Peter Gerber, CEO, Condor, says politicians should do their homework and be clear about the reasons behind decisions. Interview by Graham Newton.
Condor announced that they are transforming the business model to a “bleisure” airline—what does that mean?
We started out from a high-level perspective, and we felt that the world was changing. The motives of people traveling are not so clear anymore. You don’t have an obvious difference between the business and leisure traveler. We saw mixed motives. People were not just visiting friends or doing business, they were doing both and we particularly saw this in Europe because there are so many people with friends, family or business connections in different countries.
At the same time, we were getting new aircraft, and we knew we had a strong business product that would make us extremely competitive. We are confident of attracting new customers and believe we will be successful in the business market.
Then when we looked at the market, we saw other carriers with a low-cost background moving the same way. They were seeing the same things we were. This merging of business and leisure motives is definitely a trend in the industry.
So, this all led to a hybrid model. There is a need for it, especially if you’re doing short and long haul.
What more can you tell us about the branding of the airline and, in particular, the aircraft design?
We have stripes (hoops) in various colors over the whole aircraft. It was initially seen as an idea that was a good fit for leisure. But then we realized it would work for business too. It is different but that is what we liked about it. We want to be known as a unique airline. We have also upgraded all classes within the cabin on the new aircraft.
The branding reflects our customer centricity and the value that we offer them. Most customers know air transport well and they know the value of good service. We need to make sure they see that in Condor. And the stripes will mean they won’t forget.
How important is the fleet renewal and are the supply chain issues a concern?
It is a concern because we have had a lot of issues. Nearly every new aircraft we have received so far has been late and we know that will be the case with future deliveries too.
Our luck was ordering in the midst of the pandemic when nobody else was even thinking about new aircraft. It means we are first in line and we’re reaping the benefits of that early decision because our problems are not as great as other airlines are experiencing.
It is difficult to know how long the problems will last. Only the OEMs know the answer to that question or have the ability to influence the answer. But it doesn’t seem that we will get any quick resolution. Maybe higher oil prices will accelerate matters because the need for new airframes and new engines will become even more acute.
How difficult have operations become during the European summer?
It is hard but we are aviation professionals, and we are used to it. We know what is coming and we have had time to prepare. So far this summer, everything is going as planned and we have some good, trusted partners that help us.
Especially Frankfurt and Dusseldorf airports also have a great strategy in place, for example, and these facilities are completely back up to speed after the pandemic. We have an 80% on-time performance from Frankfurt, which is pretty decent.
Of course, we have a difficult geopolitical situation in Middle East and the ongoing conflict in Ukraine and Russia, and these are adding to the difficulties in European skies.
We expect there to be more delays as the summer goes on but generally it is not airports or airlines that are the problem. It is air traffic control (ATC) and the politicians that are making decisions about ATC.
What can be done?
Only politicians have the power to solve this issue, but there is no attempt to tackle the powerful unions or national interests. Until that happens, we won’t get a solution.
Look at the environmental benefits we are missing out on. Maybe that is the only thing that will force politicians to make changes. Then again, we’ve been talking about the single European sky, which could bring a 10% CO2 reduction, for 30 years.
We probably only need three or four ATCs in Europe but there is no political will to do this. We see some progress, but it soon diminishes. For me, in this case, politicians are simply not doing their homework. If they did, they would understand what we are missing out on.
The industry message to politicians must be clear here: do your homework!
Where else can European regulations improve?
EU261 (passenger compensation) significantly hurts the bottom line of every Euoprean carrier. It is a major problem when it comes to European aviation competitiveness and is a classic example of why Europe is not competing well on the global stage. Only airlines have this problem. It doesn’t apply to rail or other transport providers.
And it is equally bad for passengers because for airlines it is often cheaper to cancel a delayed flight. The suggestion was to extend the compensation limit to five hours, but a compromise of four hours now seems more likely. Actually, I am not sure that we will see any meaningful improvement that helps either airlines or passengers.
All airlines want to do the right thing, but they must be competitive. Without that, European aviation will vanish. And we are seeing that happen. A decade ago, just 38% of connecting passengers did so outside Europe. It is now 55%. Because European airlines do not have a level playing field with other carriers.
Are you able to buy enough sustainable aviation fuel?
We have offtake commitments with producers and potential producers and have managed to fulfil our quota for the European 2% mandate.
But it is not an airline’s task to produce this fuel. Again, the EU has failed to regulate in a fair way because they have implemented a mandate when supply is limited. We must have a political commitment to ensure that SAF is produced for a decent price. If that happened, SAF production and uptake would grow enormously.
We all want to be more sustainable, not just aviation. So why airlines are a particular target is difficult to understand. Travel will become more expensive, less people will travel, and we will all lose the freedom, the connectivity, and the benefits that air travel brings.
Are you confident that the industry will reach net zero carbon emissions by 2050?
It is achievable but a lot of things have to come together, and CO2 compensation mechanisms will have a part to play. But I’m sure we will get to net-zero earlier than many other industries. It will take a lot of investment and that is why regulation must allow us and encourage us to spend money where it makes sense.
Unfortunately, some politicians have a different agenda and are looking to achieve outcomes apart from net-zero carbon emissions. For those, the aim seems to be to limit flying and stop people and business connecting. We need to understand where there are motives beyond the environment and call it out. We must object strongly in those circumstances.
Is technology the answer to aviation’s most pressing issues?
Without technology we won’t get anywhere. Each new generation of technology represents a big leap forward and there are exciting possibilities ahead.
But when we talk about efficiency—especially in European air traffic control—the problem is clearly human. There needs to be more air traffic controllers, better management, and much better regulation. Machines follow the rules, they don’t make them.
Are there any other issues you think will affect the industry’s future that aren’t getting the attention they deserve?
The way digitalization is leading to personalization is a big deal. Every customer will be known if that is what he or she wants. It will create a very different feel around the travel experience, especially once personalization is successfully extended to border control and security.
And even though there are limits to what can be done with our infrastructure and onboard an aircraft, there is still such a lot that we can do. Imagine every customer getting the services they need, from assistance to shopping or perhaps getting through the airport as quickly as possible. We will do it even better than we are doing today and we will get better every day.
I do believe airlines will soon offer personalized services, and they will do it safely and sustainability. I am an optimist. You have to be if you’ve been working in aviation for 30 years!
