Highlights of the annual Airneth conference (& V): low cost carriers ultimate frontier, long haul and connectivity
What is going to happen once low cost carriers become the dominant force in the European short haul market. What's next?
This is precisely the question that two separate presentations by speakers Wolfgang Grimme, of the University of Giessen, and Peter Morris, of Ascend Worldwide addressed.
Mr.Morris covered the topic of low cost long-haul carriers, a product that has not yet succeed in Europe, despite some attempts like that of the bankrupt Hong Kong-based airline Oasis. However, innovation in this area is coming from the Asia-Pacific region, with a number of successful airlines making inroads in long haul low cost aviation, despite the challenges and constraints of this type of operation. Jetstar, from Australia, might be an airline to keep an eye on as it successfully deploys its business model.
Mr.Grimme's presentation focused on different models to operate connection flights within low cost networks. Airlines and airports in Germany (particularly German Wings and Cologne-bonn and Berlin airports) have attempted to develop this concept, with mixed results so far. It seems the two most promising ways for low cost carriers to successfully operate connection flights are
- Operate under feeder agreements for long-haul airlines (such as JetBlue is doing already and Vueling is planning to do with Iberia)
- Facilitate connections when there are multiple low cost inter-hub frequencies.
One of the main challenges when trying to connect between low cost carriers is that many destinations have very limited frequencies and uncoordinated schedules. If there is a network of low cost bases with very dense connections between them, potential connections might arise spontaneously. Once this point is reached, low cost carriers can facilitate these connections: this is what Southwest already does at some of its main bases. In Europe Ryanair has the type of dense network that would allow them to do it too, if they wanted (although I do not think this is going to happen anytime soon!).