How do airlines differ?

Pieter Elbers, CEO of India’s IndiGo, which has placed the largest order for aircraft ever with 1,021
planes all at Airbus, pointed out that the only real difference between airlines was the quality of the
crew. Is this really true?

Air transport is organised in such a way that all operators have the same opportunities because they
are ultimately dependent on the same rules, regardless of their country of origin. This is the only way
to be able to exchange passengers and goods from one country to another and this is what has
greatly contributed to the rapid development of this activity.
Looking at the details a little, we can see that the carriers have, in total, few possibilities to express
their originality. They use the same aircraft because, whether they are produced by Airbus or Boeing,
their performance is more or less identical: the same speed, the same ranges, the same type of
comfort, the same safety qualities. In addition, they fly to the same major airports, they use the same
distribution techniques: GDSs and they finance their fleets using the same methods: partly by
purchasing and partly by leasing from the major leasing companies.

In short, the fundamentals of air transport are available to all airlines, but the customization
capabilities between operators remain infinite. Just like with 7 notes of music, you can compose an
infinite number of works, from the most mediocre to the absolute masterpieces.
Of course, the first differentiation comes from the market in which the company operates. In this
sense, the major American carriers hold a privileged position. But what can be said about an airline
like Turkish Airlines, which for a long time was almost non-existent in the world concert and has
become almost unavoidable between the European market and Asian and even African destinations?
How can we explain the eminent position held by Gulf carriers when they do not have a natural
market?

In fact, with the same tools and facilities, airlines can still customize their offering significantly.
First of all, by the cabin fittings. Depending on whether you want to position yourself in the “low cost”
or the high-end, the choice of cabin composition is essential and manufacturers have understood this
well because they deliver aircraft that comply with the specifications of the airlines who can decide
on the entire range of interior equipment from the number, layout and comfort of the seats but also
the galleys and leisure equipment. To this personalisation, we must of course add the quality of the
services served on board, which can make a big difference, especially for long-haul flights. We now
see more and more frequent flights of more than 15 hours.

And then there are an infinite number of factors linked to the great complexity of air transport. The
regularity of operations and their ability to respect their schedules remain particularly important for
customers’ choice, especially when journeys are made with connections at very large airports.
And how can we miss the rates that remain such a determining factor for the choice of many
customers. Curiously, however, these vary from day to day or even hour to the next according to the
fluctuations imposed by the “yield managers”.

Let’s take for example a transatlantic journey that will vary from 7 to 11 hours of flight. Carriers are
violently competing in this economically profitable market. Several dozen carriers share this cake
with roughly the same number of seats offered by operators on each side of the Atlantic. The aircraft
are identical, the airports are common to all, the schedules are very comparable and the fares are
subject to the “yield managers” who use the same IT tools. And yet the flight experience is very
different depending on whether you use an American or European carrier and even with strong
differentiations if only between European airlines. Each of the operators strives to respond first to
the wishes of its main market and the expectations are not the same on both sides of the ocean.
Companies are making great efforts to personalize their product and moreover they are essentially
advertising their personalization, especially since the end of Covid which marked the end of the race
for the lowest prices. So how can we explain this unfortunate practice of “code share” which consists
of putting flight numbers of a European company on a route operated by an American carrier and
vice versa? How can a commercial approach based on the personalization of one airline be justified if
it ends with a flight operated by another that also differentiates itself in a different way? I admit
that I have a lot of difficulty, not only to understand this practice, but to accept it as a customer.
It seems that this is a factor of profitability. Why not, but then you might as well sell the carrier’s
flights directly without camouflaging the reality. The “Interline” agreements between carriers that
allow these exchanges between companies have existed since 1948 and they work very well.