The business principle of give the customers what they want appears to have worked, at least in the low cost airline sector. It has seen a phenomenal growth and has given traditional carriers a shot of adrenalin they could probably have done without.
The UK has seen the fastest development of low cost flights. Ryanair and Easyjet are now household names and as testimony to their success, in September 2003, 24 per cent of short haul flights from the United Kingdom were with low cost airlines. The rest of Europe is catching on but rather more slowly. In the same period the figure for Europe was just under 10 per cent. However, all this is set to change. Low cost airlines are springing up all around Europe and many established airlines are setting up their own low cost subsidiaries to stay competitive. Behind the success stories of Easyjet and Ryanair lie dozens of smaller outfits which are slowly but surely carving out a niche for themselves in this ever growing market.
Baboo, Snowflake, Evolavia, Flying Finn and Volare Web may not be either terribly well known or particularly inspiring names but they are part of an expanding group of companies determined to make European travel as efficient and as cheap as possible while still turning a profit.
The expansion of Europe
The European Union will be welcoming 10 new countries into the European Union in May 2004 and many operators are already looking towards this new potential market for low cost airlines. Many of the accession countries are eastern European, meaning that the distances are short and connections currently poor, an ideal combination for someone wishing to corner a bit of the market. Estonia, Lithuania, Latvia, Hungary the Czech Republic and Slovakia will all be seeing a rapid growth in airline travel as fellow Europeans come to pay them a visit and as their citizens expand their horizons to the far flung corners of the existing European Union.
There are two obstacles on the road to expansion of low cost airlines. They both come from the corridors of power in Brussels where EU civil servants have decided that the subsidies that low cost airlines have been receiving from local airports and local councils are illegal. There has been a high profile battle between the CEO of Ryanair Michael O'Leary and Brussels over the subsidies from the Brussels airport of Charleroi. Ryanair has already been ousted from Strasbourg after Air France took legal action to put a stop to the subsidies from the local town hall.
As well, the European Commission has increased the compensation that airlines have to pay in the event of a delay or a cancellation. The compensation payments are flat rates so they hit low cost airlines particularly harshly.
Low cost airlines appear undaunted by these obstacles. Expansion is gradual but seemingly inexorable. However, slim profit margins make for a precarious business model and another setback due to international terrorism or a SARS outbreak could hit these small companies hard.
Their next task will be to break into the corporate market. Companies with large travel budgets may be tempted to come to a deal with low cost airlines. Some companies may be tempted but it may be some time before you find yourself sitting next to the President of BP on your next trip to Malaga for the summer holidays.
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Useful links to the sites of some of Europes low cost airlines
Flights between U.K. (home base Manchester) and Portugal, Spain
Air Berlin, http://airberlin.de
Flights within Germany and from Germany (home base Berlin) to Austria, Cyprus, Egypt, England, Greece, Italy, Morocco, Portugal, Spain, Tunisia, Turkey
Air Finland, http://www.airfinland.fi
Flights within Finland and from Finland to France, Italy, Spain
Air Littoral, http://www.airlittoral.com
Internal French flights and Italy
Air Scotland, http://www.air-scotland.com
Flights between Scotland and Spain
Flights between Netherlands France, Italy, Portugal and Spain
Air Europa, http://www.air-europa.co.uk
Flights from UK to Spain
BMI Baby, http://www.bmibaby.com
Flights between England and Czech Rep., France, Germany, Ireland, Italy, Portugal, Spain, Switzerland and Wales
British European, http://ww.flybe.com
Flights between England and Belgium, Channel Islands, France, Ireland, Isle of Man, Italy, Netherlands, Scotland, Spain, Switzerland and Ulster
Deutsche BA, http://www.deutscheba.de
Flights within Germany and from Germany to France, Spain
Easy Jet, http://www.easyjet.com
Flights between England and France, Greece, Netherlands, Scotland, Spain, Switzerland, Ulster
Flights between Italy, France, Russia, Spain
Flying from the UK to France, Ireland, Italy and Spain
Flying Finn, http://www.flyingfinn.fi/
Flights within Finland and from Finland to England
German Wings, http://www21.germanwings.com/
Flights within Germany and from Germany to Austria, Czech Rep., England, France, Italy, Portugal, Spain, Switzerland and Turkey
Flights within Germany (Berlin, Cologne and Frankfurt)
Flights between Scotland (home base) and France, Italy, Spain
Hapag Lloyd, http://www.hlx.com/de/index.html
Flights within Germany and from Germany to England, France, Italy, Spain
Flights between Switzerland and Austria (Vienna), Germany (Berlin)
Flights between England and France, Italy, Netherlands, Spain
Jet Magic, http://www.jetmagic.com
Flights from Ireland to Belgium, England, France, Italy, Spain, Ulster
Flights within Italy and from Italy to England, France, Holland, Italy, Spain
Monarch Airlines, http://www.flymonarch.com/
Flights between England and Gibraltar, Portugal, Spain
Norwegian Air Shuttle, http://www.norwegian.no/
Flights within Norway and from Norway to Portugal, Spain
Planet Air, http://www.planetair.co.uk/
Flying from Leeds Bradford airport to Spain
Ryan Air, http://www.ryanair.com/
Flights between England and Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy, Netherlands, Norway, Portugal, Scotland, Spain, Sweden
Flights within Sweden and from Sweden to France, Ireland, Italy, Scotland
SnowFlake Airlines http://snowflake.airkiosk.com/
Flights from Denmark and Sweden to Czech Rep., France, Greece, Hungary, Ireland, Italy, Spain, Turkey
Flights between Denmark and France, Greece, Italy, Madeira, Norway, Spain, Sweden. SkyEurope, http://www.skyeurope.com/
Flights between Slovakia and Croatia, Czech Republic, Italy, Germany, Switzerland
Skynet Airlines, http://www.skyeurope.com/
Flights from Ireland to Holland and Russia
Switzerland and worldwide
Virgin Express, http://www.virgin-express.com/
Flights between Belgium, Denmark, England, France, Greece, Italy, Portugal, Spain, Sweden, Switzerland
Flights between Italy, Belgium, England, France, Germany, Spain