Thursday, September 08, 2005

Low-fare Air Saturation in Europe

Low-cost airlines in Europe haven't driven mainstream carriers out of the market. In fact, as this article from McKinsey and Co. Shows (free registration required), the low-cost-carrier market is starting to saturate in parts of Europe. Charter and traditional airlines most likely will coexist with their no-frills counterparts, in some cases consolidated under one corporate umbrella.

Airfares are so cheap now, that "low-cost carriers are also competing against dining out, the theater, and other leisure activities". But, "at the same time, traditional airlines have persuaded some passengers, particularly business travelers, that it is worth paying extra for better service and convenience"

Quite some similarities -and some differences- with the North American market.