Let's play a game, shall we? This is long, so read on only if you dare...
Air Nostrum has ordered Airlander 10s, a brave and bold move, which will certainly provide a difference in the carrier's operational strategy, so let's attempt to predict how that might look from an operational standpoint.
First, a bit about the complex world of airline business strategies (this could be teaching some of you how to suck eggs, so bear with only if you want to). There are three types of airline strategy and airlines today are any one of these strategies, but occasionally and very occasionally they might be more than one, but very rarely can an airline pull off more than one successfully. These are cost leadership, differentiation, and niche.
Examples of cost leadership are low cost carriers (LCC), such as Ryanair, Easyjet, Jetstar and Southwest. Their entire aim is to find the cheapest/most cost effective way of doing things and this permeates through every aspect of the business - never get into a price war with these guys, they have a lower cost floor than other airlines, meaning what they are prepared to compromise on cost will be greater than non LCCs.
Differentiation airlines are your legacy carriers, United, British Airways, Qantas and Emirates for example. They offer services that create good customer experiences, like airport lounges, the benefits of belonging to alliances like Star Alliance, One World and Sky Team, which offer through commonality service from departure to arrival anywhere in the world. Differentiation airlines rely on brand perception to retain and maintain customer base, a complex and often misunderstood element of why passengers choose one airline over another when they all look the same.
The third is the niche or focus strategy. This is where an airline has a unique operating strategy that differentiates itself within an existing market, for example, BA and Air France were the only airlines that offered supersonic services between Europe and the US because they had Concorde. All Business Class only airlines fall into the niche category, but they often fail because of established carriers and strategies encroaching into their markets where they hold a dominant niche. So, our airship operating Air Nostrum would be a niche carrier, offering a service unique within its established market, but at the risk of competition with established carriers.
Air Nostrum is a regional subsidiary of Iberia, Spain's national carrier, which is a differential strategy airline. Air Nostrum flies regional routes within Spain and international routes to several European and North African destinations. It is a member of the One World Alliance, which means it provides One World customers services to extraneous destinations once arriving in Spain, having flown One World services internationally. The spoke aspect of Iberia hub-and-spoke operations, essentially. Its primary competition in Europe are a mix of differentiation and cost leader carriers, such as Air Brussels, BA, Ryanair and Easyjet.
The domestic competition in Europe is big and LCCs dominate because of their low fares, although business pax do expect more than what these offer, so there is room for differentiation carriers. Putting airships into the mix offers a niche strategy, and would no doubt provide an element of curiosity to the mix. It does depend on how Air Nostrum incorporates airship services into its route structure and indeed where its departure and arrival airports will be.
Now for the practical problems. There's no way you can dock these things at conventional airport terminals. They'd have to dock on the tarmac, or a mooring mast which increases pax time at the airport, which might be a negative, particularly for business travellers. It's suspect that they can operate at conventional airports at all, so where does this position airship operations? Do they fly to a field near the airport and does this field have mass-transport connections? Do One World travellers have the ability to transit onto their final destination adequately if connecting with an Air Nostrum airship flight that lands near, rather than at the airport?
It's arguable who the demographic might be that uses the airships, leisure travellers who see airships as a novelty will certainly be a predictable customer base. Business travellers might appreciate the exclusivity but won't appreciate the speed of travel, which is not useful for early morning meetings.
So, back to the business strategy, as a niche operation, Air Nostrum will stand alone, which offers a point of difference, but is it enough to sustain advantage in a highly competitive environment, especially when LCCs offer low fares, and what about Europe's rail network? Train travel in Europe is quick, efficient and easy; can airships, which travel at speeds equating to train journey times compete against them? Answering these won't be easy, but thankfully the business world assists airlines in positioning themselves within markets.
According to business analysts there are five forces acting on airlines that aid in determining their corporate strategy, these are:
1. competition within the market,
2. potential of new entrants into the market,
3. power of suppliers,
4. power of customers,
5. the threat of substitutes.
Each of these determine where and how an airline positions itself in a particular market depending on it's core competencies, i.e. its strengths as a business entity. Analysing these elements determine how its business strategy evolves to become sustainable in a competitive environment.
Using this to analyse a potential airship operator helps advise us of what an airline operating airships in an existing competitive environment can expect. Considering point number 1, Air Nostrum operates in a highly competitive environment, where LCCs dominate because of their low cost approach. Airship travel has to compete evenly with these to maintain market share.
Considering point number 2, airship travel has to be able to prove profitable as a new entrant into a highly competitive environment to sustain operations, otherwise it'll quickly wither and die.
Considering point number 3, airships are high maintenance with their own peculiar issues that are unique to operating them, such as supply of lifting gas and overnight facilities available at destination airports. Essentially, the efficiency of supply of maintenance and operational elements could determine the success and failure of the operation.
Point number 4 equates to whether or not potential customers are attracted to the idea enough to want to travel on the airline's airships in lieu of conventional travel. What is the current public perception of airships? What kind of service would they provide to pax and most importantly of all, is airship travel sustainable within the existing passenger base?
Point number 5, can the airship operation survive if another airship operation enters the market? Perhaps the question should at this stage be if the airship operation can remain competitive in a non-airship market?
One consideration is how is Air Nostrum going to price its airship fares, will they be the same as conventional airfares or will they be higher? If so, this limits appeal and effectively dissuades the leisure travellers who are not time sensitive but are traditionally more price sensitive? As mentioned already, Air Nostrum needs to target leisure passengers for its airship operations. Ultimately, are airship operations cost-effective for the airline?
It appears that the airship idea for Air Nostrum is being heavily pushed toward the sustainability angle, which is a noble, but at this stage financially uncertain goal, not least because airship operations are simply an unknown quantity. Airlines are investing in renewable strategies and most have big aspirations mentioned on their websites, net zero carbon emissions beyond 2050 is the common mantra, and airships might assist in achieving that, but financially, are airships sustainable? They might be ecologically, but most importantly, airlines require financial sustainability, otherwise they die.
If Air Nostrum can pull this off, it'll be a trailblazer, but be surprised if it does, not if it doesn't.