Air Transport World

Copycat tactics: Europe's large airlines are responding to the challenges posed by low-cost competitors with lower fares and simpler pricing.(Strategy)

As they confront continued erosion of business-fare travel, along with growing competition from Ryanair and easyJet and any number of smaller budget airline wannabes, Europe's large network carriers are tossing out everything but the proverbial kitchen sink in an effort to avoid the fate of their North American counterparts.

While a few, most recently SAS with Snowflake, have attempted to mimic their low-fare tormentors, most appear to have drawn the conclusion--based on observing the results of similar initiatives in the US--that such efforts are doomed to failure. But whereas most US Majors remain tied to a Fate structure that is genuinely loathed by the vast majority of their customers, including the enormous leisure segment that has benefited mightily from it, Europe's former flags are showing a willingness to try new things, at least in the intra-European and domestic markers where they are most exposed to low-cost competitors.

Of course it also is true that Europe's largest network airlines have not offered the multitude and variety of cheap fares available to discretionary travelers in North America. Even today, much of European leisure traffic moves via charter and holiday airlines. Generally speaking, Europe's network airlines also were slower to embrace the online distribution model to bypass travel agents than their US counterparts.

All that may be changing. Bmi british midland was an early adopter of the simplified model and over the past year several full-service airlines have lowered fares and/or revamped price structures to respond to the changes in the marketplace. …

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