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Cranfield publishes second report into low-cost airlines

September 03, 2003

Low-cost scheduled airlines have revolutionised short-haul air travel, particularly in the UK and Western Europe. The rapid growth of low-cost scheduled carriers in Europe is in sharp contrast to the charter airlines who have seen traffic stagnate or even decline. As the no-frills sector matures, however, a potential over-supply of airline seats means that some no-frills airlines will struggle to survive. This is according to a new research report published by Cranfield University's Air Transport Group.

The report highlights the differences between the business models of the two most successful European no-frills airlines; easyJet and Ryanair. It analyses the economic performance of over 20 of Europe's charter and no-frills scheduled operators, benchmarking these against low-cost carriers in the USA. It also describes how the European charter and no-frills markets have evolved since Cranfield's first study, published in January 2000.

The report highlights major trends and provides a detailed profile of each airline while predicting likely future developments. "The air transport sector in Europe has been totally transformed as a result of the activities of no-frills airlines," said Dr George Williams, Senior Lecturer in Air Transport.

"The implications for full service providers have been dramatic. Around 40% of passengers travelling within the UK and between the UK and European Economic Area countries now use low-cost scheduled airlines. In all, there are now some 500 routes in Europe served by 20 no-frills carriers."

The report is entitled 'Market analysis of Europe's low-cost airlines - an examination of trends in the economics and operating characteristics of Europe's charter and no-frills scheduled airlines' and is written by Dr Williams together with Dr Keith Mason, a Senior Lecturer in Air Transport and Sheelah Turner, a Research Officer.

"In our first report we speculated that no-frills scheduled carriers would account for 12% and 15% of the intra-EU air market by 2010," said Dr Williams. "But, like most forecasters, we underestimated the scale of transformation that has been occurring in the provision of short haul service in Europe. We now believe this market share will be achieved four to five years earlier."

Cranfield University