02 June 2010

Where Have All The Low Costs Gone?

I must be having a fit of deja vu or something even worse. I thought LCCs were supposed to be about low cost and eschewing the trappings of conventional airline services such as Big PSS systmes, Interline, FF marketing partners, Interline, Codeshare, Legacy GDS etc etc.

Here are the bigger news items:

WestJet, JeBlue and Volaris are all migrating (or have migrated) to Sabre from Navitaire.
jetBlue is doing a deal with AA and BA for codeshares and feeders.

Gol is joining IATA. It already participates in ARC.

So let's talk about interline...

Not content there:

Air France-KLM and Jetstar sign interline agreement. Agreement covers the 60-odd destinations served by Jetstar, Jetstar Asia/Valueair and Jetstar Pacific, as well as Air France and KLM gateways Paris and Amsterdam.

Jetstar has also announced deals with LH

Virgin Blue are sharing across the Tasman sea with ANZ

Even Air Asia and Jetstar are doing deals with Delta for FF use. Check this out!!!

Am I missing something or is there a quiet revolution going on....

What I find interesting here is that there is a downside to all of this - the use of the more expensive distribution tools such as these things are beginning to drag down the profitability of the LCCs. Yet this week LCC champ Ryanair once again showed us that the true LCC model is very much alive. And very profitable now thank you very much.

Perhaps now that everyone is flush with cash they will spend a little to assess the true cost of these programs.

iPads all round anyone?


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