ATW Daily News

Southwest sees viability in long-haul, low-cost model

Wednesday September 16, 2009

Southwest Airlines sees a future for the long-haul, low-cost model and can envision someday operating intercontinental routes, Director-Network Strategic Planning Lee Lipton told ATWOnline at the World Route Development Forum in Beijing, while emphasizing that there is "no timetable" for such a move.

"Europe and South America are our first choice. . .but currently we are still evaluating our options," Lipton said. Southwest Chairman, President and CEO Gary Kelly said last month that the LCC is "seriously considering" operating international flights to Canada, Mexico and the Caribbean as soon as 2011 (ATWOnline, Aug. 21).

Lipton told this website he is confident that the "low-cost, long-haul" business model can work for the carrier "just as AirAsia X and Jetstar have achieved success," adding, "it could even become a trend for LCCs in the coming days."

Interestingly, Spring Airlines, the most successful Chinese LCC, also plans to launch international service. It intends to operate to neighboring Asian countries in time for Shanghai's Expo 2010 starting in May.

However, Assn. of Asia Pacific Airlines DG Andrew Herdman expressed reservations about the low-cost long-haul model, saying, "It's too early to tell if it will be a trend for the future."

He contrasted the normal low-cost business model--narrowbody aircraft, single-class cabins and online ticket sales--with a typical long-haul operation. "Once the LCCs enter the international market, they have to comply with international standards, which means they have to operate a two-class cabin on widebody aircraft and sell their tickets not only through their website but also by GDS," he told ATWOnline. "All these would make low-cost carriers look like full-service airlines, as they have a lot of convergence with carriers that choose the standard model." Herdman concluded: "I wouldn't say it can't work, but it's quite challenging."

by Katie Cantle

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