Low-cost carriers have an extremely strong presence in Europe, and with dominant airlines such as Ryanair and easyJet, the future of the low-cost market is unpredictable.
Speaking at the Routes Europe Strategy Summit in Aberdeen, a panel including representatives from Transavia France and Vueling as well as Budapest Airport and OAG, discussed low-cost carriers and their position in the European market.
Fernando Estrada, Chief Strategy Officer, Vueling Airlines discussed the position of Vueling among the low-cost carriers:
“We have the same procedures as low-cost carriers, such as efficiency and our cost-base. We know we cannot increase this cost-base, because it is the key factor for surviving into the future,” he said.
Europe has a total of 168 carriers, and LCCs make up 45 percent of the capacity share in Europe. During the session, Kam Jandu, Chief Commercial Officer, Budapest Airport discussed the idea that every country in Europe wants to have its own flag carrier, and this is adding to the huge number of carriers operating in Europe.
Since Malev Hungarian Airlines ceased operations in 2012, Hungary has not had a national carrier in operation: “Hungary is a good example of somewhere that doesn’t need a flag carrier. 36 airlines operated from Budapest when we had Malev, and now we have 42,” said Kam Jandu.
Despite the number of national carriers, the panel confirmed that the likes of easyJet and Ryanair are among the hardest to compete with. By 2024, Ryanair and easyJet will command 35 percent of the intra-European market share, up from 22 percent in 2015.
“Do I think we can compete with easyJet and Ryanair? No and yes. Yes because I have the same cost-base as easyJet, but in the case of Ryanair, they are still flying to secondary airports- they are still flying to Charleroi and to places we cannot pronounce and do not know where they are. So no, it would be very difficult for us to get to that point,” said Fernando Estrada.
“It’s impossible to compete with Ryanair and easyJet in terms of overall cost. Ryanair is based in countries where the labour is a lot less expensive than in France, where we have lots of taxes,” added David Sandier, Vice President, Network and Revenue Management, Transavia.
You can watch part of the Strategy Summit, moderated by Mark Pilling Executive Director, Content , Flightglobal below: