faso, Guinea, Mali and Niger, all governed by military powers which, concerned about the independence of their country, have cut the ties they had with France, which,  incidentally also has repercussions throughout Western Europe.

Recently, at a meeting of the civil aviation officials of the member states, 11 countries, if we remove the four that are at odds with the Organization, put the price of air tickets within the territory covered by the states at the center of their debates. And this is quite normal if we compare the rates charged to those in Europe. Here are a few examples taken on the most direct route with a one-way trip on December 10 and a return trip on December 17, 2024 in economy class: Bamako/Lomé 4h30 return flight, €891 with the company Asky – Accra/Douala 8h20 journey because there is a stopover €1,194 still with Asky – Abidjan/Dakar 5h25 flight,  price €525 with Kenya Airways. And by comparison on the European routes Paris/Rome: 4 hours and 25 minutes of flight, price €66 with Ryanair or Paris/Athens in 6 hours and 50 minutes round trip for a price of €176 with Transavia or London/Athens 7 hours and 50 minutes of flight time, €114 by taking EasyJet. I chose comparable great circle distances.

Differences also exist on identical routes depending on whether you travel in the south/north direction or the other way around. Examples always taken on the same dates and in economy class: Abidjan/Paris €1,208 but Paris/Abidjan €993 with the same carrier, Air France, or Accra/London €1,466 and London/Accra €1,216 travel with British Airways.

We have to face the facts, at the same distance the rates are always more expensive, even much more expensive for Africans than for Europeans, yet the cost of living is much higher in Europe than in the ECOWAS countries.

The African air transport leaders meeting in Lomé pointed to several factors to explain these discrepancies: airport charges, air traffic control charges, various taxes imposed by governments and this is probably only the beginning of their reflection. But seen from the outside, there are other reasons why banknotes in Africa are so high.

The first is the atomization of African air transport. Apart from 4 airlines: Ethiopian Airlines, Kenya Airways, Royal Air Maroc and Egyptair, no operator has reached the size of the airline to compete with international competition that is still very active. However, none of the four carriers named above is based in the territory covered by ECOWAS. Thus, European companies can sell at higher rates than they do elsewhere and they do not hide it, because they are not afraid of African competition. The first answer would be to create a good-sized company based in this region.

The second reason comes from the scarcity of supply. To achieve a reasonably low level of costs, operations are needed that are much denser than those available to the market. Each pair of major cities, I am thinking first of all of the economic capitals, should be served by at least 3 daily round trips and this is very far from being the case. It is not normal to take more than 6 hours to reach Douala in Lagos, 746 kilometers away. For the same distance, there are nearly 40 daily flights between Paris and Nice. The same is true between Accra and Douala, where it takes more than 4 hours to cover 1,122 km. The demand for transport is there, especially if fares fall to a reasonable level. To achieve this, we must, once again, create a real low-cost carrier in this region. Make no mistake, low-cost airlines are the only reason for the huge drop in European fares. They have also snatched up nearly half of the market and forced traditional airlines to align their fares with theirs.

And then it would be wise for the composition of the fleets to obey only economic and not political criteria. Ethiopian Airlines, although entirely owned by the Ethiopian state, has always kept its full independence in terms of its strategy and the choice of its equipment.

Africa, and more specifically this region, is a real Eldorado for air transport: a young, fast-growing, often well-educated population, little ground equipment and economic development just waiting to take off. Air transport is perhaps the essential means of ensuring this development.

Ancillary income legal deception

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The first question to be answered is: what are you buying when you purchase a plane ticket? There is a distinction between before and after the arrival of low-cost airlines. Previously, a plane ticket covered the entire service: the transport of passengers from one airport to another, their seat on the plane, the transport of their luggage (with a weight limit due to the less efficient aircraft used at the time), as well as the check-in of passengers with seat and luggage allocation. There was different onboard service depending on the class chosen by the customer, including newspapers and a film (selected by the airline and the same for all passengers), all included in the ticket price. In exchange, fares were proportionally higher. In 1970, there were only two classes on board: first and economy, with business class introduced in the mid-1970s to allow for some fare flexibility.

The arrival of low-cost carriers disrupted the services included in the ticket price by subjecting traditional airlines to new, aggressive competition to which they were unaccustomed. For years, these airlines denigrated—even despised—this new way of selling plane tickets, but eventually they were forced to adopt it, in response to losing customers who were content with the minimal service offered by low-cost carriers, in exchange for much lower fares.

However, from the outset, low-cost airlines recognized that the price of the plane ticket, offered at incredibly low levels, would not be enough to balance their accounts. It was therefore necessary to reduce services to such a degree that customers would have to purchase additional services to enjoy a minimum level of comfort. This led to reduced space between seats, with an extra charge for more legroom; the sale of boarding priority, as the companies no longer allocated seats to passengers (a measure they have since reversed); and the sale of services that traditionally would be included in the ticket price, such as Ryanair’s recent, controversial policy of charging customers for airport check-in. Gradually, nearly all airlines began to adopt similar practices.

This is where it has become problematic. Air travel has aligned itself with a kind of deception: announcing prices far below actual costs to secure the best positions in the displays of major consolidators, then compensating for these losses by selling ancillary services, assuming the customer would not notice. This approach treats customers as naïve, and ultimately devalues air travel by setting prices that do not cover costs. To cover the cost of a transatlantic flight (around 11,000 km), a traditional airline needs about €900 with a cost of 8 euro cents per seat-kilometer, while a low-cost carrier requires around €700, with costs closer to 6 euro cents per seat-kilometer. This means any fares below these amounts are essentially sold at a loss, which is prohibited in most Western countries. Nevertheless, when I checked a popular consolidator this morning, I found transatlantic round trips at €633, or a Bangkok-Tokyo round trip (a 12-hour flight) at €534.

Managers often argue that the availability of such discounted rates is limited and that they compensate with revenue from ancillary services. In other words, they lure customers with an offer that does not cover costs—knowing that the offer is very limited, without making this clear—while ensuring additional revenue from charging for ancillary services, sometimes even for basic needs, such as baggage fees for cabin and checked luggage. This practice is unreasonable, as customers remember the advertised price and are surprised when they must add essential services to be able to travel.

The sums involved are far from negligible. In 2024, the estimated revenue from ancillary services is nearly $150 billion, out of a total turnover of around $1,000 billion—representing 15% of total revenue.

It appeared that after COVID-19, carriers returned to better practices by initially posting significantly higher fares that covered costs. However, the trend toward pricing below cost seems to be on the rise again. How can we encourage carriers to stop underestimating their customers?

The return of the A380

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It is the story of a success transformed into a failure, only to end up becoming a success again for the carriers capable of making it profitable. Its story began with a sketch in 1988 because, at the time, it was necessary to position oneself against a triumphant Boeing. However, it took 7 years to start the project in 1995 and another 10 years before making the first flight on April 27, 2005. The first airline delivered was Singapore Airlines, which made the first commercial flight on October 15, 2007.

The development cost was staggering: in total, including penalties for late deliveries, it amounted to $26.5 billion, while the first estimate was, so to speak, only $8 billion. These huge investments were not all supported by Airbus; engine manufacturers and major equipment suppliers also took their share. And the beautiful bird flew away. I remember very well the first time I saw it fly—it was at the Paris Air Show, and what was striking was both its enormous size and very low noise compared to other large aircraft, like the Boeing 747/400 at the time.

The first market study indicated a potential for 2,046 aircraft over 20 years, quickly reduced to 1,300. This was without taking into account the development of twin-engine aircraft capable of carrying between 200 and 400 passengers over distances of 7,000 to 15,000 km. According to experts, including Tom Enders, the former head of Airbus, this aircraft arrived on the market 10 years too late—a bit like the famous Lockheed Constellation at the end of the 1950s, which was literally killed by the arrival of long-haul jets, starting with the Boeing 707. So, sales collapsed, and only 251 A380s were built and delivered to 13 operators, the largest of which was Emirates with 123 orders—half of the fleet. The last A380 was delivered in 2021.

Then, COVID hit air transport, reducing it to almost nothing in just one month, as states closed their borders in a hellish game of dominoes. All fleets were stored in deserts, where aircraft could be best preserved, and as countries gradually reopened, airlines returned their aircraft to service with great caution. There was no question of flying the largest model because they did not have confidence in their ability to fill it. Major airlines such as Air France, Asiana, China Southern, Malaysian Airlines, or Thai International have simply taken the A380 out of their fleet and condemned themselves to never operate it again.

But the demand for transport soared again. The first signs were felt in 2022, and traffic exploded in 2023. Admittedly, it was not homogeneous, as major Asian markets only opened up late, but when they did, customers rushed back to air travel. However, one of the two major manufacturers, Boeing, found itself in a truly catastrophic situation, which prevented it from delivering aircraft urgently ordered by operators when they realized the need to deal with an unexpected surge in demand. As a result, airlines had no choice but to put their large aircraft back into service, capable of replacing two good-sized twin-engine jets, such as the Boeing 787.

Thus, gradually, 10 companies have put all or part of their A380s back into service. To their credit, Emirates, which has always believed in this aircraft, has put 95 A380s back into operation and even bought 5 of them from a Guernsey lessor for only 200 million dollars, while the list price, never applied, was 437 million dollars each. Curiously, Emirates has always considered the A380 a cash machine, while its competitors have struggled to make it profitable. Nevertheless, British Airways has restarted its 12 aircraft, Lufthansa the 8 that remain, Qantas 8 out of 10, and Singapore Airlines half of its 24 aircraft. Most recently, Etihad Airways announced the resumption of its A380 flights between Abu Dhabi and Paris.

What can we learn from all this? First of all, the demand for air transport, far from weakening, remains very dynamic. From then on, the capacity of the A380s became essential to compensate for Boeing’s delivery difficulties, which we do not know when they will end. It is possible that carriers who have removed this model from their fleet will regret it. Finally, it is clear that air transport will need a very large aircraft, on the order of 1,000 seats, to solve the impossible equation of satisfying the demand for transport while achieving the decarbonization objectives announced for 2050.

Saving the boeing soldier

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The question is beginning to be seriously asked: is the giant Boeing in danger and is its survival assured? Won’t the avalanche of bad news lead to the fall of the emblematic manufacturer? The new boss: Kelly Ortberg, who replaced Dave Calhoun during the summer, is facing a huge work stoppage of 33,000 employees, which is bringing down production of the 737 MAX, 777 and 767. We don’t see where the descent will stop.

It really started with the American manufacturer’s denial about the malfunctions of the latest born, the B 737 MAX, which was supposed to compete with Airbus’ A320 NEO. Several hundred Lion Air and Ethiopian Airlines passengers lost their lives and even worse was the reaction of Boeing executives who implied a little heavily that these disasters were due to errors in the operations of “exotic” carriers. This contempt was the consequence of the arrogance of the manufacturer which tried to mask a strategy intended to preserve the company’s results even at the expense of safety, in order to serve copious dividends to shareholders.

The downturn began in the spring of 2020 and since then it has only worsened. The US Department of Transportation (DOT) fined $2.5 billion in early 2021, presumably partly to hide complicity between federal controllers and the automaker. We thought that the difficulties would end there, but this was not the case. First, whistleblowers came forward inside Boeing and its main subcontractor, Spirit Aerosystems. Two of them were also stricken with sudden death before being able to testify. And then we noticed manufacturing defects in some B 787s. As if that wasn’t enough, the door of a B737 came loose in mid-flight from Alaska Airlines, fortunately without casualties, which led to a new investigation by the U.S. Congress and finally the change of CEO Dave Calhoun in July.

The financial consequences have come to sanction the operational difficulties. Currently, Boeing is dragging a loss of $58 billion and announces disastrous figures in the third quarter of 2024: a new loss of $6 billion, all after having to reintegrate its main subcontractor Spirit Aerosystems into the parent company for $4.7 billion and the resumption of losses. And finally, Kelly Ortberg has to face the biggest strike in Boieng since 2008 with the work stoppage of the production lines of the main devices after announcing the elimination of 17,000 jobs.

Any company would have disappeared in the face of this avalanche of bad news, even the Defense sector is impacted, and we wonder if the list is over or if we won’t discover new problems. Is Boeing too big to disappear? We have not said the past of air transport giants such as Pan Am or Swissair, and yet many major companies have now disappeared, despite the widely affirmed support of states. However, there are finally enough carriers to handle a constantly growing demand, but there are currently only two major manufacturers, Airbus and Boeing, while waiting for the arrival of Comac in China and perhaps the return, one day or another, of the Russians.

It should be remembered that Boeing has an order book of more than 6,000 aircraft and that Airbus’ is close to 9,000. However, air operators make their service plans several years in advance according to the delivery dates of the aircraft ordered. A long delay can have catastrophic consequences, and that’s why Sir Tim Clark, the iconic boss of Emirates, is so. He is still waiting for the delivery dates of the aircraft he ordered in … 2013.

Boeing’s bankruptcy would be a huge disaster not only for the United States, but for global air transport. To survive, this sector of activity needs manufacturers capable of delivering around 200 aircraft per month, while currently the figure remains close to 100. And producing an aircraft is such a complex operation that a manufacturer cannot be replaced overnight as it can happen for airlines.

The airline world has no other solution than to support the manufacturer in difficulty and to bend its back while waiting for the machine to get back on track. The coming months will be difficult for all operators. It will probably be necessary to return to service many aircraft grounded during the Covid crisis. In any case and by all means, the Boeing soldier must be saved.

Air transport needs a new model

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Modern air transport dates back to the end of the Second World War, it will be 80 years old next year. Since then, it has undergone a tremendous evolution, driven by the manufacture of increasingly efficient aircraft models, highly reliable air traffic control, all to keep up with a demand for transport that continues to increase as a middle class arrives on the market on the most populous continents. But, while technological progress is permanent and impressive, the airline model has remained fixed around two concepts: traditional carriers and “low-cost” airlines. However, it seems that a new model must be invented.

Incumbent operators are facing the increase in their production costs as a result of the growing demands on their staff. This is also the role of the unions, which have become very powerful, even capable of blocking a corporate strategy, as we saw a few years ago in the Air France/KLM group, where the growth of the group’s “low-cost” operator was blocked by the unions. Since then, things have fortunately been settled. We have also seen in the United States, the unions take over the management of United Airlines, one of the three American majors, with the disastrous consequences that have led the company to reorganize. Faced with rising costs, traditional airlines have had to face the arrival of “low costs”, the other new concept of air transport. This is based on simplicity and better productivity, and aims to attract new layers of customers by lowering sales prices, which has been made possible by a reduction in costs that is at least equivalent.

This is the landscape in which air transport must move. At the same time, the manufacturers have grouped together and there are only two left: Airbus in Europe and Boeing in the USA, at least for aircraft with more than 100 seats while waiting for the arrival of the Chinese. However, one of them, Boeing, is facing considerable difficulties largely due to a management that has favoured the distribution of real or supposed dividends to shareholders, to the detriment of the obligation of safety. The consequence is that instead of delivering around 100 aircraft per month, which was the goal, the American manufacturer is only releasing less than half of them. This comes at a time when, after emerging from the terrible Covid era, passengers are scrambling to travel and companies are placing orders by the hundreds. The portfolio of the two major companies is currently around 15,000 aircraft, which represents 100 months of production, i.e. more than 8 years, all while orders continue to pour in. However, operators make their medium-summer long-term operating plans according to the delivery date of the aircraft ordered and this can no longer be respected. Engine manufacturers are not keeping up, maintenance workshops are struggling and the 400 or so subcontractors needed to manufacture the aircraft are struggling to provide their services on time.

And what do passengers think? There is no doubt that they are sensitive to the communication of the companies who promise to make them travel at fares well below their cost prices. Of course, everyone knows that this promise is fallacious, it only concerns at best a very small number of seats and if not, the “low cost” seat, it is compensated by the extreme modesty of the service, which forces customers to buy, often very expensive, services that should be included in the price of the ticket. Basically, companies don’t care about the expectations of customers who are, in professional language, only “pax”, i.e. consumer units.

However, it should be acknowledged that, although widely criticized in some of their aspects, the two concepts have brought about the results we know: nearly 5 billion passengers per year and a level of safety close to perfection. However, we now have to deal with a doubling of demand in the next fifteen years, while equipment is having great difficulty keeping up, whether on the ground with airports or in flight with aircraft.

It is high time that air transport invented a new model that is both respectful of the environment and of passengers, who should really become customers with the quality of service that this requires. This would perhaps slow down the development of the sector, but is it not necessary at a time when we are having so much trouble absorbing growth? The solution is certainly not easy to find, but after all, it was not either when the “low costs” were created. So let’s trust the imagination.

Are air alliances still useful?

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The three main airline alliances date back to the late 1990s: 1997 for the Star Alliance, 1999 for Oneworld, and 2000 for SkyTeam. They have now been in existence for a quarter of a century, and it is possible to make an assessment of them from the outside.

First of all, it should be noted that they have not weakened over time, whereas competition between carriers in the same alliance could have led to their disintegration. This has not been the case, and they continue to weigh heavily in global air transport. Between them, the 60 member airlines operate 11,909 aircraft and fly 1.89 billion passengers, covering almost all countries. Basically, the 60 carriers—25 for the Star Alliance, 20 for SkyTeam, and 15 for Oneworld—represent a third of the world’s air transport, while they account for only 6.7% of the 900 or so scheduled airlines.

So, no doubt, this is an imposing force. How, then, is it that they have very little weight in the organization of air transport? Admittedly, the current Director General of IATA comes from British Airways, one of the founders of Oneworld. But apart from that, what roles do they play in the management of the business sector?

The first limitation of the power of alliances lies in the absence of solidarity between members. Since their creation, many member companies have been liquidated without their colleagues in the same group coming to their rescue. In no particular order, we can mention Malev, Mexicana de Aviación, Air Berlin, Spanair, and even Alitalia, to name just a few of the defunct operators. Closer to home, CSA, the Czech airline, refurbished into Czech Airlines, will disappear very soon. This is because each carrier is willing to participate in the benefits of a closed club but without losing its independence.

We also see airlines changing alliances through groupings with other carriers, such as LATAM, which left Oneworld for SkyTeam following the entry of Delta Air Lines into its capital.

Finally, while an alliance should be a defensive means vis-à-vis competitors from another alliance, nothing prevents an operator from signing interline or even code-share agreements with companies belonging to either another alliance or simply outside a group. This singularly weakens the power of alliances.

However, they are far from useless for passengers and companies. The latter, especially very large groups, are looking for a global offer that can better cover their needs than one of the three alliances, each of which covers almost the entire planet, or at least all the main markets. This can be decisive in discussions between a carrier and a potential customer. Thus, the members of an alliance can benefit from the commercial establishment of the member company in its own territory. However, what is an advantage in one country can turn out to be a weakness in another. Only the United States and China have a representative in each of the alliances; this is not the case in Europe. Air France/KLM are certainly dominant in the French and Dutch markets, but they carry much less weight in Germany, Switzerland, Belgium, or Austria, where the powerful Lufthansa group, a member of the Star Alliance, is so dominant.

There remains the interest for consumers in the validity of the Frequent Flyer Programs with all the airlines of the same alliance. The loyalty capacity of this system, which has retained all its appeal for the past forty years, cannot be underestimated. The problem arises when an airline leaves one alliance to join another, which can cause great disappointment for some frequent travelers.

I note that the best international airline is not one of the three groups; I am talking about Emirates, and this has not prevented it from becoming the world reference in air transport.

For years, the concept of wedding rings—that is, the benefits they provide to their members and consumers—has not changed. We would like the facilities offered by artificial intelligence and the incredible development of social networks to be better utilized to develop the concept.