Can LCCs and regional airlines co-exist? In Europe it seems so

KLM Cityhopper MD Warner Rootliep has said that his airline can benefit from competition by LCCs on certain routes. Mr Rootliep said that the presence of an LCC on a route "creates a lot of noise about the destination". This prompts an analysis of the extent of competition between regional airlines and LCCs on routes within Europe.

There are twice as many regional airlines as LCCs operating on intra-European routes, but LCCs have a huge advantage in scale, with much bigger aircraft and a greater total number of routes. Moreover, the regional airline model has high unit costs. The only valuable card held by regional airlines over LCCs is their higher frequencies.

However, regional airlines typically operate much shorter routes and face direct LCC competition on only a very low proportion of their routes. KLM Cityhopper has a much bigger than average overlap with LCCs, but appears to have devised ways to compete.