07 October 2016
In November 2015, Eurowings entered the market for long-haul flights from Cologne/Bonn Airport to Asia and America.
Norwegian Air and Eurowings are increasingly targeting destinations outside Europe, while Ryanair is continuing to shake up the German market and is now expanding its position as market leader within Europe. Ticket prices are behaving differently; the effort by Ryanair to expand at major airports seems to have caused price rises due to increasing charges. By contrast, costs to the consumer are falling at, for example, the predominantly smaller airports at which Wizz Air operates. These results appear in the 'Low Cost Monitor 2/2016' published by the German Aerospace Center (Deutsches Zentrum für Luft- und Raumfahrt; DLR). This report has been published every spring and autumn for the last ten years.
Cheaply from Europe to the rest of the world
Norwegian Air and Eurowings are continuing to expand their ranges of low-cost long-distance airline tickets. The Scandinavian budget airline Norwegian Air increased its range of intercontinental flights from the previous year by 50 percent. At the major airports in London, Paris, Copenhagen and Stockholm, passengers are being encouraged away from the classical alliance airlines. Eurowings entered the market in November 2015 with air travel deals from Cologne/Bonn Airport to Asia and America and has so far been operating without competition in low-cost business on long haul flights from Cologne/Bonn.
50 percent growth at Berlin-Schönefeld Airport
The growth at the two airports with the most low-cost traffic in Germany is also impressive. Cologne/Bonn is growing by 20 percent and Berlin-Schönefeld by as much as 50 percent in low-cost air travel. Ryanair’s pace of growth is decisive for both airports particularly because of the numerous flights from Cologne and Berlin, which have increased from 63 and 58 to a total of 149 and 219 flights. This is an increase of 136 percent for Cologne and as much as 277 percent for Berlin with the commitments of the Irish airline. Throughout Europe, the airports at Barcelona, London and Dublin have the largest range of low-cost routes. Last year, the range was between 45 and 115 euros gross.
Flight prices falling on average
"The high dynamism in the market for low-cost airlines and consistently low fuel costs sometimes lead to significant reductions in ticket prices," explains study leader Peter Berster from the DLR Institute of Air Transport and Airport Research. The average prices in summer 2016 were between 40 euros and 105 euros gross. For the Low Cost Monitor, these prices are determined, depending on carrier, based on various advance-booking periods from one day to three months. Last year, the range was between 45 and 115 euros gross.
Approximately four per cent increase on routes from Germany
Meanwhile, Ryanair, a pioneer among low-cost carriers, has moved into second place as a budget airline with 190 routes, behind Eurowings/Germanwings with 380 routes to and from Germany. Taken together, this resulted in an increase of 4.5 percent from 670 to a total of 700 routes for low-cost air traffic from Germany. No longer taken into account in this figure is the airline Air Berlin, which indicated in a letter to the International Civil Aviation Organization (ICAO) that in future they no longer want to be treated as a Low Cost Airline but as a Full Service Network Carrier. However, the Berlin airline still has the characteristic low fares with general availability. Taking Air Berlin into account, there were 780 routes from Germany in Summer 2016, compared with 754 connections in Summer 2015. At 135, the number of Air Berlin routes has remained almost constant over this period.
Aircraft fleets augmented
Across Europe, Ryanair and easyJet are continuing to expand their market leadership. Ryanair now has 2303 connections on the continent and easyJet follows with 1370 routes. The competition between budget airlines in Europe is continuing to increase. There are 1000 routes on which two providers are operating and at least 150 connections on which more than two providers are flying. To cope with the expansion of services, the availability of a correspondingly large number of suitable aircraft is necessary. In most cases this is an aircraft of the Boeing 737 or Airbus A320 type. Ryanair now has a fleet of more than 350 Boeing 737 aircraft with 189 seats. This represents an increase of 12 percent over the last year. easyJet increased its fleet by seven percent in the same period. Norwegian has also greatly expanded its own fleet of aircraft. This includes, in addition to 100 Boeing 737 aircraft, ten of the modern long-haul Boeing 787 model, which are operated on intercontinental routes to Asia and America.
Low cost and traditional commercial airline traffic
Airlines often set their low cost offerings very differently. This means that only a few clear differentiation criteria can be defined for the low-cost market sector, such as a lower price, general availability or direct sales via the internet. The trend of airlines intermixing business models is increasingly apparent. While Ryanair is increasingly operating at major airports and is attempting to attract premium customers by selling additional packages, charter carriers and established airlines, either through subsidiaries or their own service plans, are increasingly entering the budget flight market. In Germany, Lufthansa handed its domestic and European flights over to its subsidiary Germanwings – except those through the hub airports of Frankfurt and Munich, which have been incorporated in another subsidiary, Eurowings, since early November 2015.
The airlines considered in the Low Cost Monitor by DLR are not selected because of their business model, but are those that have a large number of offerings in the low-price segment of the market as a whole. Because of the increasing hybridisation of business models, deriving further unambiguous conclusions about the particular business models is no longer possible. Low prices, their general availability and large spreads between the cheapest and the most expensive price range on a route in relation to the advance booking period remain typical for the low-cost segment. The results given in the study are based on data for a reference week in July 2016.
Last modified:10/11/2016 15:56:49