European governments have failed in their approach to tackling the COVID-19 crisis and should completely rethink their strategy on aviation, the CEO of Wizz Air has told Routes Reconnected.

Europe has failed in its approach to tackling the COVID-19 crisis and should completely rethink its strategy on aviation, the CEO of Wizz Air has told Routes Reconnected.

Speaking on the third day of the event, József Váradi said that governments “have not done anything good” for the industry since the outbreak, either in terms of their approaches to restrictions or airline financing.

“Europe, which is supposed to be a fairly well-defined way of cooperating between countries, has failed miserably on everything,” Váradi said. “We are operating to 46 countries and for over eight months I cannot find two countries that have applied the same measures.

“I think it is a miserable failure of governments and it’s a miserable failure of politics. It’s a miserable failure of the whole system.”

In addition, Váradi said, the “various political agendas” have been leading governments’ responses, rather than tackling the health crisis.

“Measures like closing borders or putting people into quarantines just because they were flying from one place to another have nothing to do with a pandemic; these are political measures,” Váradi said.

“What is the difference between someone flying domestically and that person is not subject to any of measures, but someone crossing the border would be? This is just politics.”

Váradi also claimed that government’s financial support for airlines is being misused because those carriers will not be able to focus on restructuring to become more efficient post-COVID.

He predicted that governments owning equity in carriers will lead to “long-term distortion” in the market and could come with higher charges as they seek to recoup their investment.

“All this money that has been put into the airline industry is simply a waste of money,” he said. “It’s not going to achieve pretty much anything other than keeping a few airlines alive, but these airlines will not be better coming out of the process.”

“They are protecting employment, because the government is requesting this, but this is actually conserving inefficiencies in the system.

“They are not renewing their fleets; actually they will be flying an ageing fleet in the future, much less efficient, much more costly. So you will see long term structural issues here.”

Photo credit: Wizz Air

 

(c) 2020 –  Routes Reconnected.

The Hub & Spoke structure will be key to Aviation’s recovery, KLM CEO says

Pieter Elbers believes the hub-and-spoke model will be crucial to the restoration of long-haul passenger traffic.

Speaking during a keynote interview as part of the Routes Reconnected conference program, he dismissed the suggestion that a rethink of the hub-and-spoke model might be necessary, believing that connecting traffic will return strongly once COVID-19 vaccines are available and passenger confidence returns.

Elbers explained that pre-pandemic point-to-point services to secondary long-haul markets would likely prove uneconomical over the coming years.

“Looking at the long-haul side, a lot of the thinner routes between midsize European cities and midsize US cities were established over the past few years—which were good economic years with solid demand,” he said.

“Obviously with the step back we are taking now, those routes can no longer sustain direct flights. Traffic is therefore going to be channelled through hubs. Within Europe it may be a bit different… but I believe that hub and spoke will lead that recovery trajectory.”

Elbers said that KLM operated between 60 and 70 long-haul destinations before the coronavirus outbreak and has resumed about 70%, including restarting services from its Amsterdam Schiphol (AMS) hub to Chengdu (CTU) and Beijing Capital (PEK) in China.

He added that the SkyTeam alliance member would “fly wherever we can fly” when it comes to rebuilding its long-haul network—although some routes remain cargo-only, and flight frequencies would remain lower for some time.

Across KLM’s European network, the carrier served 80 to 90 destinations before the COVID-19 crisis and has restored about 90% of those destinations. However, capacity remains around 40 to 50% of pre-pandemic levels.

Although Elbers admitted that KLM is braced for “a pretty cold winter,” he said there has been cause for optimism in recent weeks given the positive news about coronavirus vaccines.

“We need to see how the Christmas break goes,” he said. “Clearly it will be very slow and very weak compared to pre-COVID, but at least it will be better than we had in November. I hope that after Christmas we can start building on the momentum we will see in the next couple of weeks.”

Elbers added that KLM plans to “step up capacity” on its long-haul network, mostly to places where the airline can connect to the networks of its partners. He also explained that the carrier’s approach to network planning would be “more agile, quicker and with more trial and error” than before the crisis began.

Photo credit: KLM

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