Low-cost carriers have flooded the European market, and some have responded to the competition by adding precisely what separated them from full-service airlines: frills.
According to The Wall Street journal, there are now over 50 discount carriers operating in Europe, and having dominated their battles with higher-fare airlines, the no-frills competitors are turning on each other. Prices are dropping, and in the words of the Journal’s Keith Johnson, “too many low-cost seats are chasing too few passengers.”
Since the low-cost airlines have determined they can’t make price point their sales tactic and they can’t further lower their own prices, they’ve started to add services and benefits.
England’s flyBE Airlines has launched a loyalty program in addition to having assigned seating and waiting lounges. Air Berlin also offers a frequent flyer program along with free meals and free newspapers. Another U.K. airline, easyJet, is considering adding a frequent flyer program of its own.
Of course, all these changes may be for naught if the words of Irish low-cost carrier Ryanair CEO Michael O’Leary prove prophetic. The outspoken, slightly eccentric executive has gone so far as to suggest free tickets within a decade. “Why shouldn’t we give away seats for free,” he told the German weekly Die Zeit.
“We’d get our money from the hotels we bring our passengers to, from the rental car firms, the airport shops and from the airports themselves who’d be happy to have us fly there. Our competitors will raise their prices because they’re losing money. We’ll cut ours,” Agence France-Presse quotes him as saying.