LEGACY AIRLINES are increasingly indistinguishable from their low-cost rivals in terms of the fares they charge and the service they offer, according to research published last week by KPMG, a consultancy. The Airline Disclosures Handbook reveals that the cost gap between traditional and budget airlines has fallen by an average of 30% in six years, partly because legacy airlines have abandoned old differentiators like free baggage and in-flight catering on short-haul flights. “The service being offered by low-cost and legacy carriers is now more or less the same,” says one analyst.
On the rack throughout the financial crisis, traditional airlines tried to trim costs aggressively, but came unstuck when confronted by their unionised workforces: Iberia is the latest to have had services disrupted by strikes. Older, thirstier planes also caused costs to rocket as fuel prices rose. So, instead, managers focused on “easy wins”, cutting on-board perks and ditching inclusive extras. KLM and British Airways will both introduce checked-baggage fees on European routes next month—fees that are normally characteristic of budget airlines like easyJet and AirAsia.