Saturday, 1 July 2017

Low-cost long-haul coming of age?

Full article in PDF format

In March 2015, after years of teasing passengers with the promise of £10 transatlantic fares, Ryanair formally ruled out moving into the low-cost long-haul (LCLH) marketplace.

“The Board … has not considered or approved any transatlantic project and does not intend to do so,” it said in a terse statement, backtracking on plans announced just days earlier to connect Europe with a dozen cities in America. Chief executive Michael O’Leary insisted that the industry needs to enter a cyclical downturn before widebody aircraft become available at suitably discounted prices.

Ryanair’s scepticism of LCLH models has not changed over the past two years, but the once-vacant sector is now advancing leaps and bounds without it. Two rivals – Norwegian Air Shuttle and Iceland’s WOW Air – have grabbed sizable chunks of the transatlantic market with their no-frills offerings. Responding to the new competition, three of Europe’s legacy carriers have launched or promised to launch their own LCLH subsidiaries...