A new report has put forward figures suggesting that not only does the UK’s love affair with no-frills air travel show no signs of cooling, but that the demand is actually continuing to grow.
The figures have been announced by OAG, a company that compiles aviation data, and they show that no-frills airlines have grown their monthly capacity in the UK from around four million international seats in 2003, to the 8.8 million seats that will be available this month. This puts the UK firmly at the top of the low-cost capacity league table, a full 1.4 million seats ahead of Spain, which takes second place with 7.4 million international seats.
The growth in low-cost air travel capacity over the last 10 years easily outstrips that of standard-service air travel, by a ratio of 14 percent per annum to 1 percent per annum. Ryanair and UK-based easyjet are the dominant players in the field, together accounting for over 50 percent of European no-frills capacity. Ryanair has around 33 percent of all seats, with easyjet claiming 21 percent.
OAG’s executive vice president, John Grant, commented, ‘While it’s no surprise that LCCs are increasing capacity at a faster rate than their legacy counterparts, the actual rate at which low-cost airlines are growing their market share is quite astonishing. In the last 12 months alone, the UK’s international LCC capacity increased by 15 percent.’
By comparison with the UK, France has the lowest no-frills ratio of all the major European countries. There, just 18 percent of domestic capacity is available from no-frills carriers, and they account for only 28 percent of international capacity.
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.’