UK. Independent aviation consultants, The Route Development Company (RDC) has highlighted the phenomenal growth of low cost airlines in a new report that is likely to make interesting reading for European travel retailers.
The report found that 75% of all intra-European and domestic low-cost routes operated during the summer 2003 season were started after the beginning of January 2002. There are now around 500 routes across Europe on which a low-cost carrier operates, compared with just 125 routes barely 18 months ago. In short, the number of low-cost routes has quadrupled (+300%) in the last 18 months.
Richard Leigh, director of RDC, which offers consultancy to airlines and airports throughout the world said: “With over 160 airports across Europe now having a low-cost carrier operating to at least one destination, it seems likely that the low-cost revolution is well and truly here to stay. Indeed, given the experience in the UK, LCCs may end up having a bigger share of European air travel in the long-term than their counterparts have achieved in the US despite a head start of many years.”
The LCM provides a comprehensive review of low-cost carrier (LCCs) activity in the UK and continental Europe. It analyses LCC activity by individual country and by airline, as well as providing an assessment of fares available in the market. It also gives a detailed technical analysis of performance of LCCs versus ‘conventional’ carriers on over 70 city-pairs. Other key findings include:
* The UK still dominates the low cost market with 312 LCC routes and 660 daily departures. This is twice as many as Germany.
* Germany has seen the fastest growth, from four LCC routes in January 2002 to 141 routes by summer 2003. Italy has grown from 25 routes to 155, while France has grown from 19 to 78
* EasyJet and Ryanair between them operate more than 55% of daily LCC departures in Europe
* London Stansted is the biggest LCC airport in Europe with 99 services, well ahead of the next two airports Cologne/Bonn (37 services) and East Midlands (31 services)
* In the UK, the growing market share of LCCs on both domestic and European services shows no sign of slowing. In February 2003, LCCs had an estimated 37% of the scheduled UK domestic market in terms of passengers while on scheduled European services the LCC share had climbed to 39%. It seems likely that by the end of 2004 LCCs will have 50% of the UK – Europe scheduled passenger market
* easyJet has not added a single new route to its London Stansted base since November 2001, instead focusing on London/Gatwick. In that time Ryanair has added 30 new routes from Stansted, several of them competing directly with easyJet
* The proliferation of regional LCC operations in the UK has seen catchments of the London LCC airports shrink back towards the south east.
* 10% of LCC passengers through the London airports in 2002 made connections
* While cheap fares are the essence of LCCs, return fares of over £350 (EUR 450) are widely charged when booking at the last minute. In general, evidence suggests that fares are higher on monopoly routes, lower on competitive routes and the lowest on newly launched routes
* Crucially, only Ryanair, easyJet and Virgin Express have reported profits of any sort in the LCC market
The report concludes that the phenomenal growth of LCC activity in 2002/03 may slow down somewhat in 2004 as many of the new carriers attempt to consolidate and start to improve their profitability to ensure their long-term survival.
Click here for details of the report, which is available at £250.
