2019 Skytrax World Airline Awards: Who are the real winners?

It’s that time of the year when the airline industry is abuzz with the Skytrax World Airline Awards announced recently at the Paris Air Show.

There are surveys and there are surveys, if you know what I mean. Skytrax, which launched its survey back in 1999 (according to its website) is generally viewed with some regard. It is said that more than 21 million respondents participated in the 2019 survey.

But what can we read of the results?

Which is the real winner: Qatar Airways or Singapore Airlines?

Qatar Airways switched places with last year winner Singapore Airlines (SIA) to be the world’s best airline.

As far back as 2010 until now, the two airlines have been ranked one behind the other in the top three spots, except in 2012 when Asiana came in second place between Qatar the winner and SIA in third position. In the ten year period, SIA came behind Qatar in eight years, except in 2010 when SIA was second and Qatar third, and last year when the Singapore carrier became the world’s best ahead of Qatar in second placing.

It looks like a tight race between Qatar and SIA for the top spot, and going by the survey results, Qatar has outranked SIA. It has become the first airline to have won the award five times, one more in the history of the awards.

But SIA is still ranked ahead of Qatar for first class and economy class.

In the first class category, Qatar is not even a close second to SIA in first placing but fifth behind Lufthansa, Air France and Etihad as well

In the economy class category, Japan Airlines is tops followed by SIA and Qatar in second and third placing respectively.

Besides SIA has the best premium economy in Asia, second only to Virgin Atlantic worldwide. But,of course, Qatar does not offer that class of travel.

Additionally SIA tops for cabin crew, and Qatar is farther down the list in 9th position.

But Qatar wins for business class, followed by ANA and SIA in second and third placing respectively. So it seems there is heavier weightage for this segment which has become probably the fiercest battleground for the airlines. First class included, it also suggests the halo effect of the premium product, but it is the business class that is the primary focus in today’s business.

It also attests to the impact of the recency factor. Qatar obviously impresses with its cubicle-like Qsuite that comes with its own door to provide maximum privacy. Quad configurations allow businessmen to engage in conference as if they were in a meeting room and families to share their own private space. And there is a double bed option.

Which brings up the importance of having to continually innovate and upgrade the product to stay ahead in the race.

The top ten listing: Consistency equals excellence

The ranking does not shift much from year to year. Besides Qatar and SIA, there are some familiar names: All Nippon Airways (3rd this year), Cathay Pacific (4th), Emirates (5th), EVA Air (6th) and Lufthansa (9th). So there is not much of a big deal as airlines switch places so long as they remain in the premier list.

Hainan Airlines (7th) is making good progress, moving up one notch every year since 2017. Qantas (8th) is less consistent, moving in and out of the top ten list, Thai Airways retained its 10th spot for a second year.

It is no surprise that the list continues to be dominated by Asian carriers which are generally reputed for service. You only need to look at the winners for best cabin crew: Besides SIA, the list is made up of Garuda Indonesia, ANA, Thai Airways, EVA Air, Cathay Pacific, Hainan Airlines, Japan Airlines and China Airlines. With the exception of Qatar, no other airline outside Asia is listed.

If you to look to find out how the United States carriers are performing, scroll down the extended list of the 100 best and you will see JetBlue Airways (40th), Delta Air Lines (41st), Southwest Airlines (47th), Alaska Airlines (54th), United Airlines (68th) and American Airlines (74th).

Home and regional rivalry

Rivalry between major home airlines or among competing regional carriers is often closely watched.

Air Canada, placed 31st ahead of rival WestJet at 55th can boast it is the best in North America. That’s how you can work the survey results to your advantage.

ANA (3rd) has consistently outdone arch rival JAL (11th). In fact, ANA has been the favoured airline in the past decade till now. It has Japan’s best airline staff and best cabin crew. Across Asia, it provides the best business class. Internationally, it provides the best airport services and business class onboard catering.

Asiana (28th) is favoured over Korean Air (35th ).

The big three Gulf carriers are ranked Qatar first, followed by Emirates (5th) and Etihad (29th).

Among the European carriers, Lufthansa (9th) leads the field, followed by Swiss International Air Lines (13th), Austrian Airlines (15th), KLM (18th), British Airways (19th), Virgin Atlantic (21st), Aeroflot (22nd), Air France (23rd), Iberia (26th) and Finnair (32nd).

What about low-cost carriers?

Worthy of note is how some budget carriers are ranked not far behind legacy airlines. AirAsia (20th) is best among cohorts. EasyJet (37th) and Norwegian Air Shuttle (39th) are not far behind the big guys in Europe. Among US carriers, Southwest Airlines (47th) is third after JetBlue (40th) and Delta (41st).

Also, pedigree parents do not necessarily produce top-ranked offshoots. Placed farther down the list are SIA’s subsidiary Scoot (64th) and the two Jetstar subsidiaries of Qantas – Jetstar Airways (53rd) and Jetstar Asia (81st). So too may be said of so-called regional arms. Cathay Pacific’s Cathay Dragon is ranked 33rd, but SIA’s SilkAir is way down at 62nd.

Pioneer of the modern budget model Ryanair is ranked 59th.

Down the slippery road of decline: Aisana Airlines and Etihad Airways

If it is difficult to stay at the top, it is easy to slip down the slippery road of decline. Asiana and Etihad are two examples.

Asiana was ranked world’s best airline in 2010 and became a familiar name in the top ten list up to 2014, after which its ranking kept falling: 11th (2015), 16th (2016), 20th (2017), 24th (2018) and 28th (2019). Its erstwhile glory has been whittled down to being just best cabin crew in South Korea.

Etihad did reasonably well for eight years until 2018 when it was ranked 15th, and a year later suffered a dramatic decline to the 29th spot. That, despite beating Qatar to be this year’s best first class in the Middle East.

As I stated at the onset that there are surveys and there are surveys. Some are not specifically targeted , whether its interest is business or leisure for example. There is always an element of subjectivity and bias in the composition and weightage, and this renders no one reading as being definitive. At best, we can read across several creditable surveys to know with some conviction how the airlines really measure against each other.

Read also:

https://www.todayonline.com/commentary/can-singapore-airlines-overtake-qatar-worlds-best-airline

Is Istanbul Airport the new Middle East hub?

Courtesy Getty Images

Turkey’s new Istanbul Airport is set to be the world’s largest airport, capable of handling up to 90 million passengers by 2021 with room for expansion to increase capacity to 200 million by 2028.

By comparison, Hartsfield-Jackson Atlanta International Airport in the United States – the current title holder – is capable of handling 104 million. Neigbouring Dubai International Airport has a capacity for 84 million, behind Beijing Capital International Airport’s 94 million but ahead of Haneda Airport’s 80 million, Heathrow Airport’s 76 million and Frankfurt Airport’s 61 million. (2016 figures provided by Airports Council International).

The airport was declared open on Oct 29 by Turkey’s President Recep Tayyip Erdogan. However, not all flights operating at the existing Ataturk Airport have been transferred to the new airport – not until the end of the year according to plans.

Mr Erdogan referred to the new airport as the “most important transit location on the north-south, east-west axes, connecting 60 countries and US$20 trillion economies”.

So, is Istanbul Airport the new Middle East hub, overtaking Dubai International?

No reason why not if you consider how geographically Istanbul is positioned not much differently from its Gulf neighbours. In fact, Istanbul, situated in a country that straddles both Asia and Europe, makes a viable alternative considering touristic interest in the region and how it is actually located on the doorstep of the wider Europe.

Already the authorities are encouraged by Istanbul’s growth of transit traffic albeit at the Ataturk Airport, and analysts are inclined to think that the new airport is likely to grow at the expense of other Middle eastern airports including Dubai, Doha and Abu Dhabi. That is, if Istanbul can ramp up the game to match what these other airports are offering in terms of cost, facilities and service. And, of course, if the volatile political climate in the region can be contained.

The competition will be fierce.

It cannot be denied the Gulf airports have been growing in tandem with that of their home airlines – Dubai/Emirates Airlines, Abu Dhabi/Etihad Airways, and Doha/Qatar Airways. Turkey’s national carrier, Turkish Airlines, is no small player. It operates scheduled services to 304 destinations in Europe, Asia, Africa and the Americas, making it the largest carrier in the world by number of passenger destinations, serving more destinations non-stop from a single airport than any other carrier in the world.

However, Turkish is ranked 18th in the 2018 Skytrax survey of the world’s top airlines, behind Emirates (4th) and Etihad (15th). But that’s still ahead of some major European carriers including KLM (19th), Air France (25th) and British Airways (31st).

Right now, Ataturk Airport is the 11th busiest airport in the world in terms of total passenger traffic and the 10th busiest in the world in terms of international passenger traffic. As of 2017, it is Europe’s 5th busiest airport after London Heathrow, Paris Charles de Gaulle, Frankfurt Airport and Amsterdam Schiphol Airport. The new airport, larger and capable of providing better facilities, should not fare any worse off.

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).

Competing to be the best: How reliable are survey readings?

Courtesy Cathay Pacific

Courtesy Cathay Pacific


SKYTRAX has named Cathay Pacific as the world’s best airline in 2014, displacing last year’s winner, Emirates. In second and third place are Qatar Airways and Singapore Airlines (SIA) respectively. Asian and Middle East carriers dominated the ranks of the top ten: Emirates (4th), Turkish Airlines (5th), All Nippon Airways (6th), Garuda Indonesia (7th), Asiana Airlines (8th), Etihad Airways (9th) and Lufthansa (10th). No American carrier was placed.

Are those really the world’s best airlines?

The winning airlines are unlikely to question the validity of any survey, as you can see how many of them are listing awards from all and sundry like a laundry list as endorsement of their good reputation. The corollary must be that if you accept the accolade willy nilly, so must you recognize one and all sideswipes.

Which leads to the next question: Is Skytrax the standard?

Skytrax claims its World Airline Awards to be “the global benchmarks of airline excellence”. The winners are decided by 18.85 million travellers from over 160 countries, and that should take care of any misgiving about the survey having an inadequate population and most importantly, the bias factor or its susceptibility to political influence.

Cathay CEO Ivan Chiu said: “The World’s Best Airline award is particularly important to us because it was decided by the votes of close to 19 million travellers from around the world.” Cathay was placed sixth last year and has won the award four times, previously in 2003, 2005 and 2009.

Emirates president Tim Clark said: “These awards are widely regarded as the industry’s benchmark for excellence. To be voted ‘World’s Best Airline’ by millions of discerning travellers is something… to be proud of.”

Qatar CEO Akbar Al Baker said: “These awards are highly rewarding as they are judiciously voted by passengers a true account of the overall experience felt by customers who have travelled with the airline.” Qatar won in 2011 and 2012.

Courtesy Etihad Airways

Courtesy Etihad Airways


However, Etihad’s withdrawal from participation apparently over differences in the methodology may tell a different story. Although it had never won, Etihad was consistently placed in the top ten in the past five years, ahead of Emirates in some years. Despite its withdrawal, Etihad was still ranked in this year’s survey because according to Skytrax, “an airline cannot be withdrawn from the World Airline Awards since these results are directly decided by customers.” That statement should add to the survey’s credibility, yet without taking sides and arguing the toss about fairness, one can only suspect and understand that the subjective nature of the survey (and of any survey) is naturally exposed to dissatisfaction, whether baseless or with reasons which may well be valid, the way that the Oscars results do not sit as squarely with a lot of people. Now and then you get an outstanding actor declaring his or her disinterest in the awards.

The issue is usually one of weightage and relevance of selection. However designed, the respondents may to some degree be steered by what is being asked. Take, as matter of curiosity, the 2014 Skytrax survey readings for the top ten. SIA is ranked ahead of Cathay for inflight entertainment, cabin cleanliness, First Class amenities, First Class cabin overall, seats in First, Business and Economy, and First Class meals; but close behind Cathay in other areas except for its noted absence for airport services, Business Class amenities and Business Class meals. Yet Cathay takes the cake.

It is encouraging to see breakthroughs by airlines such as Turkish and Garuda in a game dominated by the familiar big names. Interestingly, Turkish ranks above everyone else except Emirates and SIA for inflight entertainment. It is no surprise that Garuda tops for cabin crew, the epitome of Asian service culture, in a category swept by Qatar (6th) and nine other Asian carriers: Cathay (2nd), SIA (3rd), Asiana (4th), Malaysia Airlines (5th), EVA Air (7th), ANA (8th), Thai Airways (9th) and Hainan Airlines (10th). In like fashion, with the exception of KLM (8th) and Qantas (9th), the airport services category belonged to Asian carriers: ANA (1st), EVA (2nd), Thai (3rd), Asiana (4th), Cathay (5th), Korean Air (6th), Garuda (7th) and Dragonair (10th).

Yet, giving credit where it is due, one may question the appropriateness of comparing a carrier having limited global presence with others that are more exposed in the global arena, and how a population of largely local respondents compares with the wider global population. Hence it may be more meaningful to look at niche rankings, but we all love the sweeping titles of the best overall, don’t we? Even regionalized readings must be viewed in their proper context. The Qantas Group went ga-ga over Jetstar Airways’ win as best low-cost airlines in Australia/Pacific over AirAsia X (2nd), Scoot (3rd) and Tiger Airways (4th), but the world’s best is AirAsia followed by AirAsia X in second place ahead of Jetstar Airways (4th). Note how the preferences change when the population mix changes.

Who then really is the best overall? It may be difficult to say for sure one definite airline, and under the circumstances a wider reading of the top three or five or up to ten may be a more sensible assessment. The contest is to get into that magic circle of the elite.

Courtesy TODAY

Courtesy TODAY


Equally significant is the consistency over time. Airlines such as Cathay, Emirates, Qatar and SIA may pat themselves on the back for being there long enough to deserve their stripes. Narrow that down further, and you will see that only two airlines – Qatar and SIA – have been consistently placed in the top three in the past five years. Asiana had a good run from 2010 to 2012. Cathay was just outside in 4th place until it tumbled to 6th last year and bounced back to be this year’s winner. The wider reading should lead some airlines such as Qantas to ask why it has dropped out of the respectable club.

One survey alone cannot be definitive, hence winning across notable surveys may strengthen the reading. Compare the Skytrax results with Conde Nast Traveler’s assessment by its readers – based on the same principle of uninfluenced feedback – and you will begin to understand why. In its ranking for foreign carriers (outside America), Etihad is placed 4th behind Emirates (2nd) and ahead of Qatar (7th). Cathay is 7th, and the winner is SIA. Korean Air (8th) did better than rival Asiana (18th), and so did Japan Airlines (16th) over ANA (21st). The Conde Nast top ten includes Virgin Atlantic (3rd), Air New Zealand (5th) and Swiss International (10th).

Then there is the annual Airline of the Year award given by the Air Transport World (ATW) magazine. The criteria take into consideration financial performance (which debunks the myth that the world’s favourite airline is not necessarily the most profitable or even profitable) and visible leaps forward in services. However, naming only one winner can often lead to suspicions of political influence (the way that some beauty pageants are said to be when a winner is crowned) and the tendency to pass the honour around although airlines such as ANA (2007 and 2013) and Air New Zealand (2010 and 2012) had been named twice. Cathay (2006), SIA (2008) and Asiana (2009) had all had their turns. Delta Air Lines is ATW’s Airline of the Year 2014.

Several other magazines also dish out their own annual awards, which may be based on their readers’ feedback, or assessed by a panel of judges or arrived at combining the two methods. Some of them target niche markets such as awards that recognize the best airline for business travel. That in a way avoids spillover or halo effects and sectarian prejudices as, for example, an airline that impresses in First and Business Class may pay scant attention to what happens in Economy.

Nevertheless, surveys are useful tools in maintaining competition. Everyone loves to win, unless you do not give a hoot about how the world sees it and how that may affect your bottom line. So too, everybody loves a winner; but that is no guarantee that the traveller will necessarily fly with the named best airline. Without downplaying their influence on the market, such awards probably mean more to the airlines than the travellers.

This article was first published in Aspire Aviation.

KLM advances green effort

Courtesy Boeing

Courtesy Boeing

KLM last week becomes the first airline to operate a regular weekly transatlantic flight, using an eco-friendly fuel mix of 25 per cent Dutch airline cooking oil and 75 per cent jet fuel.

The cooking oil, which comes from restaurant wastes, is able to reduce carbon emissions by up to 80 per cent. This is noteworthy, considering that aviation is responsible for 2 per cent of global emissions, and that number continues to grow.  

Captain Rick Shouten, who piloted KLM’s maiden transAtlantic biofuel flight from Amsterdam’s Schiphol to New York’s JFK, told the New York Post: “For pilots, it’s totally transparent. It’s as if you’re flying a normal aircraft.”

Back in Jun 2011, KLM too was the first airline to operate the world’s first commercial biofuel flight when it carried 171 passengers from Amsterdam to Paris, also using cooking oil. It was a major step forward in the green pursuit. Since then, a number of airlines have powered either test flights or commercial flights using a mix of jet fuel and plant alternatives that include jatropha, algae, camelina, carinata, coconut and babassu.

The list of airlines championing the green effort include Virgin Atlantic (which flew the first biofuel test flight from London to Amsterdam), AeroMexico, Air Canada, Air China, Air France, Air New Zealand, Alaska Airlines, Continental Airlines, Etihad Airways, Finnair, Brazil’s GOL, Iberia, Interjet, Japan Airlines, Lufthansa, Canada’s Porter Airlines, TAM, Thomson Airways and United Airlines.

However, still in its infancy stage, biofuel is expensive, and may cost as much as three times the price of regular jet fuel. “A lot still has to happen before biofuel will be available on a large scale and for it to be economically competitive in relation to fossil-fuel kerosene,” said KLM. “We cannot achieve this alone. We absolutely need the commitment and support of all the relevant parties: business, government and society.”

For it to be sustainable there has to be cheaper refining methods and widespread use across the industry. Support from national agencies at this stage is imperative, if only because saving the environment is everybody’s business.

Air Canada introduces premium economy: Is the trend finally catching on?

air caqnada

Photo courtesy Air Canada

IS the premium economy trend slowly catching on? Air Canada becomes the latest airline to announce its introduction as “a new class of travel”, starting with the Montreal-Paris non-stop in July 2013. New, perhaps for the Canadian carrier, but not quite globally.

EVA Air of Taiwan was one of the first carriers to introduce the premium economy, when it launched its operations in 1991. There was a limited number of seats, that boasted more legroom. Since then, a number of airlines have dabbled with the idea and more of them started to introduce an expanded “middle” class particularly when it became clear that the global financial ciriss has taken a toll on business (and first) class travel.

The concept has taken on an international dimension, with many major airlines pushing the trend. They include British Airways, Virgin Atlantic, Air France, United Airlines, American Airlines, Delta Airlines, Cathay Pacific Airways, Japan Airlines, All Nippon Airways, Qantas and Air New Zealand.

There are noticable exceptions. Singapore Airlines introduced the class on non-stop flights between Singapore and Los Angeles but did away with it when it upgraded the flights to an all-business class configuration. Since then the airline has insisted that it has no plans to revisit the concept anywhere in its network. Some analysts think it may be a mistake for SIA to not go with the flow as it banks upon recovery of the business class traffic.

Noticeably too, one may wonder why there is no premium economy on Emirates Airlines which may have prided itself as providing an economy class that is as good as any other airline’s premium economy. In the same way, one may ask: Do you fly legacy economy or budget business class?

Indeed, what makes the premium economy any better than the normal economy? The early model was not that much visibly different, and that probably explained why it was slow in catching on.

Air Canada offers:

  • priority check-in with personalized service. It is not clear what “personalized service” entails, but priority check-in can assuage the nerves if the line for the normal economy means an inordinately long wait.
  • priority boarding. It means getting to your seat before others and assessing the overhead compartment for your hand luggage before space runs out.
  • priority baggage handling, which entails up to two free pieces of checked baggage and amonmg-the-first placement on the arrival belt. While Air Canada restricts free carriage to only one piece for economy, many other airlines such as Cathay, SIA and Emirates still allow up to two pieces (or equivalent). First on the arrival belt? There is no guranatee; much depends on what happens at the airport where you arrive. Reputable Asian airports such as Hong Kong and even Beijing are known for speedy delivery of arriving baggage even for economy, whereas many airports in the west have questionable standards even for priority-tagged baggage.
  • wider cabin seat with more recline and legroom. This has been the main selling point for premium economy, offering more comfort for the long-haul. Increasingly, airlines are competing on the comfort factor even for economy.
  • a larger screen for in-flight entertainment. This is a good-to-have but not critical feature, especially when you may prefer to squeeze in some hours of sleep and good only if the airline offers a wide range of programs.
  • power outlet at the seat for electronic gadgets. Many travellers are already powering their gadgets with portable battery.
  • premium meal service served on china dishware with complimentary wine and spirits. Does it really matter the kind of dishware? If you do not know, you get complimentary wine with meals in economy on Air Canada, perhaps not the premium brand.
  • hot towel service. No big deal. SIA hands out hot towels in economy as well.
  • a larger pillow. Some people do not need pillows. You can get two in economy if you are resourceful enough.
  • a handy amenity kit. Some airlines such as Qantas and Cathay boast brand-name amenity kits for their premium economy passengers. You will find even business class passengers leaving behind the kits on disembarkation.
  • earn higher mileage. This may be the best deal, depending on how generous is the specific airline’s frequent flyer program.

For the premium economy to sell, downgraders from business and upgraders from economy must be adequately tempted with visible advantages to make the trade-off vis-à-vis the cost, whether it is saving on the otherwise higher fare or paying the difference additionally. As the name suggests, premium economy is more an economy than a business class product. Thisa could be the reason why airlines such as SIA and Emirates probably prefer to market a superior economy and at the same time not be detracted from the truly premium product of the upper classes.

 But it may all be a case of nomenclature. The early days of the business class was really an upgrade of the economy status. Swissair (the predecessor of Swiss International) swore it would not bow to the fad, believing there was no room for a three-class configuration. But it did in the end. In the same way, today’s premium economy looks set to take on an exclusivity of its own, though it is unlikely to evovle to the same degree as the business class which, for some airlines, has in fact replaced the first class product. Quite on the contrary, carriers that susbcribe to the concept may be compelled to do even more for their business class to maintain an enviable difference.

Air France-KLM needs to court Lady Luck!

Courtesy Air France-KLM

Courtesy Air France-KLM

Air France-KLM’s report of widening losses for the full year to €1.2 billion ($1.9 billion) from €809 million a year ago is yet another indication of the uncertainty of the airline industry. This was despite rising revenue from increased traffic and higher fares. The negative results were attributed to higher fuel costs, the dismal performance of cargo operations, revised staff pensions, goodwill payment for the acquisition of Belgian regional airline VLM Airlines, and the restructuring costs under the Transform 2015 program amounting to €471 million.

Of course, like most legacy airlines, Air France-KLM also faces rising competition from low-cost operators and Middle East airlines. Therefore, only to be expected, Transform 2015 is rolling out a new French regional carrier Hop!, which will operate 530 daily flights to 136 destinations within Europe from March 31. Seen as part of the move to rationalize short and medium-haul operations, the new carrier merges regional units Brit Air, Regional Air and Airlinair.

Perhaps a necessary move in response to the changing travel preferences, it is really a strategy not much different from the rest of the industry. Yet the Group’s executive VP finance Philippe Calavia remained encouraged; he said: “We are beginning to see the initial results of our Transform 2015 restructuring plan.” Under the 3-year plan, Air France-KLM hopes to reduce costs further by cutting 5,000 jobs. This was targeted to be achieved by end-2013. (See Air France to axe 5000 jobs, June 26, 2012). So, what’s new?

Chief executive Jean-Cyril Spinetta said: “In 2013, we will maintain strict discipline in terms of capacity management, investments and costs.”

Short of any new bold initiatives and innovative ideas, perhaps the answer really lies in that one word “discipline”.

Mr Spinetta had been reported to say that the company’s breakeven would depend on three major uncontrollable external factors: the economy, fuel prices and exchange rate fluctuations.

It looks like Air France-KLM would need more than discipline: a courtship with Lady Luck!