Comparisons Of Foreign Airlines To Us Airlines

Andre1980

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Sep 8, 2003
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As we all know the financial performances of the major 'full service' carriers in the United States although gradually improving is still lagging the financial purformances of most major airlines in Europe and asia but I had always wanted to know why? Is the 9/11 issue still a problem where passengers refuse to fly? Do European and asian airlines have a better in-flight service than the us carriers thus passengers are willing to pay premium for that service?Are the route network of US airlines different from the foreign airlines where the foreign airlines tend to do more international long haul flying which are not affected by their LCCs and US carriers are the opposite where they have a larger percentage of domestic services that are heavilly impacted by the LCCs ?Have the US airlines grown too big than their European competitors?Do they have too many fleet types and sub-types than the European airines?. I know that AA, UA and DL are right now in an identity problem they do not seem sure what they want to become and I have seen it from most of the passenger reviews that I have been reading and it clearly showed inconsitantcy in service levels where international flights (Europe, aisa and latin america) are recieving good and exceptional services and the majority of the domestics recieve the 'bare bones' service and this has fustrated and disappointed some passengers who would then compare this to the likes of British Airways, Air France, Virgin Atlantic, Singapore Air etc. These airlines are known for outstanding service across the board and why shouldn't US airlines be known for this also?

Can anyone out there explain to me why the foreign airlines are making money and the US carriers are finding it hard to make ends meet?

Also what do you think major US carriers should do to eradicate these problems and offer a consistant service that would seperate themselves from the lowcost providers?
 
Let me answer that question...

How many airlines have a hub in Paris DeGaulle that competes with Air France?
None

How many major competitors does Lufthansa have at Frankfurt?
None

How many competitors does Air China have in Beijing?
None

How many competitors does United have in Chicago?
3- American, Southwest, ATA

The point is that most European and Asian airlines are still in some part protected by their government. In many cases they are still subject to some price regulation. And in a few cases they are still owned by their respective governments.

So comparing international carriers to US carriers is like comparing apples to oranges. In the US, carriers face competition from the big six which play on one field and the LCC's which play on their own field. By that I mean that many of the traditional carriers are still burdened by the ghosts of CAB and regulation and many of the upstarts are not.
 
In europe, the airlines that are doing better are the ones that are completely privatized or have less government ownership. Such as BA, LH and even AF. The ones doing worst are the ones where the government calls the shots, such as Alitalia and IB. Besides the European Commission, because of EU rules now forbids subsidies. Olympic, from Greece had to give money back to the Greek government or the Greeks would have paid heavy fines to the EU for illegally given the airline money...we might want to still think that is the case, subsidies funding airlines, but for the most part it is gone or almost gone. They are actually complaing about what we received due to 9/11 after years of being on the dole themselves!
I am not so sure the reason, like ual777fan states, is lack of competition at the city they call home. AF, out of CDG, just to the US, competes with UA, AA, DL, US, NW, CO, and maybe charters. And that's just direct flights. Then you have BA offering connections from about every city in europe to anywhere in the world via LHR in much the same way UA or AA will offer someone from Denver to connect via ORD, IAD or DFW to anywhere they fly. Just saw a very cheap fair advertized on TAP Air Portugal from CDG to New York via Lisbon. The same applies from Europe to Asia or anywhere else. Nope, I don't think that is the reason. Singapore, flying out of a City-State, makes most of their money on connections via SIN to Europe, America and anywhere in Asia.
 
I'm not really sure it is a valid argument to say that on the whole, European carriers are doing better than their US counterparts. In the 9/11 aftermath, two major European flag carriers went under completely-- Sabena and Swissair (though there are now reincarnations of each). So far in the US, only one major airline-- TWA-- had that fate. And some other European carriers are certainly having their share of trouble right now and recognizing that their business plans are not viable in the long term (Alitalia, for one).

On the other hand, many US airlines are doing quite well-- the LCCs.

In Asia, the reason their "home" airlines are doing well is more simply lack of competition and lack of the presence of LCCs.
 
Absolutely right Bear96, they are not. BA lost money and so did LH for 2003. IB not much better and Alitalia it is trying to save themselves by joining AF Group that just recently acquired KLM forming the largest airline in the world by sales. Just read that TAP Air Portugal turned the first profit in 32 years last quarter! In europe they are all lining up for mergers and only the ones with their "house in order", (meaning layoffs and pay cuts ), need apply. And their salaries and work rules, second best in world as an average per continent, are way worst then ours even after the recent cuts in pay and work rules.
 
Thanks for all the responses but I forgot to mention about the pay comparisons between US carriers to those in Asia, Europe and latin America. Is the standard of living in many of those countries so low that they can pay their employees less for doing the same job?