10 of the best analysed: The great global LCC network strategy comparison

Image: Amalgamation of LCCs producing a bloated airline - The Average Lo

Low cost carriers (LCCs) are often lumped together when industry trends are analysed as if they all follow the same formula. While this may have been broadly true when the concept was first adopted by carriers in different parts of the world, from a network planning perspective the world’s leading LCCs follow some very different approaches. This week anna.aero takes a closer look at 10 of the world’s most successful LCCs, all of whom have been profitable for considerable periods of their existence. These carriers are:

  • North America: AirTran, JetBlue, Southwest, Westjet
  • South America: GOL
  • Europe: easyJet, Ryanair
  • Middle East: Air Arabia
  • Asia-Pacific: AirAsia (including Thai AirAsia and Indonesia Air Asia), Virgin Blue

Although India and Mexico are awash with fast-growing LCCs none of them have yet truly established themselves as long-term survivors in the same way that the above 10 have. Europe is also blessed with many additional LCCs but many are either of the ‘hybrid’ variety (formerly or part-charter airline) or have no track record of being consistently profitable.

Attracting the business market with frequency

Southwest has the highest average route frequency of any of the LCCs studied. It operates flights predominantly on fairly dense city pairs where multiple daily frequencies are feasible. Its average weekly frequency on routes across its network is the equivalent of almost four daily flights. No route is operated less than daily while between Dallas Love Field and Houston Hobby Southwest operates around 190 weekly departures, or more than 25 daily flights.

Chart: World LCC Comparison
Source: OAG Max Online for w/c 29 September 2008

Virgin Blue and GOL both have networks averaging around three daily flights on each route while AirAsia, JetBlue and Westjet each operate around two daily flights on each route. Only Air Arabia (from its single base in Sharjah) and Ryanair average less than daily flights on their route networks. Anna.aero has previously shown how Ryanair’s average route frequency has fallen from almost nine weekly flights in the summer of 2006 to the current level of just over six. Ryanair currently operates 236 routes with three or fewer weekly frequencies. Its highest frequency route is between its two biggest bases, Dublin and London Stansted. Here it operates 67 weekly departures each way.

Air Arabia, GOL at opposite ends of sector length rankings

Average sector length for six of the 10 LCCs is between 1000 and 1100 kilometres. The trend-breakers here are Air Arabia, JetBlue and Westjet who are all considerably above the average and GOL which is well below.

Chart: LCC Sector Length
Source: OAG Max Online for w/c 29 September 2008

GOL’s short average sector length is influenced by the fact that its busiest route (116 weekly departures) between Sao Paulo and Rio De Janeiro is just 366 kilometres. The airline is also happy to promote journeys on its network that require several stops and possible aircraft changes. Air Arabia’s focus on the Indian market pushes up its sector length as all of these routes are at least 1700 kilometres. Its only sub-600 kilometre routes are to Bahrain, Dammam, Doha and Muscat.

Image: GOL
The average 1,100km sector length trend-breakers are led by Air Arabia which has to include a chunk of the globe on its route map and fly to far off places like Kiev (from Ocotber 15) to reach migrant labour populations – a total contrast to GOL’s crowded hinterland around São Paulo and Rio.

Ryanair rules the routes

Thanks to its ability to stimulate new traffic with low fares between previously unserved markets Ryanair operates a phenomenal 629 routes (this week). Even Southwest, with more than three times as many aircraft, operates only 434 routes, but with much higher average frequency.

Chart: LCC 10 Most Airports.
Source: OAG Max Online for w/c 29 September 2008

easyJet currently operates over 350 routes while most of the other airlines examined operate around 100 routes, except for Air Arabia which currently operates just 37.

Europe’s LCCs have greatest network spread

Europe’s two largest LCCs are also the leaders when it comes to finding viable airports to operate from. Ryanair long since passed the 100 mark and is rapidly heading for 150 while easyJet is closing in on the 100 milestone. According to easyJet’s on-line booking tool flights can currently be booked from 107 airports, which includes upcoming new routes and seasonal destinations.

Chart: Top 10 Most Popular Airports
Source: OAG Max Online for w/c 29 September 2008

Southwest, in over 35 years of profitable operations, currently operates from just 64 airports in the US. Needless to say, it is constantly being bombarded with requests by cities and airports to expand its operations into new markets. This week it announced plans to serve its 65th airport, Minneapolis/St. Paul, from next March. So far only a single route to Chicago Midway has been confirmed.

Southwest still the biggest LCC by a huge margin

Image: Birmingham Alabama terminal
Birmingham, Alabama, and Birmingham, West Midlands, UK – superficially the same and quite often confused by search engines with amusing results. The same can’t be said for their dominant LCCs – for whom comparison is a complete jumble: Southwest is still three times bigger than Ryanair in terms of weekly flights (22,800 versus 7,800)… Ryanair operates a phenomenal 629 routes combining 139 airports…whereas Southwest, with more than three times as many aircraft, operates only 434 routes from just 64 airports.

In case there was any doubt as to how large Southwest is compared with its imitators analysis of weekly departures makes it very clear. Southwest is still three times bigger than Ryanair in terms of weekly flights and operates some 540 aircraft compared with Ryanair and easyJet who both operate over 160 aircraft. Even combining easyJet and Ryanair would still not get anywhere near Southwest’s figures.

Chart: Weekly Departures
Source: OAG Max Online for w/c 29 September 2008

Air Arabia with just 14 aircraft is a relative minnow but its track record of profitability proves that under the right conditions even small LCCs can make money.

Lubbuck, Texas, and Lubeck, Germany – superficially the same but quite different really, just like their dominant LCCs: Southwest is still three times bigger than Ryanair in terms of weekly flights (22,800 versus 7,800)…but Ryanair operates a phenomenal 629 routes combining 139 airports…whereas Southwest, with more than three times as many aircraft, operates only 434 routes from just 64 airports. The only curious comparison is the 1,100km sector length for most LCCs – although that’s only a coincidental average in the case of Ryanair and SWA!


New route? New airline? Email us! Let's all celebrate your new routes. Please send photos and route details to James Davis, anna.aero's Assistant Editor. Contact James.

Comments

  1. Darren Hulst says:

    From a network planning perspective, you leave out a whole lot when you ignore the relative importance of connecting traffic to each carrier as well as the types of destinations served by the respective carriers (i.e. business, leisure, mix, ethnic, etc.) This really doesn’t do much other than scratch the surface.

    anna.aero replies: You may like to look through our archives and check our other stories where we take a closer look at many of the airlines compared in this analysis. Remember, what you are reading is free and unlikely to be found anywhere else on the internet. For the type of comparison you describe I’m sure some consultants would be happy to charge you several thousand dollars …

  2. Torolf Holte says:

    Thank you very much for an interesting comparison of major LCCs. These numbers say a lot about the airlines’ different strategies. It will be exciting to see how easyJet and Ryanair will find the growth opportunities needed to deploy all the aircraft they have on order.

  3. dave says:

    so, by you, for an LCC is better to grow up the frequencies or expand the network?

Comments are closed