Lufthansa, Air France-Klm and Iag: the hubs and strategies of the three groups in Europe
Three major groups compete for the flight market in Europe, especially in the scheme of the hub&spoke model that focuses on the [...]
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Three major groups are competing for the flight market in Europe, especially in the pattern of the model hub&spoke which concentrates on large airports the most continental traffic to feed long-haul routes.
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Lufthansa Group, Air France-Klm, and Iag (which includes British and Iberia)-thus excluding Ryanair-have definitely emerged from the difficulties of the pandemic and have now resumed their extensive flow of connections for more than a year.
Alliances and the buying campaign
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Each of the three also refers to one of the three major global alliances: Star Alliance for Lufthansa, Skyteam for Air France-Klm and oneworld for Iag.
Looking at the latest movements, finally - the sales process of Ita Airways to Lufthansa; that of Air Europa to Iag; and the likely purchase of Tap Air Portugal by Air France-Klm paints a picture that sees even more of the "big three" dividing up the European market along the lines of what is happening in the US.
Overseas, in fact, the three sisters Delta, American and United plus Southwest control the 75% in the domestic market.
The evolution of airports
But how are the three large groups in the European landscape? Which airports have become central to their network and which have lost appeal?
According to an analysis by Cirium Diio - which looked at the most prolific period of the year (the third quarter 2023, which runs from July to September)-there are those who have recovered almost all the capacity than pre-Covid (Af-Klm) and those who suffer mainly on domestic (Lufthansa). But airports also experienced major mutations.
Compared with the same quarter of 2019, between July and September 2023 therefore the capacity of Lufthansa Group's scheduled seats Is lower still than 12%; while Air France-Klm comes close to breaking even (-2%) and Iag records a 7% decline.
Lufthansa Group's hubs.
For the German giant - which includes Lufthansa, Swiss, Austrian, Brussels Airlines and Eurowings - all airports Are still behind on 2019 excluding the base of Palma de Mallorca which records a spectacular +22%.
Frankfurt and Munich remain the main hubs, as expected, with 7.2 and 4.7 million available seats. But the second airport still remains at a resounding -20% compared to 2019.
The port of Vienna seems to be the one who can catch up better (-9%) while Brussels collapses to a -20%. Zurich, on the other hand, is the fastest-growing airport over the third quarter of 2022 (+20% with 3 million seats).
The role of Ita and Fiumicino
It will be interesting to understand, from a future perspective, the role of Rome Fiumicino. At present, Leonardo da Vinci is not in any of the top 10 hubs of the three Groups. If Ita Airways joins the German Group, then Fco should have a central role in the European network balances.
To date, the strong presence of the low cost in Italy And the operation of Ita Airways as a flag carrier. post-Alitalia have not shifted many of the three Groups' investments to Italy's most important airport.
On the contrary, Lisbon (Tap hub) has had record growth with Air France-Klm in recent years, and Madrid, Air Europa's hub, is already central to Iag's route network.
The doubt remains, then, that the Lufthansa's strategy in Italy may shift from Fiumicino's long-haul centrality to a path of subordination instead of flights to Germany to feed the LH hubs.
Source: Cirium Diio
Air France-Klm's strategy.
For Air France-Klm, however, Amsterdam maintains first position as the Group's hub (5.9 million seats) despite downsizing (-7% compared to 2019) due in part to Dutch government regulations and the aftermath of last summer's flight chaos.
Eindovhen and Rotterdam (+6% both) thus seem to have benefited from the reduction at Schiphol.
The expansion of Transavia however, has revived Paris Orly airport, which, with 2.6 million seats, grows by 6% compared to pre Covid. Toulouse, on the other hand, loses 35% of available seats compared to 4 years ago. A meltdown that is difficult to recover from now.
As mentioned above, in the top ten made up of French and Dutch airports, Lisbon stands out with a +26% compared to 2019. A clear signal of the aims on Tap, although it would appear that Aior France-Klm has already moved forward with its own crescete network of routes.
Source: Cirium Diio
Iag and the multipolar model
With regard to Iag-which includes British, Iberia, Vueling, Aer Lingus, and Level-what is evident, on the other hand, is the development of a multipolar model that sees London Heathrow, Madrid, Barcelona and Dublin share the continental traffic.
The Anglo-Hispanic holding company's hubs are all approaching 2019 levels, except for Barcelona, which is down 9%. In this case, the Catalan airport is paying for the record increase in the operations of Vueling on Paris Orly (+58%).
Source: Cirium Diio
The Group has grown a lot in major Spanish tourism markets such as Palma, Malaga and Ibiza; while the largest cuts affected London Gatwick (-15%), served by Veuling.
With the likely entry of Air Europa, Iag's center of gravity could shift even more toward the Iberian Peninsula and connections to South America.