Charter airlines are being accused of standing idly by while their no-frills competitors seek to undermine fundamentals within the airline industry.
According to Peter Hartman, chief executive of KLM, inefficient airlines now face “bloodshed” after being seduced by claims from low-cost carriers such as easyJet and Ryanair that flying is inherently cheap.
His comments add weight to concerns voiced at the Institute of Travel & Tourism conference in Cyprus that airlines have missed an opportunity to capitalise on the changing face of air travel by developing new routes.
“For too many years the initiative has been with the low-cost airlines which have squeezed airport fees and generally bullied airports,” commented John Grant of Airport Strategy and Marketing.
Such measures include the negotiation of airport fee reductions of up to 50 per cent – spoils which Grant said have effectively been subsidised by charter airlines.
However, putting aside their apparent complacency in the face of growing competition, Grant insisted the majority of charter airlines are in fact weathering difficulties in the market comparatively well.
Over the past decade, the charter market has declined only marginally from 33.6 million to 33.2 million passengers, despite massive gains in the no-frills sector. During that time they have flown a total of 393 million customers around the world.
By contrast, analysts now expect the very low-cost carriers that have profited so much in recent years to become the first casualties of the global economic downturn.
They point to the more-modest profit margins enjoyed by budget airlines – which leave them exposed to fluctuations in operating costs – as well as the restricted flexibility small carriers have in scaling back routes and slashing costs.
Alluding to the impact of spiralling fuel costs, the KLM chief executive said: “I won’t say that the good times are over. But what we did wrong was to give the consumer the impression that flying is cheap.
“I have just come back from the United States and drivers there are complaining because they are having to pay $4 [
