Is LCC interlining low cost long haul ?
Julian Carr, Manager New Product Development at IATA, told local and international delegates at the Centre for Asia Pacific Aviation’s Third Annual India and Middle East LCC Symposium that interlining between LCCs may be a natural progression of the model in the region.
At the CAPA Symposium, Mr Carr posed the question, “will low cost long haul be achieved through interlining?” in the future, as LCCs in India and the Asia Pacific seek to expand their networks.
LCCs that are not planning to expand into certain markets tap growth through interline agreements amongst themselves. He cited WestJet in Canada which is moving towards this model by cooperating with full service carriers, Japan Airlines and China Airlines. The prospect is highly relevant to India where start-up carriers are prohibited from operating internationally for five years.
IATA’s Mr Carr went on to discuss how the LCC model was evolving and certain carriers may look to interlining to expand their market and increase their range of products as a way of differentiating themselves. He explained that forming interline agreements or joining alliances was a “plug and play” concept with predetermined standards and processes that most LCCs would need to accept at a cost.
Mr Carr concluded that LCCs have to consider the potential revenue and profit increases against the costs of interline agreements or joining a global alliance.
“Should LCCs interline? There are two clear answers, Yes definitely, and No, definitely not. It depends on the carrier,”
concluded Mr Carr.
The Third Annual India and Middle East LCC Symposium in Mumbai continue today. Featuring CEOs from full service and low cost carriers from across the region, as well as senior government and industry representatives, the Symposium is covering the challenges and opportunities facing the sector. Indian aviation is undergoing unprecedented growth, but profitability is being undermined through intense competition stimulated by new airline entry and significant new capacity being added by incumbents.