Posted on: 13 February 2015 by Ross McSweeny
Low-fare airlines (LFAs) in Asia are following the trends of their counterparts in Europe and North America with LFAs becoming more upmarket and full service carriers (FSCs) responding by going downmarket, resulting in convergence, delegates heard at World Low Cost Airlines Asia in Singapore.
Few true LFAs remain in any region, according to Shakeel Adam, managing director of airline consultancy Aviado Partners.
Based on the typical LFA characteristics of point-to-point services, single-class operation, single fleet, no connections, no GDS, serving secondary airports, no frequent flyer programme, no frills, no long-haul and no lounges, Adam believes Spirit Airlines is the only true LFA in North America and Europe, with Ryanair, easyJet, Southwest and Wizz Air all retaining some LFA characteristics but also adopting some from FSCs. Likewise, there are few true FSCs remaining, resulting in convergence where there is no longer a big difference between the two models.
Asia is following suit, with China's Spring Airlines being the only one sticking to the true LFA model, added Adam.
The impact of LFAs on the airline industry has been disruptive, but largely due to the actions of FSCs in response, Adam believes. The FSCs overestimated the threat of the LFAs, misunderstood the role of the LFA and believed they threatened their core business, Adam remarked.
There are three strategies available to an FSC in response to LFAs, he posited. These are convert to a LFA (in the case of Aer Lingus); go more upmarket (like Gulf carriers including Emirates); or completely focus on your traditional business (like Cathay Pacific).
"LFAs are not the only future," Adam declared.
Emma Kelly, Asia-Pacific correspondent, Low-Fare & Regional Airlines/LARAnews.net