Need I say Moores

Is there a future for ‘middle-seat' airlines? ​

As the carve-up of German carrier airberlin begins, it begs the question of whether there is an independent future for second-tier airlines that are neither niche players, nor members of large airline groups.

Airberlin has always been a difficult airline to describe. It rejected the LCC label, isn’t quite a network carrier, isn’t a niche operator and isn’t number one in its market. It is neither one thing or another – a middle seat airline.

However, while it was partly-owned by Abu Dhabi-based Etihad Airways, airberlin was a consolidated player. Being part of a larger group offered a degree of market security, but now Etihad has pulled out it looks like airberlin will be parted out to the highest bidders.

It seems there are three potential futures for airberlin now:

  1. It is acquired and continues to fly as airberlin, either as part of a bigger group or with backing from a brave independent investor
  2. It is acquired, in whole or in part, and absorbed
  3. It just disappears

My feeling is that Option 2 is the most likely and I wouldn’t rule out an acquisition and integration by another LCC.

In the past, this wouldn’t have been an obvious option for an LCC, as acquisitions add complexity. However, it is not unheard of. For example, UK LCC easyJet started easyJet Switzerland by acquiring a stake in TEA Basel and has since absorbed British Airways LCC Go and fellow UK carrier GB Airways. Ryanair has been less active, although it did acquire UK-based Buzz from KLM in 2003.

Both easyJet and Ryanair have shifted away from the established rules, adding seat allocations and exploring connecting agreements, so more acquisitions could be on the cards as the market becomes increasingly consolidated. On the European short-haul market, LCCs are undoubtedly in control.

There is certainly an attraction there for Ryanair, which has been pushing to attack Lufthansa on home turf by growing its German network. But is this just that – an attack? Ryanair may be being Ryanair, using talk to create a stir around Lufthansa’s plans to benefit from airberlin’s demise.

Also, will the potential competitive gains be big enough to justify the complexity that acquiring airberlin would create?

One thing is certain. Life is tough for middle seat airlines and it’s likely to get tougher yet.

Victoria Moores victoria.moores@penton.com

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