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Middle and higher income earners benefit from no-frills carriers – report
No-frills airlines appear to have had little impact on overall rates of traffic growth, a report by the Civil Aviation Authority shows.
And there is little evidence of any marked change to the income and socio-economic profile of air passengers.
The report – No-frills carriers: Revolution or Evolution – examines the impact that budget carriers have had on the airline market, on passengers and on society more widely.
It reveals that no-frills airlines now carry nearly half of all UK short haul passengers
The report shows that the average annual rate of growth of short-haul traffic is similar to that before the arrival of no-frills airlines. Most of the no-frills airlines’ growth seems to have been at the expense of other carriers.
But there has been little impact on the income or socio-economic profile of passengers. The profile of UK no-frills and full-service leisure passengers is similar, and has changed little over the last decade.
Although the number of leisure passengers from all income groups has increased, the majority of this increase has come from those in middle and higher income and socio-economic groups.
There has been a more significant impact on business passengers. They have a lower income profile overall now than ten years ago. The availability of lower fares to and from more destinations (and in particular the removal of fare restrictions) has made trips on a range of airlines more viable for lower income business passengers, particularly from the UK regions.
The CAA’s economic regulation group director Dr Harry Bush said: “No-frills airlines have enormously increased the range of fare, route, destination and departure choices available to the travelling public.
“The emergence of no-frills airlines and the response of other airlines to this has benefited passengers generally, and has demonstrated the advantages of opening aviation markets to competition.
“However, no-frills airlines do not appear to have significantly altered overall traffic growth. Nor have they substantially changed the profile of those flying: passengers on no-frills airlines resemble those on full-service airlines.
“Their main effect has been to provide further opportunities to those in middle and higher income groups to fly more often.”
Report by Phil Davies
Phil Davies
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