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Flyglobespan uses a 737-800 on its Glasgow-Boston route. What does this mean for other budget carriers dreaming of launching a low-cost, long-haul service?
Once upon a time, American Airlines used a Boeing 747 to transport passengers between Boston and Chicago and then on to Los Angeles. That was in 1970, though, eight years before the U.S. airline industry was deregulated, allowing the open market to ultimately influence routes and fares, rather than a government body. With deregulation eventually came a flood of new airlines, new business models, and increased competition. Fares dropped and capacity went up—that is, the number of passengers an airplane can accommodate. Today, smaller jets like those in the 737-series are used on short-haul routes such as Boston to Chicago and, as of late May, at least one carrier—Flyglobespan, based in Edinburgh, Scotland—uses a smaller jet to fly across the Atlantic. The Scottish-based carrier uses either a Boeing 737-800, Boeing 757-200ER, or a Boeing 767-300ER on its recently-launched transatlantic route between Glasgow and Boston [1]. A staple of the low-cost carrier business model, 737s are traditionally used on a regional basis, for short-haul flights. With a range of 5,665 km [2], though, a Boeing 737-800 can easily manage the Glasgow-Boston route, two cities that are 4,883 km apart [3]. The jet can carry a maximum of 162 passengers. By comparison, a Boeing 737-300 can hold 128 passengers and has a range of 3,362 km [4]. Low-cost carriers including Southwest Airlines and Ryanair use new generation 737-700s (range: 6,230 km) and 737-800s, respectively. So will these budget airlines and others like them launch long-haul service in the future? Ryanair has openly toyed with the idea, although if the carrier does follow through with transatlantic service to cities such as New York, Dallas, and San Francisco, it will probably use either the A350 or Boeing 787, both mid-sized aircrafts. Southwest, too, indicated that it might launch service to the UK. Critics are skeptical about the low-cost, long-haul vision, however. They wonder, can an airline turn a profit when an average ticket costs around $15—a figure Michael O’Leary, CEO of Ryanair, has quoted with respect to a future transatlantic flight on that carrier? Also, can the no-frills, low-cost model hold its own for a six-hour flight? Budget carriers cut costs by limiting the food and entertainment options available on flights. This strategy works on flights that last a couple of hours or less, but what about a multi-hour flight across several time zones? According to www.cheapflights.co.uk, if Ryanair’s idea ever gets off the ground, the airline plans to sell food, drink, and entertainment on-board. Passengers will also have the option to (I assume) pay an extra fee for a “premium service,” though the site doesn’t specify what’s included in this upgrade. References: [1] Glasgow-Boston [2] 737-800 range [4] 737-300 range
The copyright of the article US-Europe on a 737 in Strategic Business Planning is owned by Christine Hucko. Permission to republish US-Europe on a 737 in print or online must be granted by the author in writing.
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