Long haul low cost becomes mainstream as full service airlines gradually embrace new business models

IAG's launch of long haul low cost brand Level in Jun-2017 marks a major milestone on multiple fronts and highlights the evolution of business models in the dynamic airline industry. The "adapt or die" motto has never been so relevant as it is today. Business models are changing at a pace which may still seem ridiculously slow for other industries but is scary fast for most airlines.

Level is the fifteenth long haul low cost operation to be launched within the last five years. Perhaps most significantly, IAG becomes the seventh full service airline group with a long haul low cost operation. Australia's Qantas was the first and the pioneer, launching a long haul low cost operation in 2006 under its pan Asia Pacific LCC brand Jetstar.

Malaysia's AirAsia X, the long haul offshoot of short haul LCC group AirAsia, launched a year later and quickly expanded to become the market leader among new generation long haul LCCs. However, it was not until 2012 that the model really started to gain steam and acceptance - from both independent LCC groups and full service airline groups.