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Low-cost carriers


carriers, as short-haul travel is often purchased as the lowest logical


fare on the day. The GTMC's Wait


explains: “Most short-haul travel is currently bought at


market rates as opposed to negotiated rates, but as demand [for low-cost carriers] grows and space becomes less available at peak times, negotiated rates could be more favourable.” Hillgate's Munsey adds, “Historically,





as our major airports where the majority of connections are made.” Hillgate Travel's Julian Munsey says there


are two factors that affect the popularity of low-cost carriers: company culture and convenience. “If a company is looking to control costs, and they have staff buy-in to do so, LCCs are typically an acceptable option. The same is also true if the route and times are very convenient, so the old adage ‘location, location, location’ applies to airlines too,” says Munsey. Egencia Europe's vice president of supplier relations, Germain Huber, doubts whether Ryanair's GDS adoption will curry favour with corporates. “GDS is a distribution channel that could


BUSINESS v. LEISURE


Most popular low-cost carrier destinations from the UK by frequency (May 2014) Position 1


Airline Malaga


2 3 4 5 6 7 8 9


10 11


12 13 14 15 16 17 18 19


20


Frequency YOY change 1,278


Palma de Mallorca 1,276 Alicante Dublin Faro


Barcelona Belfast Intl.


Amsterdam 778 London Gatwick 696 Edinburgh Tenerife


542 577


Glasgow Intl. 488 Nice


Geneva Madrid


451 423 412


Berlin Schoenefeld 408 Ibiza


387


Copenhagen 376 Bristol Murcia


348 360


1,209 1,195 1,062 1,016 937


3% 4% -1% 9% 8%


19%


-10% 3%


37% -2% 23% -9% 5%


12% 15% 14% 15% 7%


-6% 0%


Source: OAG


help if you have an appealing product for business travellers. Otherwise, it will not make a massive difference,” says Huber. “Ryanair is not currently used by many business travellers, simply because the experience is not yet tailored to their needs. The airports being served is very important to business travellers.”


Buying patterns Of course, the fact that low-cost carriers serve many of the country's regional airports also works in their favour, as Nicky Bees, travel coordinator at Burges Salmon LLP explains. “As well as the potential to reduce travel costs through lower fares, I think LCCs are winning business because they often operate the routes that full service airlines do not – this is why we use easyJet a lot from Bristol airport.” Bees also points out that accessing


LCC content through corporate booking channels can help keep a travel programme in order. “It helps stop leakage and makes it easier to analyse booking data in the same way as other carriers,” she says. “It also makes it easier for bookers, as


they can just go to one booking channel for all of their bookings and they can take advantage of the TMC making payment on their behalf.” Like many, the company does not have any corporate deals in place with low-cost


low-cost carriers have performed well when corporates have a policy of taking the lowest fare and support spot-buy as part of their programme.” Ian Allan Travel's O'Neill adds that


low-cost carriers are particularly well established within the SME market “where travel costs are closely monitored and is evidenced by the reaction of legacy carriers offering the low-cost fare models.”


Meeting in the middle O'Neill alludes to the rise of the hybrid airline model. With LCCs growing their presence at hub airports and adding the likes of fast-track security and allocated seating, and legacy carriers simultaneously introducing 'basic' or hand baggage only fares, the lines are blurring between the two airline models. Eagle-eyed readers will have noticed the absence of Flybe from the chart on the previous page listing the UK's top ten low- cost carriers. The data comes from aviation intelligence specialist OAG which does not classify Flybe as a low-cost carrier. The airline itself, which operates a frequent flyer programme and airport lounges across its network, describes itself simply as 'Europe's largest independent regional airline'. After returning to profit earlier this year,


its latest development is the launch of FlyShuttle, a hop-on, hop-off service, linking Jersey and Aberdeen, with passenger pick-up and drop-offs at Southampton and Leeds Bradford airports. Aer Lingus is another airline sitting on


the fence. It has positioned itself as a 'value carrier' on the basis that the pure low-cost model is not sustainable in serving its key markets, nor is a full-service model viable. Unlike traditional low-cost carriers,


Aer Lingus offers lounge access, a loyalty progamme and some transfer connectivity, but charges for pre-ordered food and beverages and operates from a mix of central and secondary airports. The final word, however, goes to easyJet, whose allegiance to the low-cost camp is in no doubt. “We will always be a low-cost model,” says CEO McCall. “Our load factors are high, utilisation is high, we are efficient and we have quick turnarounds. That is the low-cost model.”


34 THE BUSINESS TRAVEL MAGAZINE


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