November 16, 2012 7:36 pm

Where’s the airlines’ blue-sky thinking?

The most critical problem facing Europe’s main carriers is the lack of innovation in terms of what they offer

There’s a good chance (I reckon better than 20 per cent) that you’re reading this in a scruffy lounge of a European legacy carrier, at the boarding gate of a European airline that might soon pass around the collection basket asking for donations to help top up the fuel tanks before you board, or in the seat of one of their cramped aircraft hurtling high above the continent. No matter where you are, it’s unlikely you’re sitting comfortably or feeling particularly positive about the whole experience.

It’s been a difficult time for Europe’s carriers. Last week Iberia said it was cutting staff and grounding aircraft in a move to cut costs. This week Scandinavian (SAS) said it would dispose of its Norwegian commuter airline Wideroe and its ground-handling business. Air France has issued multiple press releases about its plans for getting back on track, Lufthansa has announced it is shifting more short-haul traffic to its Germanwings subsidiary, while Slovenia may soon find itself without a flag carrier. In short, European civil aviation is in a shambles. With passengers grumpy and aggressive, and staff even grumpier and more short-tempered, it’s time to clear out the corner offices and boardrooms at Europe’s legacy carriers and start again.

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Tyler Brûlé

Whenever I see European airline chiefs stand up in front of their investors, the press or their passengers (the latter being a very rare event indeed), I usually find myself asking a few questions. Are you passionate about the aviation sector? When was the last time you sampled the services of your competitors? Who do you admire in the service industry? Do you even like flying?

From Amsterdam to Paris, Stockholm to Rome, London to Madrid, I can’t think of an airline chief who comes across as an innovator – let alone an ambassador for their brand. Just as traditional media outlets like to point to rising paper prices, the internet and the popularity of tablet devices for their woes, legacy airlines like to blame fuel costs, landing fees and the rise of low-cost carriers for their falling revenues. While they all present challenges to business plans, these stock excuses are rarely matched by anything new in the way of innovation. Droopy leadership aside, the most critical problem facing Europe’s main carriers is the stunning lack of differentiation or innovation in terms of what they offer – on the ground and in the air.

With most airlines flying the same workhorses (either Airbus A320s or Boeing 737s), one might argue that there’s not a lot you can do with a twin-engined aircraft with a three-three configuration to set it apart from all the others. Nonsense.

For starters, who said European legacy carriers must rely on single-aisle aircraft for short-haul routes? With many wide-bodied aircraft underutilised, and plenty of passengers willing to pay for a superior short-haul flight experience, BA and Lufthansa should think about reconfiguring their 767s and A330s for high-density, high-margin short-haul flights where premium passengers have a radically different experience from economy passengers. Having just returned from a tour around Asia, where JAL has reported profits of more than $1bn and does a good job of flying 777s over short stretches, there’s surely a case to be made for flying larger aircraft with better cabins around Europe and charging accordingly. Route and revenue managers will say that short-haul passengers won’t pay for the privilege of a better cabin when low-cost carriers offer more frequent flights and similar aircraft, but it’s this type of herd-like thinking that’s part of the problem. Indeed, why would anyone pay for a short-haul business-class seat (aside from ticket change flexibility), when an airline’s offer is largely the same on both sides of the curtain?

A fresh-thinking, courageous chief executive and an encouraging board of directors at Europe’s major carriers could easily shake up the short- to mid-haul market purely by differentiating their offering. Where to start? First to go would be those dreadful, slimline, no-leg-room seats, which could be replaced by proper upholstered ones (why not even think of them as chairs?) that offer privacy, comfort, connectivity and a real sense of value for money. In the galley, there could be less emphasis on offering horrid hot meals in favour of better quality beverages and chilled dishes that are more suited for tight turnrounds and shorter hauls.

As for crew, this needs a total rethink and strong leadership. Rather than locking horns with unions and failing to interact with frontline staff, managers should lead from the front and not hide behind a battalion of negotiators and middle managers. Europe’s most familiar carriers can continue to chase their own tail fins and lose market share, or they can take a hard look at where they can earn, rather than just save, and pull up from their collective nosedive.

Tyler Brûlé is editor-in-chief of Monocle magazine

tyler.brule@ft.com

More columns at www.ft.com/brule

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