It looks that the moment of truth has come for “national airlines”. The signs are that they are a vanishing breed.
A successor to the bankrupt Swissair may rise from the ashes, but for how long? The reluctance of the Swiss government to wholly back a new airline is due to the fact that they know that whoever takes over from Swissair is ultimately doomed. Switzerland cannot afford the luxury of its own emblem-blazing international carrier, any more than can Belgium or any other country, either in Europe or anywhere else in the world. Even before the atrocities of Sept. 11, it had become common wisdom across Europe that the age of national carriers was past. They are increasingly seen as an extravagant and permanent drain on government funds. The most successful of Europe’s carriers, British Airways, which would merge with KLM and other airlines if it could, says that Europe needs no more than three major competing carriers.
Of course, it will require complete deregulation of the European skies for changes to come, but it is no longer a question of “if’, but of ‘when”. It was already inevitable given the EU’s drive against state-funded enterprises and restrictive practices. The present crisis will massively speed up the process. What worries the Swiss (who are, of course, not part of the EU, but follow much of its practices) is that they might end with no major carrier in and out of the country, with consequent damage to its image and economy. There is not much sense in that. Businessmen and tourists are not going to stop traveling to Geneva or Zurich because the plane’s fin is not painted red with a white cross on it. In any event, Europe’s skies as a whole are going to see a thinning of logos.
The experience of Swissair has lessons for the wider world, including the Middle East. The deciding factor is economics. Is it really necessary to maintain five international carriers within the GCC area? Why not one or two wholly privatized carriers instead? That national pride needs a national airline is a costly illusion. All that is needed are efficient and safe airlines that fly from point A to B. Governments would still be in ultimate control because they control the air routes and the operating licenses. They can still subsidize certain routes if that is considered politically necessary. But at least they would not have the burden of permanently underwriting businesses that can never fulfill their potential because of the limitations that being a national carriers places upon them.
The airline business, operating ever larger and more expensive planes and with ever greater security and safety costs is now too big for any one country, no matter how big it is. National airlines are fettered airlines, fettered by the number of routes that a nation can offer; and being fettered makes them inefficient. Add to that the economies of scale which mean that, without subsidies, the smaller operators cannot compete with the bigger ones.
In Europe change is on its way. In the Middle East, many flights in and out of the region are now flying near empty; foreign airlines, on economic grounds rather than security ones, have started to cut back flights. Economic judgement will force the issue here as well.
