Services of low-cost and full service airlines set to overlap

The services offered by low-cost and full service airlines are increasingly set to overlap as both entities stretch their parameters to attract a wider clientele.

This blurring of services was confirmed by the bosses of major airlines speaking at the CAPA Aviation in Transition conference that has been taking place in Ireland.

Speaking with regards to full service airlines removing some of the premium aspects of their service in order to help streamline their operation and offer lower ticket costs, Alex Cruz, the CEO of Vueling, a Spanish low-cost carrier, said that this was the case, adding that conversely, ‘Some of the low-cost carriers also want to find ways to differentiate their product by upgrading the services they have. We will introduce more frills at almost no cost or zero cost to us. When competing against other low-cost carriers, there’s one factor, which is cost. When the cost is similar you need to be differentiating through your product. Make sure you have a damn low price available and then have additional features that will answer to what the business travellers want.’

Some airlines already claim to have achieved the perfect blend of economy and service. The CEO of US airline, Jet Blue, David Barger, believes that his company is one of them, saying, ‘We are higher frills and lower costs – people are willing to pay a premium to fly with us. They don’t pay for the first bag, or have to swipe a card for the TV and we will not charge for wifi when it’s introduced. Geography, product and cost structure are what’s important – you need all three together. We have a higher cost structure by being based in New York. This is a high value proposition with a lower cost structure. It works as long as we maintain a lower cost base compared to legacy carriers.’

However, Willie Walsh, chief executive of British Airway’s owner, IAG, commented, ‘BA will never be a low-cost brand. It would be crazy to do that – it would destroy so much brand equity.’