Keep it simple, stupid! That was the traditional and pure sense of a low-cost airline, to keep costs low, everything was the same – a one-aircraft fleet, simple onboard service, and an efficient all-economy onboard layout. Before the low-cost model transferred to Europe in the 90s, Southwest Airlines was really the pioneer of the low-cost model, running an all-economy onboard service which essentially replicated a bus (especially in its home state of Texas), and an all Boeing 737 fleet. The likes of Michael O’Leary and Barbara Cassani (the former CEO of Go), followed a similar model of using Boeing 737s in a low-cost, efficient model.
The original version of this included luggage; it included hand luggage, but didn’t include a seat allocation. It was a simple service for a low fare, and a few extras apart from a buy-on-board service on board selling drinks and simple snacks. Over time, that developed further, so that less and less was included in the fare, but offered payable extras – hand luggage, hold luggage, a seat allocation (which was first brought in by Carolyn McCall – but Ryanair soon followed), additional flexibility in the fare and speedy boarding. This is where the term ‘Ultra Low Cost Airline’ was born.
For trends, we do tend to look to America, and although the pioneers Southwest haven’t strayed a long way from their original model, it’s the ULCC’s that are feeling the heat the most. The three biggest being Spirit, Frontier, and Allegiant – but there are new upstarts, Avelo and Breeze, who are fighting it out, especially in many untapped regional markets. The big three majors have found a way to compete with very cheap ‘economy basic’ fares at similar pricing to these carriers, and with a larger network and broader loyalty system (this is important in America), they are able to compete and even upsell to more expensive fares.
So, the way the low-cost airlines are aiming to compete is by going upmarket – and yes, having a ‘domestic first’ as it’s described in the US as a way of gaining more revenue. The difference in the US is that many of these airlines compete head-to-head at the same airports, whilst in Europe, the likes of Ryanair, EasyJet, and Wizzair don’t have access to some of the very biggest airports, or at least in a meaningful way – London Heathrow, Zurich, Frankfurt and Munich, for example. Spirit, which was due to merge with the premium carrier JetBlue last year, is currently in Chapter 11 protection for the second time in a year, and is rapidly shrinking its fleet to essentially half and focusing on its heartland in South Florida. It is reinventing it’s ‘Big Front Seat’ concept, which has now been copied by rival Frontier and Breeze, and is due to be rolled out through the JetBlue fleet next year.
The question is, will this idea come to Europe? European Business class is generally just a blocked middle seat on either an Airbus A320 or Boeing 737, we don’t have the large premium economy style seats that America has with Domestic First. However, airlines have worked out that customers are willing to pay a bit more if they get a bit more, especially when we’re travelling to more premium destinations in Europe, and you’re travelling regionally outside a major hub.
We heard rumours a couple of years ago that EasyJet was going to trial a Business Class concept, although it never materialised and we’re unsure what’s happening to their invitation-only frequent flyer programme, having gone into hibernation. Instead, it looks like it’s going to be Hungarian airline Wizzair that is going to see if this is a concept that can work within the European low-cost model, which relies on dense aircraft configurations and heavy selling of ancillaries. Wizz Class is going to be a trial over the winter, which will include blocking off a middle seat and offering hand luggage, with seats at the front of the aircraft to allow for quick disembarkation for business travellers who favour space and convenience.
You only need to look at some of the British Airways leisure services from Heathrow or Gatwick to see there is a heavy demand for a more elevated service – sometimes with double-figure numbers of rows in Club Europe – but you have to consider a certain number of seats where people are using Avios.
