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Europe's Legacy Carriers: Take Offs Delayed by Strong Head Winds - New Study Released

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Boston, MA -- (SBWIRE) -- 01/01/2014 -- Air-France KLM was the trailblazer in consolidation in Europe through merger in 2004. Their strategy was followed by Lufthansa and Swiss Air and more recently by Iberia and British Airways. It was expected that legacy carriers would return to profitability once consolidation was achieved. However, they are struggling to return to profitability.

Features and benefits

- This case study analyzes the performance of Europe's legacy carriers compared to that of budget airlines.
- This report looks at how US carriers have adopted consolidation strategies to improve profit margins and compares this to their European counterparts.


The global airline market returned to profitability in mid 2010 but the recovery of the European market is still facing strong head winds. The combined profit of the sector in Europe was $0.8bn in 2013 but legacy carriers have been reporting considerable losses.
The consolidation strategy adopted in the United States has seen the market become more concentrated with four major carriers - American Airlines (USAir), United Airlines, Delta Airlines and Southwest - being responsible for a significant percentage of the total number of passengers flown. This has allowed them to increase operating margins.
IATA (International Transport Air Association) analysis revealed that European passengers are highly sensitive to an increase in prices, even more than American passengers. This means that for a given price increase, passengers in Europe are more likely to opt for a different route or for a different transport mode to travel.

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Your key questions answered

- How are legacy carriers performing compared to budget airlines?
- What is the future for legacy airlines in Europe?

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