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16 September 2016 , 2:41 pm

Delivering real results for LCCs and hybrids

LCCs and hybrids are changing the rules of the game for the whole airline industry with a growing shift towards hybridization, as John Dabkowski explained in his post at the beginning of the week.

Amadeus works with more than 90 LCC and hybrid partners. This means an impressive 80% of the total global LCC and hybrid seats are available in our system today. These carriers are actively pursuing an omni-channel approach to secure future growth, while retaining their low-cost models.

By adding travel agency distribution to the mix, LCCs and hybrids can focus on new strategies and models to build on the success and momentum they’ve experienced over the last decade. For example, some LCCs are seeking new opportunities in long distance routes, either as feeder flights to full service carrier routes or by partnering with other LCCs.

At World Low Cost Airlines Congress last week, it was interesting to hear from airline C-Level speakers, like Carolyn McCall, CEO of easyJet, and IAG’s Willie Walsh reference this growing trend, with Walsh citing the example of Aer Lingus and JetBlue.

There are other strategies, too. Many LCCs are expanding to new routes and markets, reaching entirely new traveller audiences and broadening their offer to existing customers. However, this brings its own challenges. As Jayne Hrdlicka, CEO of Jetstar Group, explained at the Congress, there’s often a need to adjust to local market conditions and adopt an approach to marketing that is tailored to the new traveller audience – areas in which our expertise and local teams provide crucial value.

Airlines are, of course, also adopting omni-channel strategies to access new customer segments such as high-yield business travellers. We’ve been supporting LCCs and hybrids to reach new customers and new markets for many years, giving LCCs access to the world’s largest agency network, including more than 11,000 corporations in 90 markets. Today, we are working with these carriers to help them build non-ticket revenue and reinforce loyalty through an improved customer experience.

As LCCs and hybrids put new strategies in place and drive the industry forward, we’re there with them, providing the technology and expertise to deliver concrete results:

  • Sustained booking growth, with 71% growth in LCC bookings in Amadeus over the last four years and 16% LCC and hybrid year-on-year booking growth in H1 2016
  • 19% of LCC bookings in Amadeus are interline or codeshare today
  • LCCs in Amadeus are achieving up to 60% higher yield than direct, and seeing 80% attachment rates for ancillary services

With a joint offer of Amadeus and Navitaire solutions and services, we’re uniquely positioned to support hybridisation and stimulate further expansion for carriers of all business models. As the industry evolves, we are evolving with it and working in new and profitable ways with our partners to explore and seize new opportunities.

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This post was written by Fredrik Odeen

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