Air New Zealand tops again

Courtesy Air New Zealand

AirlineRatings.com has named Air New Zealand as the world’s best airline for 2018. Other airlines that make the top ten in descending order are Qantas, Singapore Airlines (SIA), Virgin Australia, Virgin Atlantic, Etihad Airways, All Nippon Airways (ANA), Korean Air, Cathay Pacific and Japan Airlines.

According to the editorial team, airlines must achieve a seven-star safety rating (developed in consultation with the International Civil Aviation Organization) and demonstrate leadership in innovation for passenger comfort to be named in the top ten.

The evaluation team also looks at customer feedback on sites that include CN Traveller.com which perhaps explain little surprise in both AirlineRatings and Conde Nast Travel naming Air New Zealand as their favourite. (See What defines a best airline? Oct 19, 2017) Four airlines, namely SIA, Virgin Australia, Virgin Atlantic and Cathay Pacific are ranked in the top ten of both lists. These look like consistently global favourites.

Notable absences from the AirlineRatings list are Middle east carriers Qatar Airways and Emirates Airlines. While these airlines scored for service in other surveys, they may have lost the lead in product innovation for which most of the airlines ranked by AirlineRatings are commended. Virgin Australia’s new business class is said to be “turning heads” and Etihad is said to provide a “magnificent product throughout the cabins.” Looking ahead, Air New Zealand will feel the pressure from Qantas and SIA for the top spot. (See Singapore Airlines steps up to reclaim past glory, Nov 3, 2017) In the same survey, Qantas is selected for best lounges and best catering services, and SIA for best first class and best cabin crew.

For those who think best airline surveys are often skewed by the halo effect of service provided in the upper classes, AirlineRatings has named Korean Air as best economy airline.

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What defines a best airline?

What defines a best airline, considering the different surveys that rank them? Conde Nast Travel has just released its readers’ choice of the best in 2017, and it is no surprise the list is made up of Asian, Middle East, European and SW Pacific carriers.

Courtesy Air New Zealand

Of course, it depends on the readership, but recognizing that, it also points to what really makes these airlines stand out. It is clear that the premium class service weighs heavily – the seat comfort and the fine food.

Etihad Airways (ranked #16) offers “the future of first-class comfort: a three-room “residence” with a bedroom, private bath with shower, and lounge.” Emirates (#4) offers “posh perks for premium fliers – cocktail lounges, in-flight showers… part of the reason it scores so high among travellers.” And the suites on Singapore Airlines (#3) offer “a pair of fully flat recliners that can be combined into a double bed.”

Mention is made of the premium economy class in almost all the ranked airlines” KLM (#20), Lufthansa (#19), Japan Airlines (#17), All Nippon Airways (#13), Qantas (#12), Cathay Pacific (#10), Virgin Atlantic (#7), Virgin Australia (#6), Singapore Airlines (#3) and Air New Zealand (#1).

So it may appear to be the voice of the premium travellers that is being heard. Maybe coach travellers aren’t too concerned about the ranking, more driven by price and less frilly factors, although to be fair, the Conde Nast report did mention of at least one airline, i.e. Etihad Airways (#16), not ignoring “those sitting in the back.” While many travellers may resign to the belief that the economy class is about the same across the industry, it is reasonable to assume that an airline that strives to please its customers in the front cabins will most probably carry that culture or at least part of it to the rear.

Although you may draw consensus across many of the surveys, it is best best to treat each one of them in isolation. It is more meaningful to try and draw intra conclusions within the findings of the particular survey.

You will note in the Conde Nast findings, there is an absence of American (including Canadian) carriers, never mind that of African and South American carriers.

Asiana Airlines (#8) is ranked ahead of Korean Air (#11).

All Nippon Airways (#13) is ranked ahead of Japan Airlines (#17). V

Virgin Australia (#6) is ranked ahead of Qantas (#12).

The order of the “Big 3” Gulf carriers is as follows: Qatar Airways (#2), Emirates (#4) and Etihad Airways (#16).

Of European carriers, there is the conspicuous absence of the big names of British Airways (compare Virgin Atlantic #7) and Air France, and the pleasant surprise of Aegean Airlines (#9) while SWISS seems to be regaining its erstwhile status years ago as being the industry standard.

The best belongs to Air New Zealand as the quiet achiever.

Ultimately, the results also depend on the group of respondents whose experiences may be limited to certain airlines.

Other airlines ranked in the top 20 of the Conde Nast survey: Finnair (#14), Turkish Airlines (#15), EVA Air (#18).

Air New Zealand leads the pack

Courtesy Air New Zealand

Courtesy Air New Zealand

Air New Zealand is the world’s best airline according to AirlineRatings.com based on criteria that include fleet age, safety, profitability and leadership in innovation for passenger comfort. The agency’s Airline Excellence Awards program which lists the winning airlines is endorsed by the International Civil Aviation Organization.

Many travellers would recognize ANZ for its attention-grabbing in-flight safety video that takes them into Middle Earth, the kind of out-of-the-aircraft features that a few other airlines have tried to imitate but fared only poorly. AirlineRatings.com Editor-in-Chief Geoffrey Thomas said: “Air New Zealand came out number one in virtually all of our audit criteria, which is an exceptional performance.” The airline was favoured for its record-breaking financial performance, award-winning in-flight innovations, operational safety, environmental leadership and motivation of its staff.

Skycouch: Picture courtesy Air New Zealand

Skycouch: Picture courtesy Air New Zealand

But, of course, there are surveys and there are surveys that publish their own lists of favourites. Some airlines such as Singapore Airlines (SIA) and Cathay Pacific have a ubiquitous presence, and there also notable absences. This is where it is most telling, bearing in mind that the ranking is dependent on several factors such as the excellence-defining criteria and the population surveyed.

The other nine airlines ranked behind ANZ in the top ten list by AirlineRatings.com are in descending order: Qantas, SIA, Cathay, Virgin Atlantic, British Airways (BA), Etihad, All Nippon Airways, EVA Air and Lufthansa.

It is interesting to note that the top two airlines come from the remote Southwest Pacific. Qantas has in recent years been working on upgrading its product offerings, winning accolades for catering and airport lounges. Not surprisingly, innovation along with good service seem to be the driving winning streak going down the list – SIA and Cathay for their premium economy and revamped business classes, Virgin for its cabin ambience and friendly crew, BA for its leadership in in-flight entertainment, and Etihad for its equally impressive service in front and at the back of the aircraft.

Notable absences in the list are US carriers (no surprise there) and two of the big three Middle-East carriers (Emirates and Qatar).

Many survey rankings are skewed by the weight they place on service in the premium classes. However, Mr Thomas of AirlineRatings.com said: “We are looking for leadership and airlines that innovate to make a real difference to the passenger experience particularly in economy class.” Considering that the majority of travellers are seated in coach, it is time that airlines crowned with the halo of excellence pay more attention at the back of the aircraft, for this may well make the difference as the competition intensifies. And, it is where the differentiation becomes even more challenging. Perhaps too, this could be the reason why Emirates and Qatar, known for their lavish premium service, did not make it to the top ten of the list.

Air New Zealand poised for growth

Courtesy Air New Zealand

Courtesy Air New Zealand

Air New Zealand (ANZ) is probably best known for its innovative approach in its in-flight safety video presentation. Drawing inspiration from the Men In Black to Hobbits of the Middle Kingdom, what used to be or is supposed to be a staid, no-nonsense delivery of critical information that is often ignored by many travellers, particularly repeat fliers, the presentation has become entertainment. Though not without controversy, the videos show how ANZ is not only innovative but also bold enough to break tradition. While the initiative cannot be said to be a marketing strategy to attract more customers, one is tempted to ask if ANZ is in like manner finally emerging, albeit slowly, from a lacklustre past and turning heads across the industry.

The kiwi airline has just reported an impressive full-year performance. Operating revenue as at end-June 2015 was NZ$4.92 billion (US$3.01 billion), increasing by 6% over last year. But annualised earnings before taxation rose by 32% to NZ$496 million, and the statutory net profit after taxation was NZ$327 million, up 24%. The results were released right after Qantas’ announcement of a dramatic turnaround and were not surprisingly overshadowed by the hype drummed up by the flying kangaroo’s performance and no less the outspoken personality of its chief executive Alan Joyce (See Qantas is Asia Pacific’s New Star Performer, Aug 27, 2015).

In their part of the world, ANZ and Qantas are major rivals. Indeed, considering that ANZ’s short-haul load makes up 88% of the 14.3 million passengers carried for the full year, the kiwi airline is more a regional than international airline. Australia was its biggest membership base for ANZ loyalty program Airpoints, with growth in that market exceeding 20% during the year. ANZ chief executive officer Christopher Luxon said: “This doesn’t surprise us as more Australian than ever are embracing the Air New Zealand product and service offering whether it be on the Tasman, to the Pacific Islands, North America or South America.”

Obviously Australia is an important market which is critical to ANZ’s growth as an international airline, perhaps an ironic corollary to how Qantas probably sees New Zealand as a necessary appendage by offering a one-dollar fare for onward travel through Australian gateways. Both airlines have enlarged their interest bases in each other’s land – Qantas through its budget subsidiary Jetstar Airways and ANZ its investment in Virgin Australia. And both airlines, situated at the far end of the kangaroo (and beyond) route, face competition beyond their shores from a slew of airlines such as Singapore Airlines (SIA), Cathay Pacific and Middle East carriers.

Mr Luxon said: “We remain focused on the Pacific Rim as our growth strategy and will continue to provide the best connections, product and service at competitive prices, to maintain and grow our market share in these regions. Next year will see further capacity growth in international markets as we look forward to new routes starting in December 2015 to Houston and Buenos Aires. And while we are gearing up to launch these exiting new routes we have a team assessing potential new opportunities in Australia, Asia and the Americas.”

Can ANZ overcome an apparent geographical disadvantage and turn it into a strategic marketing benefit, and identify new windows of opportunities?

Mr Luxon has identified the Pacific Rim as its focus. So, fly west. The Americas are much closer and offer room for growth. Qantas too in recent years has been ramping up its connections westward, penetrating deeper into the US. It operates the world’s longest non-stop flight, between Sydney and Dallas (the record will go to Emirates when it introduces a service between Dubai and Panama City in February 2016). The challenge remains whether ANZ has enough hinterland traffic to sustain that initiative, and whether this will hinge on how successfully it can challenge Qantas on market share for the region. To turn a geographical advantage into a benefit demands a lot of the innovative spirit to make it work. ANZ is already flying onward from Los Angeles to London with fifth freedom rights.

Meantime Qantas has not only strengthened its alliances with American Airlines but also entered into partnerships with airlines in other regions, especially China having identified Asia as a potential area of growth in its restructuring plans. While still maintaining a hub for Asian connections in Singapore (after moving the hub on the kangaroo route from Singapore to Dubai in partnership with Emirates Airlines), it has been active in mounting direct flights between Australian and Chinese destinations. This, of course, makes sense when China has become Australia’s biggest inbound tourism market. The Qantas/China eastern connection now commands 87% of the market share on the Sydney-Pudong (Shanghai) sector. Qantas would have commanded a strong presence in Hong Kong in a tie-up with China Southern Airlines had the Hong Kong administration not rejected the Jetstar Hong Kong’s application.

Qantas offers a ready lesson since Mr Luxon had expressed ANZ’s interest to grow in Asia although, to be noted, Virgin Australia which is 26% owned by ANZ has also entered into an alliance with Air China for flights between China and Australia. Just that it seems a couple of steps behind. However, there are situational differences between Qantas and ANZ although the challenges may be similar. Among the factors for ANZ’s success, ANZ chairman Tony Carter cited “the continued development of our alliance partner relationships”. ANZ and Air China will jointly launch a Peking-Auckland service in December.

Mr Carter is optimistic about ANZ’s immediate future. He said, “Given the current known operating environment, along with our increased capacity and improved operating efficiencies, we expect to achieve significant earnings growth in the coming year.” How “significant” that will be is to be seen, but Mr Carter seemed encouraged by “current sales momentum”. Of course, the lower fuel prices help, but then as Qantas Joyce said, “Every airline gets the benefit.” What lifted Qantas above the rest, according to Mr Joyce, was its transformation program. This does not mean ANZ should roll out a similar program. Far from it. We’d rather be surprised by ANZ’s knack for innovation a la Lord of the Rings.

This is an abridged version of the article which was first published in Aspire Aviation, titled “Partnership is Air New Zealand’s answer to litmus test” .

Air New Zealand reconstructed

Courtesy Air New Zealand

Courtesy Air New Zealand

IF you are planning to visit the Hobbits and the Kingdoms of Middle Earth, don’t think twice about flying Air New Zealand (Air NZ). The Kiwi carrier is probably best recognized in recent times for its innovative in-flight safety videos before take-off.

Keeping a relatively low profile, Air NZ is entering a new era of growth. In a way it is like the proverbial phoenix rising from the ashes if you recall how in 2001 with the collapse of Ansett Airlines, it had to be bailed out by the government. Air NZ acquired 50% of Ansett in 1996 for A$475m and the other 50% for A$680m in 2000. Ansett became bankrupt in 2001 and was written off with a tag of $1.32b, adding to the losses suffered by Air NZ itself.

Since then it has been a long road of reconstruction for Air NZ, which today reported earnings growth for the third consecutive financial year ending June 2014. Normalised earnings before taxation were NZ$323m (US$254m), which was an increase of 30% on last year. Statutory earnings before taxation were NZ$357m, an increase of 40%. Operating revenue held steady at NZ$4.7b, increasing by NZ$48m. However, statutory net profit after taxation increased by an impressive 45% from NZ$181m to NZ$262m. Air NZ also reported a strong operating cash flow of NZ$730m.

The good results were attributed to an increase in passenger revenue of 4.6% to NZ$3.9b and yield improvements across its network of 3.3%. The airline carried 2.3% more passengers. Of course, like many airlines presently, it has benefitted from decreased fuel costs due to falling oil prices. But additionally and perhaps more importantly, Air NZ attributed the lower cost to fleet efficiencies.

What makes Air NZ’s performance worthy of note is how it has been able to sustain a turnaround at a time when many of the world’s airlines are still see-sawing between profit and loss, that in spite of New Zealand’s not too favorable geographical at the end of the active business line. A comparison with neighbour Qantas, which was unsuccessful in bids to acquire stakes in the beleaguered airline during its tumultuous years, is inevitable. In the last three years, Air NZ has done far better than its bigger rival although Qantas has just announced a spectacular performance for 2014.

Air NZ chairman Tony Carter said: “Air New Zealand continues to be a world leading airline both in terms of customer experience and financial performance.” He added, “We have made significant progress on our key strategic initiatives. With new aircraft offering better operating economics, an optimised network with the right alliance partners, disciplined cost management and a daily focus on improving the customer experience, we are very well positioned to continue growing.”

Air NZ’s revival stems from a strategy of focussing on its strengths, and that means not pursuing willy nilly a certain course of action just because every other player is doing it. Its domestic arm is a sterling performer with a load factor above 80% and a yield of NZ$0.29 (cents per RPK). Capacity grew by 5.4%. While it is doing better, key rival Jetstar’s market share fell from 22.4% to 20.7%. It is also maintaining its market lead in the Tasman and Pacific Islands region, with a load factor of 83.4%. While Qantas was promoting Jetstar and other major airlines were spawning budget offshoots, Air NZ grounded its low-cost Freedom Air, preferring to carry “all” in one plane for trans-Tasman flights. The airline has learnt that what works for one airline may not necessarily work for another.

Internationally, the airline continues to realign its long haul network. With capacity adjustment, the load factor continues to improve, up 1.4% pts to 85.4%. Air NZ withdrew from the Hong Kong route with onward connection to London. Although a Star Alliance member, it has instead tied up an arrangement with OneWorld member Cathay Pacific. While rival Qantas is expanding aggressively in Asia and boosting its kangaroo route dominance in an alliance with Emirates to use Dubai International as its European hub (replacing Singapore Changi), in a market that has become very competitive, Air NZ is turning New Zealand’s remote geographical location into an advantage by dominating trans-Pacific channels and flying to London via Los Angeles with full fifth freedom rights.

The Kiwi carrier has learnt the bitter lesson of hasty over-expansion in its bid to take on Qantas through Ansett and competing with others in the larger world. But it is crawling back, forming strategic alliances. It is reliving its Australian dream, having increased its equity investment to 25.99% in Virgin Australia, of which Singapore Airlines (SIA) and Etihad Airways are also partners. It has also expanded its alliance with SIA to recommence flying from Auckland to Singapore, aiming to boost route capacity by 30%.

Mr Carter is optimistic. He said: “Based on our current expectations of market demand and fuel prices, we expect to improve on the 2014 result in the coming year.”

With innovative product development, Air NZ is catching the attention of competitors. And it’s not just about jazzing up in-flight safety videos; this, to Air NZ’s credit, stands it out as being bold and refreshing. The airline was among the first to introduce a premium economy cabin. And it has beaten arch-rival Qantas in the race to introduce business class seats that can be reclined for take-off and landing.

What some airlines say about themselves

United Airlines used to “fly the friendly skies”, which have proven to be far from being so for competing airlines as more of them spread their wings. The sky may not be the limit after all. In 2010, United merged with Continental Airlines which has promised its customers: “We really move our tail for you.” Well, it’d better be, as no airline can afford to sit idle on the tarmac. The partnership realized a dream of United to “fly united”, professed through the depiction of two mating geese in the air.

BA to fly to serve
British Airways (BA) prides itself as “the world’s favourite airline”. But is it really, even when no one bothers to challenge the claim? Little wonder that Iberia Airlines, which has merged with BA, claims it is “one of the world’s best airlines”. There is no jostling with the dominant partner. The UK carrier says it swears by four words which have “always been at the heart of everything we do”: To Fly. To Serve. Isn’t that what is expected, you may ask. Trust the Brits to go nano on the language they own and to assume that foreigners do not quite understand the finer or deeper meaning of words as simple as “fly” and ”serve”. BA explains: “It’s what we do. It’s who we are.” Apparently those four words were painted on the tailfins of early aircraft and the pilots still wear them in the lining of their jackets and on the peaks of their hats. Do they even need to be reminded of their jobs? BA has said that will never change. It is after all British tradition.

qantas2
It is distant cousin Qantas that puts it better: “You’re the reason we fly”. It goes on to say: “While you might fly for many different reasons, we fly for one. You’re the reason we fly.” The attention shifts from the flyer of the airplane to the rider in the plane, and from the server to the person who is being served. Qantas clearly demonstrates a better understanding of marketing principles.

But Cathay Pacific Airways decided it might rephrase BA’s pride in reaching out to its customers when it rolled out a series of ads in 2011 under the banner: “People. They make an airline.” The campaign intended to showcase a team that would go the extra mile to assist someone, who, by implication, could be a customer. But when a scandal involving flying crew on board an aircraft began circulating on the internet, it had to curb its enthusiasm in extolling its staff.

Courtesy Singapore Airlines

Courtesy Singapore Airlines


Does the crew make it a great way to fly? Yes, very much so. Yet no one makes a better case of the ambiguity than Singapore Airlines (SIA) whose tagline – “Singapore Girl, You’re a great way to fly” – has become a self-fulfilling prophecy of sorts. The sarong-clad stewardess has become synonymous with the airline and everything that it represents; its name might well be Singapore Girl. Feminist activists have derided it as being sexist, but it has done the airline wonders. However, the Singapore flag carrier’s latest ad campaign, which draws on the theme of “the lengths we go to” to demonstrate its commitment to the customer, pales by comparison to the early poetic catch phrases such as “You’re as young as you feel” and “It’s the journey, not the destination”. While SIA insists that the Singapore Girl remains the protagonist in its latest ads, sometimes you wonder if you need to go to that length to drive home the point. When the Singapore Girl smiles, enough is said.

Lufthansa tries to go one-up. It says, “There’s no better way to fly.” But don’t we want to know why, if not how? But listen to American Airlines: “We know why you fly. We’re American Airlines.” That sounds a bit too arrogant, doesn’t it? In the same vein, the Northwest Airlines tagline: “Northwest Airlines. Some people just know how to fly.” Maybe it is an American thing; modesty has no place on the world stage. Yet Delta Air Lines simply promises: “Delta gets you there.” We certainly hope so, as says Air New Zealand: “Being there is everything.” Southwest Airlines wants to be known as “a symbol of freedom”, whatever that means – another American thing?

By comparison, European airlines are more down to earth. Austrian Airlines is “the most friendly (sic) airline” and Virgin Atlantic “no ordinary airline.” Or, they are simply factual. Alitalia is “the wings of Italy” the way that EVA Air in Asia is “the wings of Taiwan” but not quite what Cathay Pacific claims to be “the heart of Asia.” Cut the French some slack about “making the sky the best place on Earth.” They have the airs. But when Swiss becomes “the most refreshing airline in the world”, it suggests a toothpaste-like struggle to impress anew. Sadly, speaking the truth may be detrimental to one’s fate, as when British Caledonian Airlines confessed before it was bought by BA: “We never forget you have a choice.”

Many of the airlines pay big bucks to have those words coined and put into their mouths. Yet does it matter what airlines say or how they say it when the test of the pudding is in the eating? Think it this way – it dresses the pudding to make it look more palatable. In advertising, it is referred to as “recall”. What happens after is reinforcement or disappointment. That is why SIA has for a long time become a great way to fly and BA, whether proven or not, the world’s favourite airline, but Austrian Airlines is forgettable as one of the world’s best airlines, an epithet that is universally applicable to one and many in fluid time. You do wonder though whether for some airlines, considering the cost of their words, what has been said may best be left unsaid.

It’s the age of mega carriers: Will Air France-KLM raise its stake in ailing Alitalia?

Courtesy Wikipedia Commons

Courtesy Wikipedia Commons


Alitalia is fighting bankruptcy as its shareholders initiate efforts to raise funds in light of its main fuel supplier threatening to cut off supply. The Italian postal service will contribute 75m euros (US$101.6m) to the rescue package of 500m euros.

Meantime, Air France-KLM – already the biggest shareholder of the beleaguered airline – waits to see if it should increase, possibly double, its stake of 25 per cent. Air France-KLM chief executive Alexandre de Juniac is in favour of the takeover to gain greater access to the Italian market, but the Franco-Dutch board is cautious about the debt incurred by Alitalia. The Italian flag carrier last made a profit in 2002 and has so far lost 294m euros in the first half of this year. Air France once made a bid in 2008 to take over the airline but was thwarted by a consortium led by then Prime Minister Silvio Berlusconi. The timing today may not be right as the new Air France-KLM is itself struggling with restructuring and cost issues.

The age of the mega carriers has long arrived and it appears the trend, predicted in as early as the ‘80s, looks set to continue. In Europe, besides the Air France-KLM merger, there is the International Airline Group comprising British Airways and Iberia. Lufthansa wholly owns Austrian Airlines and Swiss, and owns 45 per cent of Brussels Airlines, 14.44 per cent of Luxair, and varying interests in a string of other airlines. The competitive field – not only in Europe but also in the United States and to a lesser extent elsewhere – has narrowed to a few mega groups of airlines with fiscal partner interests beyond mere marketing alliances.

In the United States, United Airlines is merged with Continental Airlines under United Continental Holdings; Northwest Airlines is merged with Delta Air Lines; and American Airlines is merged with US Airways. Delta made news when it acquired a 49-per-cent stake in Virgin Atlantic, the stake bought from Singapore Airlines (SIA) which until then had maintained a passive interest in its holding. For Delta, more than for SIA, it would materially increase its presence across the Atlantic.

In South America, LAN Airlines of Chile absorbed TAM Airlines of Brazil to form LATAM.

Somehow the trend is less prominent in Asia and the extended region where flag competing flag carriers generally prefer marketing alliances such as the partnership between Qantas and Emirates, and that between Singapore Airlines (SIA) and Virgin Australia. But it is changing as the competition intensifies in a tight market and as blocs begin to form to make bigger bites, and as countries relax their rules on foreign ownership. SIA now owns 19.9 per cent of Virgin, which is also 19.9 per cent owned by Etihad Airways and 23 per cent owned by Air New Zealand (ANZ). ANZ has announced it will increase its stake to 25.9 per cent, and thus continues to be Virgin’s largest shareholder outside the Virgin Group.

Cash-rich Middle-East carrier Etihad seems to be particularly active on this front, picking up stakes in Air Berlin, Air Seychelles and Aer Lingus, and targeting to complete a 49-per-cent acquisition of Air Serbia in January next year.

Yet the interest seems more as a matter of pure investment or hedging against a shifting competitive landscape. There is no white knight appearing in the horizon to rescue ailing Kingfisher Airlines while many foreign carriers have expressed interest to enter the large and growing Indian market now that India has relaxed its policy on foreign ownership. Etihad is more interested in the less vulnerable Jet Airways. Malaysian budget operator AirAsia and SIA have initiated separate deals with local investors to start new airlines. There is really no valid reason to buy into debts unless the potential for recoup plus growth is visible, almost tangible. But the Indian market has been somewhat of a come-and-go melee, susceptible to changing regulations.

Yet what should make the Alitalia case different for Air France-KLM? It is probably one of market proximity, where the impact may be more immediately felt by the suitors. It goes beyond passive investment – a case in point as mentioned earlier is the SIA/Virgin deal compared with Delta/Virgin deal – to more strategic considerations of how the acquisition would advance the Air France-KLM cause vis-à-vis its competitors within the same region. It becomes an issue of survival in itself.

Interestingly, Etihad was asked if it would be interested to buy into Alitalia, and chief executive James Hogan sidestepped the issue, telling AFP: “At the moment I’m focussed on India, transactions in India. We look at many businesses but we are primarily focused on Jet Airways.” Yet it is rumoured that Hogan has been meeting up with Air France-KLM to discuss the matter, purportedly to persuade Air France-KLM to raise its stake or let someone take its place. Does it appear obvious enough who that “someone” may be? You make a guess.