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New Breed of "Hybrid" Airlines Beginning to Outshine Low Cost CarriersMay 5, 2008 By: Kirk Cassels
More business travelers are flying on a “hybrid” carrier than on a traditional Low Cost Carrier (LCCs), according to a study released by Sabre Airline Solutions. As airlines continue to face economic and competitive issues by the day, more traditional LCCs are undergoing a metamorphosis by blending the characteristics of low cost and full-service models to create a new breed of airline to adjust to rapidly changing market conditions. In 2007 alone, these "hybrids" carried 64 percent of all passengers in the broader LCC segment.
“The LCC market is one of the most competitive in the airline industry and this has spurred many pure LCCs to explore new ways of evolving their business to remain competitive and sustainable," said Gordon Locke, vice president of airline marketing and strategy for Sabre Airline Solutions. "For many, this has meant adopting some full-service carrier business practices to help grow their passenger base and expand their market reach, although they have often added their own twist on how these business practices are implemented."
The study shows that full-service carrier attributes being meshed within the LCCs include use of the Global Distribution System (GDS), long-haul destinations, international routes, connecting services, advanced ticketing procedures, multiple fares available at any time, multiple aircraft types, multiple classes of service, interline agreements, and codeshare agreements. “Airlines that introduce more than three of these full-service characteristics should be considered a 'hybrid' carrier because each attribute adds a level of complexity and cost to the operating model that is inconsistent with the fundamental principles used to define low-cost carriers,” said Locke.
The global study also revealed that out of 123 self-nominated LCCs, 59 percent had added enough complexity to their business model in recent years that they had now evolved into a full service airline (7 percent) or were part of an emerging breed of “hybrid” carriers, which blend low cost carrier traits with that of full service carriers (52 percent).
Based upon this definition, low-cost airlines within North America that may be considered “hybrid” carriers include: Southwest Airlines, JetBlue, WestJet, and AirTran.
Meanwhile, international carriers engaging in more "hybrid" practices include easyJet, Germanwings, Norwegian Air Shuttle, bmi Baby, Sterling Airlines, KD Avia, Centralwings, Blue Panorama Airlines and Flybaboo in Europe, as well as Virgin Blue and Air Asia in Asia-Pacific.