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The cost of going low


Even by Nordic standards, Scandinavian Airlines’ CCO Roald Eivind is remarkably relaxed.


A certain local rival has created a lot of headlines in the region with a low-cost model that is being successfully operated in both short and long-haul markets.


While other European airlines are meeting similar competition by slashing prices, and so reducing service levels and customer satisfaction, Eivind is holding his nerve, prices and standards.


Why? Because, as he argues on page 32, there are enough people in the world who believe in the brand and are prepared to pay the prices he asks for the services he offers. In turn, the additional revenues mean better profits so giving further new routes a better chance of succeeding in a busy market.


And if the first two Routes events of 2017 are anything to go by, we have a busy year ahead.


Routes Americas was excellently hosted by Las Vegas in February while Routes Asia went off perfectly thanks to its Okinawan organisers. At Routes Americas (page 21), we heard how although president Donald Trump remains an unknown quantity for the travel industry, the US Travel Association is pushing to boost consumer choice and connectivity.


Meanwhile, Routes Asia’s Strategy Summit (page 17) revealed how congestion issues are an ongoing problem, while low cost-carriers increasingly face barriers from national governments keen to protect their own flag carriers.


Each region faces unique challenges, and looking ahead to Routes Europe in Belfast in April (page 81), it will be interesting to see how airlines react to the next low-cost revolution, and to both Norwegian’s expansion plans and IAG’s upcoming launch of LEVEL (page 12).


Thomas Cook Group Airlines bosses already have a plan (page 26), identifying niche, secondary airports as key. Alongside Eivind, they appear to be keeping their calm in the face of such turmoil; in Belfast we’ll discover if the rest of the market has been able to follow suit with a similarly sanguine approach.


Edward Robertson

editor, Routes News


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