co

ob

aph

theey soncfreortes

work carriers (FSNCs). If no hubs as such can be found in these new networks, signicant concentrations characterize the major bases.The geography of low-cost networks is to a large extent the geography of EU air transport liberalization.

by Ryanair (Decker, 2004).The presence of LCCs is signicant today. All the signs

reached a European scope, exceeding that of small- or med-ium-sized full service network carriers (FSNC): in 2004,

LCCs. Franke (2004) and Tretheway (2004) discuss thecompetition between traditional airlines and LCCs, and

following is lacking: 1: a current and exhaustive estimateof its volume (frequencies, seats, ASKs), 2: a systematic

* Fax: +32 2 650 50 92.E-mail address: fdobrusz@ulb.ac.be

1 Source: Airlines. Ryanair: from December 2003 to November 2004.2 Source: Ryanair, Boeing & RyanairThe Lowest Cost Partnership

(available at www.ryanair.com).

www.elsevier.com/locate/jtrangeo

Journal of Transport Geography 14 (2006) 249264are that it will increase and will not be restricted to the lei-sure sector, since even businessmen are targeted (Mason,2001). According to the European Cockpit Association(ECA, 2002), in 2000, the European LCCs have trans-ported 20.7 million pax (8.6% of the market), and thesegures have continued to strongly increase since then.The two main airlinesRyanair and easyJethave indeed

so does Morrison (2004), who also looks into the role ofthe authorities controlling the competition. Gillen and Lall(2004), Francis et al. (2003) and Barrett (2004) analyse therelations between LCCs and airports, while Williams(2001) deals with competition between charter carriersand no-frills airlines.

However, concerning the low-cost supply in Europe, the 2005 Elsevier Ltd. All rights reserved.

Keywords: Low-cost carriers; Low-cost networks; Charters; Regional airports; Secondary airports

1. Introduction

In Europe, the development of low-cost carriers (LCCs)is a signicant factor in the evolution of airline networks,competition, and demand trend. Pioneered by PacicSouth West and copied in 1973 by Southwest, even beforethe liberalization of 1978, the LCC concept became estab-lished in Europe in 1995 with the adoption of that model

they have transported 26.4 and 24.3 millions passengers,respectively.1 Furthermore, Ryanair and easyJet haveordered 125/120 new aeroplanes in 2002 with anotheroption of 125/120 for 2003. This gives an idea of theirambitions (considering, of course, that some of thoseplanes are intended to replace older eet). Ryanair planto carry 70 million passengers in 2012.2

Many academic papers have recently been published onAn analysis of European low-

Frederic D

Universite Libre de Bruxelles, Laboratory of Human Geogr

Abstract

The growth of low-cost carriers (LCCs) is currently focused onmining factor in the evolution of airline networks. In this area, thLimited to short and medium haul ights, networks are not too cwhen they have not replacedsome charter routes. The use of aira frequent phenomenon linked to the option for secondary (urban

Finally, low-cost carriers give fresh impetus to point-to-point rou0966-6923/$ - see front matter 2005 Elsevier Ltd. All rights reserved.doi:10.1016/j.jtrangeo.2005.08.005st airlines and their networks

ruszkes *

y, Boulevard du Triomphe CP 246, 1050 Brussels, Belgium

Western European market, where they represent the most deter-tand for 18% of the total air transport supply according to seats.entrated (no hubs). They are NorthSouth, and compete withedoms beyond the fourth is still limited, but exclusive routes areregional) airports and/or niches.by drawing new networks complementing those of full service net-

geographical analysis of the networks developed (width,internationalization, use of air freedoms. . .), and 3: anunderstanding of the insertion of a new supply in the exist-ing networks (new or pre-existent routes, competition orcomplementarity with FSNCs, typology of the networks,type of airports in use).

In addition to an introduction on the procedures ofLCCs, the above three questions are the subject of the pres-ent paper. To answer them, we have carried out various

and at increasing both output and productivity. Both theworkers and the methods of production are implicated(see Blyton et al., 2003; ECA, 2002; European Communi-ties, 2003.1.25; Gillen and Lall, 2004; ITF, 2002; Marty,2004; Williams, 2001).

2.2.1. Increase in output and productivity

2.2.1.1. Economies of density. LCCs achieve density econo-mies by maximising ying time for each aeroplane, thusimplying very reduced times between arrival and departure

250 F. Dobruszkes / Journal of Transport Geography 14 (2006) 249264analyses introduced in Section 3.

2. The low-cost airlines

2.1. Why do the low-cost carriers exist?

The development of low-cost airlines, also known asno-frills, is related to three factors:

1. Air transport is a cyclical sectorthe demand is con-nected with economic cycles (Hatty and Hollmeir,2003)with signicant xed costs linked to high levelof aeroplanes ownership.

2. The price of air transport often remains a limiting factorfor a large portion of the population.

3. Liberalizations in the air transport sector (in the USA,in Canada, in Western Europe. . .) allow free creationof new services and can thus encourage the creation ofnew airlines. Nevertheless, it still remains necessary forthem to nd customers, in a context of a market withsurplus production capacity.

The low-cost carriers answer directly to these elementsby oering lower prices. In Western Europe, they benetdirectly from the 3rd package of the liberalization3 (Gillenand Lall, 2004), that has set up an almost complete liberal-ization of the skies of the EU members for EU carriers,4

including de facto the fth freedom right and the sixth tothe ninth so-called freedoms rights.5 This liberalizationhas extended to Switzerland6 and non-EU Member Statesof the European Economic Area (EEA, i.e. Norway, Ice-land and Liechtenstein).

2.2. How do they operate?

The running of air transport routes at low-costs is ob-tained by a set of methods aimed at reducing the unit costs7

3 Regulations 2407/92, 2408/92 and 2409/92.4 Fully eective since 1997.5 ICAO characterizes all freedoms beyond the fth as so-called

because only the rst ve freedoms have been ocially recognizedas such by international treaty. For a description of the freedoms, seeTable 2.6 Agreement on air transport of June 21, 1999, comes into eect in June

2002 and concerning international ights between Switzerland and EU.7 According to Doganis (2001), quoted by Franke (2004), it shows thatthe edge of LCCs business model operates at sustainably 4050% of thecost of the average NC.(turnaround). For the air transport sector, economies ofdensity [the fact of increasing the use of the aeroplanesand/or their capacity within a network of a given size]are essential and much more eective in reducing unit coststhan economies of scale [the fact of extending the networkand increasing the production factors] (Sorenson, 1991;Caves et al., 1984).

In 2004, Ryanair, easyJet or Norwegian aeroplanes haveown 11 h per day on average, against 9.2 for BA or 7.7 forSN Brussels Airlines.8 In LCCs case, the turnaround isoften limited to 25 min, in particular where using smalland/or unsaturated airports. Unsaturated airports fre-quently are secondary, less expensive airports.

2.2.1.2. Pressure on the workforce. The information col-lected by various researchers, organisations, trade unionsand journalists9 show that the LCCs workers are paid lessthan their fellow workers in the FSNC although having aheavier workload. According to ECA (2002), the gross an-nual income of a pilot of short-distance carriers is lower by28% on average than that of pilots of the FSNC, despitea further 25% more ying time. Moreover, approximately1/4 of these wages are variable. According to the Interna-tional Transport Workers Federation (ITF, 2002), thexed wages are lower by 550%, depending on airlines.

The absence of collective agreements is frequent, and therelations between workers and airlines are established onan individual basis. Ryanair personnel work under Irishcontracts, so that, for example, a German hired in Lubeckwill be subjected to the Irish social and work legisla-tion, more favourable to the airline than the Germanlegislation.10

Usually, personnel of LCCs have longer ying hours,less rest time, and more restrained turnarounds (frequently25 min). They are also more exible in time and in tasks

8 Sources: Own calculations from OAG databases and BA/SNBAannual reports.9 See for example Low-cost, social questions pulled down in Libera-

tion of the 3/11/2003; Dumping: the social discount of prices breakers,in Alternatives Economiques 214 of May 2003.10 Following the complaint lodged by three former Belgian workers hiredunder an Irish contract, Ryanair was convicted on 22 March 2005 by aBelgian Court which considered that, since the litigants used to work onthe Belgian territory, Belgian laws prevailed against the Irish legislation.The workers were indeed based in Charleroi, the Belgian airport from

which they started their round trips, even though they were giveninstructions from Ireland.

(hostesses cleaning the plane, stewards loading luggage ifnecessary. . .) (Mosnier, 2003). Because of considerablesubcontracting, workers are in direct rivalry, with limitedpossibility of forming an union.

2.2.1.3. Better occupation rates. The low prices ensure good

According to the French economic newspaper La Tri-bune,15 Ryanair beneted from 168 million EUR for its20022003 nancial year, that is to say 70% of its net an-

F. Dobruszkes / Journal of Transport Geography 14 (2006) 249264 251load factors to the airlines which make the most of ademand-adapted network (e.g. 80% for easyJet in 2003,11

a percentage that places the company at an intermediatelevel, between FSNCs and charter airlines).

2.2.1.4. Additional optimisation and cost reduction factors.

LCCs are reducing their costs also by using: a standardizedeet12 (allowing a better exibility of the crews assignmentand generating savings in training, qualication, stock ofspare parts. . .) of cost-ecient aircrafts (typically B737,more recently A319) (Franke, 2004), increasing the numberof seats on the aircraft, and an optimisation of the numberof seats according to the necessary crew.13

They standardize the service (only one class, only oneservice); reduce to nothing, or almost nothing, the free ser-vices on board; and bypass the travel agents (and thus theircommissions). Reservations are made via the Internet (easy-Jet sells 95% of its seats in this way) or by telephone. Onlypoint-to-point tickets are sold; no connections are possible(simplifying luggage handling and planes turnaround); notickets are printed; seating is free; secondary airports withlower charges are used; there are no frequent yer pro-grammes; and non-integration into alliances is the rule.

Moreover, when a ight is cancelled or delayed, travel-lers usually do not get compensation, nor are they trans-ferred to another carriers ights or oered hotelaccommodation. This is the consequence of most LCCsnot belonging to IATA, and therefore not having to com-ply with quality standards such as nding a concrete solu-tion for travellers in the event of a cancelled ight.However, since February 2005, new EU regulation has im-proved the rights of air travellers in case of being deniedboarding and of cancellation or long delay of ights,14 soLCCs will have to revise their attitude towards passengers.

2.2.2. Public nancing

Only in the case of Ryanair is it clearly established thatpublic, direct or indirect nancing, is systematically re-quired during the planning of the servicing of new airports.If negotiations with the relevant authorities fail, the carrierwill serve another airport. That is why Ryanair does not yto Nice (France), where the authorities refused any prefer-ential treatment compared to other airlines.

11 Source: CAA.12 EasyJet however ordered 120 A319 instead of adding to its B737 series,because the low price paid is suciently advantageous to oset theovercost of diversication.13 Which evolves according to given thresholds (number of seats).

14 Regulation (EC) No. 261/2004, Ocial Journal L 046, 17/02/2004,00010008.nual prot. The rate of 70% includes all advantages, thatis to say money eectively received and all other types ofadvantages (e.g. reduction of landing cost compared withthe going rate).

A detailed investigation by the European Commissionon the conditions for the establishment of this airline atBrussels South Charleroi Airport shows that Ryanair ob-tained important advantages from the public airport andfrom the regional government on a purely exclusive basisand for a duration of 15 years (European Communities,2003.1.25). For the Commission, these advantages repre-sent a partial nancing of both investments and operatingcosts, and partially constitute an illegal hindrance to com-petition and cannot be considered as an aid to regionaldevelopment (European Communities, 2004.4.30). It wasestimated that the direct nancing and indirect advantagesperceived by Ryanair at Charleroi airport between 2001and 2003 total 23 million euros (De Beys, 2004).

Ryanair has retorted that it did not receive any State aidconnected to its air supply from Charleroi Airport, forthree reasons: the principle of private investor in a marketeconomy applies, there is no selectivity, and the agreementsdo not distort the competition (European Communities,2004.4.30). The Commission has decided against Ryanairsarguments, while recognizing the legality of some aidsfavouring the creation of new air connections, yet understrict conditions (maximum ve years, equal treatmentfor airlines wishing to develop new air services from Char-leroi. . .) (European Communities, 2004.4.30:2762).

Non-subsidized LCCs competitors complain about thisunfair competition and request healthy competition.16

For example, Virgin Express painted the sign Stop subsi-dies on some of its aeroplanes. On the other hand, agcarriers remain discrete, because it is publicly known thatthey receive or have received many advantages from thepublic authorities. For example, Sabena, the former Bel-gian ag carrier, is known to have received a 31.5 billionBEF (about 780.9 million Euro at current exchange rate)State aid between 1975 and 2002, half of this after 1995,notably through recapitalisation and the State stake inthe capital of Sabena (Belgian Parliament, 29 January2003).

2.2.3. Incremental revenues

LCCs have set up reservation centres via Premium RateServices from which the airlines prot. They oer direct orindirect services such as car rentals or hotel reservation.They rent advertising possibilities on board or on Internetsites.

15 The economic model of Ryanair seems viable in La Tribune,February 4, 2004.

16 However various LCCs operate on the basis of social dierentialbetween countries, which can also be seen as unfair competition.

2.2.4. Combination of factors

Certain factors represent individual sources of reduction

252 F. Dobruszkes / Journal of Transporof costs, which have a cumulative eect. For instance, hav-ing no meals to load on board, the free seating system, theuse of non-saturated airportsoften secondary airportsand the refusal to plan connecting ights can make the25 min turnaround possible.

Other factors are linked and are chain productive.The existence of only one class eliminates a constraintpotentially aecting the aeroplane occupancy rate, allowinga uniform layout of seating in the aeroplanes and a similartreatment for all passengers, facilitating the unallocatedseating system, and avoiding the need for business loungesin airports.

2.3. Where do they come from?

LCCs have various origins. Some are oshoots of FSNC(Snowake belongs to SAS). Others derive from charterairlines that have diversied (Monarch Scheduled) or fromtour operators (Hapag Lloyd Express belongs completelyto TUI). Yet others are FSNCs (Ryanair) or regional oper-ators (Flybe) that have transformed into a low-cost carrierto improve their competitiveness. Finally, some were cre-ated as a LCC (easyJet).

Regarding their geographical origins, Northern Europe,and Great Britain (8) in particular, dominate clearly. Morerecently, airlines emerged from Central/Eastern Europe,like Sky Europe Airlines, operating mainly from Bratislavafor Vienna trac beneting from the Slovakian low wages.

3. Methodology

The analyses are mainly based on the OAG databases2004, providing a detailed and disaggregate description ofthe regular air supply (origin, destinations, stops, frequen-cies, seats, ASKs. . .) performed by most airlines as sched-uled at the end of 2003 for the year 2004.

First we tried to identify European LCCs through arange of magazines and Internet sites. As many carriersclaim to be low cost, we ltered a rst list according toprice comparison between LCCs and FSNCs for a fewroutes in each case.17 We retained, as LCCs, carriers withprices of maximum 66% of FSNCs prices. Under 50%,we consider the carrier as a pure low cost; between 50%and 66%, we describe it as a mid-cost carrier (e.g. VirginExpress). Ideally, we would have liked to use unit costs, butthese were not systematically available.

Thus listed are 28 LCCs operating in Europe in early2004, 20 of whom are included in the OAG database (Table1). The other eight are small carriers, so that the followingresults will not be signicantly aected. From this point, wewere able to approach the volume of European low-cost17 Lowest price inclusive of tax for return ights booked two monthsbefore departure, excluding special oers.supply (Section 4) and to produce various indicators cha-racterising LCCs networks (Section 5).

For the purpose of establishing a typology of LCCsnetworks, both volume and network variables (see Table2) were submitted to a principal components analysis(PCA). The PCA is a classic factorial analysis method(see e.g. Harman, 1976; Johnston, 1977; Kline, 1994),which tries to summarize the information given by a largedataset through choosing a new coordinate system. A largedataset of N variables can take the form of a scatter plot inan unimaginable space of N dimensions or axes, in whicheach point represents information and each dimension oraxis a variable. If variables are correlated, the scatter plotwill be more extended in some directions. The PCA startsfrom this fact to dene a new system of axes, called prin-cipal components, the rst of which correspond to thedirections of longer extension.

Thus, the PCA summarizes a large set of inter-correlatedvariables into a smaller number of principal components.Two or three componentsand thus a classic geometricspace of two or three dimensionsare often sucient todescribe the bulk of the original dataset. Indeed, in manycases, the PCA allows to reduce the dimension of the data-set signicantly and to identify meaningful underlyingvariables.

We will present, in this paper, the two most usefulgraphics obtained by applying the PCA:

The factor loadings correspond to the linear correlationbetween the original n variables (is this case, the descrip-tive variables of each network) and each of the principalcomponents. Varying from 1 to +1, they enable toidentify the meaning of the principal components.

The factor scores correspond to the observations foreach network quoted on the new components. Theydene each observation towards each component.

According to the meaning of the principal componentsand to the position of the observations, one can dene atypology. A classic practice consists of assigning a type toeach quadrant of the aforementioned graphics.

Finally, we will analyse the geographical dimension ofLCCs networks by analysing both the weight and shareof LCCs at airport level in 2004 and the LCC eect be-tween 1995 and 2004. The OAG database of 1995 providesinformation on the air supply in that year.

4. The quantication of European LCCs supply

It appears that in 2004, 9798% of the European LCCssupply, respectively in ights and seats, corresponds totrac within Western Europe. In this area, the low-costsupply corresponds to a signicant share of the market:18% of the supply expressed in seats oered (Table 3).

However, at the airlines level (Table 1), supply is low-

t Geography 14 (2006) 249264weight if one compares ights, seats or ASKs oered tothree FSNC of dierent sizesBritish Airways, Alitalia

F. Dobruszkes / Journal of Transport Geography 14 (2006) 249264 253Table 1Low-cost carriers operating in Europe (2004)

Airlines Code IATA OAG Country

Alpi Eagles E8 Y Y ItalyBmi Baby WW N Y UKDeutsche BA DI N Y GermanyEasyjet U2 N Y UKEvolavia 7B N N ItalyFlybe BE N Y UKFlyGlobespan EXS N N UKGandalf Airlines G7 N Y ItalyGermania ST N Y GermanyGermanwings 4U N Y GermanyGetJet N N PolandHapag Lloyd Express X3 Y Y GermanyIceland Express AEU N N IcelandIntersky 3L N Y AustriaJet2 LS N Y UKKullayg N N SwedenMonarch Scheduled ZB N Y UKMyTravel Lite VZ N Y UKNorwegian DY N Y NorwayRyanair FR N Y IrlandSky Europe Airlines NE N Y Slovakiaand SN Brussels Airlines (SNBA), except for Ryanair andeasyJet, classied 6th and 7th airlines for the inner-west-European trac, after SAS but before Alitalia and KLM(Table 4, seats). Ryanair and easyJet constitute 60% ofthe low-cost seats oered in Europe.

It is necessary however to remember that EuropeanLCCs operate almost exclusively on the Western-Europeansegment, whereas the FSNC also have connections withother parts of the world. By comparison, the share ofinner-west-European trac for BA, Alitalia and SNBA isrespectively 57%, 82%, and 83%.18

We will discuss further the importance of LCCs at theairports level (see Section 6).

5. The geography of low-cost networks

5.1. Principal common characteristics

Fig. 1 presents the networks of the 20 LCCs whose sup-ply is known to us through the OAG database, and Table 5

Skynet Airlines SI N Y IrlandSnalskjutsen (TF) N N SwedenSnowake N N SwedenSterling European NB N Y DenmarkVirgin Express TV N Y BelgiumVolareweb VA Y Y ItalyWindjet IV N Y Italy

By comparison

British Airways BA Y Y UKAlitalia AZ Y Y ItaliaSN Brussels Airlines SN Y Y Belgium

Blank cells: no data in OAG 2004 database and/or no reply.Sources: OAG and own calculations, except eet (Airliners World and airlinea Stock/on order/on option.

18 Own calculations, depending on available seats.Start Airplanesa Flights Seats (106) ASK (109)

8 13,469 1.27 0.8013 25,416 3.54 2.87

2002/4 16 41,710 5.67 2.951995/11 77/120/120 168,416 25.02 21.602002

46 66,463 4.91 2.343

1999/4 5 1564 0.06 0.0317 27,853 2.79 2.69

2002/10 10 19,118 2.73 2.332

2002/12 10 5946 0.86 0.732003/2 12002/9 2 3142 0.17 0.10

7 8196 1.16 1.412003/4 2

22 8,514 1.76 3.1811 12,236 2.20 3.31

2002/9 7 21,271 3.15 2.251991 74/125/125 184,929 30.29 25.462002/2 4 5,444 0.23 0.17provides their principal characteristics.19 If one notes agreat diversity of the networks, the analysis provides somemajor common factors.

The ights are short- and middle-haul, focused on theWestern European market. We found that median distanceand time per ight are 634 km and 1.4 h; in Europe 70% oflow-cost ights are less than 1000 km. Intercontinentalconnections are non-existent. According to Franke(2004), this is due to the fact that the hubs, set up by theFSNC in order to ll aeroplanes of great capacity20 areimpossible to avoid, thus being able to guarantee accept-able unit costs. Indeed, the hubs allow the concentrationof passengers arriving from multiple origins, and thusreach the necessary thresholds in order to be protableon the intercontinental market. In addition, LCCs are stillpoorly established in Central-Eastern Europe, but somecarriers have recently created new links between Western-and Central-Eastern Europe (e.g. easyJet now serves

2 1,256 0.19 0.232002/10 122003/3 42002 8 9,217 1.73 3.081996 14 14,788 2.16 2.532003/2 8 8,992 1.62 1.34

3 7322 1.32 0.79

1974 330 450,766 65.13 192.411947 186 215,089 28.90 39.472002 32 61,903 5.87 7.48

s).

19 See Table 2 for more details about the variables.20 The future A380, in particular.

port Geography 14 (2006) 249264Table 2Variables submitted to the Principal Component Analysis for each LCC

Variables Description

254 F. Dobruszkes / Journal of TransTallin, Riga, Warsaw, Krakow, Bratislava, Budapest andLjubljana).

Many networks are clearly designed to carry travellersto the tourist destinations of Mediterranean Europe orCanaries, as charter carriers (e.g. Sterling European, Mon-

Table 3Share of low-cost carriers in intra Western European supply (2004)

All carriers Low-cost carriers

Flights (106) 4.8 0.6 13.3%Seats (106) 502.4 90.7 18.1%ASK (109) 396.9 77.8 19.6%

Source: OAG and own calculations.

Table 4Top 10 of airlines according to intra-Western-Europe supply (2004)

# Airlines Flights Seats (106)

1 Air France AF 413,535 42.02 Lufthansa LH 399,441 40.63 Iberia IB 324,300 39.54 British Airways BA 352,809 37.15 SAS SK 266,204 31.56 Ryanair FR 184,929 30.37 easyJet U2 164,024 24.48 Alitalia AZ 186,474 23.79 KLM KL 156,871 15.210 Swiss LX 120,501 11.8

Source: OAG and own calculations.

Volume of supply

logASK log of annual available seats kilometerslogFlights log of annual ightslogSeats log of annual seats

Characterization of low-cost networks

%5th9th Proportion of ights making the most of 5th to 9th freedomsAccording to ICAO

Fifth Freedom of The Air is the right or privilege, in respeanother State to put down and to take on, in the territory

So-called Sixth Freedom of The Air is the right or privilegvia the home State of the carrier, trac moving between t

So-called Seventh Freedom of The Air is the right or privigranted by one State to another State, of transporting trawith no requirement to include on such operation any pointo or be an extension of any service to/from the home Sta

So-called Eighth Freedom of The Air is the right or privileof transporting cabotage trac between two points in thein the home country of the foreign carrier or (in connectiothe granting State (also known as consecutive cabotage)

So-called Ninth Freedom of The Air is the right or privileperformed entirely within the territory of the granting Stat

%Charter Proportion of ights imitating charter ights, according to the%Exclusiv. Proportion of exclusive ights by airport pairs (any rival)%Internat. Proportion of international ightsConnexity Classical gamma connexity index: g = routes/(3*(airports-2));Destinations Number of airports servedRoutes Number of routes operatedon the air

ct of scheduled international air services, granted by one State toof the rst State, trac coming from or destined to a third Statee, in respect of scheduled international air services, of transporting,wo other Stateslege, in respect of scheduled international air services,c between the territory of the granting State and any third Statet in the territory of the recipient State, i.e. the service need not connectte of the carrierge, in respect of scheduled international air services,territory of the granting State on a service which originates or terminatesn with the so-called Seventh Freedom of the Air) outside the territory of

ge of transporting cabotage trac of the granting State on a servicee (also known as stand alone cabotage)destination

connexity = 1 if all European airports are interconnected by the airlinearch Scheduled, and Volareweb). This results in the net-works being roughly NorthSouth (from UK, Germany,Belgium, ... to Spain, Italy, south of France, . . .) ratherthan EastWest (IrelandRussia, SlovakiaUK, . . .).

Large low-cost networks were developed from countrieswhere charter ying was already successful, such as GreatBritain, Germany, Sweden, Norway and Belgium. As char-ter ights are simpler,21 one can suppose that, in thosecountries, low-cost ightsand no frillswere more easilyaccepted than elsewhere.

The LCCs do not necessarily operate out of capital cit-ies. Looking for niches, they draw networks often prefer-ring provincial towns forsaken by the FSNC and HighSpeed Trains. The LCCs organize domestic ights in coun-tries where there is a shortage of transport by train (Swe-den, Norway), or where it is slow (Great Britain) orexpensive (Germany). On the other hand, in a centralizedcountry like France, lacking in large provincial cites andwell served by the HST (TGV) converging towards the cap-ital and oering many promotional tickets at 25 , no LCCis yet successfully developed. Moreover, it seems that thegrowth of LCCs like easyJet at Paris Orly is limited onthe pretext of saturation (slot allocation), presumably inorder to protect the ag-carrier Air France. The situationis totally dierent in Germany where interior low-costights are organized in direct competition with Lufthansa

21 E.g. simpler catering and limited frills.

porF. Dobruszkes / Journal of Transand the HST (ICE) within the framework of a multipolarurban system, ensuring a signicant demand between pri-mary and secondary cities.

It is noticeable how strongly the national anchoring re-mainsnetworks centred only on one country and a weakuse of the fth to ninth freedom rightswhereas the LCCsare a product of the liberalization of the Western Europeansky (see e.g. Germanwings or Norwegian). Ryanair, Inter-sky and Sterling European constitute main exceptions.However, the use of these air freedoms remains less devel-oped by the FSNC (Table 6) and we calculated that the

Fig. 1. European low-cot Geography 14 (2006) 249264 255LCCs alone account for 39% of ights or 52% of seatsusing these freedoms within the EEA and Switzerlandblock.

Lastly, one notes fairly concentrated networks, like forUS LCCs (Reynolds-Feighan, 2001). This means that thesupply is not systematically concentrated on a reducednumber of bases. What is more, the nodes of the low-costnetworks are in fact traditional points of access or exit ofthe network and not transfer platforms. The star-shapednetworks of certain airlines do not correspond to the hub-and-spoke model. Besides, LCCs only sell point-to-point

st networks (2004).

por256 F. Dobruszkes / Journal of Transtickets and usually refuse to deal with connections becausethey result in complications and additional costs.

5.2. Principal dierences: a typology of the networks

We performed a PCA with data listed in Table 2 (Sec-tion 3). Two principal components emerge and reconstruct75% of the information contained in the original dataset.The graph of factor loadings (Fig. 2A) shows that the rstcomponent brings out the variables related to the impor-tance of the supply (ights, seats, ASK, routes, destinationsand connexity); thus, carriers with a positive score on thiscomponent will be carriers operating a supply above theaverage of analysed networks. The second component op-poses the exclusivities (routes operated without any rival),the use of fth to ninth air freedoms, and the internation-alisation of the similarities with charters shown by thegeography of routes. Thus, carriers with a positive scoreon this component will be carriers oering more exclusivi-ties and international ights, and using more fth to ninthair freedoms than the average of analysed networks; on theother hand, carriers with a negative score on this compo-

Fig. 1 (cont Geography 14 (2006) 249264nent will be carriers more charter-oriented than theaverage.

The crossing of the two components and their meaningmake it possible to dene a typology of LCCs networks:

Type A: small networks/supplies with many exclusivities(e.g. Intersky);

Type B: broad networks/supplies with many exclusivi-ties (e.g. Ryanair);

Type C: small networks/supplies imitating charters (e.g.Windjet);

Type D: broad networks/supplies imitating charters(e.g. easyJet).

The projection of scores on these two components(Fig. 2B) allows a positioning of the airlines according totypology, depending on their location on the graph. Forexample, Ryanair (FR) is closely, positively connected toboth rst and second principal components, so it is an air-line with broad networks and a lot of exclusive routes.EasyJet is mainly connected with the rst principal compo-nent, as a broad network; it is somewhat negatively con-

tinued)

Coind

0.00.00.00.00.00.00.0

Hapag Lloyd Express X3 19 42 86 0.0Intersky 3L 5 10 100 0.0

0.00.00.00.00.1

port Geography 14 (2006) 249264 257Jet2 LS 13 23 91Monarch Scheduled ZB 11 32 31MyTravel Lite VZ 14 30 60Norwegian DY 21 46 35Ryanair FR 84 292 93Table 5Characterization and typology of low-cost networks (2004)

Airlines Code Destinations Routes(return)a

Exclusivesroutesa (%)

Alpi Eagles E8 9 22 27Bmi Baby WW 24 78 59Deutsche BA DI 8 26 31Easyjet U2 38 238 65Flybe BE 32 111 77Germania ST 17 54 15Germanwings 4U 32 66 70

F. Dobruszkes / Journal of Transnected to the second component, because of a variednetwork serving several traditional airports (Amsterdam,Barcelona, Gatwick. . .) and being more charter-orientedthan Ryanair.

5.3. Types AC vs. BD: Diversity of the networks extentand the level of supply

The networks extent, directly measured by the numberof connections or routes, varies a great deal. These dier-ences are linked to several factors:

1. The age of the carrier: generally, young carriers have asmaller network (e.g. Intersky created in 2001).

2. The origin of the carrier: creation from a pre-existingairline and/or from a signicant group having sucientmeans to launch an airline that carries weight (Hapag

Sky Europe Airlines NE 9 16 88 0.0Skynet Airlines SI 4 6 67 0.0Sterling European NB 14 42 33 0.0Virgin Express TV 15 30 23 0.0Volareweb VA 23 74 38 0.0Windjet IV 5 12 33 0.0

By comparison

British Airways BA 216 615 0.1Alitalia AZ 81 312 0.0SN Brussels Airlines SN 47 92 0.0

Source: OAG and own calculations.Lower bound: 52 ights/year.a At level of segments (ight ABC = AB & BC).b Standardized index, for Western Europa only.

Table 6The use of fth to ninth air freedom for EEA + Switzerland

Airlines According to

Flights (%) Seats (%)

LCC 24 29FNSC 6 6

Source: OAG and own calculations.nnexityexb

Internationalights (%)

5th to 9thfreedoms (%)

Typical charterights (%)

Typology

081 13 0.0 100.0 C264 64 0.0 26.7 D095 6 0.0 5.1 C844 62 9.8 31.9 D400 22 0.0 3.2 D162 68 7.8 25.1 D213 83 0.0 16.9 B154 72 0.0 27.4 A037 57 67.2 0.0 A077 85 0.0 49.0 A117 100 0.0 90.9 C110 90 0.0 53.8 C154 22 0.0 3.5 D072 94 71.1 11.5 B000 67 0.0 0.0 C015 75 0 0.0 C154 98 45.0 62.6 A110 100 8.2 37.2 C257 47 2.0 60.0 C044 0 0.0 100.0 C

454 67 6.6764 49 0.0228 100 0.0Lloyd Express emanating from TUI, EBA Expressacquired by Virgin Group in order to be inated andtransformed into Virgin Express).

3. The will to expand and the availability of funds or thecapacity to raise some (e.g. Ryanair and easyJet, quotedon the Stock Exchange).

4. The acquisition of competing airlines (e.g. Buzz by Rya-nair22 or Go by easyJet).

5. The way to organize savings of density: indeed, certainroutes do not require high frequencies, realising savingsof density can mean multiplying the routes whiledecreasing their frequency (Fig. 3). This is illustratedby the fact that the eet and comparable annual timeof ight/aeroplane at the carriers disposal present a dif-ferent ights/routes ratio (Table 7).

In all cases, the airlines that reach a signicant supplyare those who maximize their aeroplanes use in order torealize savings of density. This is clear on the graph of fac-tor loadings where the ying time by aeroplane was pro-jected after the PCA. Thus, it appears near the variablesrelated to the importance of the supply, so it is positivelycorrelated with them.

22 Despite the fact that Ryanair closed around 10 out of the 21 routes.

%E

por0.8

1.0Factor loadings PC1/PC2PC2

258 F. Dobruszkes / Journal of TransRyanair provides a good example of growth, beginningwith a small network (Fig. 4). From 1991 to 1995, its net-work remained restricted and centered on the IrelandGreat Britain market and particularly the large market ofLondon. By 2001, successful and beneting from air trans-port liberalization, the network increased while being cen-

%Charter

-1.0

-0.8

-0.6

-0.4

-0.2

0.0

0.2

0.4

0.6

-1.0 -0.8 -0.6 -0.4 -0.2 0.0

Original variablesProjected variable

Type A

Type C

(A)

3L

4U

BE

DI

DY

E8 IV

LS

NB

NE

SI

ST

TV

VA

VZ WW

X3

ZB

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

-1.5 -1.0 -0.5 0.0 0.5 1.0

Scores PC1/PC2

Likeness to charter

Exclusivities / 5th freed

Type A

Type C

small network / supply

PC2

(B)Fig. 2. Typology of lowxclusiv.

t Geography 14 (2006) 249264tred on Dublin and London Stansted. By 2004, Ryanairopened several continental bases from which it has numer-ous connections (Brussels South Charleroi, FrankfurtHahn, Gerona, . . .). It has also bought out Buzz fromKLM, recovering its signicant network connecting Lon-don to the French areas that were not available in Ryanairs

%5th-9th

%Internat.

Connexity

Routes

Destinations

logASKlogSeats

logFlights

0.2 0.4 0.6 0.8 1.0

flying timeby airplane

PC1

Type B

Type D

FR

U2

1.5 2.0 2.5 3.0 3.5

Broad network / supply

om / Internationalisation

Type B

Type D

PC1

-cost carriers (2004).

ate e

F. Dobruszkes / Journal of Transport Geography 14 (2006) 249264 259Table 7Two ways for producing economies of density: Ryanair vs Easyjet (2004)

Airlines Airplanes Flying (h) Flights Routes

Ryanair 74 448,708 184,929 292Easyjet 77 460,076 168,416 238

Source: OAG and own calculations.

Fig. 3. How to genersupply. It is clear that such a fast growth is well planned, atleast if you consider the large number of aeroplanes needed.

5.4. A and B types: importance of specic routes

Considering the 1462 airport pairs run by one or moreLCCs in 2004,23 62% are not run by a FSNC. Another sig-nicant point is the operation of completely exclusiveroutes, with an average of 65%. Ryanair has made it itsspecialty (93%). This reects 1: the use of secondary air-ports and 2: the creation of niche connections.

Using secondary airports, close to big enough markets(large city and/or area) brings reductions of costs men-tioned above (see Section 2). This reduction would be muchlower in traditional airports (higher taxes, often saturatedand implying much longer time on the ground for aero-planes). Using secondary airports is a systematic policy atRyanair who, for example, ies between Brussels SouthCharleroi and Treviso or Gerona and Beauvais while othercarriers (FSNC or even LCC) y respectively betweenBrussels-National and Venice or Barcelona and Paris.Ryanair avoids cities with no secondary airports, such asAthens or Lisbon.

One should note that the airlines using more principalairports (e.g. Germania, Helvetic Airways, and VirginExpress) are rather mid-cost carriers than true low-cost.

23 Minimum 52 ights a year.Routes/airplanes Flights/routes Type

3.9 633 More routes/less freq.3.1 708 Less routes/more freq.

conomies of density.easyJet constitutes an intermediate case again, because itrepresents a pure low-cost carrier serving neverthelessmany principal airports (London Gatwick, Madrid, ParisCDG. . .).

The creation of niche connections is intended to reply toan unanswered request by other airlines and/or to give riseto demand. From this point of view, the case of Ryanair inFrance is exemplary. At city pairs level, fteen regional air-ports are thus connected to London Stansted, with a regu-lar service by Ryanair24 that is almost exclusive. This waspreviously undertaken by Buzz.

According to regional, tourist gures, the presence ofBritish tourists generally existed before the ights of Buzzor Ryanair (Dobruszkes, 2005). However, those did nothave access to direct air links: they had to either travel to-wards distant airports or use another type of transport.With Buzz, then Ryanair, the oer found an unsatisedor latent demand.

5.5. C and D types: low-cost vs. charters

The low-cost carrier tendency to compete with chartercarriers (CCs) raises the question about the latters future.

According to Mason et al. (2000, quoted by Williams,2001), CCs have a lower cost per seat than LCCs: in1997 easyJet and Ryanair had unit costs more than double

24 Montpellier is the only exception.

260 F. Dobruszkes / Journal of Transport Geography 14 (2006) 249264those of the largest UK charter airlines. This dierence, inparticular, can be explained by a load factor even higherthan those of LCCs and the use of greater capacity aero-planes over a longer distance.

It is necessary however to segment the market accordingto the distance.

As Williams (2001) shows, CCs indeed cannot competewith LCCs on less than 2.5 h ights (12001600 km), espe-cially if we are consider short stays and/or VFR.25 If welook at these connections, we often see that LCCs and theirfacilities (free access to service; frequent ights; reservationby Internet; more accessible secondary airports, at least bycar26) have already made charter ights disappear or drop(for example LondonPisa/Florence where Ryanair haspractically replaced charters after only two years ofoperating).

Fig. 4. The growth of the Rya

25 Visits to friends and relatives.26 Secondary airports often are badly-served by public transport.On the other hand, if we look at long-haul destinations(more than 2000 km), often holidays of longer duration,CCs remain more competitive, for example on the Lon-donMalaga route.27

However, the competition is increasing and it is dicultto say today what the outcome will be. On one side, LCCssupply advantageous priceseven if the enticing prices ap-ply to only a limited number of seatsand the possibilityto organize ones travel more freely. The facilities to bookhotel rooms on the Web, thanks to systems covering hun-dreds of cities all over the world,28 are an unexpected assetfrom this point of view. On the other side, CCs are inte-grated into travel packages which oer facilities and com-fort, but less freedom.

Nevertheless, as Williams (2001) notes, CCs are used tokeen competition and can adapt to a certain point. Actu-

nair network (19912004).

27 Moreover, only 2% of European low-cost ights cover more than2000 km.28 For example Hostelworld.com, covering 146 countries (2004).

ally, some are now selling seats only and the possibilityto book them on the Web. Moreover, one should be re-minded that many CC are economically viable, unlikemany LCCs who do not reach this point today. Indeed,there have already been many bankruptcies in this sector(FreshAer, Jetmagic, Volareweb. . .).

One of the consequences of this competition is that thedistinctions sometimes tend to be blurred between LCCsand CCs. Lets remember that some LCCs come from touroperators or CCs. It is also known that FlyGlobespan CCsells its last tickets at low prices. On the other hand, CCs(for example Thomas Cook or Jetair TUI) set up regularcharters freely accessible and the enticing prices are equalto low-costs rates. Furthermore in Belgium, tour operatorssell individual tickets for city trips using Virgin Expressights.

6. Analysis at the airport level

6.1. Todays situation

Fig. 5 presents volume and share of LCC at the airportlevel, according to seats. In terms of volume, the geography

of low-cost supply per airport is coherent with the geogra-phy of networks indicated above: it clearly shows the majorweight of the British, Irish, German, and Mediterraneanmarkets. The cities of the rst three countries are importantas they are all served at the same time within the frame-work of national, continental traditional and Mediterra-nean low-cost networks. London Stansted dominateswithout any doubt, with nearly 11 million low-cost seats of-fered (departures). Furthermore, this map conrms thelack of long-haul and/or non-Western European destina-tions, which remain the territory of FSNC and/or CC.Concerning Central/Eastern Europe however, the situationhas changed because EU liberalization has applied to newMembers since May 2004.

Fig. 5 shows a large range of LCC share per airport.Many airports are specialized in low-cost supply but atthe same time they become very dependent on these kindsof carriers (Dobruszkes, 2005).

If we consider location of low-cost airports and bothvolume and share, one can discern ve types of airportsin service:

1. Medium or large, traditional airports: Athens, Dublin,London Gatwick, Nice. . .

F. Dobruszkes / Journal of Transport Geography 14 (2006) 249264 261Fig. 5. Low-cost supply at airport level (2004).

2. Secondary urban airports of large cities: Rome Ciam-pino, London Stansted, London Luton. . .

3. Regional airports serving a large city fairly close by andmore generally their surrounding area: Liverpool closeto the urban area of North England, Lubeck (70 kmof Hamburg), Hahn (130 km of Frankfurt), Gerona(105 km of Barcelona). . .

4. Remotely located regional airports that airlines useeither as access to tourist area or point of departurefor road tourism: in France for example, Ryanair usesTours (Tours Loire Valley), Dinard (Dinard Brit-anny) or Pau (Pau Pyrenees).

5. Traditional airports of tourist coastal zones: Malaga,Alicante, Faro. . .

Access from capitals or large cities to regional airports isoften dicult, especially as rail links are poorly developed.On the other hand, if you live in the suburbs or in provin-cial towns, secondary airports are easy to access, at least byroad, contrary to large airports whose motorways accessare often saturated at rush hours. Moreover, regional air-ports often are compact so passengers can use them almostlike a railway station.

In addition, the concept of secondary airports becomesvery relative in some cases. London Stansted (12 milliondeparture seats produced by all carriers) is a secondary air-port compared to Heathrow (46 million), but it reachesalmost the level of Gatwick (13 million) and is the 12thon the Western-European scale! Thus we see that theimportance of the low-cost supply can seriously changethe hierarchy of airports.

6.2. The LCCs as a factor in the growth of air transport

supply (1995/2004)

Finally, we analysed the growth of European air supplycaused by the development of LCCs. We have alreadyshown (Section 5.4) that many routes have been createdby LCCs, but the development of these companies hasalso induced a growth in the supply available in terms ofseats.

Indeed, the increased supply of ights departing fromEuropean airports has risen by 183 million seats between1995 and 2004, 90 million of which correspond to LCCseats. Thus, more than half of the rise in this sector is di-rectly due to LCCs.

262 F. Dobruszkes / Journal of Transport Geography 14 (2006) 249264Fig. 6. The low-cost eect (2004).

neither a monopoly nor a duopoly within the EEA and

F. Dobruszkes / Journal of TransporNetworks are characterized by a variety of levels and alimited use of the air freedoms from the fth to the ninth,except for Ryanair and some others including easyJet. Onthe other hand, NorthSouth ights are numerous, andthe frequent recourse to secondary (urban or regional) air-ports results in LCCs creating networks that diverge fromthe traditional ones, either parallel and competing via sec-ondary airports, or really innovative for the niche market.

This observation has led Barrett (2004) to say that it ison the airport level that the impact of the European liber-alization is the strongest. Airport managers no longer haveto plan the supply decided by the governments but arecompelled to attract carriers in order to make prots. Thisis particularly true for the non-saturated airports: Lutonand Stansted, for instance, are now in competition withHeathrow. Furthermore, this can explain the complaintlodged by the Brussels airports manager to the EuropeanCommission against the advantages given to Ryanair atBrussels South Charleroi Airport.Fig. 6 represents, on a citys scale, the general increase ofairway supply and the part of it we can attribute toLCCs.29 We can observe that mostly West-European townsprot from these new air transport routes, whereas, most ofthe growth in Central Europe remains linked to the use offull service network carriers. In Western Europe, the supplyoered by LCCs benets as much the larger, main cities(London, Madrid, Milan) as secondary destinations whosegrowth is largely dependent (at more than 50%) on them.

Another striking fact is the emergence of smaller, sec-ondary (urban or regional) airports, whose creation or sur-vival are obviously linked to LCCs, or even not totallydependent on them. The growing supply in secondary Brit-ish and German cities is determined to a similar extent bythe establishment of LCCs.

Western Europe is clearly faced with a considerable in-crease in air routes and supply, largely due to the develop-ment of LCCs, which consequently represent the mainfactor in this evolution.

7. Conclusions

LCCs have already acquired a signicant place in Wes-tern Europe, especially easyJet and Ryanair, whose ambi-tions are even more signicant than their broad currentnetworks. The market is, of course, not yet healthy andseveral airlines are probably bound to disappear. Neverthe-less, dierent studies highlight a high potential in terms ofavailable airports (Fewings, 1998). Moreover, the accessionof 10 new Member countries to the EU in April 2004 auto-matically extended the territories and the number of air-lines as a result of liberalization. In these countries, lowwage costs, low incomes and weakness of the ag carriersare additional elements favouring the development ofLCCs.29 Only the cities whose air oer is growing are represented.Acknowledgements

I would like to thank Jean-Michel Decroly and Cather-ine Patris (Universite Libre de Bruxelles), Karen Slater(OAG) and Vincent Schepens for their assistance and theirvaluable comments.

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De Beys, J., 2004. La decision de la Commission europeenne du 12 fevrier2004 sur les aides dEtat accordees a` Ryanair. Courrier Hebdomadairedu CRISP 1852, 136.

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Dobruszkes, F., 2005. Compagnies low cost et aeroports secondaires:quelles dependances pour quel developpement regional? Les CahiersScientiques du Transport 47, 3959.Switzerland. In this context, the next step is the recentextension of the European Union into Central Europe asEuropean liberalization has been aecting 10 additionalcountries since May 2004. New EastWest low-cost supplycould also be quite attractive for migrants from CentralEurope, who might substitute low-cost airlines for interna-tional coaches.It is also worth noticing that LCCs are giving a newboost to point-to-point routes and networks, widely seenas condemned by the hubs. One can even say that it is pre-cisely the concentration of FSNCs on a limited number ofhubs that has facilitated the rise of LCCs, which couldcreate many direct connections bypassing the hubs andavoiding constraining connections. Finally, two types ofnetworks tend to be superimposed in Western Europe:hub-and-spokes/FSNCs/main airports vs. point-to-point/LCCs/secondary airports. Meanwhile, hubs remain forFSNCs a key strategy for the feeding of long-haul servicesand for a large cover of cities with adequate frequencies.

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European Communities, 2004.4.30. 2004/393/EC: Commission Decisionof 12 February 2004 concerning advantages granted by the WalloonRegion and Brussels South Charleroi Airport to the airline Ryanair inconnection with its establishment at Charleroi. Ocial Journal of theEuropean Communities L 137, 162.

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264 F. Dobruszkes / Journal of Transport Geography 14 (2006) 249264

An analysis of European low-cost airlines and their networksIntroductionThe low-cost airlinesWhy do the low-cost carriers exist?How do they operate?Increase in output and productivityEconomies of densityPressure on the workforceBetter occupation ratesAdditional optimisation and cost reduction factors

Public financingIncremental revenuesCombination of factors

Where do they come from?

MethodologyThe quantification of European LCCs supplyThe geography of low-cost networksPrincipal common characteristicsPrincipal differences: a typology of the networksTypes A ndash C vs. B ndash D: Diversity of the network rsquo s extent and the level of supplyA and B types: importance of specific routesC and D types: low-cost vs. charters

Analysis at the airport levelToday rsquo s situationThe LCCs as a factor in the growth of air transport supply (1995/2004)

ConclusionsAcknowledgementsReferences