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Legacy carriers saw little threat from the budget airlines that have a captured a key component of their business, but this article argues that the giants’ overwhelming presence at hub airports ultimately makes up for their losses.
The rise and rise of low-cost carriers in Europe has been rapid and, it seems, irreversible. The result has been to transform Europe’s short haul market. There is nothing new about that, but the three big legacy ‘flag carrier’ groups in Europe – Air France–KLM, IAG and Lufthansa – have only recently dedicated serious attention to new initiatives to combat this continued onslaught on their short haul operations.
… Why have the flag carriers apparently been so slow to respond? By delaying in adopting effective responses to the LCC onslaught, the majors may have left it too late to regain lost ground. But it is clear that new battle lines are being drawn, presaging a changed competitive environment. The outcome will do much to determine the future role of Europe’s big three groups, now also besieged from outside by the Gulf airlines.