A Commercial Aviation Consultancy

Airbus

We published a premium story today on the timing of the A380′s launch.  The timing of the A380 launch was driven by many factors and certainly one of the principal factors was competing with Boeing’s 747 and its monopoly of the VLA segment of its era.

Providing perspective of how Airbus had to view its decision at the time, we spoke with Professor Tobias Kretschmer, an expert on strategy and game theory from Ludwig-Maximilians-Universität München.  Professor Kretschmer uses the A380 vs 747 in his game theory lectures and is familiar with the key decision Airbus faced at the time the A380 was launched.

Bloomberg reports that Malaysian Airlines is likely to see some big changes.   A possible new CEO, layoffs and an aircraft order review are the identified changes.

The current CEO has a contract that expires in the next few weeks.  It is doubtful that he would want to renew it given the past year.  Who could blame him? It may have been the most awful year any airline CEO ever had to go through.

The layoffs could be big – 3,000 to 4,000 according to the Bloomberg story.  There are some 20,000 employees at the airline, and laying off a fifth will be be a severe blow.  Once the state effectively takes the company private, the unions will have a tough time overcoming any layoffs.

What about fleet rationalization and orders?  The table below lists the fleet and orders.  Airbus is not exposed… Continue reading

Reports in the press have confirmed that Lufthansa is looking into setting up a low-cost long-haul operation. Given the Lufthansa brand, one would be hard pressed to visualize an LCC version under the Lufthansa name.  But people felt the same about Singapore Airlines, and yet its LCC operation called Scoot is doing fine.

Many details have yet to be finalized and announced, but we have managed to obtain some insight into  the company’s current thinking.

It turns out that the company was not in quite as robust a condition as the new CEO, Carsten Spohr, was led to believe. A profit warning recently sent the shares downward by around 30%.   The market reaction is rational, because it was thought the cost cutting exercise at Lufthansa was making good progress.  But,  as most senior executives know, there is a limit to how much… Continue reading

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