The Hindu Business Line : Flying without frills over Europe

In the bedlam after the plot to bomb airliners was exposed on August 10, my British Airways flight from Munich to London Heathrow was cancelled and delays were stacking up at major airports across Europe.

Luckily, I found a seat, for just € 25, on an unadorned airline into London's Luton airport. The plane taxied right up to the arrivals gate; I walked down the staircase, across 50 feet of tarmac, and through the doors.

I glided past the cheery passport clerk and waited at the luggage belt for a few minutes before my bag rolled out. I checked my pocket watch as I exited the airport and crossed the footway to the bus that would take me to business district London. The time from getting off the plane to boarding the bus: 10 minutes! With its long lines, crowds, and sheer size, I have never got out of Heathrow in less than an hour-and-a-half.

Welcome to Europe's wonderful age of no-frill airlines!

Open skies

Low-fare airlines emerged from the deregulation of Europe's skies that came into full effect in 1997. Any qualified airline can now fly anywhere within the European Union, without any need for government approval. With this liberalisation came the first widespread competition for national flag carriers, then mostly state-owned.

From month to month, new discount airlines come into existence and old ones fail or are taken over by rival no-frills carriers. Europeans can take advantage of the newest budget air routes from Scandinavia to the Mediterranean, from the Atlantic coast to the Balkans.

Ryanair was the first airline in Europe to try this model, and now there are many imitators offering low fares across the continent. These are boom times for cheap air travel in Europe, with fares on some routes as low as € 10, one-way, including tax.

Changing lives

Fed up with costly train tickets, annoying motorway tolls, and Concorde-style prices from national `flag carriers' such as Air France and Lufthansa, Europeans have defected to the short-hoppers in droves — 200 million, nearly 45 per cent of the entire EU population, took a low-cost flight in 2005.Today, Italian golfers swarm the Scottish countryside to enjoy their sport away from the hometown heat. In the gorgeous south-west French region of Dordogne, locals now refer to the area as `the Dordogne-shire'. Why? Brits are buying up local vacation homes.

Every summer, jaded industrialised corners of Europe — Hahn (Germany), Stansted (England); St. Etienne (France) — have become incredible boomtowns, while secondary travel destinations such as Cardiff and Edinburgh have been transformed into sizzling tourist magnets, with boutique hotels, Irish pubs, and commerce, in abundance. Low-cost air traffic grew by over 500 per cent in Europe, compared to just 10 per cent growth for full-service airlines. Europeans, who not long ago used airplanes only to cross the ocean for business, are now taking them to visit girlfriends, span out real estate, and turn the EU's freedom of movement into a reality.

Interlopers in the skies

Before European air travel was deregulated, in the mid-1990s, the market was neatly divided. Scheduled carriers, focussing primarily on business travellers, controlled 75 per cent of the intra-European market. Charter airlines held the remaining 25 per cent by selling aircraft capacity to tour operators and shuttling sun-seeking package tourists from cold Northern European countries to the beaches of Southern Europe. Both scheduled and charter incumbents were shaken by the emergence of low-cost carriers that targeted leisure and, to a lesser extent, business markets.

Business design

Low-cost airlines rely on a simple business design: One kind of aircraft, one class of passenger, and more seats crammed into the airplane — as well as no airport lounges, no choice of seats, no newspapers, no food, no frequent-flyer programmes, no connecting flights, no refunds, and no possibility of rebooking to other airlines. Also, there are no travel agents and expensive computer reservation systems; about 90 per cent of easyJet and Ryanair tickets are booked over the Internet.

By keeping the logistics simple, no-frills airlines cut the turnaround time on the ground and maximise revenue-generating air time. On short-haul routes, for instance, easyJet's planes are in the air an average of 12 hours a day, compared with nine hours for the most efficient traditional scheduled carriers. Some European low-cost carriers fly to and from secondary airports — located as far as 100 km from city centres — thus minimising landing and ground-handling fees.

On intra-European international routes, this adds up to an operating cost-advantage per seat and kilometres flown (unit cost) of 40-65 per cent compared with major scheduled carriers.

Lower costs and higher seat-load factors permit no-frills carriers to offer fares 50-70 per cent lower than those of the incumbents.

The average price (revenues divided by the number of passengers) of the no-frills carriers for a one-way ticket on international intra-European routes is € 50-85, compared with € 180-200 for British Airways and Lufthansa. This approach attracts price-sensitive and flexible travellers, but the lack of convenience and flexibility makes the low-cost model unappealing for most passengers travelling on business.

When flying with a low-cost, do not expect meals, drinks, newspapers, mileage programmes, airport lounges or making a connection or re-booking with other airlines.

Many of the low-cost airlines impose harsh conditions on their crews and ground staff. They are not encouraged to join a trade union. Flexibility for the cabin crew means that they have to clean the aircraft as it is being refuelled and turn into salespersons during flights to sell drinks and sandwiches. No cleaning assistance is called from airport personnel as this costs money.

Freeway Across Continent

The days of high plane fares within Europe are over, as are the days of having to spend two days on a train just to cross the continent cheaply. No-frills are opening up the `corners' of Europe to travellers — Spain and Portugal, Scandinavia, Greece — turning what were once epic journeys of two-three days on trains and ferries into easy two-three hour flights.

The world has now become just "one global village'' and even flag-carrier airline of tiny Malta has to adjust to these harsh realities and competitive environment.

(The author is former Europe Director, CII, and lives in Cologne, Germany. Feedback may be sent to mohan.murti@t-online.de)

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