Opinion – Too far for comfort: WOW is the latest airline to try to become a long-haul, no-frills carrier | The Economist

252

252 (Photo credit: Wikipedia)

Air Canada 777-300 landing, Montreal-Trudeau.

Air Canada 777-300 landing, Montreal-Trudeau. (Photo credit: Wikipedia)

Coat of arms of British Airways.

Coat of arms of British Airways. (Photo credit: Wikipedia)

English: Logo of AirAsia.

English: Logo of AirAsia. (Photo credit: Wikipedia)

 

The Economist examines the impact as the Icelandic airline tries to rekindle Reykjavik’s historic role as a budget layover for flights between Europe and North America

Source: Too far for comfort: WOW is the latest airline to try to become a long-haul, no-frills carrier | The Economist

Too some extent, I disagree with the Economist and firmly believe that budget airlines will increasingly go global.

Look at the evidence of Air Asia, which is my favorite budget airline. Air Asia has already secured a massive share of the Australia/Asia market.

The issue is that full-service traditional airlines, with their heavily unionized staff are an anachronism. Brands like Lufthansa have been destroyed by strikes. If you book a flight on Lufthansa to Canada, you may actually be travelling with Air Canada – Air Canada is another airline where effective customer service is relegated below clumsy business business processes negotiated by powerful unions.

Let’s face it, consumers are more economically savvy now, and are prepared to pay for carefully calibrated services.

The only reason that full-service airlines survive is that they have valuable route concessions – this is historical and perpetuated by powerful political lobbying. But traditional carriers, like British Airways (BA), are also continuously rationalizing routes because their business model is no longer viable – these are cost-plus dinasaurs.

Let me ask an open question:

Do you agree that full-service airlines, like BA and Lufthansa, will eventually be replaceed by budget airlines, like AirAsia, offering wider services on an incremental cost basis?

 

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: