Travel Megatrends 2019: Low-Cost Carriers Lose Some Luster
Photo Credit: Long-haul, low-cost airlines delight customers with their prices. But many have had trouble generating profits. Skift / Bing Qing Ye
Skift Take
Customers like low-cost airlines, but no carriers so far have perfected the model for long-haul flights. It’s not clear they ever will.
If you've been following the press, you may think low-cost carriers will take over the world, disrupting established airlines and delighting customers with cheap fares for decades to come.
Let's not get ahead of ourselves.
Yes, short-haul, low-cost airlines such as Ryanair and Southwest Airlines have proven they can make money providing service customers like, or at least tolerate. But long-haul, low-cost airlines only have figured out half the equation. Most know how to win customers, but not how to produce sustainable margins.
It shows, again, how rare it is for new entrants to disrupt the world’s airlines. Most of today’s most powerful airlines have been around for decades, and though some have been resistant to change, they have so much size and scale they can withstand challenges from disruptive competitors. You could argue the last airline to truly change how the industry operates was Southwest, which introduced the low-cost, short-haul model almost 50 years ago.
