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Linus Benjamin Bauer, managing director of Bauer Aviation Advisory, describes how airlines must work together in order to achieve a strong recovery.
According to him, various carriers across the globe are looking ahead and seeking new and more effective approaches to rebuilding their airline networks in the future.
Low-cost carriers and full-service network carriers with hub-and-spoke networks alike, he reiterated are establishing tactical partnerships to shore up their connectivity to key destinations and broaden their market reach.
Airlines could be in a position to successfully navigate the recovery – and meet their long-term growth and revenue targets – only if they work closely together.
However, the legacy interline system doesn’t meet the needs of today’s and the post COVID-19 air travel landscape.
Before the pandemic, many airlines were already shifting away from traditional alliance and codeshare networks, while low-cost carriers never joined the legacy interlining and alliance bandwagon in the first place.
In saying this, the so-called old-style legacy interlining, which took shape decades ago in a heavily regulated industry where virtually every airline was a state-owned “flag carrier,” is no longer fit for purpose to solve the myriad challenges facing the industry today.
Therefore, airlines need a better approach to collaborative network development that gives them flexibility and allows them to sustainably rebuild and expand their networks in the post COVID-19 recovery phase.
While the pandemic has obliterated demand for travel, this structural shift has created network gaps that will have to be filled as the recovery gathers pace (e.g. pent-up demand).
Network carriers have to rethink how best to build back, even if the would-be partners of airlines have also cut back on routes and capacity. Airlines will need to consider new partners and find ways to link to those partners’ inventories in more flexible and profitable ways.
As the COVID-19 crisis still goes on and more airlines’ route networks erode due to capacity cutbacks, the ability to identify and quickly connect with new partners is a significant advantage. Because a more modern and flexible approach to interlining helps airlines pivot to where the seat inventory they need and maintain their revenue generation potential when they do.
Emirates recently announced a codeshare agreement with TAP Air Portugal.
Whereas the LCC business model is built on flexibility and lean operations (e.g. Air Arabia), the agility provided by managed and enhanced virtual interlining will be especially useful to full-service network carriers like Emirates, Etihad Airways, Gulf Air and Qatar Airways as they rebuild their route networks in an uncertain demand environment.Google+