Very limited time Black Friday deal: 20% off on all Hoverpens and free shipping to most countries with code MENTOUR: North America / UK / Australia / International: bit.ly/novium_mentour EU: bit.ly/noviumeu_mentour
Some nations _need_ to keep special service, because the lack of other outside connections or because the connected community is so small. I think e.g. of St. Helena or several islands at the European coast. I think, there it is legit, if the state is providing the service to keep these communities alive. For remaining? where competition is not detrimental to the service and customer, let it flow.
British Airways was described as "a pension scheme with an airline attached". While for others flying seems to be a side hustle for their loyalty programs.
At least in the US, most airlines are credit card companies now. United's loyalty program was worth more than the whole company when they put it up as collateral in 2020. (So the actual airline is worth negative money.)
@@christophermcdonald1122 Well, I guess we return to the 1930's, pay our workers nothing, kill them in the plants with dangerous conditions and call them lazy or inflationary when they say 'please sir can I have some more.' Even a cantankerous Henry Ford realized that folks don't have the money or the time to buy the products there is no profit to be made. Warren Buffet's opinions are hardly relevant/considerate to the state of the working person in America. They voted for Trump in part because even though there were lots of jobs produced under Biden, many aren't the kind of jobs that make life any better. When will leaders realize that giving the corporations breaks only 'trickles down into their pockets and that of their shareholders'. Give the middle class working folks decent pay and benefits and they will SPEND on lots of things and companies will be profitable. We are in for 4 years of corporations feasting on lower taxes and regulations. I honestly doubt that the average person will notice the difference. The country is not only run by Congress, it is also run by 100's of large companies that control much of our every day lives, run by folks we have never heard of whom we never voted for. Nothing is going to change because the selfish people are good at it.
I loved Alitalia. Whenever I booked a flight with this carrier, this flight would be cancelled and I would be put on an Air France or KLM flight, usually business class because those were the only seats available, for the price of a low budget carrier and off course with all the extra's that I was "entitled" to have as a business class traveller. This also brought me to airports that I would otherwise never visit. On the other hand: TAP = Take Another Plane.
Difficult to understand why so many entrepreneurs are attracted to the airline business. I guess it's glamorous and high-profile, but boy is it difficult. It's enormously capital intensive. It's enormously complex. You're at the mercy of fickle regulators. You're at the mercy of the price of oil. You're at the mercy of a host of subcontractors. You need to attract and retain highly skilled and highly paid employees like pilots and engineers. Training costs are sky-high. New entrants are faced by established competitors who dominate the best routes and enjoy greater economies of scale... I could go on for some time. So the failure rate is frightening - and failure can be very, very expensive.
Agreed. I'm just amazed that the aviation industry even works at all. You have stories like that of the A380, which failed because of a paradigm shift that its creators didn't see coming, I mean, processes in this industry overall are so slow, and the conditions in which the industry operates can change so fast that I just don't even know how they're able to keep it going.
I remember the "good old days" flying for business in the USA. I always tried to fly TWA whenever possible. Many times I was able to get a $50 upgrade to first class, at the gate, just before boarding! One of the reasons we call them the good old days; right? Great work Petter. Thank you.
Back when alcohol was served on flights for cash I always went aboard with a wad of ones, fives, and tens, and let the greeting cabin crew member at the door what I had and where I was seated. Many free drinks for my friendly helpfulness.
It depends on your definition of "good". I used to fly from TN to TX a lot on business in the mid 70s. The cost of ticket then is about the same number of dollars as today, not counting inflation. It was much more relaxed BUT it was a LOT more expensive.
@@MrNicoJacit's a game of luck and chance , we can see the load of the aircraft when booking standby. people cancel or miss their connections or even not make it to their airport u have a seat open for u !
@@MrNicoJac don't try to use standby on lufthansa if something like a large soccer game is happening in germany and you plan to fly there from klax otherwise probably ok if you just 1 person
One commented that they are sipping their evening whiskey, while another commented they are sipping their morning tea. I'll watch while sipping my afternoon coffee
I'm a fan of the old radio show "Yours Truly, Johnny Dollar". In one episode from the '50s, Johnny paid $1500 to fly from Hartford to Manila. That's nearly $20,000 in 2024 dollars. Air travel was reserved for the elite. Now you can get to Manila for less than $1500. What passengers paid in the 1950s is the essentially same dollar amount they pay today, which is pretty amazing!
One of the problems with Pan Am was they had no domestic routes.They where not allowed to fly domestic routes.When deregulation happened they had to merge with National Airlines quickly at a very high cost.
@@skawel1 well, i know from my italian relatives: they _can_ speak without hands - but they _prefer_ to express themself _with_ hands, of course :D and yea, i am living in the land of the krauts ;)
It's so fascinating that most airlines actually survived the pandemic. Even Lufthansa needed state support with the German gouvernment buying stakes of them. Ultimately, the German state sold thier stocks later with a huge profit, but there were pretty polarized discussions here about that in the first place.
I do think that a subsidized airline for domestic routes that are necessary but not profitable makes sense. For example, I live in Canada, and there are many northern communities in Canada that are only accessible by plane or, for parts of the year, only accessible by plane. Ensuring that these communities have regular access to the south may be necessary and also cost-effective compared to alternatives. Like if people who need medical care in the city are able to get a regular commercial flight, even if it's subsidized, that might be more cost-effective than paying for chartered transport every time someone needs medical care beyond that available in their community. (Of course emergency airlifts would still be necessary sometimes, but there are lots of situations where a local clinic cannot handle it, but it's completely appropriate to put the patient on a commercial flight in a few days and have them see the specialist in the city.)
Similar case here in India with SpiceJet. Founded in 2005, older than India's most popular airline IndiGo, it had completely ceased operations for a day in 2014, bounced back after the original CEO took over. Post pandemic, it had multiple safety incidents and half of its fleet grounded by the DGCA. Recently, everyone believed it was their end due to their unclean planes and bad reputation, but surprise surprise, they are looking to expand today. On the other hand, Go First was a similarly aged airline which had a spotless record and survived the pandemic, but got done in by the P&W engine issues on their full A320neo fleet.
It will be worth watching Air India. It's undergoing transformation under Tatas but it remains to be seen if they still have the nous to run a large airline. They are far from making any money yet.
@@tiwaringp so funny when on the route to Hong Kong, Air India is advertising what percentage of entertainment units were fixed since Tata take over - and you look around and almost none of entertainment unit work :))))))))))) People still tell stories how their US-India flights were cancelled just last minute and they were almost physically fighting with staff pretending there is no problem, completely rude and almost insulted that passengers are asking for hotel, compensation and when the new flight will be. There is really great book 'The Descent of Air India' by former high ranking manager Jitender Bhargava. the stuff he is describing and mechanism prevalent during Air India descent...just unbelievable.
btw. I would not even check Spice Jet schedule and prices when I fly. Why the headache? Straight to IndiGo - low cost but reliable, and more comfortable on the routes I am flying than let say Wizz Air or Ryan in Europe.
Air india face similar issue also worker strike and flight cancellations come from no where And Indians mostly consider Emirates and Etihad air arabia indigo as their flag carrier because they are more punctual
Fun fact: the most profitable division of the entirety of the LH Group is Lufthansa Industry Solutions, which basically sells historical air transport data, ticketing systems, management software and so on to other airlines around the globe. Same applies to Lufthansa Technic...people put LH on the same level as Air France/KLM or IAG, but they're on a completely different scale.
This is exactly the kind of content I subscribed for-fascinating! I can see this evolving into a series with occasional deep dives. Thank you, and keep up the great work!
What about AirBaltic? New, nice fleet, they actively carry Latvia's flag into sports or military events, carry home national sportists, bring tourists to Latvia and carry country's name around etc.; Their CEO gets big salary, while from time to time he asks from governmental fund injections. Is it ok?
Air Baltic is profitable. Although they have a much larger fleet than they need, particularly in the colder months, they leased out their aircraft to a number of other carriers. It is not at all unusual to see Lufthansa group services, especially Swiss, being operated by Air Baltic aircraft.
A brief history of Alitalia: - first one was formed with the merger of Alitalia and LAI (linee aeree italiane, literally italian air lines), this is why the "first" alitalia up to 2009 is named Alitalia LAI - in 1960 for the Rome Olympics they became the first major european airline to have an all-jet fleet, with Sud Aviation Caravelles and DC-8s - Alitalia remained distict in Europe for being basically an all McDonell Douglas airline, from the DC-8, trought DC-10 and DC-9, MD-80 all the way to the MD-11 - they had by far the best in house cadet pilot training in Europe, based at the super windy and tricky Alghero airport (same place where Piaggio P180 are built), on top of this, the core of the captains where all air force veterans, ex F-104 (the flying casket) survivors - famous prime minister Berlusconi stopped the merger with Air France because he knewyou can't do business with the french. If a company is between nations, the french governament will always work to screw the foreign part and preserve the french one. For proof, do you know which was the Dutch governament first c0vid decree? Medicine? Masks? No. Buying shares of AF-KLM to have ownership parity with the french governament, otherwise all the emergency cuts would have been done only on the KLM side. - in 2009, the "new" Alitalia CAI is born (CAI compagnia aerea italiana, italian air company) - too much meddling form politics, prime minister Renzi tries to solve the situation by selling 49% to Etihad - a "new new" alitalia is born, Alitalia SAI (società aerea italiana, italian air corporation) - Etihad only stuck its nose in to lease out old planes at outragious rates to Alitalia and steal all the precious slots Alitalia had from its history. Guess why ITA doesn't fly to Heatrow anymore? Yeah, Etihad stole all the slots. - ITA the new arline stand for Italia Trasporto Aereo, italian air transportation
One of the challenges of Alitalia was/is routing. It's kinda hard to make money flying between (for instance) Rome and Milan, since there's the Frecciarossa. Likewise for many other city pairings up north. In the south people tend to have less money, so while yes there's less competition due to the government's relative lack of investment into rail it's harder to turn a profit particularly in the business market. A lot of the north-south routes that are run now are by low-cost carriers targeting holidaymakers, but despite that the train is usually still cheaper if you're not going more than halfway across the country. Particularly if you use an Intercity rather than high-speed train.
LOT Polish Airlines USED TO BE in that group but then they became profitable when the Polish government has restructured them. Poland has elite pilots - Polish pilots are basically a national pride and have been for ages, and this is why Polish flag career - LOT - will persist and will never be abandoned - after restructuring they became healthy as hell
Polish aviators are known for their aeronautical skill regardless of what country they fly in. I have trained and flown with many Polish pilots, and they stand out for their knowledge, airmanship, and leadership abilities.
It was a Polish pilot that flew the Polish presidential airplane with the Polish president and several other top officials few years ago and did a CFIT.
I do not fly much, but the few times I had to fly international, LOT has always been one of my go to airlines to check because of their good value for quality, reputation and modern fleet. I don't hear them mentioned a lot, so I consider them a bit underrated in the European market. Unfortunately the timetables were never favorable for me so I have not actually flew with them... yet.
I'd love to see a dedicated episode of Finnair as a company. A some way the kind of oddball in the game. Maybe some kind of deep dive to its history and fleet choises and adaptation to changing business envitonment during past decades.
I hope Finnair will survive the closing of Russian sky and resulting loss of competitiveness to Chinese airlines! I soon plan to fly to Japan, I specifically bought Finnair tickets, to first, fly over the North Pole, and second because Helsinki is just convenient for me as a starting spot (and thirdly to just support a Europen company), but price difference was 850 vs 500 EUR, and flight time was almost the same, despite transfer in Bejing...
@ivankuzin8388 i am also hoping that they get through of Russia closing its airspace, and find new ways to make their business thrive. Polar route to Japan is something I'd love to experience, but for now that' not financially possible. Maybe later, hope so 👍 Really love Finnair, and Japan too ❤️
@@maalaistollo BTW, prices I mentioned were for return journey - so comparatively inexpensive, if buying several months in advance, and compared to prices to SE Asia or US, for example...
I believe Finnair remain profitable by us OneWorld folk on AA, BA, Iberia, Qatar etc. flying to HEL and back multiple times a year for no reason for status to get to Emerald :)
@@ivankuzin8388 I hoped this too when I flew to S.Korea, but sadly I got the south route. It made sense, but around the days that I booked, there were a few direct flights from Helsinki to Korea that took the northbound route. It was a very pleasant flight (I recommend to ask for the blueberry juice at least once, it is delicious!) and the journey felt more like a casual train trip than an international flight. I was tired from traveling, but far from as exhausted state that i have experienced other times. Helsinki airport was the most comfortable airport i have ever been (not that I have been to many) and with the funniest airport code (HEL.) I paid about 550 for that (return) flight, including the 2nd leg from/to Amsterdam, but I got a bit lucky probably.
One difference in mentality is that US citizens don't generally see their major airlines as "flag carriers", even though they _de facto_ are. The biggest three airlines are more typically called "legacy carriers" since they originated during a more regulated period. The fact that the US _has_ multiple major airlines has probably allowed the US to absorb the loss of one or more internationally recognized airlines more readily than countries with only one flag carrier. Which is one reason that the consolidation of airlines after 9/11 happened more readily here than it did over in Europe. Even after all that consolidation, we do still have three major airlines and a few smaller carriers to supplement them--some low-cost, some not. I suspect that if the US ended up with only one major airline we would do a lot more to protect it, the way other countries have done with their own flag carriers--but we're not there yet.
TBF we did have a flag carrier once - Pan Am. Though it’s for the reason you said that the government probably didn’t see it a major priority to help them when they went under.
@@yamato6114especiall after deregulation. Mergers and Consolidation were allowed to happen because we had regional airlines at the time. Remember PAN AM was mostly international airline so when they went under their international operations and slots were sold off to the likes of American, Delta, and United and all the other regional airlines like NorthWest and Eastern Airlines. The process was fast compared to smaller EU nations with mostly intra Europe flights and long haul international operations.
One of the "smallest" airlines in the USA is Southwest Airlines, a mostly domestic airline. But "small" is a matter of perspective. Southwest has 800+ airplanes, more than most European Airline consortiums.
Actually the Surströmming business is tightly linked to the aviation business in the case of SAS: SAS has started to replace some of its fuel powered engines with ones that are solely powered by Surströmming. The downside is of course that the population living close to the airport have to wear a gas mask all the time.
My father also flew TWA for business. One of my earliest memories is waiting to see him at the then relatively new Saarinen TWA building @ Kennedy. He had been assigned to turn around the Italian plant there and was making preliminary visits, but we would be moving there a few months later. He even had one flight immediaty return due to birdstrike. Once in Italy, my mother flew Alitalia exactly once and thereafter refused because they had ex-WWII fighter pilots flying and she never felt safe with them. Thereafter, we always flew KLM. Though I've never understood the willingness to merge w Air France, for cultural reasons.
Avianca is an interesting case, it is the second oldest airline in the world and has almost all its history been private, but still gets state support because it is one of the principal means of transportation in Colombia due to our difficult geography
And then when one of those huge groups goes bankrupt they claim they are "too big to fail" and need a bailout, making the tax payers pay for their losses while in better times the private investors get the profits.
I find particularly important your point on national diaspora. Here in the Canary Islands the tourism industry couses a lot of struggle for canarian people to return home. We basically do not have a low touristic season, which is why a two way ticket from France to Gran Canaria for the Christmas holidays could cost more than a thousand euros. Another thing is the connectivity, the lines are based on tourism prifitability so they become quite unstable, this is where national flag carriers come in. I've been in a position of deciding where to go do a masters degree and the decision was basically taken on whether Binter or Iberia operate to a nearby airport or not. On the Spanish scale it is becoming easier but only because os state payed reductions. If it wasn't for that a two way ticket to a nearby Island where most likely you are going to for a family visit could cost more than 200€ for a less than 100km travel.
Your final point about air carriers being absorbed by bigger carriers or die out altogether only works up to a point. In Australia we are seriously struggling for decades now with 2 main carriers: Qantas and Virgin Australia. Other carriers especially smaller carriers rise and fall and it's not just our regional towns that are suffering - even the bigger city hubs are such a monopoly that prices are skyrocketing, flights get cancelled constantly (because of slot hoarding)... ABC News Australia have several "Four Corners" investigative programs on this problem. Any time a 3rd carrier tries to enter the market, the two big guns covertly push them out.
LIAT (officially Leeward Islands Air Transport, unofficially Leave Island Any Time) is an eastern Caribbean airline that is perpetually on the brink. But some sort of regional carrier is necessary in this part of the world. With LIAT under repeated restructurings, and American Eagle having withdrawn from the region, it is often necessary to fly all the way to Miami to get to a neighboring island. Imagine having to fly 3000 km, often spending overnight, to get to an island only 300 km away!
Just as is the case with postal service, it is in the interest of a country to have air service to certain small, remote destinations, even if that cannot be done in a profitable way. But that should be solved by subsidizing particular routes, not the whole airline.
Feels like an okay solution to a fair point to me. Allthough most national airforces do operate VIP planes which could take over these remote destinations, without having their government be open to getting scammed by the national carrier on what the losses on those destinations are. (Feels to me those remote destinations need to be reached for 90%by diplomats and tradescommittees or skilled personnel, which are all in the national best interest.)
The acquisition of Air India group ( includes Air India and its low cost division Air India Express) by the Tata group ( which operated Vistara airlines and AirAsia India ) in 2022 perfectly fits into what is mentioned in the video!
Hi Petter, thank you for bringing this topic up. My POV: 1 - You assume airline industry is something worthy of nice profits, but it is in fact a risky business, for private or public; a privite bankrupcy can affect connections to a country greatly. 2 - America deregulates the air transport however, airports are generally owned by the local municipality, completely opposite from Europe. Airports in Europe are private and where the big money is and so you have to include both in you analysis for Europe. 3 - Spoke and Hub systems rederect 2nd tier or peripheral countries/locations even further from the center, thus investing in airlines make sence (e.g. hawaiian or Alska airlines). Whould you depend your hospitality on Ryanair's Michael O'Leary mood?
Air Malta should be treated separately, as the country is one of the most corrupted, nepotism-swamped countries of EU. The over-employment of Air Malta was a result of these nation-wide trends (or properly said: 'tradition'). Hence: mismanagement is an understatement when applied to this airline. Failed investments in bizzare, non-airline-related projects (mainly properties) can be turned into a long multi-volume novel... But it was nice to see it being mentioned in my favourite aviation channel. Greetings from Malta!
You should mention Aerolineas Argentinas, Argentina's flag carrier. It has a very interesting history, has been groundbreaking in the past with one of the few transpolar routes and has very skilled pilots who land in adverse conditions in the southest airport in the world (you should check out some cockpit videos, the arrival is just wild and it used to be even wilder in the old runway). It was privatized, then nationalized again and has been unprofitable for ages. I miss the old Alitalia livery, not gonna lie, I don't like the name or the ITA livery to be honest haha
Just to complement this comment, Aerolineas Argentinas is again under discussion in today's public agenda. The government is pushing for privatizing it again, based on continuous losses over the years and its decision not to continue funding its operation, which in addition had the advantage of plenty of regulatory benefits which prevented other airlines to consolidate and compete in equal conditions. The unions and the opposition, on the contrary, emphasize the "flag carrier" status of Aerolineas Argentinas, and justify the need of a national company to link a large territory such as Argentina, where only a few domestic routes would be profitable, and therefore many cities would lose their air conectivity if left to market-driven decisions.
It's pretty impressive how long they kept Alitalia going, it never had the same prestige outside Italy, it was less optimally placed to serve as a hub airline, it had to deal with splitting operations between Rome and the richer north of Italy (why would you fly from Milan to somewhere in North America via Rome if you could fly via any other european hub or even directly on a US carrier), and its domestic market was torn up by high speed rail and Ryanair. They honestly had no business staying around as long as they did. As for consolidation, i think we are getting to a point where there is soon going to be a lack of competition on many important routes, so I am not very keen to see the behemoths grow bigger with every few years that passes.
To reference 23:00 In Norway we have a carrier, Widerøe (Wideroe) They operate the Dash-8 variants and are key for transport in Norway As were a long country with a sparce population, especially in the north, they’re given state funds to enable them to have lower prices thus easing the cost of travel between the small airports in Norway and making it accessible and suitable to live in these small places. Just recently they halved their prices on these domestic flights though state subsidiaries
We've cheapened flying so much it's impossible to survive as an industry without state support. I can fly to Marrakech from London for less than £50 yet pay £185 for train ticket to Manchester!
Ryanair and other LCC's are thriving without state support. Or maybe you could call it hidden support, because where most countries have some sort of way to tax the use of fuels for roadtransport, the airline industry is totally excempt of paying more then price on kerosene. In my eyes a total unlawfull way of sponsoring airtravel.
Given how some European governments are acting, they want the airlines to fail. Just look at the insanity of the UKs APD tax. There are lots of people who no longer go to the UK as a direct result of the extreme rate of that departure tax.
Train infrastructure is expensive and there has to be a lot of it. Kilometers upon kilometers. Essentially zero passenger train lines left without massive subsidies. We should fly more instead.
The new SAS structure is... interesting, to say the least. You have an airline conglomerate (Air France-KLM), a foreign investment fund (Castlelake), a Scandinavian pension fund (Lind Invest) AND STILL a state participation (Denmark). You have a relatively balanced representation of investment interests with views set on growth and even a stock market re-listing (in 2026 at the earliest, it seems) BUT with a seemingly uneconomic imperative of prioritising a certain hub (Copenhagen) while balancing the other two (Oslo and Stockholm, where airport consolidation is going to spice things up) and with the added question of where the company is to be headquartered. It's going to be a fun ride!
This is no different from the mid 1980’s when a lot of carriers closed. Many of them started after deregulation and couldn’t survive. It wasn’t just small airlines, we lost both Eastern and Pan Am which were legacy carriers. I worked for four airlines in a period of about seven years and they all went bankrupt. Needless to say, I changed careers.
Yep. Deregulation meant goodbye to the cozy protected world of old and hello to the brutal shark tank that was the free market. Pan Am was at a major disadvantage from the start. Already battered from the fuel crisis and having no experience in the domestic market, the airline quickly crumbled under the competition.
Many small Caribbean airlines were at least partially state supported in the past. That way, they didn't just have to depend on the whims of large airlines from foreign countries for a connection to the rest of the world.
I think it is important to have a flag carrier. My first ever flight was with Alitalia back in 1976. We also frequented Pan Am and TWA in our two years living overseas. Over the years, I have flown many airlines that are no longer flying. For me, it is a sad day when a historic airlines goes under. With that said, all businesses need to turn a profit and if you can’t…
"all businesses need to turn a profit." That is actually not given. Or to be more accurate, sometimes it is not necessary that a given enterprise is fully a business
@@dmitripogosian5084I think you can use the frase “all business need to turn a profit”, you just have to consider some service companies not business, healthcare, local transport, trash disposal, street cleaning, police, firefighters and you can add whatever you want to the list, if it is needed to the people it can lose money to operate better. I don’t have a strong opinion on air travel but I think that in every sector if there are only two options: 1 helping a company that is going bankrupt or 2 letting only one company have all the control in a market ( because RN there are 2 and one is bankrupted) I believe the best option is 1
Ithink that there are a couple more factors that are worth mentioning. Strong unions and strikes have a big impact on profitability. Also pricing of airport services reduce profits. Being able to use low fuel prices does that as well. Only big international airlines are able to bolster against one or multiple of those factors. Beimg able to have credit lines for more fuel efficient aircraft and leverage for early delivery is also a mayor plus for the big players.
4:19 While I obviously can't speak for the entire country, of all the people I've ever discussed this with nobody ever thought that was ok. What happened is that the company's management ran away with an enormous (relative to population and area of the country) fleet, infrastructure, many contracts and fixed-wage labor - that is to say, all the good things - while discarding all the debts upon the general population for it to figure the mess out. Yes, we ended up paying the same as we did before, but now the state-owned part (the one that had regulated prices and schedule guarantees fixed by the appointed government) was essentially at collapse and for all intents and purposes useless, while the good part was free to increase prices and/or cut routes/schedule, meaning that we paid the same for significantly less. As far as I remember (i am relatively young) the biggest reason for rhe struggle in finding a buyer was that the union demanded strong guarantees for the existing workforce, meaning a more disadvantageous purchasing contract that fewer airlines were interested in taking (edit: as other replies have pointed out, while this was an important factor, it was not the only one, with political issues arising on earlier attempts to sell off the airline). This is actually fairly common for foreign acquisition of Italian assets, even outside the airline industry. Eventually the LCC sweep meant alitalia was made largely redundant in the european market, with a ryanair ticket costing much less of an equivalent alitalia/ITA ticket. Not a critic or anyrhing, but hopefully a bit of insight into the situation!
I was going to write exactly this (Italian here). There were many airline groups interested in Alitalia (either purchasing it whole or just a stake), but they all had to deal with union demands. I'm convinced we need unions, but in Italy at times they have way too much leverage on how a company can manage the workforce, leading to a lot of wasted resources, monetary and not. I must also say that Alitalia always had a "why would you fly with them?" kind of aura, other European airlines were often percieved as better (equipment, personnel, overall efficiency): some was due to inaccurate/false stories (like how Alitalia airplanes weren't shielded against mobile phones and therefore prone to crashes...yep, that was a story going around in the early 2000s), some due to a general distrust of big Italian companies, and some due to true stories coming from the airline (like theft in baggage handling or overly long layovers for international crews).
Workforce power was a thing , but politics matters a lot. If you remember, alitalia was almost sold to KLM/air France in 2008 but berlusconi was against it and did what he could to stop the affair. Remember then the CAI (capitani coraggiosi 😂) and so on.
@@gerryino Unfortunately in 2008 I barely knew who Berlusconi was and instead spent most of my time reading Topolino. I guess I should have better specified what "relatively" young means 🤣 Thanks for pointing that out! I will add to the original comment, and will further research the pages of history that I missed or could not remember!
@@alessandroceloria 100% agree. Non potevi descriverla meglio. Se poi ci metti il fatto che decenni fa era un vero e proprio serbatoio elettorale, e che “se voti per me ti faccio entrare a te e tutta la famiglia in Alitalia”… Ci siamo capiti.
Thanks so much Petter for including Alitalia!! I remember leaving a comment about this a few months ago and it’s so nice to see that it provided some inspiration for content ❤
OMG, 1970s air travel! I remember my grandparents jetting to Spain and Italy. As the orphan son of a miner and the 9th child of an Irish peasant, this must have been mind blowing. Whereas today we pop to Barcelona for the weekend!
Fun unsubstantiated factoid: the Alitalia-KLM deal was said to have been scuppered because of socks. The Dutch apparently showed up wearing cheap short socks. When sitting down the trouser legs moved up a bit, showing bits of the leg. The Italians, wearing regular longer socks, apparently found this a deal breaker. Again, something I picked up at the time, not sure if true.
Fascinating..love this supplemental series. Airline industry has always been a bit different than most others. Was always curious why in usa there used to be so many Regional Carriers despite the fact airline travel was primarily for the wealthy and business traveler. Now as you mentioned leisure travel is the driving force behind profitability. Deregulation and then tge emergence of LCCs have certainly recalibrate this industry into a more free market economy which in general is good for the consumer. However we hope the LCC can survive as we don't want to get to a point of Oligopoly or Monopoly where pricing can be controlled by the Companies themselves rather than the market.
The free market is never good for the consumer in the long run. Communism isn't it either I know that but we need to keep experimenting we need to find something that works better. Because the free market always tends toward a few big companies owning everything suppressing wages, raising prices and buying politicians to protect themselves. Just because it's the best system we have doesn't mean it's the best system possible
After seeing what happened with TWA, American, Delta, PanAm, Piedmont and US Airways, I now realize they all still exist in some form, but the prevailing brand name is what we see today. American took over TWAs fleet, US Air and Piedmont became US Airways, American were going bankrupt and US Airways “merged” their money to AA along with their execs and kept the AA brand. So really US Airways is AA, Piedmont and TWA. I actually flew on a TWA jet in 2019. An MD-80 in AA paint. Delta are for all intents and purposes Delta and PanAm, but no PanAm jets exist today (which is surprising given how old Delta’s fleet is). I’d be interested to know if TWA, PanAm crew/FAs are still around as part of AA and Delta. I know Piedmont, US Air crews are still with AA as I know many of them. Maybe some FAs from TWA and PanAm are still around.
I remember flying in the 90ties with American Transair, from LA to DC. Was a redeye (learned that one some years ago) and had a stopover at Chicago at 4 AM. Any idea what happened in the mergerworld?
@@Dirk-van-den-Berg According to Wikipedia, ATA went bankrupt in 2008 and some of their assets (such as airport slots, as well as their name and logo) were eventually purchased by Southwest (though this did not include their aircraft or staff).
the main issue is that unchecked consolidation leads to monopoly. if it reaches a point there is only one airline serving an area, then they can set whatever price they want, and people only have the choice of take it or leave it. the statistic I would be interested in comparing these chronically distressed airlines to others is their cost per mile traveled, and what factors resulted in it being different from more successful airlines.
When you get a few of these large corporations buying out the smaller airlines competition goes down and passengers end up paying waayyy more for their tickets. Competition is always good, monopolies are not.
My home airlines Air India is great example of this. Politicians kept ruining it for years. When it got privatised, the government acted as if they solved a problem, but not mentioning that they themselves were the problem.
Transportation and communication are essential functions of government. Governments build roads, governments run bus routes, governments build bridges and railways. And a lot of the time, these roads and routes and bridges don't 'make a profit' - and that's fine. They're not supposed to. Not everything has to be about profit! How many horror stories have we heard about airlines cutting corners in the name of 'cutting costs' to increase profits? In 1987, British Airways was privatised. Three years later, in an effort to 'cut costs' and 'improve profits', an engineering supervisor was working alone, overnight, without proper equipment, lighting, or workspace, to change the windscreen of a BAC-111. In the name of getting the job done quickly and 'efficiently'. Remember what happened when that aircraft got up to altitude?? In the 1960s, the chairman of British Railways decided to axe 22% of Britain's rail routes, because they "weren't profitable". Great plan! you no doubt think. That plan saved £30 million per year. Thing is, those routes were often the only access people in rural areas had to efficient transport. People relied on them to get to work. As a result, rural Britain suffered economic stagnation, population decline, jobs were lost, people couldn't get medical care. The profitable routes were subsidising the unprofitable ones, for the benefit of all. Oh, and the cuts didn't fix the problem; British Railways were still £70 million in the red. Not everything is about profit. All those advantages you listed at the beginning for flag carriers? They're still real. Focusing entirely on the profit motive is a small-minded and failing approach.
The profitable routes often need in-feed from other routes, to become profitable. No connection to your start/end destination will make you finde other ways of transportation.
Oh I agree, we already seen those effects with the current Ulkranian conflict were European nations after decades of demilitarization are simply in a state that if things get worst, they cannot really match up fast enough since they destroyed their own reserves. The same thing happened in 1930 ... Another factor is the core of a nation, independence were in some countries that might not be that much of a issue to have a international carrier, in others are ... take Portugal for example, the Azores and Madeira are part of it but they are islands in the Atlantic, the argument about their profitability runs into the issue of each having a population slightly over a quarter of a million, how can they travel? should Portugal be dependent of foreign companies that are subjected to their own nation governments that could very well apply that as a means of pressure? After all Aeroflot is blocked and arguing about the fairness of such measure doesnt change it have been applied. And speaking of transportation, the US railroad passenger almost collapsed, Amtrak was created and despite its "for profit" it receives state and federal subsidies, they also have the "Essential Air Service" that exists so companies fly to small communities that wouldnt be profitable to do so otherwise.
Yeah...NO. Railways to remote zones are one thing. Air travel companies are another. I don't give a shit you pay more for your plane ticket, Mr Worldwide. And cancelled railway routes can be replaced with buses.
Hey Petter. As always thank you for the great video. On a similar topic, you could do a video about the bust of the brazilian air lines in the 1990/2000.
Garuda Indonesia in Indonesia also faced similar struggles. They've been struggling since the 1997 Asian financial crisis followed by a lot and a lot of controversies and accidents namely a human rights activist murder and several accidents leading to the ban from EU. Early 2010 was kinda better, with restructuring and EU ban lift but the pandemic hit them hard and is constantly reporting losses as of now. Around 2 years ago Garuda was planned to be replaced by another smaller airline called Pelita Air which is also state owned but it was decided that Pelita Air were to focus on the domestic markets. They went from flying oil and only have several turboprops to obtaining AOC and ordering a dozen A320.
Profitability is just an accounting exercise. As large groups gobble up small, we're just back to a monopoly, but with companies owned by a handful of people rather than by citizens. Then they have to be broken up again, and the stupid, inefficient cycle continues.
SAA should also be on that list. The South African taxpayer has had to bail this company multiple times but they still lose money and are making it extremely difficult for private carriers to compete as they get no handouts.
Rocky Balboa: “It Ain't About How Hard You Hit. It's About How Hard You Can Get Hit and Keep Moving Forward.” What makes us unique is how we overcome that. Everyone should find their own ways without any pressure!
If you could look at airline companies in the U.S like Spirit Airlines and other carriers and how they operate and survived and also look at the Ground operations mostly the Ramp and why airlines are splitting up the costs as to who can run the ramp
Hello Mentour Pilot. I’m a huge fan and I really enjoy your content. Here are some news from my country. Today this early morning in Lithuania a DHL cargo Boeing crashed. They are doing investigation but there are casualties. Thank you for your time.
I feel like option (A) is the government is loosing money with airlines or option (B) corporations are loosing money with airlines, and then get government money to continue operating. I personally prefer option (A) because government money isnt used to feed the owners, the CEOs and the stock holders.
Interesting timing on this since I am flying Lufthansa tomorrow for the first time in about 20 years. I normally fly Delta everywhere (I live in Atlanta) but Lufthansa was a few hundred dollars cheaper for my round-trip to Germany.
The state-owned airlines lived in a cozy, feather-bedded IATA world where the taxpayer paid up while the employees enjoyed protected employment. The arrival of Ryanair and the like into Europe's open skies policy revealed to taxpayers just how much padding was in place. Where state-funded airlines get further money (like Condor) should have to forfeit landing slots. While you mention Aer Lingus, it is as you mentioned, long no longer Irish state owned and is part of the same group as BA and Iberia.
Condor is no longer state-owned but is owned by Attestor and is competition for Lufthansa, bringing some healthy diversification for the German market.
Ryanair have made multiple attempts to buy Aer lingus, on one occasion offering 40% more than the airline was worth. The state and the EU have blocked the purchase before based on anti monopoly regulations etc, but its only a matter of time before Aer Lingus fold or are absorbed into another carrier, possibly Ryanair. Last time I flew to Ireland I could have used either carrier, but Ryanair cost the same as Aer Lingus but the flight time was half that of Aer Lingus due to aircraft type used. Also Aer Lingus aircraft often struggle to land at my local airport in adverse weather, whilst the much Larger Ryanair aircraft have no problems what so ever. I dont mind being treated like cattle when Im only in the air for 30 minutes.
You missed the Cathay group when its regional subsidiary Cathay Dragon ceased operations, and its A321neo orders were transferred to its parent company, Cathay Pacific.
Wizz Air is owned by Indigo Partners which also owns Frontier Airlines, JetSmart and Volaris. Granted these are operating on different continents, but they have a combined fleet of more than 400 aircraft so by your metric they are not a small airline group.
I have a hard time understanding how allowing several competitive companies can really be more efficient than a fully managed and funded route exist. It seems like "deregulation" spurred competitiveness, at the loss of quality, but that only leads to future monopolization of the market. It seems that it would be far more efficient to have well regulated and well managed routes. I can see that the main issue is that each country wants to control and manage their own route, but in the end it seems that moving people is more likely a public service than a private gain/loss business.
One of the biggest issues with a lot of airlines, is that they privatize profits and the public takes the hit for the losses. Before the pandemic, airlines were making money hand over fist, and within weeks of the pandemic, the talk of bailouts began. As soon as the pandemic ended, airlines were back to making money hand over fist and handing those profits to their shareholders and executives, and it will only be a matter of time before they have to layoff employees to "remain profitable" rather than learn their lesson. If a business is not capable of managing their company, then they go under and so be it. It also doesn't help the big airlines have bought out all the regionals and there is very little competition in the market anymore.
You can look at South African Airways also the type of story as AlItalia. Also some LCC's in South Africa who closed down: Sun Air, Mango, British Airways Comair, SAA Express who was affiliated with SAA.
A video about Turkish airlines please, how exactly they didn't struggle much during pandemic and their profits skyrocketed since then. Their business model is quite unique among flag carriers with the most international routes worldwide which explains it a bit. But why other flag carriers can't adopt similar models?
I can look at them but I suspect that the fact that they can still fly into Russia, when other European carriers don't, might have something to do with their recent success.
@@MentourNow Hmm, checked their routes for clues. They are only flying to three destinations in Russia, St Petersburg 21 flights, Kazan 7 flights and Moscow 42 flights a week. While they fly to 4 destinations in even Kazakhstan and they have both more destinations and flights into Saudi Arabia than Russia. They have 328 routes worldwide that all of them are direct flights from Turkey, it is really an unique model no other airlines is using as far as i know. I'm sure still flying into Russia increased their profit but i really doubt the bulk of their income is coming from it.
Another European two that on the surface looked like they went bust were Sabina in Belgium and Swiss Air in Switzerland but in reality, presumably via government bailouts Sabina became SN Brussels and Swiss Air became Swiss International.
Transportation is a vital strategic interest of any country. The ability to ensure the freedom of movement and access to travel for your citizens and transportation of goods , independently of other nations' interests, is much more vital than aviation industry profits. Which is why i disagree with the final statement "this is how it should be". However, chronic mismanagement by governments and the use of flag carriers as vote production machines for political parties, have caused this essential function to be reduced to just another product to be sold and bought. It is sad, but that is what happens when governments don't really care about the interests of their country. There is a price to be paid.
In the US, we need more competition among airlines, not more mergers. My home airport is DTW. For a lot of destinations, Delta (or a regional airline serving as a Delta feeder) is the only nonstop to many destinations. For those routes, Delta can charge whatever they want. Pricing is much more reasonable on routes where Delta faces serious competition. I was unhappy to hear about bankruptcy at Spirit Airlines last week, because they compete against Delta’s service between DTW and TPA. That’s a flight I take relatively often. This is not a new problem. Prior to its merger with Delta in 2010, traffic at DTW was dominated by Northwest. Before its 1986 merger with Northwest, traffic at DTW was dominated by Republic Airlines.
Could some of these flag carrier airlines be considered a loss leader for their respective national economies? That is to say, do Alitalia, SAS, etc generate more economic benefit in their home countries than they consume in subsidies paid by taxed citizens? Many national postal services and municipal public transit agencies are such entities. Personally, I think we have an unrealistic expectation that these organizations are going to make profit when their real benefit is in enabling the greater economic web.
A broader economic benefit is a "traditional" argument for loss-making flag-carriers, yes. How that "squares" with competition, etc, is debatable, though.
That’s exactly what happened, though Mentor didn’t mention it. This issue isn’t limited to the airline industry, it’s also prevalent in the high speed rail industry, ocean carrier industry, and others. Essentially it happens to any industry that is critical to national interests while being extremely cost intensive. In fact, some countries such as China apply this strategy across nearly all their critical industries, including EVs, green energy, semiconductors, and more.
There are also the South African ones like Kulula, Nationwide, Mango, FlySafair is on their way out soon too. The only ones that seems to make a lot of money appears to be the Airports
Very limited time Black Friday deal: 20% off on all Hoverpens and free shipping to most countries with code MENTOUR:
North America / UK / Australia / International: bit.ly/novium_mentour
EU: bit.ly/noviumeu_mentour
Some nations _need_ to keep special service, because the lack of other outside connections or because the connected community is so small. I think e.g. of St. Helena or several islands at the European coast. I think, there it is legit, if the state is providing the service to keep these communities alive. For remaining? where competition is not detrimental to the service and customer, let it flow.
this channel is the most advertisement heavy channel ive ever seen.
@@AnomymAnonym Really?!?
Thank you for the upgrade on your sponsorship.
@@AnomymAnonym How do you make money?
British Airways was described as "a pension scheme with an airline attached". While for others flying seems to be a side hustle for their loyalty programs.
BA is doing just fine
At least in the US, most airlines are credit card companies now. United's loyalty program was worth more than the whole company when they put it up as collateral in 2020. (So the actual airline is worth negative money.)
@@the_ratmeister Air Canada as well.
That's true of a lot of business. Warren Buffet called General Motors "a health and benefits company with an auto company attached."
@@christophermcdonald1122 Well, I guess we return to the 1930's, pay our workers nothing, kill them in the plants with dangerous conditions and call them lazy or inflationary when they say 'please sir can I have some more.' Even a cantankerous Henry Ford realized that folks don't have the money or the time to buy the products there is no profit to be made.
Warren Buffet's opinions are hardly relevant/considerate to the state of the working person in America. They voted for Trump in part because even though there were lots of jobs produced under Biden, many aren't the kind of jobs that make life any better.
When will leaders realize that giving the corporations breaks only 'trickles down into their pockets and that of their shareholders'. Give the middle class working folks decent pay and benefits and they will SPEND on lots of things and companies will be profitable. We are in for 4 years of corporations feasting on lower taxes and regulations. I honestly doubt that the average person will notice the difference. The country is not only run by Congress, it is also run by 100's of large companies that control much of our every day lives, run by folks we have never heard of whom we never voted for. Nothing is going to change because the selfish people are good at it.
I loved Alitalia. Whenever I booked a flight with this carrier, this flight would be cancelled and I would be put on an Air France or KLM flight, usually business class because those were the only seats available, for the price of a low budget carrier and off course with all the extra's that I was "entitled" to have as a business class traveller. This also brought me to airports that I would otherwise never visit. On the other hand: TAP = Take Another Plane.
What a steal, getting a business class seat on another airline because you knew your Plan A flight would likely cancel!
Alitalia = Always Late In Take-off Always Late In Arrival
Although I had only good experience with TAP though. 😂
Air Itália didn’t exist… you are sleeping…😴🥱
@@NATUREPRESERVER You are right about the existence , not about the sleeping.
Difficult to understand why so many entrepreneurs are attracted to the airline business. I guess it's glamorous and high-profile, but boy is it difficult. It's enormously capital intensive. It's enormously complex. You're at the mercy of fickle regulators. You're at the mercy of the price of oil. You're at the mercy of a host of subcontractors. You need to attract and retain highly skilled and highly paid employees like pilots and engineers. Training costs are sky-high. New entrants are faced by established competitors who dominate the best routes and enjoy greater economies of scale... I could go on for some time. So the failure rate is frightening - and failure can be very, very expensive.
Agreed. I'm just amazed that the aviation industry even works at all. You have stories like that of the A380, which failed because of a paradigm shift that its creators didn't see coming, I mean, processes in this industry overall are so slow, and the conditions in which the industry operates can change so fast that I just don't even know how they're able to keep it going.
Money laundering?
Because it always gets bailed out. The industry is too big to fail.
@@PixelatedLlama The industry is too important to be profit-driven.
Ego. They all think they are gods gift to business and they are going to fix it.
I remember the "good old days" flying for business in the USA. I always tried to fly TWA whenever possible. Many times I was able to get a $50 upgrade to first class, at the gate, just before boarding! One of the reasons we call them the good old days; right? Great work Petter. Thank you.
I'm glad you enjoyed it, thanks for sharing!
Back when alcohol was served on flights for cash I always went aboard with a wad of ones, fives, and tens, and let the greeting cabin crew member at the door what I had and where I was seated. Many free drinks for my friendly helpfulness.
It depends on your definition of "good". I used to fly from TN to TX a lot on business in the mid 70s. The cost of ticket then is about the same number of dollars as today, not counting inflation. It was much more relaxed BUT it was a LOT more expensive.
@@johnstreet797 "friendly helpfullness" my new fav way to say bribing
Dad worked for American Airlines and we always traveled standby in the 60s and 70s. Otherwise we could never have afforded buying tickets to fly!
Totally understand, I got spoiled traveling up front for virtually nothing. I got to do a lot of transatlantic flights which was nice while it lasted.
How long would you usually have to wait until you got put on a plane?? 👀😮
@@MrNicoJacit's a game of luck and chance , we can see the load of the aircraft when booking standby. people cancel or miss their connections or even not make it to their airport u have a seat open for u !
@@MrNicoJac don't try to use standby on lufthansa if something like a large soccer game is happening in germany and you plan to fly there from klax otherwise probably ok if you just 1 person
His Italian is so impressive that made me open a bottle of wine and start making spaghetti
Make sure the wine is al-dente and the spaghetti are properly cooled.
😉
It made me make a hawaiian pizza
Mama Mia!
What 😂
Wow! No dried product for you -- you make fresh spaghetti, do you? What a hero!
One commented that they are sipping their evening whiskey, while another commented they are sipping their morning tea. I'll watch while sipping my afternoon coffee
Sipping morning whisky here.
@j_taylor that's the way to go 😎👍
and I'll reply while casually drinking water
I prefer baileys in my coffee, but to each their own :)
I have nothing to sip but water 🙁
I'm a fan of the old radio show "Yours Truly, Johnny Dollar". In one episode from the '50s, Johnny paid $1500 to fly from Hartford to Manila. That's nearly $20,000 in 2024 dollars. Air travel was reserved for the elite. Now you can get to Manila for less than $1500. What passengers paid in the 1950s is the essentially same dollar amount they pay today, which is pretty amazing!
Was it simply deregulation that changed the exclusivity of flying?
One of the problems with Pan Am was they had no domestic routes.They where not allowed to fly domestic routes.When deregulation happened they had to merge with National Airlines quickly at a very high cost.
Italian here. Thank you a lot for NOT butchering our language when talking about Alitalia! Good pronunciation!
If an Italian pilot loses their radio, how can they talk to the copilot and still steer the plane?
@@saxtant simple by speaking without hands...🙄
@@saxtant gestures
@@toraxmalu such a kill joy or simply you don't know anything about Italians?
@@skawel1 well, i know from my italian relatives: they _can_ speak without hands - but they _prefer_ to express themself _with_ hands, of course :D
and yea, i am living in the land of the krauts ;)
It's so fascinating that most airlines actually survived the pandemic. Even Lufthansa needed state support with the German gouvernment buying stakes of them. Ultimately, the German state sold thier stocks later with a huge profit, but there were pretty polarized discussions here about that in the first place.
Same with KLM with a loan and polarized discussions. But it was paid back in full by summer 2022 already.
I do think that a subsidized airline for domestic routes that are necessary but not profitable makes sense. For example, I live in Canada, and there are many northern communities in Canada that are only accessible by plane or, for parts of the year, only accessible by plane. Ensuring that these communities have regular access to the south may be necessary and also cost-effective compared to alternatives. Like if people who need medical care in the city are able to get a regular commercial flight, even if it's subsidized, that might be more cost-effective than paying for chartered transport every time someone needs medical care beyond that available in their community. (Of course emergency airlifts would still be necessary sometimes, but there are lots of situations where a local clinic cannot handle it, but it's completely appropriate to put the patient on a commercial flight in a few days and have them see the specialist in the city.)
Similar case here in India with SpiceJet. Founded in 2005, older than India's most popular airline IndiGo, it had completely ceased operations for a day in 2014, bounced back after the original CEO took over. Post pandemic, it had multiple safety incidents and half of its fleet grounded by the DGCA. Recently, everyone believed it was their end due to their unclean planes and bad reputation, but surprise surprise, they are looking to expand today.
On the other hand, Go First was a similarly aged airline which had a spotless record and survived the pandemic, but got done in by the P&W engine issues on their full A320neo fleet.
It will be worth watching Air India. It's undergoing transformation under Tatas but it remains to be seen if they still have the nous to run a large airline. They are far from making any money yet.
I think it was the name. People thought the Spice Girls were flying the planes lol.
@@tiwaringp so funny when on the route to Hong Kong, Air India is advertising what percentage of entertainment units were fixed since Tata take over - and you look around and almost none of entertainment unit work :)))))))))))
People still tell stories how their US-India flights were cancelled just last minute and they were almost physically fighting with staff pretending there is no problem, completely rude and almost insulted that passengers are asking for hotel, compensation and when the new flight will be.
There is really great book 'The Descent of Air India' by former high ranking manager Jitender Bhargava. the stuff he is describing and mechanism prevalent during Air India descent...just unbelievable.
btw. I would not even check Spice Jet schedule and prices when I fly. Why the headache? Straight to IndiGo - low cost but reliable, and more comfortable on the routes I am flying than let say Wizz Air or Ryan in Europe.
Air india face similar issue also worker strike and flight cancellations come from no where
And Indians mostly consider Emirates and Etihad air arabia indigo as their flag carrier because they are more punctual
I love the fact that while the Lufthansa group is profitable, Lufthansa itself isn't. Swiss is by far the most profitable airline in the group.
This is wrong. The latest report for Q3 2024 states that all airlines in the group where profitable
Swiss was not profitable - search 2. Oktober 2001
Fun fact: the most profitable division of the entirety of the LH Group is Lufthansa Industry Solutions, which basically sells historical air transport data, ticketing systems, management software and so on to other airlines around the globe.
Same applies to Lufthansa Technic...people put LH on the same level as Air France/KLM or IAG, but they're on a completely different scale.
@@nickpick5735 good we live in 2002
@@mariadasolva9102 maybe, but in q1 and 2 of 2024 Lufthansa airlines made a loss
This is exactly the kind of content I subscribed for-fascinating! I can see this evolving into a series with occasional deep dives. Thank you, and keep up the great work!
Awesome, thank you!
What about AirBaltic? New, nice fleet, they actively carry Latvia's flag into sports or military events, carry home national sportists, bring tourists to Latvia and carry country's name around etc.; Their CEO gets big salary, while from time to time he asks from governmental fund injections. Is it ok?
Air Baltic is profitable. Although they have a much larger fleet than they need, particularly in the colder months, they leased out their aircraft to a number of other carriers. It is not at all unusual to see Lufthansa group services, especially Swiss, being operated by Air Baltic aircraft.
A brief history of Alitalia:
- first one was formed with the merger of Alitalia and LAI (linee aeree italiane, literally italian air lines), this is why the "first" alitalia up to 2009 is named Alitalia LAI
- in 1960 for the Rome Olympics they became the first major european airline to have an all-jet fleet, with Sud Aviation Caravelles and DC-8s
- Alitalia remained distict in Europe for being basically an all McDonell Douglas airline, from the DC-8, trought DC-10 and DC-9, MD-80 all the way to the MD-11
- they had by far the best in house cadet pilot training in Europe, based at the super windy and tricky Alghero airport (same place where Piaggio P180 are built), on top of this, the core of the captains where all air force veterans, ex F-104 (the flying casket) survivors
- famous prime minister Berlusconi stopped the merger with Air France because he knewyou can't do business with the french. If a company is between nations, the french governament will always work to screw the foreign part and preserve the french one. For proof, do you know which was the Dutch governament first c0vid decree? Medicine? Masks? No. Buying shares of AF-KLM to have ownership parity with the french governament, otherwise all the emergency cuts would have been done only on the KLM side.
- in 2009, the "new" Alitalia CAI is born (CAI compagnia aerea italiana, italian air company)
- too much meddling form politics, prime minister Renzi tries to solve the situation by selling 49% to Etihad
- a "new new" alitalia is born, Alitalia SAI (società aerea italiana, italian air corporation)
- Etihad only stuck its nose in to lease out old planes at outragious rates to Alitalia and steal all the precious slots Alitalia had from its history. Guess why ITA doesn't fly to Heatrow anymore? Yeah, Etihad stole all the slots.
- ITA the new arline stand for Italia Trasporto Aereo, italian air transportation
@@luca7069 not just Renzi… LucaLuca CdM? Forgot him?
One of the challenges of Alitalia was/is routing. It's kinda hard to make money flying between (for instance) Rome and Milan, since there's the Frecciarossa. Likewise for many other city pairings up north. In the south people tend to have less money, so while yes there's less competition due to the government's relative lack of investment into rail it's harder to turn a profit particularly in the business market. A lot of the north-south routes that are run now are by low-cost carriers targeting holidaymakers, but despite that the train is usually still cheaper if you're not going more than halfway across the country. Particularly if you use an Intercity rather than high-speed train.
LOT Polish Airlines USED TO BE in that group but then they became profitable when the Polish government has restructured them. Poland has elite pilots - Polish pilots are basically a national pride and have been for ages, and this is why Polish flag career - LOT - will persist and will never be abandoned - after restructuring they became healthy as hell
Same as the military. Can't rely on NATO.
And Putin? Incalculable 🙄
Polish aviators are known for their aeronautical skill regardless of what country they fly in. I have trained and flown with many Polish pilots, and they stand out for their knowledge, airmanship, and leadership abilities.
It was a Polish pilot that flew the Polish presidential airplane with the Polish president and several other top officials few years ago and did a CFIT.
I do not fly much, but the few times I had to fly international, LOT has always been one of my go to airlines to check because of their good value for quality, reputation and modern fleet. I don't hear them mentioned a lot, so I consider them a bit underrated in the European market. Unfortunately the timetables were never favorable for me so I have not actually flew with them... yet.
I'd love to see a dedicated episode of Finnair as a company. A some way the kind of oddball in the game. Maybe some kind of deep dive to its history and fleet choises and adaptation to changing business envitonment during past decades.
I hope Finnair will survive the closing of Russian sky and resulting loss of competitiveness to Chinese airlines! I soon plan to fly to Japan, I specifically bought Finnair tickets, to first, fly over the North Pole, and second because Helsinki is just convenient for me as a starting spot (and thirdly to just support a Europen company), but price difference was 850 vs 500 EUR, and flight time was almost the same, despite transfer in Bejing...
@ivankuzin8388 i am also hoping that they get through of Russia closing its airspace, and find new ways to make their business thrive. Polar route to Japan is something I'd love to experience, but for now that' not financially possible. Maybe later, hope so 👍 Really love Finnair, and Japan too ❤️
@@maalaistollo BTW, prices I mentioned were for return journey - so comparatively inexpensive, if buying several months in advance, and compared to prices to SE Asia or US, for example...
I believe Finnair remain profitable by us OneWorld folk on AA, BA, Iberia, Qatar etc. flying to HEL and back multiple times a year for no reason for status to get to Emerald :)
@@ivankuzin8388 I hoped this too when I flew to S.Korea, but sadly I got the south route. It made sense, but around the days that I booked, there were a few direct flights from Helsinki to Korea that took the northbound route.
It was a very pleasant flight (I recommend to ask for the blueberry juice at least once, it is delicious!) and the journey felt more like a casual train trip than an international flight. I was tired from traveling, but far from as exhausted state that i have experienced other times.
Helsinki airport was the most comfortable airport i have ever been (not that I have been to many) and with the funniest airport code (HEL.)
I paid about 550 for that (return) flight, including the 2nd leg from/to Amsterdam, but I got a bit lucky probably.
One difference in mentality is that US citizens don't generally see their major airlines as "flag carriers", even though they _de facto_ are. The biggest three airlines are more typically called "legacy carriers" since they originated during a more regulated period.
The fact that the US _has_ multiple major airlines has probably allowed the US to absorb the loss of one or more internationally recognized airlines more readily than countries with only one flag carrier. Which is one reason that the consolidation of airlines after 9/11 happened more readily here than it did over in Europe. Even after all that consolidation, we do still have three major airlines and a few smaller carriers to supplement them--some low-cost, some not. I suspect that if the US ended up with only one major airline we would do a lot more to protect it, the way other countries have done with their own flag carriers--but we're not there yet.
Well, US economy is of a size similar to EU as a whole, not of individual European country
TBF we did have a flag carrier once - Pan Am. Though it’s for the reason you said that the government probably didn’t see it a major priority to help them when they went under.
@@yamato6114especiall after deregulation. Mergers and Consolidation were allowed to happen because we had regional airlines at the time. Remember PAN AM was mostly international airline so when they went under their international operations and slots were sold off to the likes of American, Delta, and United and all the other regional airlines like NorthWest and Eastern Airlines. The process was fast compared to smaller EU nations with mostly intra Europe flights and long haul international operations.
One of the "smallest" airlines in the USA is Southwest Airlines, a mostly domestic airline. But "small" is a matter of perspective. Southwest has 800+ airplanes, more than most European Airline consortiums.
Actually the Surströmming business is tightly linked to the aviation business in the case of SAS: SAS has started to replace some of its fuel powered engines with ones that are solely powered by Surströmming. The downside is of course that the population living close to the airport have to wear a gas mask all the time.
🤣🤣🤣 I suppose you know that Petter comes from the region where they produce surströmming?
Fueled up with Hakarl ones, no need to fuel up with it ever again.
😂
@@FredrikGranlundkayaker I know.
How do the engines handle the corrosion?
@@peterfireflylund Surströmming is anti-corrosive.
My father also flew TWA for business. One of my earliest memories is waiting to see him at the then relatively new Saarinen TWA building @ Kennedy. He had been assigned to turn around the Italian plant there and was making preliminary visits, but we would be moving there a few months later. He even had one flight immediaty return due to birdstrike.
Once in Italy, my mother flew Alitalia exactly once and thereafter refused because they had ex-WWII fighter pilots flying and she never felt safe with them. Thereafter, we always flew KLM. Though I've never understood the willingness to merge w Air France, for cultural reasons.
Thank you for another great video!
Avianca is an interesting case, it is the second oldest airline in the world and has almost all its history been private, but still gets state support because it is one of the principal means of transportation in Colombia due to our difficult geography
The issue I have with forming larger and larger groups is monopolisation of the market - which is bad for the customer.
With that comes with a massive downgrade in services which you can already see with US Carriers and aviation industry.
There should be only one one airline for the world.
World Airline ✈️🌏🌎🌍
@@carlyellison8498 What a great way to control people and limit travel.
@@carlyellison8498 no trans-worldairlines (it is probably not pride month idk but i needed to make this pun)
And then when one of those huge groups goes bankrupt they claim they are "too big to fail" and need a bailout, making the tax payers pay for their losses while in better times the private investors get the profits.
Thanks!
Thank you!
I find particularly important your point on national diaspora. Here in the Canary Islands the tourism industry couses a lot of struggle for canarian people to return home. We basically do not have a low touristic season, which is why a two way ticket from France to Gran Canaria for the Christmas holidays could cost more than a thousand euros. Another thing is the connectivity, the lines are based on tourism prifitability so they become quite unstable, this is where national flag carriers come in. I've been in a position of deciding where to go do a masters degree and the decision was basically taken on whether Binter or Iberia operate to a nearby airport or not. On the Spanish scale it is becoming easier but only because os state payed reductions. If it wasn't for that a two way ticket to a nearby Island where most likely you are going to for a family visit could cost more than 200€ for a less than 100km travel.
Your final point about air carriers being absorbed by bigger carriers or die out altogether only works up to a point. In Australia we are seriously struggling for decades now with 2 main carriers: Qantas and Virgin Australia. Other carriers especially smaller carriers rise and fall and it's not just our regional towns that are suffering - even the bigger city hubs are such a monopoly that prices are skyrocketing, flights get cancelled constantly (because of slot hoarding)... ABC News Australia have several "Four Corners" investigative programs on this problem. Any time a 3rd carrier tries to enter the market, the two big guns covertly push them out.
LIAT (officially Leeward Islands Air Transport, unofficially Leave Island Any Time) is an eastern Caribbean airline that is perpetually on the brink. But some sort of regional carrier is necessary in this part of the world. With LIAT under repeated restructurings, and American Eagle having withdrawn from the region, it is often necessary to fly all the way to Miami to get to a neighboring island. Imagine having to fly 3000 km, often spending overnight, to get to an island only 300 km away!
Just as is the case with postal service, it is in the interest of a country to have air service to certain small, remote destinations, even if that cannot be done in a profitable way. But that should be solved by subsidizing particular routes, not the whole airline.
Feels like an okay solution to a fair point to me. Allthough most national airforces do operate VIP planes which could take over these remote destinations, without having their government be open to getting scammed by the national carrier on what the losses on those destinations are.
(Feels to me those remote destinations need to be reached for 90%by diplomats and tradescommittees or skilled personnel, which are all in the national best interest.)
The acquisition of Air India group ( includes Air India and its low cost division Air India Express) by the Tata group ( which operated Vistara airlines and AirAsia India ) in 2022 perfectly fits into what is mentioned in the video!
Hi Petter, thank you for bringing this topic up. My POV: 1 - You assume airline industry is something worthy of nice profits, but it is in fact a risky business, for private or public; a privite bankrupcy can affect connections to a country greatly. 2 - America deregulates the air transport however, airports are generally owned by the local municipality, completely opposite from Europe. Airports in Europe are private and where the big money is and so you have to include both in you analysis for Europe. 3 - Spoke and Hub systems rederect 2nd tier or peripheral countries/locations even further from the center, thus investing in airlines make sence (e.g. hawaiian or Alska airlines). Whould you depend your hospitality on Ryanair's Michael O'Leary mood?
Air Malta should be treated separately, as the country is one of the most corrupted, nepotism-swamped countries of EU. The over-employment of Air Malta was a result of these nation-wide trends (or properly said: 'tradition'). Hence: mismanagement is an understatement when applied to this airline.
Failed investments in bizzare, non-airline-related projects (mainly properties) can be turned into a long multi-volume novel...
But it was nice to see it being mentioned in my favourite aviation channel. Greetings from Malta!
You should mention Aerolineas Argentinas, Argentina's flag carrier. It has a very interesting history, has been groundbreaking in the past with one of the few transpolar routes and has very skilled pilots who land in adverse conditions in the southest airport in the world (you should check out some cockpit videos, the arrival is just wild and it used to be even wilder in the old runway). It was privatized, then nationalized again and has been unprofitable for ages.
I miss the old Alitalia livery, not gonna lie, I don't like the name or the ITA livery to be honest haha
Just to complement this comment, Aerolineas Argentinas is again under discussion in today's public agenda. The government is pushing for privatizing it again, based on continuous losses over the years and its decision not to continue funding its operation, which in addition had the advantage of plenty of regulatory benefits which prevented other airlines to consolidate and compete in equal conditions. The unions and the opposition, on the contrary, emphasize the "flag carrier" status of Aerolineas Argentinas, and justify the need of a national company to link a large territory such as Argentina, where only a few domestic routes would be profitable, and therefore many cities would lose their air conectivity if left to market-driven decisions.
*How about VARIG? They used have an office in Stockholm Sweden opposite the Stockholm Central Station near the Sheraton.*
It's pretty impressive how long they kept Alitalia going, it never had the same prestige outside Italy, it was less optimally placed to serve as a hub airline, it had to deal with splitting operations between Rome and the richer north of Italy (why would you fly from Milan to somewhere in North America via Rome if you could fly via any other european hub or even directly on a US carrier), and its domestic market was torn up by high speed rail and Ryanair. They honestly had no business staying around as long as they did.
As for consolidation, i think we are getting to a point where there is soon going to be a lack of competition on many important routes, so I am not very keen to see the behemoths grow bigger with every few years that passes.
To reference 23:00
In Norway we have a carrier, Widerøe (Wideroe)
They operate the Dash-8 variants and are key for transport in Norway
As were a long country with a sparce population, especially in the north, they’re given state funds to enable them to have lower prices thus easing the cost of travel between the small airports in Norway and making it accessible and suitable to live in these small places. Just recently they halved their prices on these domestic flights though state subsidiaries
We've cheapened flying so much it's impossible to survive as an industry without state support. I can fly to Marrakech from London for less than £50 yet pay £185 for train ticket to Manchester!
Ryanair and other LCC's are thriving without state support.
Or maybe you could call it hidden support, because where most countries have some sort of way to tax the use of fuels for roadtransport, the airline industry is totally excempt of paying more then price on kerosene. In my eyes a total unlawfull way of sponsoring airtravel.
No European or US airlines get subsidy
Given how some European governments are acting, they want the airlines to fail. Just look at the insanity of the UKs APD tax. There are lots of people who no longer go to the UK as a direct result of the extreme rate of that departure tax.
@@charleskennedy1712in the same way the uks channel 4 doesnt. "Make a profit please but if yoi don't well bail you out"
Train infrastructure is expensive and there has to be a lot of it. Kilometers upon kilometers. Essentially zero passenger train lines left without massive subsidies. We should fly more instead.
The new SAS structure is... interesting, to say the least. You have an airline conglomerate (Air France-KLM), a foreign investment fund (Castlelake), a Scandinavian pension fund (Lind Invest) AND STILL a state participation (Denmark). You have a relatively balanced representation of investment interests with views set on growth and even a stock market re-listing (in 2026 at the earliest, it seems) BUT with a seemingly uneconomic imperative of prioritising a certain hub (Copenhagen) while balancing the other two (Oslo and Stockholm, where airport consolidation is going to spice things up) and with the added question of where the company is to be headquartered. It's going to be a fun ride!
Yes, but does Denmark really own Greenland?
This is no different from the mid 1980’s when a lot of carriers closed. Many of them started after deregulation and couldn’t survive. It wasn’t just small airlines, we lost both Eastern and Pan Am which were legacy carriers. I worked for four airlines in a period of about seven years and they all went bankrupt. Needless to say, I changed careers.
Yep. Deregulation meant goodbye to the cozy protected world of old and hello to the brutal shark tank that was the free market. Pan Am was at a major disadvantage from the start. Already battered from the fuel crisis and having no experience in the domestic market, the airline quickly crumbled under the competition.
Many small Caribbean airlines were at least partially state supported in the past. That way, they didn't just have to depend on the whims of large airlines from foreign countries for a connection to the rest of the world.
I think it is important to have a flag carrier. My first ever flight was with Alitalia back in 1976. We also frequented Pan Am and TWA in our two years living overseas. Over the years, I have flown many airlines that are no longer flying. For me, it is a sad day when a historic airlines goes under. With that said, all businesses need to turn a profit and if you can’t…
"all businesses need to turn a profit." That is actually not given. Or to be more accurate, sometimes it is not necessary that a given enterprise is fully a business
@@dmitripogosian5084I think you can use the frase “all business need to turn a profit”, you just have to consider some service companies not business, healthcare, local transport, trash disposal, street cleaning, police, firefighters and you can add whatever you want to the list, if it is needed to the people it can lose money to operate better. I don’t have a strong opinion on air travel but I think that in every sector if there are only two options: 1 helping a company that is going bankrupt or 2 letting only one company have all the control in a market ( because RN there are 2 and one is bankrupted) I believe the best option is 1
I absolutely love your pleasant narrative of such a complex subject as aviation. I always watch all your programs until the last minute.
South African airlines is another great example for this.
Indeed.
So very true!
Dudu Myeni, and Zuma injection billions in it without progress.
It looks like new they are slowly moving forward.
Ithink that there are a couple more factors that are worth mentioning. Strong unions and strikes have a big impact on profitability. Also pricing of airport services reduce profits. Being able to use low fuel prices does that as well. Only big international airlines are able to bolster against one or multiple of those factors. Beimg able to have credit lines for more fuel efficient aircraft and leverage for early delivery is also a mayor plus for the big players.
4:19 While I obviously can't speak for the entire country, of all the people I've ever discussed this with nobody ever thought that was ok. What happened is that the company's management ran away with an enormous (relative to population and area of the country) fleet, infrastructure, many contracts and fixed-wage labor - that is to say, all the good things - while discarding all the debts upon the general population for it to figure the mess out. Yes, we ended up paying the same as we did before, but now the state-owned part (the one that had regulated prices and schedule guarantees fixed by the appointed government) was essentially at collapse and for all intents and purposes useless, while the good part was free to increase prices and/or cut routes/schedule, meaning that we paid the same for significantly less. As far as I remember (i am relatively young) the biggest reason for rhe struggle in finding a buyer was that the union demanded strong guarantees for the existing workforce, meaning a more disadvantageous purchasing contract that fewer airlines were interested in taking (edit: as other replies have pointed out, while this was an important factor, it was not the only one, with political issues arising on earlier attempts to sell off the airline). This is actually fairly common for foreign acquisition of Italian assets, even outside the airline industry.
Eventually the LCC sweep meant alitalia was made largely redundant in the european market, with a ryanair ticket costing much less of an equivalent alitalia/ITA ticket.
Not a critic or anyrhing, but hopefully a bit of insight into the situation!
I was going to write exactly this (Italian here). There were many airline groups interested in Alitalia (either purchasing it whole or just a stake), but they all had to deal with union demands. I'm convinced we need unions, but in Italy at times they have way too much leverage on how a company can manage the workforce, leading to a lot of wasted resources, monetary and not.
I must also say that Alitalia always had a "why would you fly with them?" kind of aura, other European airlines were often percieved as better (equipment, personnel, overall efficiency): some was due to inaccurate/false stories (like how Alitalia airplanes weren't shielded against mobile phones and therefore prone to crashes...yep, that was a story going around in the early 2000s), some due to a general distrust of big Italian companies, and some due to true stories coming from the airline (like theft in baggage handling or overly long layovers for international crews).
Workforce power was a thing , but politics matters a lot. If you remember, alitalia was almost sold to KLM/air France in 2008 but berlusconi was against it and did what he could to stop the affair. Remember then the CAI (capitani coraggiosi 😂) and so on.
@@gerryino Unfortunately in 2008 I barely knew who Berlusconi was and instead spent most of my time reading Topolino. I guess I should have better specified what "relatively" young means 🤣
Thanks for pointing that out! I will add to the original comment, and will further research the pages of history that I missed or could not remember!
@@alessandroceloria 100% agree. Non potevi descriverla meglio.
Se poi ci metti il fatto che decenni fa era un vero e proprio serbatoio elettorale, e che “se voti per me ti faccio entrare a te e tutta la famiglia in Alitalia”… Ci siamo capiti.
Thanks so much Petter for including Alitalia!! I remember leaving a comment about this a few months ago and it’s so nice to see that it provided some inspiration for content ❤
OMG, 1970s air travel! I remember my grandparents jetting to Spain and Italy. As the orphan son of a miner and the 9th child of an Irish peasant, this must have been mind blowing. Whereas today we pop to Barcelona for the weekend!
This video came out as I was sipping my morning tea. Perfect timing petter🎉🎉
Fun unsubstantiated factoid: the Alitalia-KLM deal was said to have been scuppered because of socks. The Dutch apparently showed up wearing cheap short socks. When sitting down the trouser legs moved up a bit, showing bits of the leg. The Italians, wearing regular longer socks, apparently found this a deal breaker. Again, something I picked up at the time, not sure if true.
Some airlines do go under sometimes, like Slovenian Adria Airways. Maybe a video about those in the future?
Czech airlines went out of operation about a month ago.. However, they had been ailing for over a decade due to incredible missmanagement.
Many years ago on an Alitalia 757 my seat detached from the rail 😂 but it was fine as the aircraft was almost empty… mental airline !!
That's just the italian safety feature, you're alright
just pick another seat. 😅
now you know why the pope always kisses the ground when he disembarks😁
I believe AZ never used 757s…
@ was definitely a big Boeing maybe sixty seven, it had a big kitchen and TV
Fascinating..love this supplemental series. Airline industry has always been a bit different than most others. Was always curious why in usa there used to be so many Regional Carriers despite the fact airline travel was primarily for the wealthy and business traveler. Now as you mentioned leisure travel is the driving force behind profitability. Deregulation and then tge emergence of LCCs have certainly recalibrate this industry into a more free market economy which in general is good for the consumer. However we hope the LCC can survive as we don't want to get to a point of Oligopoly or Monopoly where pricing can be controlled by the Companies themselves rather than the market.
The free market is never good for the consumer in the long run. Communism isn't it either I know that but we need to keep experimenting we need to find something that works better. Because the free market always tends toward a few big companies owning everything suppressing wages, raising prices and buying politicians to protect themselves. Just because it's the best system we have doesn't mean it's the best system possible
Sabena (Belgium) is a cool story to! They flew unmarked boxes to afrika. These boxes may or may not have come from the rifle industry in Belgium.
King Leopold's ghost rides again!
@@barbarawilcox182Well, he was already dead when Sabena was founded…
Somebody in the comments is sipping their morning tea, I'll be watching this sipping my evening whiskey. Thanks for the vid as always, sir.
I'm doing that drinking a guava juice
@@istochnikov45257 is it any good?
Tack, this talk was very informative. Cheers
After seeing what happened with TWA, American, Delta, PanAm, Piedmont and US Airways, I now realize they all still exist in some form, but the prevailing brand name is what we see today.
American took over TWAs fleet, US Air and Piedmont became US Airways, American were going bankrupt and US Airways “merged” their money to AA along with their execs and kept the AA brand. So really US Airways is AA, Piedmont and TWA. I actually flew on a TWA jet in 2019. An MD-80 in AA paint.
Delta are for all intents and purposes Delta and PanAm, but no PanAm jets exist today (which is surprising given how old Delta’s fleet is).
I’d be interested to know if TWA, PanAm crew/FAs are still around as part of AA and Delta. I know Piedmont, US Air crews are still with AA as I know many of them. Maybe some FAs from TWA and PanAm are still around.
I remember flying in the 90ties with American Transair, from LA to DC. Was a redeye (learned that one some years ago) and had a stopover at Chicago at 4 AM.
Any idea what happened in the mergerworld?
I wonder who absorbed Eastern Airlines.
@@Grasshoppertrish Eastern Airlines was liquidated with assets going to a number of airlines.
Delta is more Northwest than anything else nowadays. That's where a bunch of it's older generation airbus fleet comes from
@@Dirk-van-den-Berg According to Wikipedia, ATA went bankrupt in 2008 and some of their assets (such as airport slots, as well as their name and logo) were eventually purchased by Southwest (though this did not include their aircraft or staff).
I knew much of what you explain in this video but you recap it so well as always Peter! Bona feina!
SAA has Announced that it made a Profit 😅😅
Chronic example 😂😂
Read that this morning. Their issue was also mostly political interference (route networks / BEE etc., etc).
You missed PIA. It’s amazing how that airline is still around
I am surprised you did not mention Air India at all
There are many that could be mentioned.. I’m talking about the principle
Ya me too 😂
the main issue is that unchecked consolidation leads to monopoly. if it reaches a point there is only one airline serving an area, then they can set whatever price they want, and people only have the choice of take it or leave it.
the statistic I would be interested in comparing these chronically distressed airlines to others is their cost per mile traveled, and what factors resulted in it being different from more successful airlines.
AeroSucre just knocked off the ILS system in Colombia/Bogota's main airport a couple weeks ago (november 10) 🙄😅
Sucre is famous, even on this channel
Shit happens but business goes on as usual!
3 minutes of aviation is the way to go
When you get a few of these large corporations buying out the smaller airlines competition goes down and passengers end up paying waayyy more for their tickets. Competition is always good, monopolies are not.
My home airlines Air India is great example of this. Politicians kept ruining it for years. When it got privatised, the government acted as if they solved a problem, but not mentioning that they themselves were the problem.
I understand you ,Same here in Pakistan my Indian Brother.
On the private side in India, Spicejet has become a zombie airline in the past few years, they seem to be struggling constantly.
I appreciate your hard work. Thank you.
Transportation and communication are essential functions of government. Governments build roads, governments run bus routes, governments build bridges and railways. And a lot of the time, these roads and routes and bridges don't 'make a profit' - and that's fine. They're not supposed to. Not everything has to be about profit!
How many horror stories have we heard about airlines cutting corners in the name of 'cutting costs' to increase profits? In 1987, British Airways was privatised. Three years later, in an effort to 'cut costs' and 'improve profits', an engineering supervisor was working alone, overnight, without proper equipment, lighting, or workspace, to change the windscreen of a BAC-111. In the name of getting the job done quickly and 'efficiently'. Remember what happened when that aircraft got up to altitude??
In the 1960s, the chairman of British Railways decided to axe 22% of Britain's rail routes, because they "weren't profitable". Great plan! you no doubt think. That plan saved £30 million per year. Thing is, those routes were often the only access people in rural areas had to efficient transport. People relied on them to get to work. As a result, rural Britain suffered economic stagnation, population decline, jobs were lost, people couldn't get medical care. The profitable routes were subsidising the unprofitable ones, for the benefit of all. Oh, and the cuts didn't fix the problem; British Railways were still £70 million in the red.
Not everything is about profit. All those advantages you listed at the beginning for flag carriers? They're still real. Focusing entirely on the profit motive is a small-minded and failing approach.
Marxist approach. Just sick.
The profitable routes often need in-feed from other routes, to become profitable.
No connection to your start/end destination will make you finde other ways of transportation.
Oh I agree, we already seen those effects with the current Ulkranian conflict were European nations after decades of demilitarization are simply in a state that if things get worst, they cannot really match up fast enough since they destroyed their own reserves. The same thing happened in 1930 ...
Another factor is the core of a nation, independence were in some countries that might not be that much of a issue to have a international carrier, in others are ... take Portugal for example, the Azores and Madeira are part of it but they are islands in the Atlantic, the argument about their profitability runs into the issue of each having a population slightly over a quarter of a million, how can they travel? should Portugal be dependent of foreign companies that are subjected to their own nation governments that could very well apply that as a means of pressure? After all Aeroflot is blocked and arguing about the fairness of such measure doesnt change it have been applied.
And speaking of transportation, the US railroad passenger almost collapsed, Amtrak was created and despite its "for profit" it receives state and federal subsidies, they also have the "Essential Air Service" that exists so companies fly to small communities that wouldnt be profitable to do so otherwise.
Yeah...NO. Railways to remote zones are one thing. Air travel companies are another. I don't give a shit you pay more for your plane ticket, Mr Worldwide. And cancelled railway routes can be replaced with buses.
@@babayaga6376 Look, if you don't know how analogies or economics work, you an just say so.
Hey Petter.
As always thank you for the great video.
On a similar topic, you could do a video about the bust of the brazilian air lines in the 1990/2000.
That is an interesting idea. I'll look into it!
Alitalia’s cost to us Italian taxpayers is around 13,4 BILLION €
Yup, don't think anyone of us had ever anything nice to say, especially when it came up in the news
TAP Air Portugal is going on 4 billion😮
That’s unsustainable. European taxpayers need to wake up and revolt.
@@Alfablue227 And with those southern countries, it will be the North European (read: EU) taxpayer that has to finance this.
Let's hope LHG can turn it around. The rebranding is very nice and modern
Garuda Indonesia in Indonesia also faced similar struggles. They've been struggling since the 1997 Asian financial crisis followed by a lot and a lot of controversies and accidents namely a human rights activist murder and several accidents leading to the ban from EU. Early 2010 was kinda better, with restructuring and EU ban lift but the pandemic hit them hard and is constantly reporting losses as of now. Around 2 years ago Garuda was planned to be replaced by another smaller airline called Pelita Air which is also state owned but it was decided that Pelita Air were to focus on the domestic markets. They went from flying oil and only have several turboprops to obtaining AOC and ordering a dozen A320.
the minute he started talking my mind went straight to Alitalia
Profitability is just an accounting exercise. As large groups gobble up small, we're just back to a monopoly, but with companies owned by a handful of people rather than by citizens. Then they have to be broken up again, and the stupid, inefficient cycle continues.
SAA should also be on that list. The South African taxpayer has had to bail this company multiple times but they still lose money and are making it extremely difficult for private carriers to compete as they get no handouts.
From what I learnt when I was doing my MSC in Air Transport, the Euro Control Route Charges is one of the biggest out goings with airlines
Rocky Balboa: “It Ain't About How Hard You Hit. It's About How Hard You Can Get Hit and Keep Moving Forward.”
What makes us unique is how we overcome that. Everyone should find their own ways without any pressure!
Rocky Balboa
the fact that he is depicted as a italian american according to wikipedia makes this even better
If you could look at airline companies in the U.S like Spirit Airlines and other carriers and how they operate and survived and also look at the Ground operations mostly the Ramp and why airlines are splitting up the costs as to who can run the ramp
I love the statement, "...leg room, I guess, might be another story."
Really like your presentation Petter, as always, best Al
Hello Mentour Pilot. I’m a huge fan and I really enjoy your content. Here are some news from my country. Today this early morning in Lithuania a DHL cargo Boeing crashed. They are doing investigation but there are casualties. Thank you for your time.
Great video, thanks for covering Alitalia!
I feel like option (A) is the government is loosing money with airlines or option (B) corporations are loosing money with airlines, and then get government money to continue operating. I personally prefer option (A) because government money isnt used to feed the owners, the CEOs and the stock holders.
*losing. The loo is a toilet.
Interesting timing on this since I am flying Lufthansa tomorrow for the first time in about 20 years. I normally fly Delta everywhere (I live in Atlanta) but Lufthansa was a few hundred dollars cheaper for my round-trip to Germany.
The state-owned airlines lived in a cozy, feather-bedded IATA world where the taxpayer paid up while the employees enjoyed protected employment. The arrival of Ryanair and the like into Europe's open skies policy revealed to taxpayers just how much padding was in place. Where state-funded airlines get further money (like Condor) should have to forfeit landing slots. While you mention Aer Lingus, it is as you mentioned, long no longer Irish state owned and is part of the same group as BA and Iberia.
Condor is no longer state-owned but is owned by Attestor and is competition for Lufthansa, bringing some healthy diversification for the German market.
Ryanair have made multiple attempts to buy Aer lingus, on one occasion offering 40% more than the airline was worth. The state and the EU have blocked the purchase before based on anti monopoly regulations etc, but its only a matter of time before Aer Lingus fold or are absorbed into another carrier, possibly Ryanair. Last time I flew to Ireland I could have used either carrier, but Ryanair cost the same as Aer Lingus but the flight time was half that of Aer Lingus due to aircraft type used. Also Aer Lingus aircraft often struggle to land at my local airport in adverse weather, whilst the much Larger Ryanair aircraft have no problems what so ever. I dont mind being treated like cattle when Im only in the air for 30 minutes.
You missed the Cathay group when its regional subsidiary Cathay Dragon ceased operations, and its A321neo orders were transferred to its parent company, Cathay Pacific.
Wizz Air is owned by Indigo Partners which also owns Frontier Airlines, JetSmart and Volaris. Granted these are operating on different continents, but they have a combined fleet of more than 400 aircraft so by your metric they are not a small airline group.
I have a hard time understanding how allowing several competitive companies can really be more efficient than a fully managed and funded route exist. It seems like "deregulation" spurred competitiveness, at the loss of quality, but that only leads to future monopolization of the market. It seems that it would be far more efficient to have well regulated and well managed routes. I can see that the main issue is that each country wants to control and manage their own route, but in the end it seems that moving people is more likely a public service than a private gain/loss business.
One of the biggest issues with a lot of airlines, is that they privatize profits and the public takes the hit for the losses. Before the pandemic, airlines were making money hand over fist, and within weeks of the pandemic, the talk of bailouts began. As soon as the pandemic ended, airlines were back to making money hand over fist and handing those profits to their shareholders and executives, and it will only be a matter of time before they have to layoff employees to "remain profitable" rather than learn their lesson. If a business is not capable of managing their company, then they go under and so be it. It also doesn't help the big airlines have bought out all the regionals and there is very little competition in the market anymore.
You can look at South African Airways also the type of story as AlItalia. Also some LCC's in South Africa who closed down: Sun Air, Mango, British Airways Comair, SAA Express who was affiliated with SAA.
can you do a Video about the African Airline market
That transition at the beginning 😄🔥🔥🔥
don't forget aerolíneas argentinas, it loses 500M usd every year... their secret is every citizen pays with their taxes 😢
Luv these even more than the "incident" specific things you do.
A video about Turkish airlines please, how exactly they didn't struggle much during pandemic and their profits skyrocketed since then. Their business model is quite unique among flag carriers with the most international routes worldwide which explains it a bit. But why other flag carriers can't adopt similar models?
I can look at them but I suspect that the fact that they can still fly into Russia, when other European carriers don't, might have something to do with their recent success.
Thank the mayor of NY and other corrupt Daemoncrats 😂😂😂😂
@@MentourNow Hmm, checked their routes for clues. They are only flying to three destinations in Russia, St Petersburg 21 flights, Kazan 7 flights and Moscow 42 flights a week. While they fly to 4 destinations in even Kazakhstan and they have both more destinations and flights into Saudi Arabia than Russia. They have 328 routes worldwide that all of them are direct flights from Turkey, it is really an unique model no other airlines is using as far as i know. I'm sure still flying into Russia increased their profit but i really doubt the bulk of their income is coming from it.
Geography, similar to Emirates'?
@@ggoddkkiller1342 I thought Gulf airlines, like Qatar, are using similar model. Wolrdwide transit through their home hubs ?
Another European two that on the surface looked like they went bust were Sabina in Belgium and Swiss Air in Switzerland but in reality, presumably via government bailouts Sabina became SN Brussels and Swiss Air became Swiss International.
Transportation is a vital strategic interest of any country. The ability to ensure the freedom of movement and access to travel for your citizens and transportation of goods , independently of other nations' interests, is much more vital than aviation industry profits. Which is why i disagree with the final statement "this is how it should be". However, chronic mismanagement by governments and the use of flag carriers as vote production machines for political parties, have caused this essential function to be reduced to just another product to be sold and bought. It is sad, but that is what happens when governments don't really care about the interests of their country. There is a price to be paid.
In the US, we need more competition among airlines, not more mergers.
My home airport is DTW. For a lot of destinations, Delta (or a regional airline serving as a Delta feeder) is the only nonstop to many destinations. For those routes, Delta can charge whatever they want. Pricing is much more reasonable on routes where Delta faces serious competition. I was unhappy to hear about bankruptcy at Spirit Airlines last week, because they compete against Delta’s service between DTW and TPA. That’s a flight I take relatively often.
This is not a new problem. Prior to its merger with Delta in 2010, traffic at DTW was dominated by Northwest. Before its 1986 merger with Northwest, traffic at DTW was dominated by Republic Airlines.
Could some of these flag carrier airlines be considered a loss leader for their respective national economies? That is to say, do Alitalia, SAS, etc generate more economic benefit in their home countries than they consume in subsidies paid by taxed citizens?
Many national postal services and municipal public transit agencies are such entities. Personally, I think we have an unrealistic expectation that these organizations are going to make profit when their real benefit is in enabling the greater economic web.
A broader economic benefit is a "traditional" argument for loss-making flag-carriers, yes. How that "squares" with competition, etc, is debatable, though.
That’s exactly what happened, though Mentor didn’t mention it. This issue isn’t limited to the airline industry, it’s also prevalent in the high speed rail industry, ocean carrier industry, and others. Essentially it happens to any industry that is critical to national interests while being extremely cost intensive. In fact, some countries such as China apply this strategy across nearly all their critical industries, including EVs, green energy, semiconductors, and more.
There are also the South African ones like Kulula, Nationwide, Mango, FlySafair is on their way out soon too. The only ones that seems to make a lot of money appears to be the Airports
Why does the pope kiss the ground when he arrives in a country ? Well, he has to use AlItalia !
Saw the title and immediately thought: Aerosucre. I wonder how much money they have to keep bribing officials.
Highly profitable cargo
@@GarfieldRex Aerosucre is like Boeing nowadays.
More with less
They’re very profitable, don’t worry
Aerosucre deserves its own episode, like why are they afraid of height?😁
Indeed. I was missing Aerosucre, too.