Fare Skies Ahead Low-cost carriers are flying high around the world    By   Yasmine Saleh

Sit down to plan a trip and you’ll find ‘choose an airline’ near the top of your to-do list, right after ‘pick a destination.’ Sure, it sounds obvious, until you consider how much your choice will cost you. An airline ticket is likely to take one of the biggest chunks out of your vacation budget. Or at least it used to.

Like the hotel industry, which has long offered budget options, the airline industry has evolved to accommodate price-conscious consumers. Airlines bill themselves as ‘budget,’ ‘no frills’ or ‘low cost’ in an effort to woo customers. Is it worth it?

courtesy Christian Wyvern/Hapagfly Already popular in Europe, low-cost airlines like Hapagfly are gaining ground in the Middle East.

Mostafa Sultan, outbound manager at Emeco Travel Services, thinks that it helps. While carriers can set themselves apart with the type of aircraft, range of on-board services, staff and on-time arrival record, “there are now many competitors in the market with similar standards, which makes the price of the ticket an important factor in attracting customers,” Sultan says.

When you are deciding which airline to use, it’s important to look at what you are getting for your money. An incredibly cheap ticket may mean you will go without in-flight meals or entertainment, for example. On the other hand, some budget airlines offer a full line of services at cheaper prices — so they must be cutting costs somewhere else.

Mohsen Allam/IBA Lower prices may mean less in-flight services, like meals.

To keep prices low, an airline has several options. They could cut back on in-flight services; increase the physical number of seats per flight to create economies of scale and provide only one passenger class, eliminating first- or business-class. An airline could offer unreserved seating, which encourages passengers to check in and board early; fly to secondary airports and even have employees working multiple roles, to name just a few strategies.

While low-cost carriers try to simplify their business approach, traditional carriers, sometimes called legacy airlines, prefer to cater to diverse customer needs.

Mohsen Allam/IBA Conventional airlines like EgyptAir offer premium seats in business- and first-class.

For example, Jet Airways, a full-service private airline in India, offers many special services in order to attract travelers. Shakir Kantawala, regional sales and marketing manager for the Gulf, the Middle East and North Africa, says, “Since its inception in May 1993, [Jet Airways] has believed that the business of aviation is not just to transport passengers from one point to another, but to do so with a very high degree of reliability and comfort [providing] the highest levels of efficient service.

“Our aim hasbeen to provideinnovative products that will not only giveus a definitive edge over competition, but also enable us to achieve standards comparable with the best internationally.”

ctsy Christian Wyvern/Hapagfly Hapagfly, on the other hand, has only one class of seats, lowering costs by carrying more people per flight.

The concept of low-cost carriers has developed quickly over the past couple of decades and is now a well-established category within the aviation industry. People can accept flying without the traditional passenger services as long as they can arrive safely for less. Because competition between low-cost airlines has increased, their credibility and quality of service have also improved.

Sultan says he’s received positive feedback from many Emeco clients who have used low-cost carriers, and not just because of the cheaper rates. Some of these carriers offer direct transatlantic flights, he adds, adding to the many advantages of using low-cost airlines. Sultan claims the only service missing is free on-board catering, which “is not that much of a temptation to travelers anyway.” If you want something to eat, you might have to pay for the meal or bring your own lunch.

Sultan explains that travelers can be categorized as class-A, class-B or class-C consumers, noting that low-cost flights attract those in the class-C segment. This segmentation is the key to the low-cost airlines’ success against the larger, more-established carriers.

Kantawala claims that the low-cost concept and low-cost business model is not a threat to traditional airlines. “They do not compete with the conventional airlines but, more so, complement and helpthe conventional airlines,” the Jet Airways executive says. “We have noticed that the low-cost airlines attract a completely different market segment and create new markets which never existed [before] or were never targeted by the so-called conventional or legacy airlines.”

“I believe [low-cost flights are] just great. The world is getting smaller. [The] airline market is booming. There is [a growing] need to fly around, either for business or pleasure,” says Diego J. Lofeudo, regional manager for the Mediteranean, Middle East and Africa at Expedia Travel – Lodging & Destinations Europe. The third-largest travel agency in the United States and the largest of seller of travel online, Expedia offers bookings on all regular airlines plus selected charter airlines. “Low-cost flights are effectively taking off booming in India, the Arab world and Southeast Asia, with millions of potential customers, sometimes even first-time customers for the air industry.”

Lofeudo adds, “[The] concept is independent of nationalities or regions. As long as you provide a reliable and valuable proposition to customers, I don’t see any issue as to why the concept won’t work in Egypt and the Arab world. Everyone wants value for money.”

Kantawala says that Air Arabia was the first major low-cost player in the Middle East region, adding that it has the best aircraft, offers and varied service options. “In most ways it is no different than the conventional airlines,” he asserts.

Now it has to compete with carriers like Hapagfly, one of the leading low-cost airlines in Europe, which in May started offering four weekly flights from Cairo to Munich, Germany. Though new to Egypt, Hapagfly, a subsidiary of the European travel group TUI AG, is established internationally: Last year, the airline flew nearly 7 million passengers to destinations around the Mediterranean, the Red Sea and the Black Sea as well as to the Canary Islands and Madeira.

Hapagfly bills itself as a family-friendly airline, offering a modern Boeing 737-800 fleet, free or inexpensive transportation of sports and golf equipment, special meals (such as children’s menus or halal meals) on request, free reservation of “mother and child” seats, increased baggage allowance for stays of 28 days or more, on-board duty-free sales, an on-board entertainment program, e- ticketing and online booking.

With all these features, it’s hard to tell what differentiates it from a conventional carrier, except the price — a return Cairo-Munich ticket is less than LE 1,500. (In an Expedia search of legacy carriers, non-stop airfares for the same route started at around LE 3,000.)

Hapagfly’s low fares are not a result of cuts in the quality of service or safety, says Yara A. Rizkalla, director of marketing and public relations at Travco, one of Egypt’s leading leisure groups and another TUI subsidiary. Instead, Rizkalla says, the airline minimizes its staff. “Instead of appointing five [people] to do one job we hire one or two very qualified persons.”

A second European low-cost carrier, Jet Only, started regularly scheduled flights between Cairo and Brussels in May.

Tourists coming to Egypt from Europe are quite familiar with another well-established concept in flying — the charter flight. Charters, usually organized by a travel agency or company, fly any number of travelers to any destination at any requested time. Sultan believes that while companies specializing only in charter flights do not have much credibility in Egypt, charter services offered by major airlines are outstanding. “It is as if you are taking a private flight,” he asserts.

Ezz El Din Safwat, general manager of charter flights at EgyptAir, says that EgyptAir’s charter flights feature all the services offered on its regular flights. The national carrier can fly up to 200 passengers to any destination in the world at any time on its charter flights.

The cost of a charter flight is calculated on an hourly basis, with the total cost divided by the number of passengers. The more people on the flight, the less each person has to pay. Safwat says that more organizations are chartering flights, especially local and international companies arranging business or incentive trips for their staff.

In the end, your choice of an airline comes down to personal preference. Some travelers are loyal to a certain airline regardless of the cost. Some insist on flying in luxury, while still others will shop around for a low price. When in doubt, ask your travel agent. “Personal experience is also very important,” Sultan says. “Travel agents are usually invited on fun trips, and we get to have first-hand experience of the airline before recommending it to our clients.” tt