Date published: 22nd June 2015

Latest low-cost long-haul developments "clearly show which way the market is moving - a timely reminder to the Airports Commission to face the future, not the past" says leading aviation analyst Chris Tarry

                        

Aviation analyst Chris Tarry:

“Back in April I outlined my view that ‘low cost long haul’ has the potential to be a real game changer in the aviation market.

“Two months later and we have now seen another significant development with the news that WestJet, a well-established Canadian airline, will be launching low cost long haul services from Gatwick to a series of Canadian destinations.

“This is the latest step forwards in a market that has been gathering pace for several years. Whilst a number of ‘leisure airlines’ (which indeed have low costs) have offered long haul services for a considerable period, what we have seen over the last decade or so has been a range of additional approaches to the address this opportunity.

“We have seen ‘Legacy’ carriers set up ‘airlines within an airline’; there have been new standalone ‘start ups’; and also increasingly an entry into this market by established low cost airlines expanding into the long haul segment.

“This latter development is something recognised by Boeing in its latest Commercial Market Outlook as it notes, when reporting on low cost carriers, that “others are exploring longer mission distances”.

“The recent announcement from WestJet that it is to operate widebody services from Canada to Gatwick from Spring 2016 provides further evidence of the trend highlighted by Boeing. It also reinforces my view about the growing importance of the low cost long haul market.

“I have been following the developments at WestJet closely for some time – over the past year we have seen the airline join the international long haul market by starting a Toronto-Dublin service in 2014. It has also begun operating between Toronto and Glasgow via Halifax since May this year. And now in the latest step, London has been chosen as the first destination outside North America for WestJet’s widebody services – another important chapter in the low cost long haul story.

“Along with the significant news of the WestJet announcement, interesting comments have also emerged from another airline helping to shape the low-cost long-haul market.

“Speaking at the Paris Air Show, Bjorn Kos the CEO of Norwegian (another low cost airline that has expanded from short haul into long haul) outlined that the next stage of its long haul network will involve “routes other than Europe and North America from Gatwick in 2017".

“In particular the Norwegian CEO is of the opinion that “India is interesting” and that “South Africa and South America are also very interesting” too. Furthermore his comments that “London is a place that all the people want to go” acts to highlight the importance of the inbound market and London as a destination for point to point traffic.

"These developments show not only the increasing presence of low cost long haul in the UK market but also act to underline London’s prominence as both an origin and, particularly in the future, a destination for point-to-point traffic.

“Both are key trends that clearly show which way the market is moving – providing a timely reminder to the Airports Commission to face the future, not the past, as it prepares to make its final recommendation on the UK’s next runway.”