Low cost carriers (LCC) must serve the market they are in, said Stephan Nagel, senior vice president strategy for Air Berlin.
He said the hybrid model suited his airline as it was aiming for the business and the premium leisure markets.
Mr Nagel told the World Low Cost Airlines Congress at the QEII Conference Centre in London today (September 23) that a hybrid model did risk higher costs.
”You don”t have to be a Ryanair or a legacy carrier. You have to choose your model ” that is really essential.
”For our model you need to use the GDS. It brings costs but it also brings the high yield market. Like easyJet, we want to attract the corporate customer.
”We do have some frills, some complexity. We give our customers seating, a loyalty programme. We have built up a 30% share of the market so there is a market for this hybrid model,” he said.
Mr Nagel was speaking in a debate on the evolving model of LCCs.
Earlier Brett Godfrey, ceo of Australian LCC Virgin Blue said that price was the main thing on which to compete.
”The reality is that more and more, we are competing against each other. Ryanair and easyJet is the classic example.
"Price is the main lever. We have always had the view that there is a market which will pay for a network and higher frequency. You don”t have to mimic the legacy carriers.
”We make more profit on flying 16 times a day between Melbourne and Sydney than we did five or six times a day,” he said.
Alex Cruz, ceo and one of the founders of Clickair, said that his carrier had evolved over the years.
”Our cost base was going to be the lowest. But two years on we have changed very slowly.
”We have not changed from a low cost airline but we have upgraded our product. We have been copying Virgin Blue.
”We have seat reservations, we have lounges. Is this a hybrid model?
”We are not going to stop evolving or disregard our customers and I think we are still managing to keep our costs down.”
Visit www.airberlin.com, www.virginblue.com.au and www.clickair.com.
Stanley Slaughter
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