The Covid-19 crisis will act as an accelerator in the structural changes that have been taking place in air transportation in Europe over the last twenty years on intra-European flights, marked by the rise in power of low-cost players. Despite a sustained context of market attrition, the low cost companies will take advantage of the crisis to expand geographically, thus better linking together the European continent. This expansion will be achieved particularly through external growth operations, by taking over the assets of companies that have either gone bankrupt or are downsizing. It is also expected that their investment in the business segment will be stepped up through increased frequencies on major routes. Similarly, it is likely that the low-cost carriers will continue their strategy of network densification by developing a strategy of connecting both within and outside Europe. For their part, the major incumbent operators will certainly be rescued by their Member States, but risk being marginalised in the future unless they accelerate the transformation of their business model on medium-haul. There is an opportunity for the historic airlines, and the first announcements by Air France KLM, British Airways and Lufthansa demonstrate their awareness. They will need the support of all stakeholders if they are to achieve the effective implementation of these transformations.

This study was written by Emmanuel Combe, University Professor, Professor at the Skema Business School, Vice-President of the Competition Authority, and Didier Bréchemier, Senior Partner, in charge of the transportation and travel sector at Roland Berger.