The air transport business has undergone a massive transformation, accelerated by the economic malaise of the past 18 months since the first edition of the 'Low Cost Airports & Terminals' (LCAT) report was published by the Centre for Asia Pacific Aviation in February 2008. The airports and terminals referred to in the original edition were conceived and instigated largely during a period of comparative economic boom. That boom was replaced by bust, but the Low Cost Carriers (LCCs) have, so far, survived better than the legacy carriers, and have even profited from their demise in many cases.
The Centre has now published the second edition of this unique management report. The report notes it may be that the LCCs have all but exhausted viable routes to fly in some regions, but the enormous delivery schedule of new equipment from Seattle and Toulouse to the LCCs both now and during the next few years suggests that an ever more desperate search for new routes on which to fly these aircraft will continue and grow, creating a major opportunity for some airports.
Airports must understand LCCs!
Airports must therefore continue to adapt to the demands of the LCCs, allowing for their increasing propensity to change shape.
The second edition of the Low Cost Airports and Terminals (LCAT) report notes, "apart from the well-documented cases of hybrid airlines that attempt to satisfy all passenger types, we are seeing a clear shift towards the business traveller in some LCCs – including GDS participation, business lounges and fast-track check-in and security clearance, while others experiment with shared website booking facilities, and codesharing between themselves, long haul LCCs and even legacy airlines. We have not seen many major mergers or takeovers in this segment in recent years, but that is not to say they will not occur".
The long haul LCC experiment having previously failed, AirAsia X looks as if it will succeed, and has already established new operating patterns, such as 30% of its passengers transferring to other, short haul LCCs at London’s Stansted Airport.
"This introduces a new conundrum for airports – how to cater for the long haul/short haul low cost non-interline transfer", states the LCAT report.
No longer is the interface between legacy airline and LCC regarded as ‘contamination.’ It is clear that the two must co-exist and the low cost terminal epitomised for example by early versions at Singapore and Kuala Lumpur (March 2006) may already be out of date. Indeed, the decision by Malaysia Airports to make the new low cost terminal at Kuala Lumpur part of a ‘next generation hub’ concept demonstrates the contemporary thinking. It will facilitate ‘seamless interchange’ between all sorts of airlines - full service, low cost and regional.
Some airlines are not party to such agreements and will continue to hammer home their own message for as long as it takes. Ryanair for example remains fixated on cost and regularly takes the decision to quit operations completely at airports that will not comply with the charging structure it expects. But recently one British airport took a very public stance and refused outright to lower its charges, losing almost all Ryanair service as a result, but arguing that there were already too many unsustainable routes.
At the same time, another British airport is standing firm against the demands of easyJet to lower its charges. Could it be that the slimmed down, leaner airport sector is now in a position to drive its own bargains with the LCCs? And what implications would that have for the level of facilities it offers the airlines?
Source: Centre for Asia Pacific Aviation
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