But what could possibly attract Air France-KLM, Lufthansa or British Airways to the shores of the Mediterranean? In the space of a few months, British Airways has announced its intention to acquire a majority stake in Spain's Iberia, clearly announcing its ambitions to merge in the short term. For their part, Air France-KLM and Lufthansa have been outbidding each other for Alitalia, the outcome of the competition having just led to the Franco-Dutch airline taking a 25 % stake in the Italian company.
The stakes are highly strategic, especially in times of economic turbulence. Air transport in the Mediterranean continues to enjoy reasonable growth rates, and has enormous potential. So, beyond simply acquiring airlines in the region - Alitalia, for example, cannot be said to be a profitable investment at the moment! -But the three giants of European aviation are keen to take advantage of the huge aviation windfall, estimated at 500 million passengers, currently generated by Mediterranean airports... So it's easy to understand the alliances' eagerness to integrate members from the region into their "club". Last year, Star Alliance welcomed Turkish Airlines and Egyptair. As for Skyteam, it already includes the Lebanese carrier Middle East Airlines and has Air Europa (Spain) as an associate member. In the longer term, it hopes to include Tunis Air and Royal Air Maroc.
This craze marks an historic turning point, a real break with the past. For a long time, the countries bordering the Mediterranean were on the fringes of the development of air transport on the continent. To the north, an air route for business travel was taking shape along a line crossing Germany, Great Britain, Benelux, Ile-de-France and Switzerland; to the south - with the possible exception of Rome - air transport seemed to serve mainly the sunbathing needs of hordes of holidaymakers from the north, who disembarked each new spring in whole charters in the seaside resorts of Italy, Greece or Spain. Even today, the activity of airlines such as Spanair or Air Europa (Spain), Cyprus Airways or Air Malta depends heavily on the tourist activity of their country.
Southward slide
The enlargement of the European Union in the 1980s, and again in the 2000s, rendered this distribution obsolete. The integration of Cyprus, Malta and Slovenia into the Union has shifted the centre of gravity of European business southwards. This situation is reflected in the strengthening of the economic centres of major cities such as Athens, Barcelona and Marseille, as well as the emergence of ambitious secondary destinations such as Genoa, Montpellier and Valencia.
In July 2008, the creation of the Union for the Mediterranean, which brings together 43 countries, further accelerated this southward shift in the business world. The French government's political project gives a new dimension to the Mediterranean as an area of commercial and cultural exchange on a north-south axis. After Marseille and Valencia, it is now the turn of Casablanca, Istanbul and Tunis to rise to the rank of metropolises of the future.
The shift in Europe's centre of gravity towards the south of the continent is reflected in the results of local airports. On average, airports on the Mediterranean route recorded growth rates of between 8 % and 15 % in 2007, well ahead of their northern European counterparts. Rome-Fiumicino, Barcelona and Istanbul - with growth rates of between 9 % and 10 % - ranked 8th, 9th and 11th respectively in terms of passenger numbers in 2007. Valencia in Spain, Cairo and Casablanca, for their part, recorded growth in passenger numbers of over 15.5 % last year. This kind of dynamic poses problems for traffic management. In Spain, for example, airports handled more than 210 million passengers in 2007, compared with 181 million two years earlier. "We have to cope with very rapid growth in traffic, which means we have to redouble our efforts in terms of airport investment. Especially as eight out of ten visitors come to us by air. We are devoting €25 billion over the period 2005-2020, including €8 billion for the expansion of Barcelona airport alone, which has become a major hub in the Mediterranean. Eight billion is also earmarked for the expansion of Malaga", explains Magdalena Alvarez Arza, Spain's Transport Minister.
Airports under construction in Morocco
Spain is not alone in experiencing an air transport boom. Turkey and Morocco are also experiencing record growth. According to Abdelhanine Benallou, Director General of the Office National des Aéroports du Maroc (ONDA), the capacity of the Kingdom's airports will reach 30 million passengers a year by 2010, compared with 12 million passengers in 2007. New projects have been launched to double Casablanca's capacity to 11 million passengers and triple Marrakech's to 10 million passengers. Other expansion projects are underway in Rabat, Fez, Tangiers and Oujda.
National airlines with a dense network of connections are benefiting most from this Mediterranean boom. Three southern European carriers are already approaching or exceeding the 20 million annual passenger mark. Iberia carried almost 27 million passengers in 2007, Alitalia 24.6 million and Turkish Airlines more than 19 million. Other major national airlines in the Mediterranean include Egypt Air, the leading carrier from North Africa with 6.7 million passengers, while El Al, Royal Air Maroc and Tunis Air are all close to the four million passenger mark.
In Europe, many 'secondary' carriers have emerged over the last fifteen years, some of them becoming serious competitors for national carriers. Alitalia, for example, has lost its status as Italy's leading domestic carrier to AirOne and Meridiana. Over the years, the Italian carrier has seen its market share, measured in terms of seat capacity, shrink to just one third on domestic routes. In Greece, Aegean Airlines, which has just launched its Paris-Athens route, has become the benchmark for Greek air transport, in the face of OIympic Airlines, which is caught up in its restructuring and privatisation problems.
Other airlines based along the shores of the Mediterranean are positioning themselves mainly on a niche activity. Air Malta has achieved a remarkable conversion. The airline has increased its frequencies to Europe's major cities in order to reduce its dependence on the British tourist market. With more frequencies and lower fares to compete with low-cost carriers such as Easyjet and Ryanair, Air Malta saw a 17 % increase in passenger numbers last year. For its part, Cyprus Airways is continuing to specialise as a transit airline between Europe and the Middle East. The airline offers numerous flights to Lebanon and has opened new routes to Bulgaria and Romania. Finally, France's Aigle Azur focuses mainly on routes to Algeria and Morocco.
The Spanish locomotive
Spain is the region's air transport laboratory. The deregulation of Spanish skies has made the country one of the most dynamic in the European Union in terms of air transport. Tourism, with almost 58 million European visitors in 2007 and a very dynamic second-home market until the financial crisis, has boosted traffic.
Tourism is not the only cause of this growth. The cities are also experiencing remarkable growth, particularly Barcelona, Seville and Valencia, the economic centres of southern Europe. For example, Catalonia and its capital Barcelona account for 20 % of Spain's GDP. According to Edo Friart, Head of Development at Spanish low-cost airline Vueling, 85 % of the 7 million foreign visitors to Barcelona fly to the Catalan metropolis. The airport has seen spectacular growth, with 6 million extra passengers between 2005 and 2007, the vast majority coming from low-cost carriers... Barcelona is now emerging as the biggest airport in the Mediterranean, with flights to 140 cities in 45 countries.
In recent years, the hub has gained new intercontinental routes to the United States, Latin America, the Middle East and Asia. Iberia has recently strengthened its presence there, notably through its low-cost subsidiary Vueling. Today, the two airlines have a combined market share of over 50 %. Iberia faces stiff competition from two other Spanish heavyweights: Spanair, a subsidiary of Scandinavian SAS, with 11.5 million passengers and a member of Star Alliance, and Air Europa, with 8.5 million passengers.
At the geographical opposite end of the spectrum from Spain, Turkey is experiencing an equally remarkable boom in air traffic. A record 66 million passengers passed through its airports in 2007. "Traffic growth averaged 14 % between 2000 and 2007 in Turkey. It even doubled for the Istanbul region", explains Nihat Ozdemir, chairman of the GMR Infrastructure consortium investing in the development of the Istanbul hub. Although Istanbul has no access to the Mediterranean, it is a major hub in the region. Our strategy is to reach 30 million passengers by 2010, up from 20 million, by building up our Istanbul hub," says Candan Karlitekin, Chairman of Turkish Airlines, "We already connect 130 cities and are positioned on a Europe-Middle East and Central Asia axis. As our fleet consists mainly of medium-sized aircraft of the Airbus A320 and Boeing 737-800 type, we can serve the major cities of Europe and Central Asia several times a day and land in many secondary cities. We serve 60 cities in Europe and more than twenty in the Middle East and Central Asia. The possible integration or association of Turkey with the European Union should further strengthen the city's role as a crossroads in the Eastern Mediterranean.
As we approach the African shores of the Mediterranean, Egypt and Morocco emerge as the most dynamic markets. Signed in 2006, the open skies agreement between Morocco and the European Union has had tangible effects on traffic growth. "In 2007, nearly 150 weekly flights were added between Morocco and Europe. Air traffic in our country grew by 17 % in 2007, one of the highest recorded in the world, while the number of passengers practically doubled between 2003 and 2007, rising from 5.2 million to 10.1 million", declared Karim Ghellab, Minister of Equipment and Transport, last July at a conference in Casablanca. Royal Air Maroc (RAM) has adapted to this new situation by restructuring its network around the Casablanca hub and creating a low-cost subsidiary, Atlas Blue. The airline expects to double its traffic by 2010, with more than 10 million passengers, including 3 million travelling on its low-cost routes.
Tunisia, for its part, is less eager to embrace deregulation, preferring to protect its local carriers, Tunis Air and the private airlines Karthago Air and Nouvelair. According to Nabil Chettaoui, CEO of Tunis Air, the airline's growth should rise from 6 % to 7 % in 2008 and 2009.Tunis Air plans to renew its fleet over the next few years with 19 new Airbus aircraft and to strengthen its routes to Africa with the probable opening of connections to Cotonou, Khartoum and Ouagadougou by 2010.
Egypt in the throes of modernisation
2009 will certainly be an excellent year for Egyptair. Its integration into Star Alliance in July 2008 kick-started its modernisation. This year, Egyptair will receive its new Boeing 737-800s. It has created a new, more dynamic logo, and will take possession of its new private terminal in Cairo. Terminal 3, which houses all its domestic and international flights, will welcome all Star flights from March onwards. The Cairo hub is linked to 75 cities worldwide, including Dar El Salam and Catania, which will be added to the Egyptair network from spring. The new terminal will be able to handle more than 10 million passengers a year, doubling the airport's total capacity, with 22 boarding lounges.
Despite its central geographical location, the South of France suffers from a poor airline network. This is partly due to the hub strategy of the Air France group, which has concentrated its services on Roissy and Lyon, its two main hubs, to the detriment of Nice and Marseille. As a result, Air France-KLM now only serves around fifteen cities from Nice, most of them in France. As a result, the carrier's share of the passenger market fell to just 31 % in 2007. However, with 10.5 million passengers a year, Nice remains France's leading airport on the Mediterranean.
New French realities
At Marseille, Air France still accounts for 60 % of seat capacity at the Provence hub, but the vast majority of this capacity corresponds to routes to Paris. As with Nice, Air France now only serves a few international cities from Marseille: Algiers, Rome and Tunis. "We have to understand that the regional airports, particularly those in the south of France, have to live without Air France. So we have to look to develop our passenger traffic with other airlines", says Pascal Bigot, head of marketing at Montpellier airport.
Nice has long favoured low-cost airlines. The Côte d'Azur hub ranks second in France after Paris, with almost 3.3 million passengers in 2007 using the services of 17 low-cost airlines to 42 destinations. Low-cost airlines account for a third of Nice's total traffic. Easyjet is in first place with 14 destinations and 25,000 seats offered during winter 2009. Ryanair launched its first French base in Marseille in 2006. The airline flies to 14 destinations, also offering 25,000 seats a week. The urgent request from the French President to open up Corsican air traffic to low-cost competition in order to stimulate traffic speaks volumes about recent French realities. The good news is that Easyjet has just launched regular services to Paris-CDG and Lyon from Bastia...
