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What is The Future of Low Cost and Classic Carriers?

Qatar-Vueling

You may think that there is no link between a low cost and a classic carrier.

A low cost airline doesn’t have the same customer target as a classic airline. So, there is no competition between the two.

Instead it looks like things are different and there is actually quite a good correlation between the low cost and the classic airlines.

Some of them have found an agreement where both share the same customer in a very smart way.

The Future of Low Cost and Classic Airlines

When I speak about classic airlines I mean the ones we all know, the big ones, the famous ones, the original ones!

Instead for low cost… well, you what know what I mean.

The difference between the two is clear and we all know what makes a low cost what it is.

But despite their differences, there is one thing they have in common.

The classic airlines had to learn a lot from the low cost in order to survive and compete. Mainly, they had to learn how to reduce their costs.

Besides this, they had to find a way to get most of those customers interested in low cost flights and convert them to a better way of flying.

So instead of reducing air fairs, they created their own low cost company.

If you can’t buy it, make it!

Lufthansa did this creating Germanwings and Eurowings. Klm and Airfrance created Transavia.

At this point also the low cost companies had to change something because of the increasing competition.

So, for example, Ryanair decided to create the low cost business class.

Ryanair also decided that they had to increase their sales by accepting to sell tickets not only from their website, but also from other channels. This is when they created a partnership with Travelport.

Another very important signal that shows how low cost carriers and classic airlines are not so different anymore, is that many companies are looking for new agreements to be done between each other.

Agreements between low cost and classic airlines

This means that, if I fly from A to C transiting in B, I will fly from A to B with a low cost in codesharing with a bigger classic airline, whilst from B to C I will fly with the airline I actually want.

This can mean that I will do a short flight with a low cost and a long haul flight with a classic airline.

Still not convinced about it?

Well, Lufthansa uses Germanwings for one way routes and not for connecting flights. If the passenger needs a connecting flight, he will have to buy a Lufthansa ticket.

But other companies changed this strategy.

Emirates and Jetblue are partners. Also Qatar Airways and Vueling are.  vueling e qatar airways codesharing

This is real proof that having agreements between classic airlines and low cost, is possible.

Which new agreements?

Ryanair has already been trying to open an agreement with Norwegian.

Norwegian wants to open intercontinental low cost flights and Ryanair wants to connect its own flights to those long haul of Norwegian.

It is difficult to keep the low cost business model also for intercontinental flights. The main quality of low cost  flights is to have always full flights.

To have always a high percentage of filling, it means that the airline needs to bring passengers from smaller airports to hubs.

In Asia this business model has been around for some time with AirAsia low cost short flights bringing passengers to connect with low cost long haul flights of the same carrier.

New partnerships are key to have long haul flights full, also for classic airlines, with the guarantee of a good price and an even better service.

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