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Strategy Briefing

The Risky Business of Low–Cost Long Haul Airlines

26 pages, May 2017

US$1,325

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About This Report

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If you purchase a report that is updated in the next 60 days, we will send you the new edition and data extract FREE!

Low-cost long haul is going through a revival with the aggressive route expansion of such players as Norwegian Air Shuttle and AirAsia X which are expanding further afield. Challenging the status quo for both low cost and schedule operators, these players are upgrading their fleet with fuel efficient and high capacity aircrafts while opening the door for interesting partnerships with the aim to boost traffic and margins.

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Overview

Why buy this report?

Gain competitive intelligence about market leaders. Track key industry trends, opportunities and threats. Inform your marketing, brand, strategy and market development, sales and supply functions.

Low-cost long haul airlines picking up speed

Disruptors such as Norwegian Air Shuttle and AirAsia X have shaken up the airline market and forced scheduled operators to rethink their transatlantic strategies. They are aggressively upgrading their fleet and opening routes to and from such regions as Asia Pacific and North and Latin America. The increased competition is also impacting schedule operators such as IAG to follow suit by launching its own low-cost long haul brand – e.g. LEVEL.

Low operational costs still a major challenge for this business model

This business model has a different operational economics with costs being the major hurdle for airlines. Fuels costs can be over 50% because of the long haul nature of the flight in addition to higher surcharges, which in turn can dampen passenger demand and become profitability constraint.

Partnerships are on the agenda

Low cost airline powerhouses in Europe have been trying to boost their margins, through partnership with different players. Norwegian and Ryanair are considering a partnership in the form of joint feeder flights. This will ultimately give Norwegian access to destinations such as Barcelona and some Irish cities, from where it will be able to boost its transatlantic passengers flows to the US.

Pressure on established players

Competition from low cost long haul carriers could threaten the expansion and performance of established market players by offering cheaper fares with new unexplored route networks while tapping into the price sensitive consumer segments.

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Introduction

Scope

New Business Model

Key findings

Low-Cost long haul defined

The formula for success

Achieving economies of scale amid plethora of costs

Not all attributes transferrable

Sustaining lower costs can be a challenge

Why no-frills appeals across the board

Norwegian diversifies the product

LEVEL promises greater flexibility

Route network of major low cost LCCs

Financial difficulties all the way

Main Players

Competition is heating up

Scoot strategic direction

Opportunities in a new market niche

Can Lufthansa crack the LCC market with the Eurowings brand?

Key Strategies

Economic performance directly impacting airline sales

Thriving low cost paves the way for long haul LCC

By 2030 Asia Pacific will be the catalyst for outbound travel

Tailor made China strategy to capture middle class potential

Challenges and opportunities of low-cost long haul travel

Why buy this report?

Want to find out more about this report?

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Megatrends

Strategy Briefing

The Risky Business of Low–Cost Long Haul Airlines

New Report Guarantee

About This Report

New Report Guarantee

Overview

Why buy this report?

Low-cost long haul airlines picking up speed

Low operational costs still a major challenge for this business model

Partnerships are on the agenda

Pressure on established players

Want to find out more about this report?

Table of Contents

Introduction

Scope

New Business Model

Key findings

Low-Cost long haul defined

The formula for success

Achieving economies of scale amid plethora of costs

Not all attributes transferrable

Sustaining lower costs can be a challenge

Why no-frills appeals across the board

Norwegian diversifies the product

LEVEL promises greater flexibility

Route network of major low cost LCCs

Financial difficulties all the way

Main Players

Competition is heating up

Scoot strategic direction

Opportunities in a new market niche

Can Lufthansa crack the LCC market with the Eurowings brand?

Key Strategies

Economic performance directly impacting airline sales

Thriving low cost paves the way for long haul LCC

By 2030 Asia Pacific will be the catalyst for outbound travel

Tailor made China strategy to capture middle class potential

Challenges and opportunities of low-cost long haul travel

Why buy this report?

Want to find out more about this report?

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