More carriers consider long-haul LCC model

THE concept of long-haul
low-cost operations is
taking off in Europe.
Lufthansa is the latest carrier
that is considering launching
a long-haul LCC, following
Norwegian Air’s transatlantic
LCC launch earlier this month.
Lufthansa is looking at
setting up a no-frills longhaul
airline under the WINGS
banner. The new airline will
form part of a strategic
overhaul to face competition
from Middle Eastern carriers.
The airline would not reveal
details about which routes it
was considering.
Axel Simon, Lufthansa’s
director of Southern Africa,
told TNW it was in talks with
Turkish Airlines as a possible
partner for the operation.
In the initial phase, the
airline is expected to operate
with a fleet that will gradually
be built up to seven B767 or
A330 aircraft, with operations
likely to commence in the
European winter 2015.
It could be some time before
Africa welcomes this kind
of LCC model, but there is
definite potential, says Aasa
ce, Chris Zweigenthal. He
says the continent remains
an expensive destination in
terms of operating costs and
landing fees, therefore solid
deals need to be negotiated to
reduce these costs for LCCs.
Chris adds that, generally,
low cost means few amenities,
such as warm meals and
in-flight entertainment, which
could prove to be a problem
for customers on a long-haul
flight. “Will this be charged
for?” he says.
Linden Birns, md of Plane
Talking, says the long-haul LCC
model has been an enigma for
quite some time and airlines
seem unsure of how to crack
it. He says the model seems
to be working well in Asia, and
AirAsia X seems to have found
a way to make a long-haul
LCC work. The airline recently
purchased 50 A330-900neo
aircraft, a new aircraft type
that reduces fuel consumption
by 14% per seat.
The cost of a long-haul LCC
operation could prove to be a
problem. “The normal model
for an LCC is to increase
the seating density on the
aircraft and to cut out as much
distribution and passenger
costs as possible. However, on
a long-haul flight these costs
make up a very small portion
of the total flight cost and so
there is little scope to bring
the fares down,” says Erik
Venter, ceo of Comair.
Adrian Hamilton-Manns,
ceo of Flyafrica.com, agrees
the biggest risk is that the
cost differential on long haul
is not as pronounced. He
adds that although the longhaul
LCC model is difficult
to perfect, Asian LCCs have
succeeded in this venture, as
well as charter airlines such
as Britannia. “As local routes
are exhausted and revenue
opportunities become more
difficult, it will make sense
for airlines to explore new
opportunities, including
long-haul.”