The revolution in low-cost flight, brought about by the deregulation of the European air-transport market in 1997, has meant that flying has become an integral part of Europeans’ lives. Nowadays, we do not lose touch with friends and relatives on the other side of the continent; a short-notice business meeting in another country, or even a mini vacation, are now also within reach of most people.
Before 1997, the European air-transport market was tightly regulated. Air fares were high and locked on a bilateral basis between countries, with airlines under tight control by national governments. No wonder traffic on EU routes has increased by 140 per cent since 1997. Deregulation, and the greater mobility it has generated, has contributed more to a common European spirit than most treaties put together.
The cabotage regulations were essential to this. They made it possible for an Irish carrier like Ryanair to fly between two unrelated countries, like Sweden and the UK, at a remarkably low cost. This not the case in the US; a European airline can fly you to and from the US, but you are not allowed to fly on a non-American carrier between, for example, New York and Chicago.
Bjørn Kjos, a former fighter pilot and now CEO of budget airline Norwegian, plans to bring the low-cost model to transcontinental flights – from Europe to America and Asia. In doing so, Kjos is positioning himself as a key rival to Ryanair’s Michael O’Leary, not only as the boss of a low-cost airline, but also in the field of flamboyant management. Long-haul operations will be moved from Norway to Ireland, pilots and crews will be based in Bangkok, while flight attendants will be hired in the US. Kjos is confident that this novel approach will enable Norwegian to offer fares at half the price of its competitors.
But Kjos is facing stiff opposition from the unions, airlines and pilots who see his plans as a backhanded attempt to outsource work to cheaper labour and undercut competition, calling it the ‘Walmarting’ of the airline industry. The global airline alliances – Star Alliance, SkyTeam and Oneworld – that dominate flights across the Atlantic are also terrified of low-cost competitors on this route. Fearful that the drive to lower prices will result in a drop in safety, some are calling for new regulation to keep the low-cost flight industry in check.