the leanest and most efficient carriers conquer the market

Will it be the summer of low cost? Most likely yes. The factors at play, from the aftermath of the pandemic to the conflict in Ukraine, partly translated into higher cost of living and air fares, will lead passengers, who traditionally prefer to remain loyal to national airlines, to book with low cost airlines. And to certify how the low cost team will emerge from these years of crisis stronger than ever is the latest study carried out by GlobalData.

“While the low-cost sector suffers as much as full-service carriers from increases in fuel and operating expenses, the typical young age of their aircraft makes many of them be more efficient from the point of view of fuel, helping to reduce costs. The low cost business model and then designed to reduce other operating overheadswhich means that tariffs can remain relatively low despite the current climate ”.

According to GlobalData’s Q3 2021 Global Consumer Survey, 58% of respondents said that affordability is the main factor in deciding where to go on vacation. This sentiment is now being picked up by the entire travel industry, which is about to recover in 2022. Key players – Wizz Air, easyJet and Ryanair – have in fact that July 2022 capacity levels will be higher than in 2019.

“With passengers potentially booking more flights with low cost airlines, this is likely to have a impact on different sectors, in particular on business travel, where the budgets for corporate travel have already been compressed ”.

With the inevitable rise in airfares, the full service industry will be forced to find creative ways to improve their product. In recent years, some elements of the full-service product have become indistinguishable from low-cost products. This is particularly the case in the short-haul economy class, where full-service fares have been unbundled to offer customers more choice, for example in luggage, meals and seat selection.

Bradley concludes: “We must expect a response from traditional companies in the coming months, especially regarding loyalty programs. Many will look to add value to their current frequent flyer initiatives to maintain their customer base. However, thecurrent market sentiment says cost is by far the most important motivator for travelers. Therefore, low cost airlines are likely to emerge from the pandemic stronger than other airlines ”.