News

The age of low-cost airlines is coming to an end | opinion by Danny Rogers

Danny Rogers, editor, PR WeekSo, is this really the end of an era in low-cost air travel? “Bull****,” replied Ryanair boss Michael O’Leary at a press conference this week.

“The era of high-fare travel is over,” he insisted. One begs to differ.

O’Leary was on vintage form on Tuesday, adding: “I hope oil stays high for the winter so a lot of crappy airlines go out of business.”

In essence, the Ryanair boss is a consummate PR man. Journalists love him because he gives them great quotes, while the upshot of this bravura media performance – in which he also said that if oil prices stayed above $130 a gallon, Ryanair wouldn’t make any profits this year – was an increase in Ryanair’s share price.
 
In short, he manages expectations brilliantly, and generally outperforms his own forecasts.

But one feels he was being disingenuous with that first statement. It just happened to come in the same week another business-only carrier, Silverjet, suspended operations and the Oneworld alliance talked about introducing surcharges for bags and food.

It certainly feels like a completely different airline market to that of a decade ago, when low-cost carriers were launching almost every week.

For more than 10 years since, the more established UK brands – such as British Airways and Virgin Atlantic – have faced fierce competition from a new generation of competitors.

As a result, travellers have seen some amazing deals on flights – returns to European cities for less than the price of a pair of jeans and business-class returns to New York for the price of a decent laptop. But now the challengers are starting to dwindle in number.

Sure, Ryanair and easyJet will continue to curb short-haul fares, but it is difficult to see much fresh competition on long-haul routes.

Oil prices look likely to remain high for some time and even if they drop, environmental taxes will prop up prices.

Even low-cost evangelist Ryanair is starting to charge heavily for things many people consider ‘basics’ such as taking a decent suitcase and checking in at a desk.

O’Leary chucks the blame at everyone from the airport authorities to pension funds. However, if even Ryanair is talking about making minimal profits, there is really no slack left in the system.

Without slack the only option is to let fares creep up. The room to manoeuvre is dwindling. The second golden age of air travel is drawing to a close.

Share article

View Comments

Jacobs Media Group is honoured to be the recipient of the 2020 Queen's Award for Enterprise.

The highest official awards for UK businesses since being established by royal warrant in 1965. Read more.