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Low cost carriers in the hot seat - driving the agenda from London

Marian Hens

Manager, Global Communications Travel Intelligence, Amadeus IT Group

There has been no shortage of food for thought in the World Low Cost Airlines Congress in London this week. From Michael O’Leary’s comments on baggage-handling (“The future to checked bags is not to do checked bags.  People will carry their luggage through security and directly to the side of the aircraft”) to IAG’s Chief Executive, Willie Walsh’s views on travellers (“There is no such thing as a single type of consumer. We have a lot more choice for the consumer now than 20 years ago”).

airplane wing

 

On one point there seems to be broad agreement, the LCC model is sustainable if carriers maintain focus on the low-cost profile which, many speakers argued, is about costs.

But price is not the only key - comfort is also required and, from the traveller’s perspective, it’s certainly not all about the money.  Low Cost carriers -we have heard at the Congress- need to engage with the passenger by finding a good balance in bundling and unbundling their offer, providing the right product at the right time and simplifying the supply chain.

Airlines

today are very different from what they were 10 years ago”, said Walsh. “Every airline should aim to have an independent low-cost arm”, argued IAG’s boss, a group that now has full control of the Spanish no-frills carrier Vueling.

“We drive the agenda, the high fare airlines copy us”, remarked O’Leary, the outspoken head of Ryanair.

So what’s next for LCCs? Is the future long-haul? Frode Foss, CFO of Norwegian Air Shuttle, Europe's third biggest budget airline, said that differences between legacy carriers and LCCs will fade in the future, as the two will almost blend. Norwegian has recently begun flying to the US using Boeing Co.'s 787 Dreamliner planes.

O’Leary said that long-haul will happen in time and that the operation he envisages would start with routes between the UK and the US and have a business class cabin –“It won’t be all low fares”. He had previously warned, however, that with the growing order backlog at Boeing and Airbus, it might be years before he could get the aircraft he would need. Walsh remarked that he is not concerned about LCCs entering long-haul flying.

So perhaps the future is about long haul, after all.

This post is part of a series exploring how Amadeus is driving the next phase of growth for low cost and hybrid carriers. See new posts as they are published on theLCC page .


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