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Low-cost carriers branch out into new lucrative territory

Low-cost carriers branch out into new lucrative territory Low-cost carriers (LCC) are successfully branching out into new areas, such as business travel, according to Sabre Airline Solutions.

Sabre found that 59 per cent of 123 budget carriers studied now offer products and services that were considered beyond the usual remit of a low-cost airline.

Traditional LCCs are classed as providing a point-to-point airline with just one-class cabin and a simple fare system.

Only 41 per cent now fit this description and seven per cent have now in fact become fully fledged carriers.

Popular features of what have been termed 'hybrid' carriers include maintaining international and long-haul routes with a multiple availability of fares and aircraft types.

In 2007, these hybrid carriers dominated the budget market by flying 64 per cent of passengers.

Murray Smith, vice president of Sabre Airline Solutions, pointed to the competitive LCC market as prompting some carriers into "evolving their business to remain competitive and sustainable".

He added that this has meant "adopting some full-service carrier business practices to help grow their passenger base and expand their reach in the marketplace."

"Although, they have often added their own twist on how these business practices are implemented."

"Many of these airlines have evolved into a 'hybrid' carrier in order to make a play for the highly lucrative business traveller, who has a completely different set of needs and shopping behaviours from the leisure traveller that LCCs have traditionally targeted."

Airlines such as bmibaby, easyJet, Germanwings and Virgin Blue were all pinpointed by Sabre as being successful 'hybrid' carriers.


Airline News posted on 14 May 2008

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