Why Low-Cost Carriers Are Still Making the Aviation Industry Nervous
Photo Credit: Passengers at London's Stansted airport. Flickr / Mats Hagwall
Skift Take
IATA may be right that Europe poses special market challenges to airlines, but the ongoing success of LCCs in the market proves that IATA members may need to look inwards for the answers to their woes. And much as Tyler might want it to, the infrastructure argument just doesn't hold water.
In his official remarks to attendees at the International Center for Competitive Studies in the Aviation Industry, Rome this June 17, Director General and CEO of IATA Tony Tyler expressed frustration that European market conditions do not foster the success of legacy carriers in the region.
At the SITA IT Conference in Brussels this week, he also told attendees that low-cost carriers (LCCs) competing against legacy carriers "are taking advantage of the infrastructure [legacy] airlines have built."
The two points are not unrelated and form a part of a greater argument which reveals how IATA members feel about the continued growth and profitability of low-cost carriers, particularly in Europe.
The success of low-cost carriers in the European market weakens and in some cases contradicts IATA's arguments that infrastructure in Europe is inadequate to support growth, and that regulations and taxes imposed on airlines by European governments are the root cause for weak profitability
