World Low Cost Airlines Congress 2015: Evolving LCC business models

Fredrik Odeen

Senior Manager, New Carrier Strategy, Travel Channels, Amadeus IT Group

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Low cost air travel was once the preserve of the leisure traveller, having stimulated many millions of people to travel for the first time or more regularly. Today, major low cost airlines are turning their attention to the business traveller with new fare structures, evolved technology systems and a fresh approach to service. The question on everyone’s lips now is: can Low Cost Carriers (LCCs) capture the business travel market and what does this mean for the industry?

Amadeus for low-cost and hybrid carriers

These were two of the central themes discussed on the first day of this year’s World Low Cost Airlines Congress in London. The audience heard from a range of airline CEOs and senior managers including Alex Cruz from Vueling and Kenny Jacobs from Ryannair. What stood out from the early keynote presentations was the focus both executives placed on serving the business traveller with investments in digital technologies and mobile apps to support growth. Kenny Jacobs foresees a time when LCCs will move from circa 35% of the European market to reach closer to 50% with further offers for the business traveller including lounge access and loyalty schemes.

Amadeus Light Ticketing enhancements

This focus is fundamental if LCCs are to win the trust of the business travel market they currently seek. Our own work with easyJet has seen the introduction of Amadeus Light Ticketing enhancements, which have resulted in tremendous adoption rates amongst our TMC, corporate and travel agency partners by making booking easyJet fares just as simple as those of full service airlines. Gianni’s recent post highlights the impressive results easyJet is seeing from these partnerships. For LCCs seeking to serve business travellers it’s about making distribution simple and considering how to intelligently evolve services whilst remaining true to the fundamentals of the low cost model.

Amadeus for low-cost and hybrid carriers - growth strategies

It remains to be seen exactly how these developments will play out from a wider industry perspective but it is my expectation that the entry of LCCs into business travel is likely to result in a larger overall market, stimulating demand as they have done in the leisure sector. As we saw in last year’s Shaping the Future of Travel: macro trends driving industry growth over the next decade business travel is expected to growth steadily on a global basis.

The Amadeus team is already looking forward to seeing what day two of the conference has in store.