Between 2002 and 2007, there was a strong growth of the Low Cost market, followed by a decline by the end of 2008 until mid-2009 due to the global financial crisis. The low cost market recovered thereafter, showing positive growth rates in 2010; however, due to the new air passenger duty being in effect since 01/01/2011, low cost traffic dropped drastically by 11%. While the number of different routes offered reached a new all-time high (675) in summer 2010, they declined by about 6% in 2011. Flights and seats offered decline even more: there were 19 Low Cost Carriers departing from German airports, offering 5400 flights per week. The number of carriers remained the same for 2011, however, they now offer only 4800 flights per week in summer 2011 (-11%). This is a full stop of the growth we have observed in 2010.Here are some of the core statements of the newly available “Low Cost Monitor”, published by the Institute of Air Transport and Airport Research (FW) of the German Aerospace Center (DLR):
The Low Cost division of Air Berlin is the largest Low Cost Carrier in Germany in terms of the number of flights offered (July 2011), mainly because of the takeover of a large number of flights from TUIfly in 2009. In addition, a number of highly frequented routes from dba were integrated into the Air Berlin network in the past. However, some of these routes have already been closed for several reasons; resulting in a decline of the number of Low Cost routes by 12% in summer 2011. Besides, in particular Ryanair and Germanwings discontinued a rather large number of routes (each about 10) compared to the year 2010. On top of this, frequencies on existing routes were reduced, in particular on routes which are served by Ryanair. The only exception in the Low Cost market is easyJet expanding their supply of flights noticeable. Altogether, the largest six Low Cost Carriers at German airports almost serve the whole Low Cost market (95%). While some larger carriers had to reduce their supply of flights during the global financial crisis, a number of small Low Cost carriers have specialised in niche markets, e.g. Air Arabia Maroc serving destinations beyond Europe. However, there were also examples of Low Cost airlines going bankrupt. Another recent development we observe are airlines that combine the Low Cost Carrier business model with features of more traditional charter and legacy carriers. This makes a clear distinction between the different business models somewhat difficult, if not impossible in some cases.
Overall 635 different Low Cost routes were served from German airports in 2011, both domestic and international. Compared to the year before, this sums up to a decrease of 40 routes (-5.9%) and roughly equals the level of the years 2008 and 2009. This year’s new airport in the German Low Cost network is Magdeburg-Cochstedt; however, the airport of Altenburg was closed. New destinations served by Low Cost Carriers from German airports comprise such as cities in Southern and Eastern Europe, the Middle East and North Africa. The airports of Frankfurt Hahn, Weeze, Cologne/Bonn and Berlin-Schoenefeld on the other hand face drastic declines in the number of Low Cost flights offered at their airports.
The average Low Cost fare varies considerably between the different Low Cost airlines as well as it depends on the time span between the booking date and actual flight date. Net fares are usually published, excluding e.g. taxes, fees, and service and kerosene charges. Sample size was 10% of all Low Cost routes offered and air fares were drawn with different time spans between booking and actual date of flight. Average net fares for a single flight vary between 40 € and 80 € (late summer 2011); for fares including charges they vary between 80 € and 130 €.
In the first half of 2011, there were more than 30 m air passengers on Low Cost flights at 26 international and regional airports in Germany. In the first half of 2011, there were 93 m local air passengers counted at those 26 airports, thus the market share of Low Cost traffic sums up to 33% (2010: 35%), which is a decrease of 2 points compared to the year before. Moreover, the Berlin airport system served 6 m air passengers travelling by Low Cost flights, which is the highest value of an airport (system) in Germany in 2011.
If we take a closer look at the European Low Cost market, Ryanair clearly extends its lead. With more than 10.700 take-offs and about 2300 destination, Ryanair has the largest market share of about 25-30%, followed by easyJet, Flybe and the Low Cost division of Air Berlin. The number one destination is still Great Britain, followed by Spain, Italy and Germany. The top airport is London Gatwick, followed by Barcelona, London Stansted and Dublin. Low cost traffic has increased much at Barcelona airport in the past, thus moving up to rank 2. Cologne/Bonn dropped from rank 9 in 2010 to rank 18 this year, just as all German airports dropped in the European Low Cost airports ranking since 2010. While Low Cost traffic in Germany is stagnating or even decreasing compared to 2010, most European airports beyond Germany enjoy increasing Low Cost traffic. On a European scale, Low Cost air travel has increased its market share slightly from 27% in 2010 to 28% in 2011. By now, in more than 40 European countries Low Cost flights are available, and the North African and Asian markets are served increasingly more. Overall, there is a strong growth of the number of routes, even though the growth rate of the number of flights lacks a bit in comparison.
Low Cost Monitor