European Low Fares Airline Association (ELFAA) stated (05-Sep-2013) LCCs are providing the right product for the European market supported by a "sizeable" increase in passenger traffic for the eighth consecutive year. The number of passengers travelling on ELFAA airlines grew by 6.7% year-on-year in Jul-2013, a period which also saw a 10% increase in the number of aircraft operated by ELFAA members, in order to meet the burgeoning demand. ELFAA secretary general John Hanlon said: “These figures demonstrate that ELFAA members are going from strength to strength and are offering consumers what they want, namely affordable and reliable travel...We constantly hear about how airlines today are suffering from economic slowdown, and yet low cost airlines are shown to be bucking this trend...Clearly, the low cost model is a growth model and is even being replicated by flag carriers – yet some of these carriers still feel compelled to go cap-in-hand to governments asking for state handouts. This hampers the development of a level-playing field and punishes both successful airlines that operate at a profit, as well as consumers who are forced to pay higher ticket prices.” [more - original PR]
LCCs are going from strength to strength in Europe, LCC model is a growth model: ELFAA
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SunExpress: "Lufthansa's biggest strategic project"
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Jointly owned by Turkish Airlines and Lufthansa, SunExpress and its German counterpart brought about a consolidated result that fell into loss in 2016 as passenger numbers and revenue both declined. When the observer scratches beneath the surface of the headline figures, a picture of significant strategic change at SunExpress Germany starts to emerge.
The larger Turkish SunExpress has maintained its focus on Turkey-Germany routes, whereas SunExpress Germany has abandoned this country pair. It has instead developed leisure routes from Germany to elsewhere in Europe and in North Africa, in spite of not having an obvious competitive advantage in those markets. Within these new market areas, SunExpress Germany has undergone substantial changes in its route portfolio. Lufthansa wetleases capacity from SunExpress Germany for its Eurowings low cost operation and this may help to make some sense of these outwardly random network changes.
Finnair and TAP Portugal: their location based long haul niche strategies compared
Both Finnair and TAP are based in peripheral corners of Europe: Finnair in the extreme northeast and TAP in the southwest. Both are based in countries with relatively small populations, but they have developed networks that capitalise on their geographic location to carry connecting traffic from across Europe and elsewhere to long haul destinations in other continents.
TAP's main long haul market is Upper South America (primarily Brazil), but it also has a secondary long haul niche in Africa. Finnair's main long haul market is Northeast Asia, with an additional presence in South and Southeast Asia. Both also operate to the US. On short haul, LCC competition has been a bigger threat to TAP than to Finnair, but cost savings are important to both.
TAP and Finnair have similar traffic volumes, unit costs and average trip lengths. Moreover, both have struggled to generate sustainable profitability. This report compares and contrasts Europe's two leading independent exponents of the location based long haul niche strategy. Both are set to accelerate their long haul growth.