European consolidation is finally on the cards, but not through mergers, rather through cost cutting. Thomas Cook is merging its European businesses, while Ryanair and Flybe will together create an option that should allow for a Ryanair takeover of Aer Lingus under current EU stipulated regulations. This will be good news for Ireland and good news for European aviation and will give both airlines significant increased feeder options across the British Isles. Of course the crunch is in the route detail but given that Aer Lingus has pulled out of many Irish domestic routes it seems only right that a Ryanair/Flybe airline should not be forced to re-kindle loss making operations. The good consolidation news should come on Northern Irish routes where Flybe and Ryanair could, if a joint airline goes ahead, make sure that they work together on their competing operations.
Meanwhile JAL and ANA have impressed this week and shown that even though they have had to deal with political problems between Japan and China and to a far less extent 787 groundings, they have had a good period. Indeed airlines across the globe are showing that calendar Q4 2012 was a period when people took to the air in their droves. This week sees the largest mass migration of humans for the Chinese New Year, the only time when most Chinese workers get to see their family. It is a movement of some 3.2bn people and it will be interesting to see how many more leave the trains behind for aircraft in 2013 given that there are over 100 airports in rural areas which simply were not in existence 12 months ago.
A quick scan of the global market leaves one in no doubt that Etihad, Emirates and Turkish Airlines are the ones to watch. Turkish Airlines will in 2013 try to get a credit rating, with Citigroup assistance, which should pave the way for a very interesting bond issuance post 2013. Turkish Airlines are also at this time looking to the leasing market for narrowbody orders of A320 and 737 aircraft and announcements on this issue should be expected in the months to come. Turkish Airlines has had a wonderful year with huge transfer passenger growth, with much of this coming from the goldmine that is Africa. In 2013 the airline will look to improve frequencies in the Middle East and Africa. The THY plan for 2013 is the same as that for both Etihad and Emirates that are looking at narrowbody aircraft to deploy in the Middle East and north Africa. The three airlines are very well placed but it will be interesting to see if Emirates and Etihad are willing to meet the service and price point balance that Turkish Airlines has at this time.
Look to the next issue of Airline Economics for a full interview with the Turkish Airlines CEO as he collects his Aviation 100 Industry Leader of the Year Award.