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No-frills carriers stay aloft by Roger Collis, International Herald Tribune , Friday, May 9, 2003 While the big international airlines face their darkest hour, cutting fares and flight schedules as much as 20 percent in a desperate attempt to offset a slump in passenger bookings, they are challenged in their home markets by the inexorable expansion of no-frills carriers on both sides of the Atlantic. Even as the icons of civil aviation - American Airlines, Air Canada, British Airways, Continental Airlines and United - reel from catastrophic losses that can threaten their survival, here comes the no-frills U.S. carrier JetBlue Airways with orders and options for more than 100 Airbus jets. JetBlue, which flies between Kennedy International Airport in New York and 30 U.S. cities, and Southwest Airlines, the model for all no-frills airlines, are the only major U.S. carriers to have made a profit last year. Ryanair and EasyJet, which bought 120 Airbus A319 aircraft last year, have done the same in Europe. No-frills or low-cost carriers are winning the hearts of travelers for short point-to-point trips within Europe, North America and Asia. In the United States, no-frills airlines account for about 25 percent of short-haul bookings, compared with 20 percent in September 2002, as major carriers have reduced capacity. Europe is "probably 15 percent, but growing rapidly," according to McKinsey Co. No-frills carriers are characterized by operating only one kind of aircraft, such as the Boeing 737 or Airbus A319/$ 320, which carry 107 to 185 passengers in one class. Don't expect lounges, free meals and drinks, newspapers, mileage programs, seat allocation (JetBlue is one noble exception) or the ability to connect or re-book with other airlines. Flights are normally booked through the Internet. The snag is that online agencies like Opodo.com, Expedia.com and E-bookers.com do not show flights of the main no-frills carriers, such as EasyJet and Ryanair, because the fares are not available through the global distribution systems (Amadeus, Galileo, Sabre, Worldspan), only through the specific airline site. The reason is that the carriers want to avoid paying booking fees of up to $15 for each ticket. But you can check the schedules of most no-frills carriers on Official Airline Guides timetables at www.oag.com. It's hard to keep up with the protean no-frills scene. A good source for updates is www.lowcostairlines.org, which lists 34 no-frills carriers in Europe and seven "coming soon (or maybe never)," 13 in North America, five in Asia and a couple in Africa and South America. Aside from such everyday names as EasyJet, Ryanair, bmibaby, Virgin Express, German Wings and Hapag-Lloyd Express, you can find Air Berlin; BasiqAir (Amsterdam); Snalskjutsen (Sweden); SkyEurope (Bratislava, Slovakia); Volareweb (Milan/Venice); Evolavia (Ancona, Italy); Jetmagic (Cork, Ireland), and Air Catalunya (Barcelona). The crucial challenge that no-frills carriers have posed for the full-service airlines is with low one-way fares, breaking the convention that low fares must be hedged with conditions designed to frustrate their use by business travelers. Full-service airlines have responded by creating their own no-frills clones - British Airways' Go (since subsumed into EasyJet); KLM's Buzz (now part of Ryanair); BMI British Midland's bmibaby, and the recently launched SAS SnowFlake Airlines and Delta Air Lines' Song in the United States - or by matching many no-frills fares, especially for late booking, with one-way prices and no Sunday stay requirement. No-frills often deceive travelers with "come on" early-bird fares, penalizing late-booking travelers with much higher fares than those of the network carriers. EasyJet sells the last seats on flights for as much as a fully flexible ticket with British Airways. "I think there's a blurring at the edges between low-cost and network carriers," said Miguel Vermehren, director of corporate affairs at Amadeus, in Madrid. "And a new feeling in the business-travel world, especially in Germany, that it's chic to save money by using low-cost airlines." Amadeus has developed FareChaser, a search engine that will interrogate travel sites for the definitive low-cost fare. Galileo has a similar product. EasyJet hopes to get more corporate bookings with the introduction of B2B (business-to-business) on its Web site for managing business-travel arrangements. Martin George, marketing and commercial director of British Airways, said that BA had no intention of relinquishing short-haul routes to no-frills carriers. "Some may retreat, but we're fighting to make money on short-haul." "The myth that people only care about price is nonsense," he added. "We know that people will pay a premium to fly from their favorite airports and a good travel experience, and that if things go wrong they get looked after. They don't have the same confidence with no-frills." The no-frills formula works brilliantly for short-haul trips. Can it be adapted to long haul? And can the network carriers reinvent themselves to survive? Craig Jenks, president of Airline/Aircraft Projects Inc. in New York, said: "The answer is that the high-cost, full-service carriers are doing their best to reduce costs. And the low-cost carriers over here are going progressively longer haul." A survey by the Business Travel Coalition from April 20 to 22 of 146 corporate travel managers in the United States to determine if travel policies are now being relaxed in light of subsiding military operations in Iraq found that 38 percent have lifted bans on international travel. Access the survey at www.btctravelogue.com/waranalysis3.htm. Readers may contact Roger Collis by fax at (44-20) 7987-3451 or by e-mail at rcollis@iht.com. Please include city and country. Copyright 20003 International Herald Tribune Click here to see original article on IHT website |