New breed of long-haul discounter here to stay, IATA chief says

Low-cost airlines targeting inter-continental routes have come and gone since the days of UK entrepreneur Freddie Laker’s trans-Atlantic Skytrain service in the 1970s. But a new generation of discounters equipped with more-efficient jets and using the Internet to tap markets closed to their forerunners is set to endure, challenging the long-haul dominance of network carriers, IATA CEO Alexandre de Juniac said Tuesday. “There’s a general conviction in the industry that this phenomenon will keep on going and developing,” de Juniac said. “You see a lot of legacy companies which are preparing for competition with low-cost long-haul either by reducing fares or creating their own subsidiary.” This time round, airlines have “learned from past experience,” he said. Carriers such as Norwegian Air Shuttle are also benefiting from the fuel savings offered by aircraft including Boeing’s 787, together with an ability to sell flights in a far bigger marketplace via digital technology. Emirates said last week it was bracing for a “gathering storm” as low-cost airlines encroach on the inter-continental routes around which it has built a business model. Still, de Juniac said that the forecast increase in global air travel over coming decades should be sufficient to support the co-existence of both hub-based airlines and discounters plying point-to-point routes, adding that the latter may remain focused on connecting secondary cities.<br/>