North Atlantic aviation: Brexit, Long Haul LCCs mean change

Although the North Atlantic is one of the more mature air travel markets, change is now in the wind as long haul low cost operators continue to capitalise on the capabilities of new narrowbody aircraft and create more competition for the full service airlines that dominate the market.

It is arguably too early to determine the level of success of operators such as Norwegian and Primera in the long haul low cost market, but larger airlines are adapting to the latest low cost threat. Large US airlines appear to be relying on their basic economy fares to combat new low cost competition, while some larger European airline groups are turning to low cost subsidiaries to preserve their competitive strength in the North Atlantic.

Against the backdrop of low cost expansion is the pressing need for the UK and the US to negotiate a new air service agreement before Brexit takes effect in a year from now. Talks appear to be progressing slowly, and some airlines could be forced to develop contingency plans if a new agreement does not materialise.