In an innovative move to take on the low-fare carriers, UK regional British European has launched a new marketing and pricing strategy targeting the cost-conscious leisure traveller.

The move comes against a background of heavy selling of promotional fares by mainline carriers, which has also seen low-fare operators cut prices. British Airways says it will continue its pro-motional fares campaign for the foreseeable future. November traffic figures show that BA actually managed to increase year-on-year load factors on UK-Europe routes as traffic falls were matched by capacity cuts. The airline admits, however, that yields have fallen. British European will be offering fully inclusive fares from £25 ($36) per sector on its London Gatwick/City to Belfast City routes.

The airline will continue to operate what managing director Jim French describes as a "classic" revenue management structure with a two-class service and the £25 fare aimed at early bookers. "The product on-board is not changing," says French. "The pricing and marketing strategy is."

The carrier has also rebranded its web-site as in an attempt to woo budget travellers from low-fare carriers such as Ryanair, easyJet and Go. "A significant portion of the market only considers low-cost carriers," French says. "We are appealing to a sector of the market which has different perceptions to the traditional British European market."

The seemingly relentless growth of the low-cost carriers continues. Go is launching a new base at the UK's East Midlands Airport, while Buzz is making a major push into France (see report on page 35). Ryanair, which said it would establish its second continental base in Hahn, Germany, in November, is close to announcing a third, with Stockholm Skavsta Airport the front runner.

Source: Airline Business