"KLM CEO says European aviation will look like the US in 10 years time"

" \n The impact of COVID could see the move to a more consolidated European aviation market begin to accelerate. KLM boss Pieter Elbers has already led his airline through the first steps of consolidation, teaming up with Air France in 2004. \n \n\n \n Elbers believes that, in Europe, the market will look very much like the US in 10 years. \n \n\n \n The European aviation market could look very much like that of the US within a decade. Photo: Air France-KLM \n \n\n \n COVID will spur consolidation \n \n\n \n While many would agree that the European aviation market is ripe for consolidation, in some parts, it has begun to happen already. One of the airlines that has led the way on this is Dutch flag carrier KLM, under the control of CEO Pieter Elbers . \n \n\n \n Now, with COVID curtailing opportunities to make a profit, could there be more strength in numbers? Speaking at Eurocontrol\u2019s \u2018Hard Talk\u2019 session recently, the KLM boss was clear about the direction he expected European aviation to take. He commented, \n \n\n \n \u201cEurope is lagging behind some 10 years compared to the US in terms of industry consolidation. If we look at how the US looks today, probably that\u2019s how the EU will look 10 years from now.\u201c \n \n\n \n In the US, the four biggest airlines \u2013 Delta, American, Southwest, and United \u2013 between them control around two-thirds of the aviation market. Add in JetBlue and Alaska Airlines, and that share goes up to more than three quarters. But it wasn\u2019t always that way. \n \n\n \n The big airlines in the US control a large portion of the aviation market. Photo: Getty Images \n \n\n \n Prior to\u00a0 deregulation , the US aviation market was served by a plethora of small airlines operating in their local areas and with a much wider spread of market control. \n \n\n \n However, mass consolidation before and after the turn of the millennia has left us with a market that is very much in the hands of a few big players. How would that work in Europe? \n \n\n \n How will the market look in the future? \n \n\n \n We can already see the shoots of a more consolidation air travel market beginning to emerge. Aside from the low-cost carriers operating in Europe, most of the large, full service, legacy airlines are already tied up into some sort of group. \n \n\n \n In almost every country in western Europe, the biggest carriers are the flag carrier, complemented by one or two low-cost airlines. For example, according to\u00a0 FlightGlobal , Portugal\u2019s biggest airlines are TAP Portugal, followed by easyJet and Ryanair. \n \n\n \n It\u2019s British Airways and the same two LCCs in the UK, while in Germany it\u2019s Lufthansa, Eurowings, and easyJet. \n \n\n \n The IAG group is formed of British Airways, Iberia, Vueling, Air Lingus, and LEVEL. Photo: British Airways \n \n\n \n Many of those flag carriers are tied up into airline groups or are being closely eyed to become part of the group. In Scandinavia, SAS has been rumored to be a target for\u00a0 Star Alliance partner Lufthansa, \u00a0while Finnair could be attractive to IAG. \n \n\n \n Norwegian, snapping at the heels of SAS for market share, has\u00a0 been on IAG\u2019s radar \u00a0for some time. \n \n\n \n Elbers made his predilections for the shape of the European market, saying, \n \n\n \n \u201cThere\u2019s going to be a few large low-cost carriers. There\u2019s going to be a few big groups, like we see already emerging today with the Air France-KLM Group, the Lufthansa Group, the IAG Group. And then there\u2019s going to be some new contenders or some regional contenders in that system.\u201d \n \n\n \n Consolidation will be different \n \n\n \n One thing that has characterized consolidation in the US is the rebranding of airlines to a single unit. Pan Am, Braniff,\u00a0 Continental , US Airways\u2026 they were all strong brands in their own right, but became\u00a0 absorbed into other airlines \u00a0and have ceased to exist. \n \n\n \n Things in Europe will be rather different, says Elbers, and that\u2019s not necessarily a bad thing. \n \n\n \n \u201cEuropean consolidation by nature, because Europe is different with all the countries and all the national rules and regulations, is going to be different to the US \u2026 sometimes we see that the existing brands are a blockage to further consolidation. But we could also see it as a strength. For us at Air France-KLM, we have two fantastic, but very distinct brands. And I consider it an asset to have such two strong brands rather than a weakness.\u201d \n \n\n \n Despite being wrapped into a group, airlines in Europe keep their own standalone brands. Photo: Tom Boon \u2013 Simple Flying \n \n\n \n Despite moves to bring Air France and KLM closer as a group, there has never been any mention of changing the face of the brands. \n \n\n \n It\u2019s the same in Britain, as likely the vast majority of British Airways\u2019 customers have no clue they\u2019re flying an airline that is essentially Spanish controlled. \n \n\n \n With many fliers still somewhat patriotic when it comes to which airlines they choose, and flag carrier brands tending to hold the biggest presence at major airports, it makes sense for these separate brands to remain somewhat separate. \n \n\n \n But that doesn\u2019t mean consolidation will not take place, just that it will be done more quietly and subtly than it happened in the US. \n "

"KLM CEO says European aviation will look like the US in 10 years time"

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