No-frills carriers adopt subtle differences to survive

Monday, 21 Oct, 2002 0

ABTA Convention Special: No-frills carriers will survive in the future by adopting distinctive brands.

They may appear to offer the same product, but a panel of experts speaking at the ABTA Convention, argued that no-frills carriers were here to stay.

PricewaterhouseCoopers partner, Malcolm Preston said Ryanair would continue to market itself as the airline with the lowest fares, because it had the lowest cost base. He said easyJet would offer a slightly more expensive, value for money product, by flying to better situated airports. Stepping into the space left by Go, as the better quality no-frills carrier, would be bmibaby.

Bmibaby managing director, Tony Davies said bmibaby was aiming to be the new Go. EasyJet/Go sales and marketing director, David Magliano said easyJet had no concerns about dropping the Go brand. He said: “easyJet is a stronger brand, particularly in Continental Europe”.

Mr Davies added that bmibaby could become larger than parent, bmi british midland. He said: “If bmibaby gets bigger than bmi it will only be because bmi is constrained at airports like Heathrow.” He added: “Only five percent of the European market is low-cost, so there is a huge business segment ripe for tapping into.”

Simon Calder (pictured), travel editor of the Independent said there was plenty of room for growth in the no-frills market. He said Ryanair’s next expansion would be into Spain. It already flies from Germany to Gerona; its stop for Barcelona. He said regional airports like Gerona would continue to pay no-frills carriers to fly there because tourism boosts the local economy.

Another survival tactic from the no-frills carriers is that they don’t compete with each other, according to Mr Calder. PWC’s Malcolm Preston corroborated this, saying that only five airport to airport routes are replicated by no-frills carriers, all of which involve Go.

The general consensus from the panel was that agents and operators would have a role in the distribution of no-frills carriers in the future. Mr Preston said that he knew of agents that had doubled thier profits through introducing service fees on no-frills bookings.

See:
24-May-2002 Book review: No Frills, by Simon Calder

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