Fly from London to Jeddah (Saudi Arabia) on a long-haul ‘low-cost’ airline for the equivalent of 162 euros each way, compared to prices of about 370 euros from another company that also operates from the British capital. That is the difference in cost, in a random search for dates next spring, between a company that competes on price and a traditional one. Of course, in the first one, the seats do not recline and food or luggage are charged. So are additional services, such as watching movies on board or asking for a blanket to keep you warm.
In recent months, the commercial offer of airlines that are betting on long-haul flights competing on price has been growing, at a time when tourism is skyrocketing. Among them is the Hungarian company Wizz Air, which starting next spring will fly from London to Saudi Arabia on a single-aisle Airbus A321 with capacity for 240 passengers on a journey that lasts almost seven hours.
The growth of this airline is relevant because the CEO of the Hungarian company, Jozsef Varadi, has made clear what his commercial strategy is, which includes future routes between the United Kingdom and India or Pakistan. “When you go on a traditional flight and they give you a coffee, it’s not free, it’s probably the most expensive cappuccino of your life,” he said, dropping that the price of the ticket already includes very high prices for on-board services. “We don’t want to do that,” he said, when presenting the flight to Jeddah, in statements reported by the Bloomberg agency. Also watching movies or series will be paid. “If you want to have fun, you have to create the fun for yourself,” Varadi stressed. “We won’t be the ones who believe it.”
Pay for food or luggage
That of Wizz Air is not a unique case, All Nippon Airways (ANA), the parent company of Japan Airlines, relaunched a couple of years ago a brand designed for charter flights and rethought for ‘low cost’ between Tokyo and different points of Asia, like Bangkok. In this case, the company itself explains that it does have different types of seats, depending on what you want to pay, and if you go between rows 1 and 9, the drinks are free. However, you have to pay for food, as well as other items, such as blankets, which cost the equivalent of 10 euros.
In Europe, there are more examples, such as the Norwegian Norse or the French company French Bee. The latter sells direct flights to the United States (Miami, New York, Los Angeles or San Francisco), as well as to the island of Reunion or Tahiti. Its most economical category does not include the possibility of taking luggage on board, which is subject to a fee. Compete on price. For example, flying from Paris to Montreal, in Canada, starts at 258 euros. In this case, in-flight entertainment is free, but the rest of the services, such as upgrading the type of seat, are paid.
IAG, the parent company of British Airways, Iberia and Vueling, competes in a cheaper price segment through Level, which operates from Barcelona to destinations such as New York, Boston, Santiago de Chile or Buenos Aires. IAG is working for Level to have an Air Operator Certificate (AOC) in the coming months, which will give it more autonomy as an airline. Level plans to have eight aircraft over the next year – currently there are six – and according to IAG, it is reporting double-digit growth in its operating margin (the difference between income and expenses) and its punctuality exceeds 85%. At Level, baggage check-in is also paid, as are the menus, which are included in the rates called Comfort or Extra.
More flights and more CO2 emissions
The sector has been arguing for months that tourism is skyrocketing due to the desire to travel after the pandemic, a situation that has caused the price of plane tickets to take off, as has happened with hotels. The CEO of Ryanair, Michael O’Leary, assured months ago that ‘low cost’ had not died, but that it was going to transform.
“What we will not see are 9.99 euro tickets, but that does not mean that the ‘low cost’ is going to end,” said O’Leary. He was referring above all to short and medium-range flights, for example, those that operate routes within Europe, but not long-distance ones, where the commercial proposals of these new companies are cheaper than those of traditional airlines, but they are still far from being within reach of all pockets.
There are also doubts about their viability in the medium and long term, because these flights designed for long distances cannot take advantage of some of the usual low-cost characteristics, such as journeys with hardly any rest time. “It is difficult to see the border between ‘low cost’ and traditional ones,” Javier Gándara, president of the Association of Airlines (ALA), explained at a press conference. “Some have not been successful,” he noted. For example, Norwegian was on the brink of bankruptcy after the pandemic.
“Many of the advantages of ‘low cost’ are diluted in the long haul, such as the use” of airplanes or “operating flights 12 or 13 hours a day and other costs,” he listed. “It seems to me that the key to why it is complicated” for them to be profitable “is because of the income. “A big part of success is the ability to generate demand through cheap rates,” he argued in reference to the most common low cost until now. “On a weekend, when you don’t know what to do,” you can “book a flight and an Airbnb, but if You go to the United States, you can’t go on a weekend, you have to have a visa; It is more complicated and the traffic is less dense. There are no routes that allow feeding traffic.” As a reference, in the case of the Barajas airport in Madrid, “70% of long-haul traffic does not originate or end in Madrid, but rather in Europe. That makes the success more difficult” for these airlines.
The other derivative is the environmental one, because some of the low-cost brands are among those that achieve the highest CO2 emissions. A study by the Transport & Environment (T&E) organization shows that Ryanair and Wizz Air polluted more than ever during the 2023 financial year. In the case of the Irish airline, 23% more than in 2019; and the Hungarian 40% more than before the pandemic. They also point out that, in 2023, one in four flights in Europe was operated by one of the three main low-cost airlines (easyJet, Ryanair and Wizz Air).
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