We’re creating a more connected travel industry, underpinned by sustainability and long-term investor relations.
Today, airline business models are no longer as black and white as ‘full service’ versus ‘low cost’. As airlines embrace dual brand strategies and the lines between traditional low-cost and full service carriers start to blur, we’re seeing a hybridisation trend take form. It’s no longer one size fits all.
As I outlined in my presentation yesterday at the World Low Cost Airlines Congress in London, these new hybrid forms are now, in fact, disrupting the disruptors. They’re adapting quickly, identifying and seizing new opportunities, and moving away from short haul, point-to-point and direct sales strategies.
LCC subsidiaries of traditional full service airlines are a great example of this hybridisation trend: they are flourishing and, in some cases, traffic is shifting from the parent carrier’s network or model over to the lower cost subsidiary.
At the same time, new and unique alliances that suit the LCC business model are emerging. The Value Alliance in Asia Pacific, a region where the strongest growth is anticipated in the coming years, is a good example.
Well, what’s clear is that they are sustaining double-digit annual growth and reaching record levels of total seats flown: LCCs and hybrids accounted for 25% of total global seats flown in 2015. These carriers are seeing a rising seat share across every region and have large numbers of aircraft on order. Just 15 of our customers have 1,700 aircraft on order!
As they adopt new growth strategies, they’re breaking records and setting the pace as the industry moves forward. Ryanair, for example, was the first airline in the world to carry more than 100 million international customers in one year.
The task now for this new breed of hybrid is to retain the characteristics that make them successful today, while creating opportunities for future growth. Connectivity will be key: creating better connections with both travel sellers and other airlines will lead to innovative new alliances and networks.
This is a really exciting time for the industry and, at Amadeus and Navitaire, we have the expertise and technology to answer the transitioning needs of airlines of all business models. We are partnering with carriers to create and maximize new revenues in a flexible and cost-efficient way, bringing our rich experience in the LCC and hybrid space to open up a world of opportunities.