A Future for Low-Cost Carriers ?

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2003/02/04

A future for low-cost carriers ?

- Labour news from UNI global union - for trade unions in a global services economy. -

Has the buzz gone out of low-cost airlines? - Some have gone bust in the boom sector as many others queue for take-off

Andrew Clark, transport correspondent

Tuesday February 4, 2003

The Guardian

They say that if you walk along the promenade in Nice, you hear Scouse spoken almost as often as French. The low-cost airline revolution has injected a dose of democracy into European travel - but can it last?

The price of a return flight to the Mediterranean can be cheaper than a bar bill after a few jugs of sangria. For a weekend break from Liverpool, Alicante on the plane can be a quicker and less costly than London on the train.

It seems too good to be true, and maybe it is. The cracks are beginning to show in the budget aviation world.

In a surprise move on Friday, Buzz threw in the towel, agreeing to a takeover by Europe's biggest low-cost carrier, Ryanair, for a knockdown price of £15m - or a humiliating £4m after deducting the likely value of its cash balance.

Buzz's Dutch parent, KLM, lost patience after three years of multimillion-pound losses. Critics said it had chosen the wrong planes and destinations, flying fuel-guzzling BAe 146s to high-charging airports such as Paris Charles de Gaulle and Schiphol, Amsterdam.

Gert Zonneveld, an airlines analyst at WestLB Panmure, says Buzz is not the only operator finding the going tough: "It sounds very easy to say, 'let's start up a low-cost airline and make lots of money'. But in reality it's not easy, and it takes quite a few years - if you're lucky."

Britain's airports boast a wide choice of low-cost carriers, with MyTravelLite, BmiBaby and Jet2 among the start-ups over the past 12 months. The Germans are getting in on the act, with Hapag-Lloyd Express and Germanwings.

Few of them release detailed financial information. Mr...