Monday, November 24, 2014

The Little Airliner That Could

There are currently two new European airline companies that subscribe to a new theory called Ultra Low Cost Carriers (ULCC’s). These new companies the French La Compagnie and the Iceland-based, WOW (seriously that is the name of the company); both have developed new ways of cutting costs of international travel. The French company La Compagnie has a fleet of Boeing 757 ‘s that have been modified instead of having about 150 seats including business and coach seating they have removed the coach section and replaced it with a total of 75 business class seats. This means that the people on board will enjoy more room and better seats. These planes leave from Newark airport and travel to Paris Charles DeGaul airport and cost about $1000 round trip compared to Delta's $,5000- $20,000 depending on your seat and how many stops.

The other company WOW (awesome name) has another way of saving money. With flights leaving from Baltimore and Boston to Reykjavík you would think that it would be fairly expensive, but no, a round trip ticket can cost as low as $400 (I think that’s why its named WOW as soon as you see the price that’s what you say) however this cost does not include baggage, drink, food, or even boarding pass printing fees. They are using narrow body Airbus A320’s for their flights because they are smaller planes they hold less passengers and therefore can allow you to have a little (very little) more room while flying. And due to the low fares it is almost guaranteed that the flight will be full.

One company that is becoming a ULCC is frontier Airlines which is offering lower prices than their chief rival Spirit Air. Frontier Airlines headquartered in Denver Colorado the company Frontier Airlines has a fleet of 55 active aircraft, with 93 aircraft ordered, and 78 destinations with 14 more routes becoming available soon out of Dulles Airport in Washington D.C. Currently Frontier only fly’s Airbus aircraft including the 319, 320, and 321, however they used to fly 737’s and Embraer ERJ 145’s. however these aircraft have since been retired.

Another company out there founded in 2003 and began flying in 2004 is the Budapest based company Wizz Air (another awesome name). This company fly’s all around the European skies and has a large amount of flights out of London. They currently only fly A320’s like WOW and have a fleet size of 74 aircraft. If you want to know more about this company visit their web site http://wizzair.com/en-GB/Search

Personally I think both of the companies discussed in my first two paragraphs are very interesting and neither really has an advantage over the other. WOW is cheap but who wants to go to Reykjavík while La Compagnie is a little more expensive the seating is more attractive and it does have the advantage of traveling to Paris which is a much nicer location, however it only flies there and Newark nowhere else.

Overall I feel that these models will bring a lot of business into the industry, it will also create a lot of competition. However these low prices might force a lot of companies out of business, not to mention what will happen to things such as maintenance because fixing an aircraft is not cheap to own and maintain.

3 comments:

  1. WOW reminds me a lot of Spirit in their business model. Spirit flys to a few international destinations also, Mexico and the Dominican Republic. Wonder if they will branch out even more?

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  2. I wonder why the routes are so limited for all these carriers..I'm guessing that a lot of market research went into the route selections and given these business models, only select routes would be able to turn a profit.

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  3. I wonder if La Compagnie would expand their services to other locations if its current one brings in the profits they are looking for. I could see a problem if they expand too quickly and can not fill up all the seats on each flight. I also wonder if they would have to increase their prices if fuel were to increase, or if they would just make a smaller profit on each seat sold.

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