Bangkok--Sep 30--eTurbo news
Research and Markets has announced the addition of European Low Cost (No-Frills) Airline Industry to their offering.
In recent years the airline industry has suffered heavily: stocks have plummeted and ticket prices are at all time lows. News headlines such as 'The unpalatable truth' have considered the dire straits of the industry. The flag carriers (national airlines) have certainly been forced to economise, cutting the number of short route European journey where costs are too high. Sabena, Belgium's national airline and one of the oldest in the world has become history. Swiss Air has had similar liquidity problems and has had to be bailed out by the Swiss government. Even now they are not running a full service.
Low-cost carriers however, have turned away many problems that could be coupled with consumer confidence, and have remained cost-effective. Europe's Budget airlines such as Ryanair and EasyJet and Go, are also however flying high. After a brief post-September 11th dip and global airline recession the Ryanair, based at Dublin, now says that seat sales are back to normal and there are flying full capacity.
The success of the low-fare strategy is critically dependent on the maintenance of a low cost base. Ryanair is maintaining high margins despite reducing yields through disciplined cost management. Lower costs are the only competitive advantage in the short-haul economy sector since air travel is effectively a commodity product. It is believed that believe Ryanair will continue to lower costs, which will enable it to persist lowering fares aggressively. The Q1 results show average fares fell 7%. At British Airways, despite a new short-haul pricing strategy, average yields rose 5% in the quarter.
Since a couple of years, following the European deregulation of commercial aviation, an armada of discount carriers is reshaping the local airline landscape, or rather horizon. Ryanair bluntly fought its way into the market with an aggressive pricing strategy. At first sight considered impossible, the no-frills trick hit the nerves of the European passengers. Even more so, it has basically thrown overboard anything slightly related to catering, which could be considered a good thing; given the ""denial of food"" almost airliners serves. Ryanair's no frills strategy does not only mean a cut in Cabin crew, but also allows for a faster pre-flight preparation, thereby reducing the time grounded as well maintaining low fare.
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--InfoQuest (EB)--