Low cost carrier market could see consolidation
One of the most prominent investors in the low cost aviation sector says he expects to see consolidation of budget carriers in the US market.
Mirroring the transformation of the traditional market into the big four legacy carriers, Bill Franke expects to see carrier consolidation cascade down into the low cost sector.
"If you want to see how the international aviation landscape is going to evolve, just look to the United States, where consolidation has left just four major legacy carriers to compete with the low-cost airlines that serve the rest of the market," said Franke, partner of private equity firm Indigo Partners which owns Frontier Airlines.
"As an aside, don’t we all wonder just how long it will take before the three to five lower-cost airlines in the States will consolidate?" Franke said during an address at an airline conference in Dublin.
Indigo Partners also has stakes in Hungary’s Wizzair and Mexico’s Volaris.
Franke cited the struggles of Southwest Airlines to rein in high operating costs and the move by Virgin America and JetBlue towards a legacy airline-style business model.
"As we see it that leaves the market under-served by the ultra-low cost model, which explains why we are in the business of moving Frontier in that direction," Franke said.
That sector is dominated by Spirit, Allegiant and Frontier.
"From where we stand, the future rests with low-cost short haul carriers or a measured product with a lower fare for the longer haul," he said.
TravelMole Editorial Team
Editor for TravelMole North America and Asia pacific regions. Ray is a highly experienced (15+ years) skilled journalist and editor predominantly in travel, hospitality and lifestyle working with a huge number of major market-leading brands. He has also cover in-depth news, interviews and features in general business, finance, tech and geopolitical issues for a select few major news outlets and publishers.
Vegas’s Billion-Dollar Secrets – What They Don’t Want Tourists to Know
Visit Florida’s New CEO Bryan Griffin Shares His Vision for State Tourism with Graham
Chicago’s Tourism Renaissance: Graham Interviews Kristin Reynolds of Choose Chicago
Graham Talks with Cassandra McCauley of MMGY NextFactor About the Latest Industry Research
Destination International’s Andreas Weissenborn: Research, Advocacy, and Destination Impact
Graham and Don Welsh Discuss the Success of Destinations International’s Annual Conference
Graham and CEO Andre Kiwitz on Ventura Travel’s UK Move and Recruitment for the Role
Brett Laiken and Graham Discuss Florida’s Tourism Momentum and Global Appeal
Graham and Elliot Ferguson on Positioning DC as a Cultural and Inclusive Global Destination
Graham Talks to Fraser Last About His England-to-Ireland Trek for Mental Health Awareness
Kathy Nelson Tells Graham About the Honour of Hosting the World Cup and Kansas City’s Future
Graham McKenzie on Sir Richie Richardson’s Dual Passion for Golf and His Homeland, Antigua
ADS PRO 
Airlines suspend Madagascar services following unrest and army revolt
TAP Air Portugal to operate 29 flights due to strike on December 11
Qatar Airways offers flexible payment options for European travellers
Airbnb eyes a loyalty program but details remain under wraps
Air Mauritius reduces frequencies to Europe and Asia for the holiday season