Friday, November 27, 2015

Low fair airline news summary - Trends in the low cost carrier industry

Many things have happened in the low cost airline business and I think it's time for good summary about some major trends and changes in the industry.

Long distance low cost flights - Norwegian is in the business and Ryanair planning it
Cheap Airlines have traditionally their major cost advantage in short routes where optimizing the capasity and personnel costs are more significant. In the long distance flights there hasn't been similar cost advanteges because fuel costs play important role and Ryanair and Wizzair have very limited possibilities to get cheaper fuel than any other airline company. However new less fuel consuming airplanes have made this long distance market more interesting for low cost carriers and Norwegian Air Shuttle have already started their long distance flights. They are using Boeing 787 Dreamliner for their continental flights. Norwegian flies from Nordic capitals (Stockholm, Oslo and Copenhagen) to New York, Florida, Los Angeles and Bangkok. In addition to this they have some continental routes to the US from London Gatwick Airport. Ryanair has published some mixed views about their possible long distance flights but they are definitely seriously considering the opportunity.

Copenhagen intense competition thanks to Ryanair
If you look at the European map it's easy to understand why Copenhagen is so important airport between Northern and Central Europe. Ryanair opened 17 direct routes from Copenhagen and that made competition between Ryanair, Easyjet and Norwegian very intense in Denmark. If you look at the Skyscanner you can find more than 10 cities where you can now fly one way flight with less than 20€ from Copenhagen. If Wizzair opens flights to Copenhagen it's possible that Copenhagen becomes similar low fares hub as Brussels Charleroi, Milan Bergamo and London airports. More information about Ryanair routes from Copenhagen can be found here: Ryanair cheap flights from Copenhagen.

Cabin baggage fees have not become popular - Ryanair is not following Wizzair example
Wizzair launched some times ago policy of two sizes hand luggage. Small Cabin Bag, that fits below the seat in front of you (Free cabin bag) and Large Cabin bag that is approximately same size as normal cabin baggage on other airlines (Cabin baggage fee). I assumed that if this seems to work Ryanair would follow the example but they haven't so I assume that they have come to a conclusion that it's not generating them more profits than current fees.

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