Showing posts from January 20, 2012

European Airlines Cost Pressures grows ©

The year has begun with enormous cost pressures in the airline sector as legacy carriers continue to evolve their business models to ensure competitiveness and long-term viability, the transformation phase is far from over, in fact it is only has just beginning as personnel costs increasingly coming into focus to close the cost gap with LCC’s and Middle East competitors, in an uncertain economic environment, as recession looms. Air France announced on the 13 th of January a new transformational plan which will freeze pay and cut personnel costs by €1 Billion and it plans to increase productivity, as the carrier aims to return its short and medium haul network to break-even within three years (Bloomberg 13 th January). The carrier has yet to outline the shape of its short-haul network where it has indicated routes will be axed, but has responded to the LCC threat with a new production platform using A320s at regional bases in Bordeaux and Marseille. Since Mid-December unions