Corporates ‘weaned off’ low cost carriers, says report
Low prices, interlining and good onward connections are helping traditional airlines fight back against no frills carriers, a report has revealed.
Research conducted by technology firm Traventec said the Guild of Travel Management Companies believe airlines are “weaning UK business travellers” away from low cost carriers.
“The Guild maintains that less than 15% of air travel undertaken by its 33 members involves low cost carriers,” the report states.
The conclusions emerged from an analysis by Traventec into the low cost and regional airline sectors.
Among the findings were that the differences between low cost and regional airlines are blurring and they will converge into one powerful airline sector.
“Already there are no longer hard and fast rules governing what constitutes a low cost carrier verses a regional airline,” the report says.
Both operate on short to medium haul routes, have smaller, efficient aircraft and fly to lesser known airports. The one major difference, the report stated, is that many regional carriers do not offer online booking and are missing out on selling additional products such as car hire, accommodation and insurance.
“But that will diminish over the coming years,” it said.
The report also quotes consultants McKinsey & Co who predicted only two or three low cost carriers will survive in the Europe in the long run.
“Sheer market saturation, excess seat capacity and intense competition with both charter and traditional airlines for the basis of this prediction,” Traventec said. “Nonetheless, low cost carriers’ share of the European travel market is expected to increase from 16% to 24% by 2010.”
Report by Steve Jones
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