Budget airlines adding new services

[14th May 2008]

Many low cost airlines are becoming more like full service airlines according to a study by Sabre Airline Solutions.

Sabre, which provides integrated solutions and services for airlines and airports, looked at 540 airlines around the world. Of the 123 airlines that called themselves low cost carriers, Sabre found that only 41% “retained true LCC characteristics”.

These characteristics include single aircraft types with single cabin configuration, direct flights, simple fares with no interline or codeshare agreements, and direct sales usually through the internet.

Many so-called low cost airlines are now introducing the kind of services typical of full service airlines says Sabre. These include long haul destinations, connecting flights, multiple classes of service, and multiple fares available at any time.

“Airlines that introduce more than three of these full-service characteristics should be considered a ‘hybrid' carrier because each attribute adds a level of complexity and cost to the operating model that is inconsistent with the fundamental principles used to define low-cost carriers,” says Sabre vice president of airline marketing and strategy, Gordon Locke.

Using this definition, Sabre suggests that low fares airlines including easyJet, bmibaby, Germanwings and Centralwings could all be classified as hybrid carriers.

“Many of these airlines have evolved into a ‘hybrid' carrier in order to make a play for the highly lucrative business traveller, who has a completely different set of needs and shopping behaviors from the leisure traveller that LCCs have traditionally targeted,” comments Locke.

“In comparison, pure LCC airlines don't use these tools. They stay true to the LCC model – a simple, no frills offering using discounted airfares to appeal to a single travel segment, in this case the price-conscious leisure traveller,” he adds.

Written by: Nick Purdom