Socio-economic effects

This paper also examines the social and economic impacts of the growth of the no-frills sector in the UK over the last decade.

One question is how far the availability of flights on no-frills carriers has resulted in people from lower income groups or socio-economic classifications being able to fly more often. The perception is that this has been one of the major changes flowing from the entry of no-frills carriers, and that lower air fares have led to a change in the income profile of passengers.

However, as Figure 3 shows, this perception appears to be incorrect. There is little evidence of any major change in the type of people who are flying today as compared to a decade ago, particularly in the leisure market. There has been a significant increase in the total number of people flying from all groups. The more observable effect is of middle and higher income and socio-economic groups flying more often than in the past, and often on shorter trips.

Figure 3 Income levels of UK-EU and UK domestic business and leisure passengers, 1996 (adjusted for income growth) and 2005.

Source: CAA Passenger Survey 1996 and 2005

A common perception of no-frills carriers is that they are essentially focussed on leisure passengers. In fact, there is a considerable and growing volume of business traffic. The range of destinations offered by no-frills carriers (particularly from regional airports), the frequency of services, combined with lower prices, and the lack of restrictions on tickets, may be combining to make travel for business purposes more feasible and attractive than in the past. Indeed, evidence suggests that business passengers have benefited significantly more from lower fares than leisure passengers. This is likely to have particularly helped smaller firms and those in the regions, as is suggested by the increase in the proportion of business travellers from lower income levels over the last decade shown in Figure 3. This element of no-frills carriers’ business could expand, as they seek to compete more directly with full-service carriers on the ‘thicker’ routes between major EU cities.

The increased number of destinations available from no-frills carriers, particularly to Eastern Europe, may also be facilitating wider social and economic changes. Throughout most of the 1990s the amount of inbound traffic to the UK on no-frills airlines was relatively small; their main impact was on the choices and fares available to UK residents travelling to Europe. But this has changed in the last few years. Inbound traffic on no-frills carriers has increased significantly, particularly with the opening of routes to Eastern Europe, most notably Poland. This has coincided with an increase in the numbers of Eastern Europeans taking up job opportunities in the UK following the enlargement of the European Union.

Although migration itself is small as a proportion of total traffic, it creates follow-on growth in “visiting friends and relatives” (VFR) traffic as migrants receive visits from friends and relatives and travel back to their countries of origin. These trends are illustrated in the table below, which shows the composition of inbound traffic at Luton and Stansted between 2000 and 2005. During that same period, inbound traffic grew from around 24% to around 36% of total traffic.

Change inbound passengers composition (EU–UK) at Luton and Stansted


Passengers 2000 (mill)

Passengers 2005 (mill)

% change

% of total in 2000

% of total in 2005



















Source: CAA Passenger Survey 2000 and 2005

VFR traffic has been the fastest growing segment of inbound traffic at Stansted and Luton in recent years. Between 2000 and 2005 it increased by 198%, and is now the largest single component of total inbound traffic, accounting for almost half of all inbound trips at these two airports.