The battle of the low-cost, long-haul flights is about to go next level

By | 04.12.2017

For much of 2017, the boom in low-cost, long-haul fares from airlines like Norwegian Air, Wizz Air, AirAsiaX and Eurowings seemed too good to be true. But the real good news for budget conscious travelers is that the trend appears ready to further expand in 2018.

Last week, the upstart airline LEVEL—the low-cost, long-haul offering from IAG, the parent group behind British Airways and Iberia—announced further expansion in 2018. March will see the debut of a Barcelona to Boston route—followed by four new routes from Paris Orly Airport to Montreal, New York (Newark), Guadeloupe, and Martinique launching later in the year. This came after the airline’s initial June launch, which featured a quartet of debut routes from Barcelona’s El Prat airport to Buenos Aires, San Francisco (Oakland), and Punta Cana—along with a summer service to Los Angeles. The airline announced that one-way fares on its Airbus A330-200 aircrafts would be as low as €99 ($118).

While the demand for the low-cost, long-haul trend seems to be getting more robust, entry into the market is not without its risks. And there have been skeptics of the long-term sustainability of the strategy from the beginning. Transatlantic routes are among the industry’s most competitive (and profitable), and many full-price carriers—unable to compete on low costs alone—have attempted to rely on their in-flight service offering as a key differentiator between themselves and the new competition.

Meanwhile, low-cost carriers have gone with the opposite strategy: They’ve made themselves competitive by increasing cabin capacity and flying attractive and efficient planes across the Atlantic (such as the single-aisle Boeing 737 MAX 8 aircraft flown by Norwegian) at increased schedules. They’re also offering thoroughly customizable reservations, which allow passengers to opt for no-frills tickets—with, say, minimal in-flight meals or meager luggage allowances—in exchange for rock bottom fares. t.

Indeed, despite the skeptics, the strategy seems to be working. Norwegian, for instance, was recently named by Skytrax as the word’s leader in the low-cost, long-haul concept. And IAG recently noted that LEVEL’s Barcelona operation will be profitable by year’s end. Meanwhile, in summer 2017, Norwegian increased its share of all scheduled seats between Europe and North America from 1.8% to 2.8%, according to aviation industry analyst CAPA Centre for Aviation. Furthermore, CAPA estimated that in summer 2017, the sector accounted for 6% transatlantic seat capacity—up from 3% in the summer before.

IAG’s expansion of LEVEL is a further sign that the time for legacy carriers to wait for the low-cost, long haul trend to ebb is officially over. As the parent company of not just BA and Iberia, but also Aer Lingus and Vueling, IAG seems to recognize the need for a long-haul option that competes on ticket price alone, as does Lufthansa, which operates EuroWings. AirFrance just launched its low-cost, long-haul concept designed to woo millennials (named name “Joon” to sound like the word for young in French, jeune). As of last week, the airline is already flying from Paris to Barcelona, Berlin, Lisbon and Porto. Come March, will begin routes to medium and long-haul destinations including Rome, Naples, Oslo, Istanbul, Cairo, Cape Town and Tehran.

While the long-term future of the low-cost, long-haul concept may still be unclear, one thing is already certain: This is all very good news for cash-strapped passengers in the short term—even if it means more flights where you have to bring your own snacks.

qz.com

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