Lots of talk during the World Low Cost Airline Congress about budget carriers and business traffic, and to what extent carriers are catering for it and picking it up.
The different scope of low-cost carriers means some are already pitching themselves pretty much directly against network carriers on high-frequency routes between primary airports, and Norwegian chief executive Bjorn Kjos – off the back of record results for the carrier in the first half – told us the airline has definitely benefited from passengers trading down from network carriers in the tough market conditions.
Alex Cruz, chief executive at recently merged Spanish budget carrier Vueling (pictured here on the left next to Kjos during one of the panel debates), says his carrier puts a lot of emphasis on dependability in terms of catering for business passengers. “There are a lot of attributes they want, of which [onboard] freebies are are the end if the list,” he says, saying punctuality and being able to book tickets in their normal channels are the keys.
A business product is even more obviously part of the equation on the long-haul model. Ryanair chief executive Michael O’Leary, who has floated the subject of one day setting up a long-haul low-cost operation (separate to Ryanair), has always said a premium cabin would form part of such a product, while Malaysian long-haul, low-cost carrier AirAsia X is already making a move to lie-flat beds. Chief executive of the carrier, Azran Osman Rani says around 10% of its seats are premium, but says the carrier focuses on the seat rather than the other elements of traditional business class. “What people want is a comfortable seat,” he says. “There is a huge gap between what carriers charge for business class against the cost.”
He says in addition to the direct benefit of securing higher paying fare, “the intangible benefit is you broaden your brand’s reach beyond price-sensitive customers”.