DL and VS swap flights

[FrugalFlyerv2.0]

yes, and the reasons are essentially the same.

Both AF and LH have to get their costs down in order to compete with lower cost competition.

the future for the companies and their employees is incredibly clouded and uncertain.

The future of the European legacy carrier segment is at stake. Literally.

In the meantime, DL pilots will carry passengers that were originally AF and LH passengers.

It happens every time the European airlines strike.

I think you're being a bit too dramatic. If/when AF and LH do get into deep financial trouble, their governments will bail them out. I know it's against EU rules, but those only apply selectively to the EU big boys like the Frenchies or the Krauts.

 

[WorldTraveler]

no, AF and LH will not be bailed out.

If you have any doubts, look at the number of "no longer with us" EU airlines who could not adapt. And then look at AZ which now has foreign owners.

There are European airlines that can step in and fly routes the Euro legacies are flying now and several of them are talking about adding longhaul flying over the next few years.

The EU governments not only won't step in because there are other carriers who can fill the role of the Euro legacies but they simply cannot afford to spend money bailing out another segment of the economy on top of the other commitments they have made.

The very long-term existence of the European legacy sector is at stake. There is no bankruptcy provision as there is in the US where companies can cancel labor contracts and start over with a fresh slate as the US airlines were allowed to do.

The European longhaul airline sector is already controlled by 3 players so consolidation won't fix the problem.

If someone has the answer to how AF and LH can deal with the changed world they live in, they aren't telling their CEOs or boards.

In the meantime, DL employees including pilots are seeing growth, profits - including significant profit sharing, and the fact that DL is reliably stepping in to carry traffic for the JV and in LH markets when the Euro carriers strike.

 

[FrugalFlyerv2.0]

no, AF and LH will not be bailed out.

If you have any doubts, look at the number of "no longer with us" EU airlines who could not adapt. And then look at AZ which now has foreign owners.

There are European airlines that can step in and fly routes the Euro legacies are flying now and several of them are talking about adding longhaul flying over the next few years.

The EU governments not only won't step in because there are other carriers who can fill the role of the Euro legacies but they simply cannot afford to spend money bailing out another segment of the economy on top of the other commitments they have made.

The very long-term existence of the European legacy sector is at stake. There is no bankruptcy provision as there is in the US where companies can cancel labor contracts and start over with a fresh slate as the US airlines were allowed to do.

The European longhaul airline sector is already controlled by 3 players so consolidation won't fix the problem.

If someone has the answer to how AF and LH can deal with the changed world they live in, they aren't telling their CEOs or boards.

The major European legacy carriers that are "no longer with us" that I can name off the top of my head that were, IMHO of any significance are Swissair (alhtough they're more or less back as Swiss), and Sabena (although they're back as Brussels Airlines - and along with Swiss they're a part of the LH Reich), and Olympic (although they're back too). There was also Malev, Balkan XL, Zoom, Silverjet, Lauda Air - but did anybody really notice they're no in business?

Yea, there are European charters that could and would fly some of the routes. The only LCC that is flying longhaul from Europe is Norwegian Air. Ryanair might be able to pull it off, but despite their amazing size (financially and # of passengers) in the EU right now, they're not flying longhaul and probably not thinking about it either.

Speaking of AZ, how many times have they been bailed out?

I'm going to disagree with you and say that AF and LH will never be allowed to fail. Their national governments would bail them out in a heartbeat. It's a matter of national pride first, and second, it is the reality that although EU laws exist to prevent bailouts, if it were a German or French legacy airline that would need help - well good luck in trying to stop that. In the EU there are some countries that are more equal than others - if you can't believe that or see it in the functioning of the EU then you're blind.

BTW - this is so off topic.

 

[WorldTraveler]

yes, it is off topic.

Because, DL isn't violating any production guarantees regarding DL and VS which is the title of this tread.

Someone decided to throw DL-AF/KL into the mix and that is why the issue was addressed.

SN and SR were different airlines on a number of levels than the airlines that replaced them in the market.

AZ also was told they could not accept any more handouts; the choice instead was to sell equity to a Middle East airline that wants to get its foot into the EU market.

Being owned by a foreign entity is a far different and new game that the EU airlines are going down and it is far from clear that move will be in the long-term interests of European aviation.

If there is a similarities between VS and AF/KL it is that VS reached the point where they realized they could no longer compete in the longhaul market going east and south. They had previously turned to DL who saw potential in VS' LHR network and DL and VS have both seen significant improvement in their own financial results as a result of cooperation between a US and EU carrier.

AF and LH already have deep levels of cooperation with US carriers and their problems are still not fixed and there is no end in sight.

VS is adding capacity into the US market and DL and VS are reshuffling some of their own networks because both see opportunities to improve revenue; AF and LH do not have that option.

Labor at DL can complain and try to force an agreement but the simple fact whether we are talking about VS or AF is that DL is profitably growing its own network and is hiring pilots in the process.

VS could not grow; they are simply replacing some cancelled Asian flights with flights to N. America - but the numbers probably will show that VS' total block hours are probably less than what they would have been if they kept flying the Asia and Africa routes they are cancelling.

Further, AF and LH do not have alternate markets in which they can replace their capacity - and thus are moving in the directions they are which will come at the cost of pilot and other employee pay and benefits.

Labor can push all the want - either here or in Europe - but they cannot create or preserve jobs when the market says those jobs cannot be maintained by profitable flying.

VS has a solution via a partnership with DL.

AF/KL and LH have to deal with their own network and competitive issues, most of which are beyond the scope of their JVs with their US partners.

I would far rather they figure it out but anyone betting that they will be bailed out are making a huge gamble that likely will not end up the way they think it will - and history supports that reading.