This question keeps coming to my mind…so many low cost carriers come up in Europe and USA, but why is this concentrated only on these regions? Places like Asia and Africa will do a whole good with low cost carriers, specialy Asia, massive population and a very fast growin middle class.
For instance China, hige population, so many airlines and no low cost…even the smallest carriers have competative price. India’s first low cost is coming up named Deccan Air most. prob. with ATRs ot Dash 8s, but this is the only one in near future.
I think the main hurdle in front of low costs in regions like Asia and Afria is the rate of ATF……which is sky high….in India there is a 200% tax on ATF…and more than 120% in china, thats why airlines come and go here like rain……they r not so well equiped to take first few quaterly losses.
Your oppinions?
By: A330Crazy - 12th March 2003 at 21:07
Just to let you know, to get you stressed out a liitle bit more… FlyinFinn, new low cost start up in finland… coming soon.
As for low cost carriers in Africa and Asia, theres only one i know of in each of these…
Africa – (south) Kulula.com
Asia – Air Asia?
By: Saab 2000 - 12th March 2003 at 19:15
Well in Europe there are still gaps, Spain, Portugal, Austria, and certain places in Germany for example. However, my tip for the future is Eastern Europe as the next growth area for the low cost airlines. Next year, 2004, there is going to be a “Big Bang” of activity in this region. Why? -Because in May 2004 Slovakia, Slovenia, Poland, Lithuania, Czech Republic, Estonia, Hungary and Latvia all join the European Union. This will allow massive growth because theoretically the EU has open skies, as soon as you step out of this boundaries of the EU then the interests of the flag carrier intervene making it difficult for anyone to get in. But this all should change when these Eastern European states join the EU, thus allowing growth in the market.
Secondly the APD is four times higher if you step out of the EU so making money on these types of routes is very hard until EU membership is granted.
I can guarantee that you will see growth here with the likes of Easyjet and Ryanair ready to pounce, the latter airline having already apparently bought an airport outside of Prague . Then you have all those nice German loco’s getting closer to the boarders. Personally I don’t blame them, Tallinn, Bratislava, Riga just like miniature Prague’s, look at their city tourism industry and see what these cities could be like. Though where this leaves Czech, Malev, LOT etc is another question,
By: Bhoy - 12th March 2003 at 14:56
Originally posted by T5 The point that I am trying to make is that there is no room for more low cost carriers in the UK.
Not sure I’d go along with that… in teh South East, certainly, but the further North you go, the less services are avaliable, and as none of the LOCO’s are nescesarily geared to transfers, it can be a right pain for non Londoners to use them…
By: mongu - 11th March 2003 at 18:34
Well for a start you cannot compare India/China to Europe/US because the level of penetration of air travel is totally different.
The number of Europeans or Americans who can afford to take flights and equally as relevant, who are in the routine habit of doing so, is fairly high compared to the rest of the world. Asia and Australasia being the obvious exceptions.
Secondly, locos rely upon credit card payment and internet booking for a lot of their cost savings – again, take up and willingness to use these is far greater, per head of population, in Europe/US.
By: MapleLeaf_330 - 11th March 2003 at 18:00
It seems to me that one of the core factors in the success of no-frills is the non-business traveller, more the leisure traveller, going to see granny on the weekend, or a quick trip to Paris, Berlin or San Fran in the States. The average joe that doesn’t need to worry about frequent flyer programs, or seat pitch. The kind of person that flies once in a blue moon. You indicate that their is a growing middle class in Asia, no doubt it seems only logical, however, are these people flying? I point to a fact that you stated in an earlier e-mail that Air India has only thirty-something planes for a population of some billion plus people. Perhaps more the question is how to convert people’s way of thinking in this part of the world to fly? Low cost would seem like an obvious choice. How do you make it an attractive alternative? Or, perhaps it’s a case of people not travelling as much as in Europe. Is continental travel as much a part of the landscape in India and the rest of Asia for the average Joe?
Not stating that frequent flyers don’t use low frills, but my assumption is that more often than not they use a major.
By: T5 - 11th March 2003 at 17:53
I don’t think it’s possible to move into a new stage of low cost air travel, certainly not in the UK anyway.
Low cost airlines are being set up on what could almost be said to be a daily basis… that’s how frequent these things are! I just don’t think any new airlines setting up from now onwards stand a chance for a number of reasons:
1. Where is the airline’s hub?
– Is this airport easy to get to? By car and public transport?
– Do other low cost airlines operate from this airport?
2. Where does the airline fly to?
– Do other airlines fly the same route?
If a new low cost airline was to start operations from an easy-to-reach airport, one which isn’t used by other low cost carriers and then flys to a variety of destinations across the continent or maybe even further afield (similar to what the non-existent Sky Bus plans on doing), routes which are in high demand, they’ll be a success, surely – Is there such a thing?
If you plan to set up an airline at London Luton say, and you plan to fly to Barcelona, Palma and Geneva for example… you can wave your future as a low cost airline goodbye. Competition with easyJet would be impossible. They have hubs in London and Geneva and are known by lots of people. Their flights are operated more frequently, giving the travellers a whole lot more choice as to when they can travel because they are such a large airline with an even larger fleet and their prices are competitive!
The point that I am trying to make is that there is no room for more low cost carriers in the UK. Any new airlines wanting to start up would need to be based at an airport which does not currently offer low cost flights and fly to destinations which cannot be reached from that airport.
By: EGNM - 11th March 2003 at 17:08
re Leeds/Bradford
Only other service Loco before Jet2 was Ryanair 3x Daily to Dublin – T5 i can see you’re talking sense but are we now moving into a new stage in LOCO air travel?
By: T5 - 11th March 2003 at 16:50
There are too many low cost carriers in Europe especially and I think it’s obvious that less than half of these will actually make it big – like easyJet.
I think any low cost carrier being set up now is taking a huge risk. There is a lot which could be lost financially, competing with the largest low cost airlines in my opinion – Ryanair and easyJet.
However, airlines such as Jet2 do stand a chance as far as I’m concerned. Operating from Leeds Bradford, not a major airport (if at all) for low cost flights.
Mama Air was all ready to go then flopped, taking a turn for the worst with the project never taking off! Perhaps their choice of hub was never the best anyway.
Too many low cost carriers, regardless of where in the world it is, is a crazy idea. The smaller airlines will just be forced to cease operations after a while because they cannot compete with the long-established and more well-known airlines.
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March 11, 2003 at 4:15 pm