Press
Low-cost airlines fly high, but face hard landing. - 02/11/2003
GENEVA: No-frills airlines are jetting off around Europe while more traditional carriers struggle, but as with the Internet boom of dot-com ventures, many of these start-ups are in for a hard landing, experts warn.
In Switzerland, Flybaboo Airways and Helvetic Airways take to the skies this month, hoping to emulate the success of low cost leaders such as Ryanair and easyJet while benefitting from a gap in the market left by reduced services at troubled mainstream carrier Swiss.
And in Britain, Duo - an independent airline spun off from a franchise with British Airways (BA) - is launching a cheap, business class service to create a new market in between the budget and network fliers.
"We love to see start-ups and we love to see carriers trying things that others have not tried because it is great to expand the market for everyone," said William Gaillard, a spokesman for the International Air Transport Association (IATA).
Claps and cheers upon touchdown often come from first time fliers who, just four years ago, would not have been able to afford air travel, said Angelika Schwaff, spokeswoman for Air Berlin, Germany's largest low cost airline.
But while the cost of flights is falling, the future for many new carriers looks uncertain.
"You are going to see a lot of them fail," predicted the IATA's Gaillard.
"It is like the time of the dot-com" bubble, which burst in 2000 sending a lot of new Internet companies under, he said.
Europe's no-frills market is still relatively new, meaning budget airlines rarely compete directly against each other. But the day they do "there will be blood on the tracks," warned Gaillard.
Baboo Airways will start cheap flights from Geneva to Lugano - a route that Swiss abandoned at the end of last month - and Venice from November 3.
"In Switzerland you have got the national carrier, Swiss, cutting back month after month, so there is an opportunity for new carriers," explained Baboo's British founder Julian Cook.
Across the country in Zurich, Helvetic Airways is due to start flying to three European destinations from November 28 for a one-way flat fare of 99 euros (116 dollars).
"Our concept is to be very lean, very little and very simple," said the firm's chief commercial officer, Thomas Frischknecht, when asked why he thought Helvetic would prosper in an industry that has seen many larger carriers fail. Determined not to be left behind by the low cost boom, which already comprises 25 percent of air travel in the United Kingdom and looks set to capture the same share Europe-wide, network carriers are also cutting fares.
"We have launched a new concept on European flights where passengers pay for their food," said Christine Buhler, a spokeswoman for Swiss, which recently announced a tie-up with BA and the Oneworld alliance.
Since the cheaper service was introduced in August, bookings had risen by 30-40 percent, she said.
But Paul Fitzsimmons, head of communications at Ryanair - Europe's largest low cost carrier, which aims to overtake BA to become the biggest European airline by 2005-2006 - says success takes more than a good idea.
"We love the competition, but to be a low cost airline you have got to eat, sleep and drink low fares ... and we do that particularly well," he said.
GENEVA: No-frills airlines are jetting off around Europe while more traditional carriers struggle, but as with the Internet boom of dot-com ventures, many of these start-ups are in for a hard landing, experts warn.
In Switzerland, Flybaboo Airways and Helvetic Airways take to the skies this month, hoping to emulate the success of low cost leaders such as Ryanair and easyJet while benefitting from a gap in the market left by reduced services at troubled mainstream carrier Swiss.
And in Britain, Duo - an independent airline spun off from a franchise with British Airways (BA) - is launching a cheap, business class service to create a new market in between the budget and network fliers.
"We love to see start-ups and we love to see carriers trying things that others have not tried because it is great to expand the market for everyone," said William Gaillard, a spokesman for the International Air Transport Association (IATA).
Claps and cheers upon touchdown often come from first time fliers who, just four years ago, would not have been able to afford air travel, said Angelika Schwaff, spokeswoman for Air Berlin, Germany's largest low cost airline.
But while the cost of flights is falling, the future for many new carriers looks uncertain.
"You are going to see a lot of them fail," predicted the IATA's Gaillard.
"It is like the time of the dot-com" bubble, which burst in 2000 sending a lot of new Internet companies under, he said.
Europe's no-frills market is still relatively new, meaning budget airlines rarely compete directly against each other. But the day they do "there will be blood on the tracks," warned Gaillard.
Baboo Airways will start cheap flights from Geneva to Lugano - a route that Swiss abandoned at the end of last month - and Venice from November 3.
"In Switzerland you have got the national carrier, Swiss, cutting back month after month, so there is an opportunity for new carriers," explained Baboo's British founder Julian Cook.
Across the country in Zurich, Helvetic Airways is due to start flying to three European destinations from November 28 for a one-way flat fare of 99 euros (116 dollars).
"Our concept is to be very lean, very little and very simple," said the firm's chief commercial officer, Thomas Frischknecht, when asked why he thought Helvetic would prosper in an industry that has seen many larger carriers fail. Determined not to be left behind by the low cost boom, which already comprises 25 percent of air travel in the United Kingdom and looks set to capture the same share Europe-wide, network carriers are also cutting fares.
"We have launched a new concept on European flights where passengers pay for their food," said Christine Buhler, a spokeswoman for Swiss, which recently announced a tie-up with BA and the Oneworld alliance.
Since the cheaper service was introduced in August, bookings had risen by 30-40 percent, she said.
But Paul Fitzsimmons, head of communications at Ryanair - Europe's largest low cost carrier, which aims to overtake BA to become the biggest European airline by 2005-2006 - says success takes more than a good idea.
"We love the competition, but to be a low cost airline you have got to eat, sleep and drink low fares ... and we do that particularly well," he said.
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