Spot the difference between legacy and LoCo

[farci]

LEGACY AIRLINES are increasingly indistinguishable from their low-cost rivals in terms of the fares they charge and the service they offer, according to research published last week by KPMG, a consultancy. The Airline Disclosures Handbook (http://www.kpmg.com/Ca/en/IssuesAndInsights/ArticlesPublications/Documents/2013-airline-disclosures-handbook.pdf) reveals that the cost gap between traditional and budget airlines has fallen by an average of 30% in six years, partly because legacy airlines have abandoned old differentiators like free baggage and in-flight catering on short-haul flights. “The service being offered by low-cost and legacy carriers is now more or less the same,” says one analyst.An article in The Economist argues that legacy airlines have not benefited by adopting LoCo's policies.

Discuss.......

[MCDU2]

MOL has stated on numerous occasions that his strategy is to now increase fares and chase yield. So the question is are the locos now closing the gap or the legacies?

[ManUtd1999]

It's an interesting point. A decade ago when low cost flying really took off, flights were a lot cheaper than they are now. Even the last-minute bargain fares on Ryanair are at least £10 now, back in the day they marketed £1 flights. At the same time BA and other legacy carriers have stripped away the service to the bare minimum of a drink and snack and reduced the price accordingly. They are even trialling a 'without baggage' fare from LGW. This has reduced the gap between them dramatically.

In terms of route network, low cost carriers have been battling with charter airlines. Most loco's, especially EZY, now offer a lot of flights to Spain, the Canaries, Greece etc and target holidaymakers. This has never really been the legacy market and they're happy to target mostly long haul feed and business traffic. The charter airlines have lost out, resulting in Monarch trying (somewhat slowly) to become a low cost scheduled carrier and Thomas Cook nearly going bankrupt. Charter routes are now the ones where they can't be replaced as easily (Egypt, Cape Verde, Turkey, Florida, Caribbean). The other aspect of this is LHR. Had Easyjet/Ryanair been able to get access to LHR like they have at Barcelona, Schiphol and Paris then they might have put more pressure on BA short haul.

[racedo]

then they might have put more pressure on BA short haul.

BA shorthaul is effectively LHR shorthaul as BA have pretty much given up elsewhere.

Difference between legacy and LoCo is the mindset of being willing to try new things and new ways of both doing business and attracting passengers.

Legacy now copying but snobbishly trying to tart it up to look different because it would mean admitting they were way behind the market.

BA went from being a leader to being a follower either by Lowcos or by Emirates / Etihad etc.

I remember a senior BA director claiming 10-12 plusyears ago that BA didn't need LoCo as its passengers didn't travel that way and never would......

[Phileas Fogg]

A decade ago when low cost flying really took off, flights were a lot cheaper than they are now. Even the last-minute bargain fares on Ryanair are at least £10 now

Not neccessarily so, in this part of the world here's a recent booking of ours, round trip SUG/CEB/SUG for two of us, 4 flights and at today's exchange rate equates to £7.46 per flight including the add-ons.

SUMMARY OF CHARGES
FARE:
Base Fare PHP 4.00
TRAVEL FEES AND TAXES:
Other Taxes PHP 48.00
PH-VAT PHP 144.48
Aviation Security Fee PHP 60.00
Fuel Surcharge PHP 1,200.00
OTHER FEES:
Web Admin Fee PHP 400.00
TOTAL: PHP 1,856.48

[Capetonian]

The fundamental difference remains in the structure of their services. Whereas legacy airlines offer interline/online services with through check-in, alliance partners, through fares, lounge facilities and loyalty scams, the LoCos generally only offer point to point services.

In terms of pricing for ancillary services, the distinction is increasingly blurred.

[PAXboy]

farciAn article in The Economist argues that legacy airlines have not benefited by adopting LoCo's policies.And they could not be expected to benefit!

Firstly, all the legacies that tried it as a separate line 'GO' etc. failed because they had the wrong mindset.

Secondly, all the legacies that try LoCo style short haul are going to have difficulty because they still have not slimmed down the main structure of people and buildings enough. i.e. they have the wrong mindset.

I do have sympathy for the legacies and can see why such good carriers as BMI/BD closed as they could not hope to survive in that market. More will close/merge in the next five years.

The legacies cannot hope to win for as long as we have the recession (another five years) but even then people will still want to fly for less money and will put up with discomfort. To many (most?) it's just a bus.

[The SSK]

The biggest single differentiator is seating configuration. BA 737s - 143 seats, Ryanair 737s - 189 seats. That gives FR a 25% per-seat advantage on any given cost.

[Lord Spandex Masher]

Not quite because they also pay higher airways charges etc.

[dwshimoda]

The biggest single differentiator is seating configuration. BA 737s - 143 seats, Ryanair 737s - 189 seats. That gives FR a 25% per-seat advantage on any given cost.

Not really - you are comparing different aircraft types, and therefore different operating costs so it's not as simple as just saving 25%.

[Jack1985]

An article in The Economist argues that legacy airlines have not benefited by adopting LoCo's policies.

Tend to agree, if you look at Aer Lingus which went from Legacy to purely low-cost after 2001 it seen short-term benefits between 2002 and 2007 fueled by a growing home-economy, it quickly became unsustainable and had to adapt and change its model to survive which it is now doing well using a hybrid type business model.

[The SSK]

My point was that if BA, AF, LH chose to configure their aircraft to the same seating density as FR they would reduce their costs per seat/km by 25% at a stroke. This would go much further in closing the cost gap than tinkering with baggage, catering or crew costs.

[EI-BUD]

This is a very interesting and worthwhile discussion, a couple of key things spring to mind as I read:


The decline in the number of airlines in the market (many factors driving this down including competition from loco airlines/impact of same and fuel prices etc.)
The cost of fuel
The recession and reduction in disposable income
It feels like the whole thing is going full circle with the reduction in the number of airlines in the market and the growth of a few loco's the fares they can chase are much higher, capacity is being matched much more closely to demand.

MOL's view was some time ago that we will have more consolidation and Europe will have 1 or 2 big (legacy) carriers, plus Ryanair and Easyjet.

Given this concept which when we see the level of consolidation in the US market post deregulation, what lies ahead for Europe considering scale and viability, we should expect the needle to move yet again to fewer airlines on the particular routes offering services that match demand and fares that give much better shareholder returns.

In terms of looking at the airlines in a spectrum from Full Service to Pure low cost, it is clear that in the extreme we have Ryanair, with easyJet certainly moving up the spectrum offering 'convenient airports' and pre assigned seats, and Ryanair staying true to its cost leader strategy.

As the pure loco's cannot get after the long haul business (or rather none have quite cracked this yet), the legacy carriers can use this to support filling seats on short haul (for interlining), hence often the legacy carrier can compete with say easyJet but not be solely reliant that point to point, moreover, this fact may in itself drive the legacy carriers to be over reliant on long haul routes and shy away from sort haul where loco's reign supreme. If looks like this in many cases, IB on the South American market, and interestingly airlines like LH reforming its own short haul outside of its main hub and transferring services to Germanwings, Iberia transferring some services to Vueling and IBexpress.

As someone has said earlier about airlines like BA , LH and to a lesser extent AF all retreating to their main hub airports, it would seem that many legacy carriers are focussing on routes/markets that the loco's cannot adequately penetrate, it seems that for the mean time these markets will be the domain of the legacy carriers while other accessible markets will become loco... the question is as the airlines attempt to differentiate from the competition will we simply see more hybrids of locs/legacy ...i.e a continual evolution up this spectrum?

That would be my take on the situation...

[Phileas Fogg]

Just as an example ... BHX/FCO/BHX,

A few years ago this was a regular business route of mine, Jet2 operated once a day direct services yet, somewhat cheaper, Swiss operated three times a day cheaper indirect (via ZRH) services and on each and every sector one was served with a complimentary snack/sandwich/coffee/beer and an exemplary friendly and professional cabin service ..... Why on earth would one want to "LoCo" it? :)

[MCDU2]

And as an aside lets not be comparing apples and oranges either. MOL got his 189 seat aircraft at rock bottom prices and has accelerated their depreciation taking advantage of a lucrative company tax regime in Ireland. Legacy carriers would have paid a lot more for smaller aircraft eg: BA. Taking a USD10m price differential as an example that is a lot of extra seats to be filled. Then there are lower maintenance costs on newer machines, air stairs etc etc.

[racedo]

has accelerated their depreciation taking advantage of a lucrative company tax regime in Ireland.

Companies get Capital Allowances from Govts to offset investing in new equipment / buildings all allowed against tax. Every EU country gives capital allowances.

Its why Tesco in UK is continually investing in new stores as means they pay little tax.

Depreciation has no impact on tax so writing aircraft down in 5 years or 10 years matters little as this is ignored for tax purposes.

[racedo]

MOL got his 189 seat aircraft at rock bottom prices

Ryanair bought favourably because everybody else not interested in buying, they bet the farm.

Of course the fact that the dollar has tanked in the last 10 years has helped as $1 was worth €1.22 at its highest and now worth €0.78.

Means you get a massive benefit as Boeing sell in $ and a €25M plane cost €30M when Euro weak but €20M when Euro strong.

[stormin norman]

Easy to tell the Locos from the legacys.

Go into the terminal .

Passengers with no baggage, a bag from mc donalds, a tin of drink in their hands and a copy of the Sun are on loco's.

Those with baggage, having a latte and reading a copy of the times with a seat number are not.

[racedo]

Easy to tell the Locos from the legacys.

Go into the terminal .

Passengers with no baggage, a bag from mc donalds, a tin of drink in their hands and a copy of the Sun are on loco's.

Those with baggage, having a latte and reading a copy of the times with a seat number are not.

Really so Gatwick .......local to you, sells few Times and thousands more Suns since BA pretty much abandoned it.

Wonder has anybody told WH Smiths........

[ZFT]

racedo
Depreciation has no impact on tax so writing aircraft down in 5 years or 10 years matters little as this is ignored for tax purposes.

Has a very significant impact on Corporation Tax

[racedo]

Has a very significant impact on Corporation Tax

None at all.

Understand where you coming from

Depreciation policy is set by Board of directors of a company and they can set whatever policy they like........................therefore management would do everything they could to ensure high or low profits by saying Aircraft will last 25 years or 1 year and Laptops 10 or 6 months so higher / lower profits shown and they get bigger bonuses or pay less tax .

However Govts want to avoid companies doing this as would mean no idea what tax they could collect PLUS they want to incentivise businesses to invest in new technology / equipment / buildings etc as this helps the economy grow. #
So for tax calculation Depreciation is added back to profits and then the Govt give a Capital Allowance over a number of years depending of what has been invested in.

A tax accountant friend explained this down the pub over a long beer or least it felt like that............................then he said thats how he and his colleagues make money by interpreting WTF the Govt are doing on tax.

[Airbourne-Adamski]

Easy to tell the Locos from the legacys.

Go into the terminal .

Passengers with no baggage, a bag from mc donalds, a tin of drink in their hands and a copy of the Sun are on loco's.

Those with baggage, having a latte and reading a copy of the times with a seat number are not.

I am presuming this was a comment made as a joke??????

If not then you are poorly mis-led and stero typing. I would challenge you to watch the easyJet check-in desks at LGW and the passenger profiles who check in. then see if your views are right.

[Zag23]

I see your operation was a complete success.:ok:

[Fairdealfrank]

Quote: "Had Easyjet/Ryanair been able to get access to LHR like they have at Barcelona, Schiphol and Paris then they might have put more pressure on BA short haul."

It's not a question of ability "to get access to LHR", both U2 and FR can afford to buy slots at LHR, but perhaps not in the quantity they require.

They choose not to for three reasons:
(1) the costs of slots can be better used to offer lower fares;
(2) they don't need to be at LHR to take on BA and BD (previously);
(3) congestion and delays at LHR are an obstacle to no-frills type operations: they cannot do 25 minute turnarounds for example, constraints that do not apply at AMS and BCN.


Quote: "MOL's view was some time ago that we will have more consolidation and Europe will have 1 or 2 big (legacy) carriers, plus Ryanair and Easyjet."

Yes, it was to be FR and U2 for the no-frills, and BA (now IAG), AF-KL and LH group for the legacies.

Persumably, at the time, FR envisaged taking over EI.

His predicted "bloodbath" (sic) hasn't happened and probably won't.

[Fairdealfrank]

With the blurring of the boundaries between legacy and no-frills, there is only one fail-safe way to tell the difference: the operation of a hub-and -spoke v. pure point-to-point.

Legacy carriers provide interlining and through ticketing on their own flights, on those of it's "parner" airlines, and competitors in general, and baggage can be checked through to the final destination.

This is not the case on no-frills operators where two connecting flights, even on the same carrier, are two separate contracts, and baggage has to be collected and then dropped off again (hence no protection for missed connections, etc.).

[Peter47]

I believe that US legacy carriers have downgraded their product so much that they cannot differentiate themselves from the LoCos. Southwest & JetBlue arguably offer a better product. (Spirit & Allegiant model themselves on Ryanair). Its interesting how this seems to be the opposite to most other industries which are moving in the other direction. It would be interesting whether one of the 'Big 3' (assuming that AA / US merge) could charge a small premium for a better product.

In carriers airlines such as BA, LH, LX & KL still differentiate themselves but LH are following BA in withdrawing from or spinning off short haul services from non hub airports. LX only has small operations at GVA & BSL. BA & KL are charging extra for baggage for low cost SH point to point tickets. How long until others follow?

One commentator has pointed out is that the great thing with Ryanair is that it has forced the legacies to reduce their fares so that you don't actually have to fly FR (perish the thought) to benefit from them (as long as you live in London).

Whilst some of the difference in price structure is to due to service standards which will be reflected in the ticket price and some from flying from congested hubs - necessary to attract transfer traffic - much is due to the need to overnight aircraft. You need to provide hotels & expenses for two sets of crews to overnight one aircraft away from a crew base. How much would be saved if the legacy carriers outsourced to a company like easyJet with local crews at most bases? (I dare say that there would be a few staff issues to consider!) At LAX SkyWest provides codeshare services for three separate airlines with a separate operation for each. Could this be the way ahead or a step too far for Europe?

[PAXboy]

The only certainty in the European airline world is more consolidation in the next ten years and no one is safe.

Peter47 mentions the changes in the USA but you can easily list the ex-carriers who had it worked out - until times changed (PanAm/TWA/Eastern and all the rest). Over time, the small grow bigger. Then they get Big. And then they over reach themselves ...

As has been discussed in other threads talking about the major UK airline that is now well into it's mature years - list the companies that are still big AND comanding their market AND are 100 years old. Not just in airlines but all commerce? It's a rule of thumb that very few are able to break.

[EI-BUD]

His predicted "bloodbath" (sic) hasn't happened and probably won't.


One for debate, and I suppose the precise definition of bloodbath, but the sheer decline in the number of airlines in the EU has been big over the last few years.

EI-BUD

[Fairdealfrank]

Quote: "One for debate, and I suppose the precise definition of bloodbath, but the sheer decline in the number of airlines in the EU has been big over the last few years.

EI-BUD"

Agreed, there has and will be consolidation.

Perhaps a slow bleed rather than a bloodbath?

Don't think it will ever be a case of just 2 no-frills and 3 legacy carriers in Europe.

[1DC]

storminVery glad to see your post Stormin, which I agree with. Hope you are keeping ok..

[racedo]

Quote:

His predicted "bloodbath" (sic) hasn't happened and probably won't.
One for debate, and I suppose the precise definition of bloodbath, but the sheer decline in the number of airlines in the EU has been big over the last few years.

I agree and despite lots of names of airlines around there are not many solely independent ones.

[PAXboy]

Take a new business - such as railroads:


One brave company starts and goes bust
The bits get picked up, sometimes by govt of the day because of employment or money or other factors
New companies start up and regulation starts
Many new companies start up so more regulation
Time goes by with a few mergers and a few start ups and failures
More regulation
You are now a parent and tell your children that you have seen this behaviour before
The country goes through a very bad slump/depression so more closures and mergers
Govt of the day may well decide to nationalise or, at the very least, regulate a great deal more
Time goes by with a few mergers and a few start ups and failures all aimed to 'make the industry more efficient and blah blah'
Govt of the day may well decide to privatise or, at the very least, change the regulations considerably which is re-regulation but billed as de-regulation
Time goes by with a few mergers and a few start ups and failures
Continue the loop until you are a grandparent and tell the little ones that you have seen this behaviour before
You die
The loop continues ...

Does any of this sound familiar? :}
Humans like to call it 'progress' :p

[nivsy]

Certainly the gap between low Cost and Legacy has diminished. Indeed the latest offerings from BA Gatwick of a cost with or without bags is a proving point plus naturally EZY have now intoduced allocated seats and the days of the scrum should have gone. Other things I have noted - well obviously (for the likes of EZY against BA out of LGW - newer, cleaner aircraft. A tendancy to depart on schedule or ahead of schedule form various airports has also been experienced. Sure there can be issues with low cost if in transit however it is interesting that actually the airport of Milan Malpensa is thrying to deal with that to ensure seamless LCC to LCC transfer. This could be the way forward....

Nivsy.

[neil_2008]

This is an interesting debate however one can't help looking at the legacy charter operators in the same breath. Maybe as a result of having the life squeezed out of the short haul sun routes to France & Spain (certainly in the competitive South-East corner) the traditional holiday companies have reacted by steadily increasing the cost of traditional charter flights to slightly further afield destinations.

Its now ironic that you can fly cheaper with a traditional flag carrier or similar via a hub than it costs to fly point to point with a charter operator (operating as a 'low cost' carrier) to those mid - long haul destinations.

All of this I'm convinced is relatively short term, under 30's today with new families are less reliant on travel agents and holiday companies as their parents were, also with comparison tools online becoming the norm in searching for travel options this exploitation of the traditional holiday maker is surely not sustainable.

[easyflyer83]

You could argue that the very same point to point charter flights have actually improved in many ways compared to how they once were. i.e all economy 757's and later 767's.

Take the TOM product for instance. PTV's, meals are still served, seat pitch isn't bad plus a premium economy style cabin for those who want to pay for it. For your average leisure passenger travelling in economy there really isn't that much difference.

Give me the legacy via a hub any day as I like to clock up the airlines and aircraft types but quite frankly you average punter doesn't give a sh*t. Long haul, many still want the frills but the kudos of flying the legacy's just isn't there anymore. There is still a bit of residual 'wow-ness' for those flying Virgin for the first time to see Mickey Mouse but even the Virgin innovation aspect has faded over the years.

[LNIDA]

Norwegian are by any measure a low cost airline and they through ticket on many routes,even with hold luggage, in fact if you check out their website you will see that you can select either direct or connecting routes.

You of course pay for food and drink and they make big play that they don't need to give you a free newspaper because they provide free WiFi on board so you can surf/read what you want

They also shortly to start long haul flights, so the gap gets ever closer

[racedo]

All of this I'm convinced is relatively short term, under 30's today with new families are less reliant on travel agents and holiday companies as their parents were, also with comparison tools online becoming the norm in searching for travel options this exploitation of the traditional holiday maker is surely not sustainable.

I know few parents with kids who have booked a package holiday in the last 3 years but I know lots who have booked flights, accom and car hire separately.

The ability to come and go from different airports has been important for some as more than a few have started in one airport and have no wish to backtrack to arrival airport or even departing airport particularly in South East.

Flying into Madrid and departing from Santiago or into Rome and flying from Naples or into Nice and back from Pisa opens up lots of different opportunities that people exploiting.

[PAXboy]

A friend of mine works in a small, traditional travel agency. They are in the High Street of a prosperous town in the Home Counties where many commute to London. They continue to do great business - with the over 50s. They know they are in a terminal business.

Taking a 10 day break with friends in late May to the Canaries, we:


searched property rental sites
checked out locations on G Earth
read information from reccomendation sites - which we mostly discounted as we had no means of verifying statements and went with gut instinct
we could see availability and communicate direct with the agent or owner
this lead us to drop the first villa owner when we did not like their response.
booked flights with different carriers for the out and back
researched abd booked car hire
co-ordinated all this between ourselves and the property owners through email and SMS
payment by credit card and transfers within the group by direct bank txfer completed online
When I need euros, I will get them at the Post Office or delivered by my bank (or collect) that will depend on the rates that I will check (where else?) online

Simples :ok:

[Phileas Fogg]

Some of the legacy airlines have what might be commonly referred to as "open jaw returns", namely fly out to one airport and fly back from another.

Most recently I used an open jaw return with Air France KLM, and because the fare was some £200 cheaper routing via CDG rather than direct from AMS to SIN I routed, on the outbound, CWL/AMS/CDG/SIN with AF and I returned MNL/AMS/CWL with KL and all on a cheap (ish) economy return.

[Phileas Fogg]

Passengers with no baggage, a bag from mc donalds, a tin of drink in their hands and a copy of the Sun are on loco's

I doubt one will find many copies of the Sun in the LPL terminal ... Unless things have changed the Sun is banned for life on Merseyside following their antics in the wake of the Hillsborough disaster.

[Fairdealfrank]

Quote: "FairdealFrank not always
Norwegian are by any measure a low cost airline and they through ticket on many routes,even with hold luggage, in fact if you check out their website you will see that you can select either direct or connecting routes.

You of course pay for food and drink and they make big play that they don't need to give you a free newspaper because they provide free WiFi on board so you can surf/read what you want

They also shortly to start long haul flights, so the gap gets ever closer"

Hmm, must admit, wasn't aware of that one! No "no-frills" outfit has yet made long haul work, maybe they'll be the first. Are you sure that they are pure "no-frills"?

Would expect the blurring to continue as each type has to react to market conditions. It's the old adage: adapt and survive.


Quote: "A friend of mine works in a small, traditional travel agency. They are in the High Street of a prosperous town in the Home Counties where many commute to London. They continue to do great business - with the over 50s. They know they are in a terminal business."

The travel agent of the future will probably specialise in niche options and complicated trips, and providing visa services, etc.. Of course there are also those who will always want a personal touch.


Quote: "Some of the legacy airlines have what might be commonly referred to as "open jaw returns", namely fly out to one airport and fly back from another."

Some of the "legacies" have been doing open-jaw for quite a while, and airline online booking also allows for "multi-sector" flights to be booked. In addition there are various deals such as "round-the-world" options.

[LN-KGL]

It wonders me that so many equals low cost carriers with being no frills carriers. Since Norwegian Air Shuttle has been mentioned here, it's definitely not a no frills carrier but they have low costs due to a slim administration, innovative use of information technology and intelligent revenue mangement. Use of new 186 seat B738w also contibute to lower costs although they have the same Recaro seats as many legacy carriers have and the leg room is equal or better than most legacy carriers due no extravagant gallies, closets and extra leg room up front. You have pay extra for checked in baggage and reservation of a seat, but then don't need to wait for this seat reservation until it's 22 hours before departure - you just reserve the seat when you pay for the ticket. As long as you use a debet card you don't need to pay for paying the ticket (no extra charge). If you want to bring with you your bike or your golf bag on a vacation, the extra charge for this is lower than most of the legacy carriers. When you are inside the cabin you aren't bombarded with a sticky yellow colour, or saturated red colour, or overhead bin doors plastered with ads or a large letter destination overview. The only colour splash in the cabin in addition to the dark blue leather seats is the small red headrest cloth with a Norwegian logo on it. As someone here mentioned on most flights (not flights flown with the few -300s left + a few leased older -800s) you get free Internet in stead of the free newspaper that some legacy carriers offer (again new tech vs. old tech). Through the same WiFi connection it will now be possible to rent videos or music for a small extra charge; you need only to log on to a server on board through the portal with your own device (BYOD technology). The crew on board can smile and they will help in any way they can, but they don't push BOB or lottery tickets - on the shortest domestic flights they don't even offer BOB. You will never be exposed for a cheap on time fanfare. If you want to travel from let's say Bodø (BOO) to Gatwick (LGW), Norwegian offers a through ticket (via OSL) and the next time you see the baggage you checked in at BOO is at LGW.

In other words Norwegian offer a strait forward honest service, and with a punctuality equal to the best of the legacy carriers and a regularity better than most of the same carriers. It is pretty certain that you arrive at your destination on time and that for a reasonable price. What more can you ask for?

[PAXboy]

I have used Norwegian a couple of times a couple of years ago and was impressed, certainly on my short list. It is possible that they may be ahead of the game and starting off with a slim administration is key. Something the legacies cannot hope to do ever!

[Hotel Tango]

In my opinion there are now three categories of carriers: Legacy, up market low cost, and low cost trash. Fortunately there are very few of the third category.

[racedo]

Hotel

Why do you feel the need to belittle airlines you don't like ?

Calling something that employs people and flies trash says more about you than them.

[Skipness One Echo]

In other words Norwegian offer a strait forward honest service, and with a punctuality equal to the best of the legacy carriers and a regularity better than most of the same carriers. It is pretty certain that you arrive at your destination on time and that for a reasonable price. What more can you ask for?
Do you perchance work for them? I think Norwegian's plan to have offshore pilots for the B787 fleet is as ruthless as anything Ryanair have done. They're determined to keep costs at rock bottom.

[racedo]

Skip

On Norwegian you are so cynical ;)

Tis funny how everybody hates the Ryanair model but then start to follow elements of it under another name dressed up in shiny ribbons.

[Hotel Tango]

racedo

Firstly, I´m not refering to the passengers only to the type of product provided by such airlines. Secondly, as quoted, it´s my personal opinion regarding the topic of this thread. Btw, please note that I didn´t name any airlines in my third, "trash", category. Oh, and that predictable "employment" argument is complete nonsense. You can equally employ thousands of people providing a better product for the same costs, as indeed many low cost airlines thankfully do.

[no sponsor]

The European Short Haul airline model is moving well into the maturity stage. They will start to differentiate from each other, as evidenced by Easy Jet now offering bookable seats, Norwegian offering in-flight WiFi, and the Legacy carriers offering non-baggage fares. The differentiation will continue, and no doubt fares will increase, as revenues must increase to pay for end-loaded aircraft leasing costs. The major low cost airlines are forecast to grow by at least another 50%, which will tip the growth cycle into a decline due to market over-supply. Eventually, probably during the next recession, due at the end of this decade, there will be a serious casualty. In all industries, what goes around comes around, and I would also expect the current fashion for big airline groups will also go out of the window.

[LN-KGL]

Skipness One Echo, last time I checked my pay check the payment didn't come from Norwegian Air Shuttle nor a business even related to the aviation industry. The last 20 years I've earned my money in the pharmaceutical industry, and I like to spend my money wisely. The last flight I had with Norwegian was five days ago - a short domestic hop back from an Easter holiday on the west coast of Norway. SAS was an option for this flight, but with a price tag almost £70 higher the choice was easy.