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The European airline industry. A banker's view

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  • Smit, Hans G

Abstract

For those institutions which finance the aerospace industries, it is useful to estimate what the consequences will be of the present liberalisation process which has beset the European airline industry. Consequently ABN AMRO Bank is in the process of developing a model which analyses those factors which are crucial to the survival of an airline. These so called critical success factors appeared to be: financial strength, cost structure, domestic market, size of operations, internationalisation and political support. When we applied these factors to the European airline industry, we found that only a limited number of airlines stand a fair chance of surviving the anticipated restructuring process as an independent carrier. Several carriers will either have to merge with stronger partners or they face bankruptcy. Based on the critical success factors, the larger northern carriers enjoy the strongest positions. From amongst the southern airlines, those with a large domestic market and strong political support have a chance to survive, provided they will be able to adjust their cost structure in time.

Suggested Citation

  • Smit, Hans G, 1997. "The European airline industry. A banker's view," Journal of Air Transport Management, Elsevier, vol. 3(4), pages 189-196.
    • Handle: RePEc:eee:jaitra:v:3:y:1997:i:4:p:189-196
    DOI: 10.1016/S0969-6997(97)00025-2
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    Cited by:

    1. Alderighi, Marco & Cento, Alessandro, 2004. "European airlines conduct after September 11," Journal of Air Transport Management, Elsevier, vol. 10(2), pages 97-107.
    2. Aksoy, Safak & Atilgan, Eda & Akinci, Serkan, 2003. "Airline services marketing by domestic and foreign firms: differences from the customers’ viewpoint," Journal of Air Transport Management, Elsevier, vol. 9(6), pages 343-351.
    3. Marco Alderighi & Alessandro Cento, 2003. "European Airlines Conduct after September 11th," ERSA conference papers ersa03p431, European Regional Science Association.

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