 Low budget airlines may weather global storm
(China Daily)
Updated: 2008-10-14 08:08
EasyJet Plc and Ryanair Holdings Plc, Europe's two biggest low-cost carriers, will benefit from the current economic storm, executives at the companies say. As the credit crisis deepens, feeding concern about a global recession, travelers will favor discount airlines as they pare spending. "We're clearly winning market share from our competitors," EasyJet Chief Executive Officer Andy Harrison said in an interview Oct 9. "In a world where all you can see in the papers today is about the credit crunch and cutbacks, you can see that EasyJet is doing incredibly well." Ryanair Chief Financial Officer Howard Millar forecasts that in 10 years his airline and EasyJet, the continent's second-largest low-cost airline, will be the only discount carriers left flying in Europe. "There will be less players in this market and that's the reality of what's happening," Millar said at the World Low-Cost Airlines Congress in London last month. "This industry is changing and there will be enormous opportunity for those left standing."As the outlook for economic growth worsens, discount carriers are betting that passengers will be willing to do without assigned seating and complimentary drinks to save on fares. "The tighter money is, the more people look for bargains, and we're the bargain," Herb Kelleher, co-founder of Southwest Airlines Co, the largest US low-fare carrier, said at the conference on Sept 23. Kelleher, 77, who stepped down as chairman in May, said Southwest expanded "enormously" between 1990 and 1994 when the combined US airline industry lost about $1 billion. The discount airlines with enough cash to ride out the slump will likely emerge with greater market share. Agencies (China Daily 10/14/2008 page16) |
