No-frills airlines on the rise gain

Aggressive growth strategies by leading discount carriers are poised to overthrow Europe’s established airline order.
No-frills airlines on the rise gain

Ryanair, already Europe’s top low-cost operator, boosted its passenger tally 15% to 117m in 2016, a figure that is set to give it the biggest annual tally of any carrier in the region, ahead of Lufthansa, which reports numbers next week.

Norwegian Air Shuttle attracted 29.3m passengers last year, it said yesterday, a 14% increase that is likely to put it ahead of SAS Scandinavian Airlines for the first time.

SAS also posts figures next week. And Wizz Air, the No 1 no-frills carrier in eastern Europe, increased numbers 19% to 23m as it added more destinations in the west of the continent.

With fares sliding, Lufthansa, Air France-KLM, and British Airways and Aer Lingus owner IAG have responded, though they’ve generally struggled to compete with the likes of Ryanair and Easyjet.

Lufthansa, which carried 108m passengers in 2015, the most in Europe, is under particular pressure as Ryanair sharpens its focus on Germany. The group, also including Austrian Airlines and Swiss, probably finished 2016 with about 110m customers, about 7m behind its Irish rival.

The race between SAS and Norwegian, whose maverick strategy includes low-cost long-haul services, was probably closer.

Norwegian has also swept past Air Berlin, which operates a similar mix of European and inter-continental discount routes but saw its customer total drop 4.4% in 2016 to 28.9m.

Air France-KLM, IAG and Lufthansa remain Europe’s top three carriers by traffic — a measure of passengers multiplied by the distance flown that’s the industry’s standard gauge for airline rankings.

Shares of discount carriers generally outperformed network rivals last year, with Ryanair down 3.4%, compared with a 16% slide at Lufthansa, and SAS declining 43% as Norwegian slipped 11%. IAG lost 28%. cent and Air France-KLM some 26%.

The weakest performer among leading low-cost carriers was Luton-based Easyjet, which had a 42% slump in its shares largely as a result of its exposure to an uncertain UK economy and a weaker pound after the June 23 Brexit vote.

The company reports 2016 passenger numbers later today.

Bloomberg

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