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- [00:02]
A
I'm Brian Summers. I write the Airline Observer.
- [00:05]
B
And I'm Brett Snyder, author of Cranky Flyer. You're listening to the Air show, the podcast where we talk about what goes on in the business of the sky. John is out and about this week. So, Brian, let's talk about Europe.
- [00:18]
A
Europe, Brett, from the guy who we think doesn't have a passport. Are you sure you want to do this? You don't want to talk about spirit, but for the 12th time in the last six weeks.
- [00:28]
B
Wow. Wow. I see how it is. That's fine. But listen, man, I want to be clear. I am talking about flying from the US To Europe. So it's still very US centric, so don't get too excited. But yes, let's expand those horizons. Talk about what's going on over there, because it is a gigantic market that is really important to US Carriers.
- [00:50]
A
That is a pretty broad description. Brett, do you have anything more for us? Maybe some of that data that you love?
- [00:57]
B
Of course I do. What do you take me for, Brian? This is. It's actually pretty incredible. If we look at July 2025 versus July 2005. So go back 20 years, seats between the US and Europe have increased by nearly 75%. And this is not off a small base. Seats have gone from about 95,000 a day back then to over 165,000 this past July. And despite the greater prevalence of narrow bodies in the market, the average seats per departure, it's actually risen from 259 to 268. This is just a very, very big market with a lot of metal dedicated to it.
- [01:45]
A
Sounds like people are really going for the YOLO economy these days. Right? Every American believe it's their God given right to go to Europe every summer. Some of the European countries don't like that. But anyways, this is a massive market and it's grown a lot, as you say. But a lot has happened with the transatlantic market. Right. We have fewer airlines and less competition. It's kind of nice for a lot of these carriers. I guess that's what happens when regulators decide they're willing to legalize three giant competitor groups in just one market.
- [02:20]
B
Yeah, no, that's definitely the case. Not only because of the competitor groups, as you call them, the, the joint ventures, but also just consolidation as well. So if we look back in 2005, there were some limited antitrust immunity grants. Now if, if we treat all of those grants as one airline, there were a total of 38 operating flights over the Atlantic. Now today though, There are only 24 airline joint ventures, which excludes play since it just died. And I will say that also includes both ITA and sas, or sas, depending upon which side of the Atlantic you're on. How you want to say that? We're probably down to 22 at this point.
- [03:11]
A
Brett, I'm really looking forward to your Airlines that Died Memoriam Peace, the Cranky Network Awards next year. You, very nice work with that. And poor Play Airlines. We. We hardly knew you. But yes, as you say, ITA and sas, I am going to say it correctly.
- [03:28]
B
Okay, we'll go European.
- [03:30]
A
They are probably going to join these joint ventures unless regulators finally show some backbone, which I don't think is going to happen. There's a lot fewer airlines, but probably more important is just how those seats are divvied up. So how are they divvied up, Brett?
- [03:46]
B
Well, sir, in July 2005, a little more than half of the seats flying, 51.8% to be exact, were in one of the four different immunized partnerships. So that was Northwest, KLM, American Fin Air, United, Lufthansa, and the Delta Air France Alitalia, Czech Republic party there. You want to guess what it is today?
- [04:16]
A
I'm gonna say, Brett, that it is a lot more than that.
- [04:19]
B
You're such a smart guy. I knew you'd get it right. This is true if we include ETA and sass, since those are now both partially owned there. And we'll probably follow into the joint ventures. 82.5% of the transatlantic seats are in one of the now only three immunized joint ventures, the ones led by American, Delta and United on this side of the pond. And this is being somewhat generous since it includes Turkey as part of Europe, and Turkish has a decent amount of capacity, so that actually helps to lower the joint venture percentage there. But outside of Turkish, only Iceland Air and Norse Atlantic had more than 100,000 seats flying in July of this year. Putting that in perspective, United alone had more than three quarters of a million seats, and that's without its partners.
- [05:12]
A
All right, so you mentioned Norse Atlantic and Iceland Air. Are there any other airlines that aren't part of these joint venture schemes? Any airlines that matter?
- [05:23]
B
It's a pretty barren landscape out there. I do have to say we could point to Tap Air Portugal. And since we're going with European pronunciations, I just learned that it's pronounced loat and not lot. Did you know that?
- [05:40]
A
I actually did not know that.
- [05:42]
B
I did not either have any respect.
- [05:43]
A
For Poland's number one airline.
- [05:45]
B
I respect that they exist, they're still flying, but they're increasingly marginalized. Right. All these, all these small guys, it's either join the party, find a joint venture, or just kind of live on the edges and try and live off your little fiefdom and low fares.
- [06:05]
A
But what about Turkish? They're a big player, right?
- [06:07]
B
Yeah, yeah. So Turkish is a big player, but Turkish to me is a whole different story. Probably don't want to get too much into it here, but while it does serve some US Europe traffic, you know, Greece, Italy, some of those Mediterranean routes.
- [06:28]
More of the traffic that flows to Istanbul is going beyond, into Asia, Middle East, Africa. It's just different. It's more like a, like a Middle Eastern carrier in the way it behaves in those ways. So, so it just isn't quite the same. But that's also sort of the point, right? It's, it's when you're different, you don't have to compete with the JVs head on.
- [06:51]
A
Yeah. And I think it's the same way for Iceland Air. That airline has that unique hub in Iceland and so they can use those narrow bodies, connect two sides of the Atlantic. They're not a real competitor to the JVs, I don't think.
- [07:05]
B
Yeah, I agree completely. And hey, look, that is now a fortress hub. Now that play is gone. So. But those, those two airlines, obviously different models. It's how they survive. I guess the whole different model thing is also Norse Atlantic's plan, as much as there's a plan there.
- [07:26]
A
Yeah, a plan. I, I think you're giving them a little bit too much credit, Brett.
- [07:32]
B
Maybe, but they, they do have a plan. I, I think the plan at this point is to do as much wet leasing as they can because they can't make much money with their scheduled business. So. But at best, Norse is an, it's a niche business. Right. And, and then, you know, the rest are those kind of zombie like state supported carriers, the taps, the Lotes, Air Serbia, if you want to throw that one in there, there just aren't many left.
- [08:02]
A
Should we assume here that the era of the low cost transatlantic operator is, is just about over? Right. The, the conventional wisdom of that is that ULCCs don't really work on long haul because even before this period that, you know, who talks about the cost convergence period, which, where all these airlines are paying roughly the same amount for labor, the discount airlines across the Atlantic didn't have nearly the same advantages on these long haul sectors as the short haul. And I think a lot of that was because everybody pays the same amount for fuel. And a long stage length eats up a lot of that savings that you would ordinarily get. So is the era over? Nobody coming out to challenge these guys?
- [08:45]
B
Pretty much. There's nothing really anyone, anywhere that's trying to challenge that assumption. You know. Yes, there's Norris Atlantic. Oh, I guess maybe French B. We could count sort of. Probably not. That one's maybe into a different bucket. We'll talk about in a bit. Plays Gone. Yeah. So sorry for the good people of Newburgh Stewart Airport, but I don't think your transatlantic service is, is going to be coming back anytime soon.
- [09:12]
A
No. I have so many regrets, Brad. About 2022 and early 2023, I was just getting the observer, my newsletter, off the ground, and I agreed to take these interviews with senior executives at Norse and also at Play. They were telling me that, you know, this time, Brian, this time is going to be different. Wasn't going to be like before the pandemic. It was going to be even better. I was skeptical at the time, but I think when it comes to transatlantic LCCs and ULCCs, you can never be too skeptical.
- [09:47]
B
No, you can't. And by the way, I think your proper response to play should have been, wow. But that's a whole different little, little too Inside baseball.
- [09:57]
A
Best joke, actually that you have ever.
- [09:59]
B
Done on this show.
- [10:00]
A
It requires a little bit of knowledge about the industry.
- [10:03]
B
That's right. This is, this is great. All right. I'm gonna, I'm gonna remember this day. It's, it's magical. But yeah, it hasn't worked. It has never worked. But you know, there are a few hybrid style like leisure package carriers that have done somewhat better. It's more uniquely European. Condor is probably the biggest of those, but they've taken a big hit lately when the previously required interline agreement with Lufthansa was thrown out by the court. So Condor is still trying to figure out where it sits. And everyone else, though, it's tiny. You have like Tui Fly and Neos out of Italy and High sky in Romania, which I actually don't know anything about High Sky. I just wanted to mention that one by name because it's hilarious.
- [10:53]
A
Yeah, we don't have any of those super random carriers in the United States. I guess there's a few in, in eastern Canada that make a living off transatlantic in the summer. But we do have at least a couple of airlines trying to wedge themselves in JetBlue and Alaska.
- [11:11]
B
Yeah. Yeah. And we can probably lump WestJet in there kind of similar since they can carry people from the US to Europe over Calgary. But these are all rounding errors at this point. JetBlue is good for a little over 1% of the capacity between US and Europe. I should say 1% of the seats. It's really just trying to leverage strength in New York and Boston. Its networks there. Fill those mint beds at the pointy end of the airplane and call it a day. Um, JetBlue is usually cheaper than the others. They're, they're trying to buy some of that traffic and they just don't have a lot of seats to fill. So it's carving out a niche. Alaska, of course, is more interesting since it is just starting on this long haul journey here. Hasn't even operated a single European flight yet. That'll be next year. It obviously has its huge Seattle hub. It now has the airplanes it inherited from Hawaiian. But how is it going to make it profitable? That is. That is the million billion dollar question, Brett.
- [12:13]
A
You know the answer to that. It's strategic. That's the old joke in the airline industry. As long as you say it's strategic, you don't actually have to make money. Just ask American Airlines about its Pacific network. But I digress. I am also serious here. Alaska has some real strategic reasons to fly these routes. Not maybe in the next summer where they're probably going to lose a lot of money flying on those routes, but in the far future. Alaska is tired of bleeding customers to its rivals, especially Delta. And I am sure that eventually, and I don't know when that will be, but the airline will get around to making that network profitable.
- [12:55]
B
Yeah, I'm wondering for our producer here, do we need to bleep strategic? I think that might be a bad word to use.
- [13:02]
A
It's a dirty word in the airline.
- [13:03]
B
Yeah, that's what I'm thinking. Look, in my mind, this has to result in Alaska joining joint ventures American, iag, Finnair, and probably American and JAL over the Pacific as well. If it can make that happen with the governmental involvement here. But that's the best way to ensure that Alaska can actually make money on this whole thing. Otherwise I think it'll be tough, but probably still doable. There's going to be a lot of experimenting. To me, the, the flight to Rome next summer is good, that's going to probably make money.
- [13:42]
But it only operates in the summer. And you know, even with Delta following every move there, maybe that works. But how do you make money in the winter? You can't be A spill carrier, because there just isn't anything to spill outside of summer in transatlantic in most markets. So, Brian, I'm curious though. I mean, the joint ventures, they seem to have been productive for some, maybe not for all. What is your take on this structure and what it means for the industry?
- [14:16]
A
Okay, Ostrower, the voice of the customer is going to kill me for this because that man, he just likes low fares that aren't sustainable. He doesn't want people to have to pay for anything. But dare I say it, I think the JVs, Brett, they're pretty good. And I think that they've mostly given customers the choices that they have promised. So I know it's probably not a great thing to only have three groups setting prices across the Atlantic and that probably has led to higher fares. But along with the higher fares, you know what, we've gotten more options. So I'm a pretty frugal guy and I'm always looking to save money. But have you ever looked at actually buying a ticket on one of the unaffiliated airlines, like a T from Los Angeles? Super low prices, one way fares, everything that people should like. But if you're willing to fly in the JVS and you're flying Delta, United or American and you're going pretty much anywhere in Europe, you have so many choices. You can fly one airline there, you can fly one airline back, you can transfer through one hub or another hub on the Atlantic side, on the US side, depending on what you want to do for that flight. I think that's a good thing for all but the most cost conscious consumers. Those people, maybe Ostrower, they can still fly Norse if it's their thing.
- [15:42]
B
For now. I don't know, man. I'm. I'm not as sure as you seem to be about this one. Yes, there are more choices with the joint ventures, but nearly everything outside of the JVS has been frozen out. And it's nearly impossible for anyone to try and enter those markets in a meaningful way because the most important airports in Europe are full. For example, look in, in 2005, you can fly from the US to London on 12 different airlines. Yes, that is ridiculous.
- [16:13]
A
That wasn't sustainable. Brett, how many airlines were in bankruptcy in that period?
- [16:18]
B
I don't know, a lot. But your employer, that's in. Oh yeah, I was at United at that time. Yeah, that is true. Anyway, 12 is ridiculous. I don't disagree with you. It was also a different world before open skies existed. But today it's down to five options, right? You have American BA, Delta and Virgin Atlantic, United, Norse Atlantic and JetBlue. And if you really want to be picky, you technically can also take two E fly from Gatwick to Melbourne, Florida twice a week. But I don't count that.
- [16:55]
We will be at 6 when Alaska starts London next year again. So, you know, still from that point of view, competition has been greatly reduced. But on the flip side, there are now more than 20% more airports in the US that have London service than had it back in 2005. Or we can look at Paris, which actually really shows kind of the power of this. In 2005, there were 14 airports in the US that had Paris service and now it's up to 22. So I do think the JVs have absolutely provided a benefit. But there is a trade off and not everyone will feel the same way about whether that trade off is worth it.
- [17:36]
A
Let's take a quick break, Brett, and when we return we can talk a little bit more about how these routes have changed over time as well as the airlines that fly these roll.
- [17:52]
B
Brian I got some emails from some people recently that asked us how they could get in touch to sponsor the air show, to which I said, why aren't you just listening? Don't we talk about this every time? But I guess people don't listen to the credits in the end. So maybe we need to say this here and make it more clear for people to understand.
- [18:14]
A
I think we absolutely should, Brett. So how should people get in touch with us?
- [18:17]
B
Well, the best thing to do is to go to theairshowpodcast.com and we have all the information on there. But Brian, there is a pretty new development that we should mention. Anyone who has worked with me on the Cranky Network Awards may be aware of Bullpen Strategies. They are now working with us as well here and they will be very good to work with. You can even email Graham directly at grahamullpenstro.
- [18:51]
But all that is on the website as well.
- [18:53]
A
You know, sometimes people ask me, they say, brian, I want to sponsor the show, but is anybody important? Listen to the show because we need to reach the decision makers. You think we reach the decision makers? Brett?
- [19:04]
B
I know we do. In fact, I was talking to one this morning, an executive at an airline who is about to get on a long flight and was sad when I told him that this week's episode would not be ready to help him pass the time.
- [19:17]
A
Do you want your company to advertise on the air show? We're booking for 2026 and we still have a few slots for later this year. If you want to learn more, go to theairshowpodcast.com.
- [19:35]
We're back. Let's talk about markets and seasons. It seems like maybe the summer is starting earlier, at least on the US Side of the Atlantic, and maybe airlines can even make a living in the shoulder seasons.
- [19:48]
B
Yeah, it's true. We've heard more than one airline say this, that's for sure. United has moved seasonal flying further up into the spring and out into the fall. Delta has to. Well, they all have this year. Americans said it was going to start next year's full summer flying in the May schedule instead of waiting until the June schedule. But there is a downside to this and that August seems to be looking a lot less peaked than before. I think Delta CEO Ed Bastian had had flagged that as being the case as school schedules have shifted earlier. The shoulder, though, can really stretch into late October pretty easily and in some cases even beyond that doesn't work in every market. But the shoulder has has certainly gotten somewhat stronger.
- [20:34]
A
Yeah, as you say, we've heard this on a few of the earnings calls recently. Just this idea that even the peak of the peak in maybe is not as strong as it once was, but shoulder is a lot better. The people at Delta, especially Glenn Howenstein, had some spin on this recently. He told us why this was a good thing because he said he'd rather have a seasonal market that works for six months rather than four because six months is of course half the year. And so you can find good places to use an airplane for six months and then another six months when the good season was only three or four months and you had like nine months that you had to find a place to put that airplane. So for Delta, increasingly it's going to be Europe and the IATA summer and then Australia, New Zealand in the winter and it's good to go. But of course, not all markets have a strong shoulder season. Which ones are good?
- [21:31]
B
Yeah, it's the leisure markets that people really want to visit from the US that have done the best. At least from a US Perspective. You can probably guess the country with the biggest seat growth during that time from the U.S. it has to be.
- [21:48]
A
In Southern Europe, Brett, maybe Italy.
- [21:50]
B
Of course it is Italy's number one. And then Spain is number two and France is number three.
- [21:56]
A
All right, that isn't a surprise. But tell us which are the weakest markets?
- [22:01]
B
Well, actually Czech Republic in Sweden are down and Hungary is gone completely, at least until next summer when American returns from Philly, of course, Ukraine and Russia are gone too, but that is a whole different issue. The Czech Republic may be the most surprising because of Prague still seems like a important destination. But you have to remember that back in 2005, there was still a failing state carrier that flew to the US and probably shouldn't have. And come to think of it, Hungary was in the same boat. Actually, I am.
- [22:39]
A
I'm seeing a pattern here, Brett. It seems like if you have a major joint venture hub or you're a place that Americans really want to go, you do well, and if not, maybe you don't. Also another pattern. If it's cold, people don't want to go there.
- [22:56]
B
Yeah, well, that is true, but also there's another aspect to this I think we have to think about, which is that European hubs are also full. There just isn't room for growth in a lot of those places. I mean, look, Heathrow, if we're comparing to 2005, Heathrows up enormously because it wasn't until after 2005 that the Open skies agreement allowed for airlines to all fly between the US and Heathrow. So it's, you know, we see Gatwick plunged as the airlines all moved to Heathrow when they could, they gobbled up slots any way they could, repurposing them from maybe entry Europe or wherever it was to use them to fly into the us. But Heathrow still has the same two runways operating at capacity, and all the big airports in Europe are constrained, except for Madrid, I guess. So there's only so much growth that they can take and it's usually in the form of up gauging to bigger airplanes. And, and if you can't grow much in the main airports, then you're looking more and more for those leisure destinations that you can overfly those hubs and still have enough people to fill them up. So look at the UK for example. Not exactly the temperate leisure destinations that we're talking about. Right. It saw seats from the US rise just over 18% in the last 20 years. That is the lowest percentage increase of any country. Heathrow accounted for just about the entire thing with only Edinburgh having any notable growth otherwise. Gatwick was way down, as I mentioned, but so was Manchester, which was off nearly 40%. You also had big drops in Glasgow, Bristol, Belfast, Birmingham. You know, these are not the leisure destinations that are working these days.
- [24:42]
A
What about the, the home market of Europe's most dysfunctional major network airline? Things pretty similar in Germany?
- [24:52]
B
Yes, yes, they are. It's actually even Cleaner to think about it that way. So Germany is up a little over 30%, which is still not that much compared to the other countries. Almost all of that is in Frankfurt and Munich. There is a little bit of Berlin, but that's it. In that time, Dusseldorf, Hamburg, Stuttgart, they've all lost their transatlantic service.
- [25:18]
A
And then contrast that with Italy, which saw growth in each of its five existing markets. Though Naples and Palermo were very niche and only flown by a Eurofly back in the day, now each of them has joint venture non stop service and Olbia will get a new flight next year. Pretty exciting.
- [25:37]
B
Yeah, exactly. It was these, you know, Eurofly, Meridiana and Air Italy before the spectacular implosion. Those are the only ones that were connecting some of these smaller Italian cities back in the day. And those were more focused on European point of origin. And now like you said, we've got joint venture service here. Olbia coming online with Delta. It just keeps growing. Germany, meanwhile, only service from the US to three airports in Germany, while Italy has seven in the eighth coming next year. It's, it's very different than it used to be. And the question is, how long will these trends last? We, we've talked about this some time. Can Italy grow forever? Will things change? Or is this concentrated joint venture dominated market going to just remain fairly static now that there is less competition?
- [26:28]
A
Good questions, Brett. I think that Italy can probably grow for a long time, as will perhaps Southern Europe, because Americans are pretty flush right now. And as I said earlier, people really like to go to Southern Europe in the summer. But here's the thing, Brett, and I commend you for doing a Europe episode, but still talking exclusively about the United States. These are two way markets, so not necessarily for US Carriers. We heard them on recent earnings calls. A lot of these airlines are saying they're 70+% US point of sale on the transatlantic, but their joint venture partners are not 70 plus percent. Right. So the European carriers, which generally share revenue with the US carriers, they need Europeans to go the other way to want to visit the the United States. And we've been told many times by some of our listeners not to make this a political podcast. So I'll say this quickly. I don't know if you know this, Brett, but there are some Europeans anecdotally and maybe not anecdotally, if you look at the tourism data that do not want to come here anymore. If that number grows, I don't see how the overall pie of people coming here can grow, do you?
- [27:55]
B
I think that's probably the case, I do expect that that will change over time. Winds do change direction, but it could be quite some time that we do see Europeans looking elsewhere. And that may very well turn into something very interesting, as when you were up on stage with United CEO Scott Kirby recently when he started talking about the trade deficit between US And European carriers, some of which are his partners. But there may be more fighting for the traffic that's there to come. So it could be very interesting.
- [28:32]
A
That's true. Do you want to define what he said for our listeners who weren't there?
- [28:36]
B
There are more Americans than Europeans that are flying over the Atlantic. I believe the number was 60% of the traffic originates in the U.S. but there is a much lower percentage of seats that are flown by US Airlines, and that is the trade deficit. And there's opportunity for the US Carriers to gain more.
- [28:58]
A
Well, that will be interesting to watch. Apologies for any listeners we made uncomfortable by talking about politics and trade deficits, but how about we have a little fun to finish? Brett, what do you think?
- [29:11]
B
I hate fun, but okay, fine.
- [29:13]
A
All right. You have some fans in the industry. There's probably three or four people out there that read your blog, Cranky Flyer. And since you started probably in like 2008, you've had this bit you do not think very much of the Italian flag carrier. It was Alitalia, now it's ita. It's had so many iterations. And since this is a transatlantic themed podcast this week, and we did hit on Italy quite a bit, I was looking for your rant about it. You didn't make it today. I don't know if you're just getting old and senile and you forgot, but. But tell our listeners, what do you think Lufthansa Group is. Is going to own probably all of this airline at some point? Is the JV gonna save it or is ITA or Alitalia just forever doomed?
- [30:09]
B
Well, Billy, I'm glad you asked. Oh, that's not your name. I guess I am going senile.
- [30:17]
No, look, Italy, obviously a big, very important market, as we discussed, you would think that an airline based in such a big and important market would work when run like an actual functioning business. But this is not just ita, it is Alitalia. The blood is there. It is powered by Alitalia according to their airplanes now. And if anyone can figure out how to completely screw everything up, it is the spirit of Alitalia. And that is actually what is expected of them, I would argue. And so when you combine them with a dysfunctional group like Lufthansa Group which by the way I have writing up this week about their latest turnaround plan because you know it's been a couple months since their last one. You know it's entirely possible that they will screw this up completely. But there is a point right where you get to this too big to fail world and if you're now in one of these cozy three joint ventures then maybe, maybe they will survive.
- [31:34]
A
Good stuff Brett. I have only one comment about ita. It is time for Lufthansa Group to bring back the name for Re Alitalia Forever.
- [31:48]
B
You've been listening to the Air Show. If you have suggestions or questions for us or if you're interested in sponsoring the podcast, go to our website theairshowpodcast.com to get in touch.
- [31:59]
A
This episode of the air show was produced and edited by Benjamin Gottlieb. Our theme music is by the now thrice Emmy nominated Joshua Mosher. Thanks for listening and we will be back soon.