In this post I would like to recall a short and excellent blog article in The Economist about the evolution of the European airline industry, also referring to the case of Malev, the Hungarian airline.
You can read the blog post here: http://www.economist.com/blogs/gulliver/2012/02/malev-stops-flying?fsrc=nlw%7Cnewe%7C2-6-2012%7Cnew_on_the_economist
I would summarise the conclusions – and my opinion – with the following:
– the Hungarian airline Malev could not prop up a viable and profitable business model in the past two decades.
– this is not unique in the sector, other players are also struggling, thus searching their ways out of the woods by either finding a strategic partner, or a buyer.
-there is no room for national/nationalistic sentiment in the European airline industry. it is purely driven by demand and supply with very fierce competition. (exactly the way an open and competitive market should be)
– when an airline disappears, there are plenty of players ready to step on to fulfill the real demand. (the faster and flexible ones will have the better chances)
– the skilled and talented groups of the workforce that became redundant with the bankruptcy will be soaked up quickly by the competitor airline carriers.
– and that is all right this way, this is the essence of market economy.
So no need to worry or to shed a tear for Malev, even Budapest travellers will find the alternative options as well as the experienced pilots their new airline. The system works.
László Ráb
6th February 2012
Ráb László
László Ráb's blog 