WORLD: EDITORIAL - Good news for fliers as SKIES OPEN TO FREE COMPETITION.

WORLD: EDITORIAL - Good news for fliers as SKIES OPEN TO FREE COMPETITION. - 'You ain't seen nothing yet.' This is the message for airline passengers and beleaguered aviation executives alike. The already ferocious competition will step up several degree

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Last Updated: 31 Aug 2010

'You ain't seen nothing yet.' This is the message for airline passengers and beleaguered aviation executives alike. The already ferocious competition will step up several degrees through the '90s. Battle has already commenced. Giant US carriers such as United and American, flushed with their victories at home, are moving onto the global stage. A new battle of the Atlantic looms between the American and European carriers. The decision by the European Commission to open its skies to free competition by the mid-'90s will pave the way for an American style free-for-all.

Many airlines will crack under the pressure. Amalgamations will be rife and trans-national carriers will eventually dominate the major routes, leaving smaller competitors to winkle out new routes and markets. However turbulent life becomes for airlines, more competition is good news for passengers. The American experience of de-regulation has shown that it forces down fares dramatically. Passenger numbers have soared and air travel is now a mass transport business. In Europe, prices are already tumbling. The absurdity of a short-haul flight being more expensive than a transatlantic one will become a distant memory.

Prices are also falling on transatlantic routes (British Airways is now offering a Gatwick-to-Dallas return flight of £259).

Increased competition in Britain has been hugely beneficial. A decade ago, BA was renowned for appalling service, but a ruthless attention to quality has paid dividends. BA now regularly wins awards and plaudits for its service. On the domestic front, too, competition has resulted in better service. Meals on shuttle flights appeared miraculously when British Midland mounted an aggressive challenge to BA.

The competition is also good news for the aerospace industry as its old defence cash cow dries up. The virtuous circle of lower prices, leading to more passengers and then to demands for more aircraft, will be music to a Rolls-Royce or General Electric executive. By the turn of the century, air traffic is forecast to double. The snag will be in coping with the increased traffic both in the skies and on the tarmac of Europe's increasingly congested airports. By 1995, on current trends, some 40% of European airports will run out of runway, terminal and parking space. Trying to build new facilities can take a decade and infuriate sensitive electors, as the battles to extend Heathrow have demonstrated. One obvious solution would be to spread the traffic further round Europe. Currently, just 100 of the 1,000 European airports can take large commercial jets.

Smaller airfields need urgent upgrading and redundant military airfields need to be turned over to civilian use now the cold war has ended (locals would prefer quieter civilian jets to low- flying fighter aircraft). Air traffic control is another concern.

European governments, jealous of national sovereignty and frightened of the $8 billion price tag, have repeatedly refused to create a single integrated air traffic control centre. They call for greater co-operation between existing centres, regardless of their different equipment, traffic and investment spending. Yet delays to passengers and airlines in Europe cost far more than $8 billion every year. Such petty national jealousies must be swept aside, together with the desperate efforts of certain governments to protect their national airlines by blocking takeover moves. The European aviation industry needs a massive investment in infrastructure and complete freedom to

form any alliances if it is to have any hope of prospering in face of the American onslaught.

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