How low-cost operators changed the business model of big airlines

The expansion of low-cost airlines on the Romanian market has meant tougher competition, as well as a change in the business model pursued by traditional airlines, which “borrowed” elements from low-cost operators’ strategy: price, baggage fees and online check-in.
Whilst five years ago the two biggest low-cost players on the market, Wizz Air of Hungary and Blue Air, controlled by Nelu Iordache, accounted for only 6% of the market together, while passenger traffic amounted to only 4.4 million, last year the two companies reached 37% of the overall air travel market, estimated at 9 million passengers, according to ZF calculations.
“In order to cope with competition from low-cost companies, as well as to give passengers more freedom to choose services, regular airlines requested to be allowed to “break up” the price of the aeroplane ticket, so that food and baggage transport would be paid separately,” said Anca Apahidean, country manager of IATA (International Air Travel Association) for Romania and the Republic of Moldova, which represents regular airlines.