The future of long-haul low-cost

18.09.2007

Low-cost business models 
Since their emergence in the US in the mid-1970s there has been significant growth in the low-cost airline sector. The low-cost airline business model has, until now, been primarily focused on the short-haul routes and point-to-point operations. It is more difficult to translate this low-cost formula in the long-haul market. However, the market has recently observed a number of the so-called low-cost entrants on long-haul routes like Oasis Hong Kong Airlines.
 
Attempts 
Also attempts have been made to start long-haul low-cost operations on the North Atlantic market. Yet, they have not been very successful. In other markets such as in the US and Asia, there seem to be more successful examples. The US domestic market as well as the Asian market show the entrance of several new low-cost carriers on long-haul routes. A new multilateral agreement between the European Union and the United States, called Open sky, will be active from March 31, 2008. This enables European airlines tofly from any EU airport to any US airport and vice versa. Existing restrictive bilateral agreements will be replaced.
 
New plans 
Just after the agreement was accepted in March 2007, several low-cost airlines announced new plans. Air Berlin acquired the German leisure charter LTU to enter the long-haul market, Virgin Atlantic has plans to fly from six European hubs to New York within two years and also Ryanair set out their long-haul plans to launch a low-cost airline to the US. Also for (non-hub) airports this change can have a large impact. Will it in the future be possible to fly with a low-cost carrier from for example Cologne/Bonn airport to Newark?
 
Objectives of the Airneth seminar 

Airneth organised a seminar on Tuesday 18 September 2007 concerning the feasibility and future of this new low-cost business model. The purpose of the seminar was to answer these questions:

  •  Is it operationally, commercially and network technically possible for low-cost airlines to start a long-haul operation?
  • Is there a market from a consumer point of view?
  • What are the policy implications of new low-cost business models?
  • Is there a perspective for long-haul low-cost operations from non-hub airports?
  • Is hubbing inevitable for long-haul low-cost operators? 


Key-note speakers and chair 

  • Dr. John Wensveen - President & CEO of Airline Visions/ founding team member MAXjet Airways
  • Dr. Nigel Dennis - Transport Studies Group, University of Westminster
  • Dr. Christoph Brützel - Christoph Brützel Consulting
  • Peter Hind - Consulting Director rdc (the route development company limited)
  • Dieter Wilken - German Aerospace Center (chairman)

Category: more, Nigel Dennis