With consumers getting their spring and summer travel plans ready, low-fare airlines are in the news again. How low can their fares really go? Given the high price of jet fuel, "low" is meant to contrast with the higher fares, more extensive schedules and higher service levels of established airlines.
Iberia Express, a startup (left) owned by the
company that also owns British Airways, will initially fly from Madrid to cities within Spain, with one-way fares as low as £21.
Because budget airline
Ryanair is currently the market leader (by number of passengers carried) among airlines operating in Spain, Iberia Express offers an opportunity to compete in a price-conscious environment.
Alitalia's
Air One budget subsidiary (right), just entering its
third year of operation, is ready to fly to and from Marco Polo Airport in Venice, an expansion timed for the peak summer travel season. It already serves Milan and Pisa, but the Venice expansion allows Air One to serve new international routes with low fares.
If jet fuel prices stay high and competition forces ever-lower fares, will these budget airlines be able to compete over the long run?
