The Second Wave of Network Extensions of Low Cost Carriers in Europe: Background and Trends

The objective of the study is to reveal and analyse the recent network extension activities of Low Cost Carriers (LCCs) in European countries. The first wave of introducing new routes in Europe took place from about 2002 to 2008 when LCCs had entered the market and created new services on routes, often bypassing established routes. While the years from 2008 to 2013 showed little growth in LCC networks, more new routes have been introduced since then. Quite in contrast to the first wave the second wave is characterized by new routes from major airports, often in direct competition with other carriers, and by both European and inter-continental routes. In addition, new LCC routes are introduced on short-haul routes by replacing Full Service Network Carrier (FSNC) routes. The analysis, which is based on data of OAG (e. g. routes, flights) and Sabre ADI (passenger demand), shows the network changes by market and airline type over the last years and the demand growth in general and on selected routes, and thus reveals that passengers prefer LCC services in European markets more than FSNC services. LCCs have opened in Europe many more new routes in 2016 than FSNCs did. Ryanair and EasyJet, the two biggest LCCs of Europe, have added over 300 new routes, and most of the new routes opened in Europe are LCC routes. The number of intercontinental LCC routes alone has almost doubled from 20 to 38 routes. The paper is supposed to contribute to a better understanding of the current trend in air transport in Europe: LCCs continue to develop their networks with a new effort to directly compete with FSNCs, both in European and intercontinental traffic, while FSNCs adapt their business model and participate in the LCC business by setting up their own LCC subsidiaries.