After years of healthy profits—that mostly came from rock-bottom fuel prices—airlines are facing tough challenges as fuel prices recover. Fares remain under pressure from overcapacity and economic uncertainty, and cost concerns persist. To safeguard their bottom lines, carriers will have to get creative. Our analysis shows that exploiting a yet underused tactic can help.
At a glance:
- Network carriers have a largely untapped source of opportunity before them: using low-cost carriers as feeders.
- Yet building this kind of connectivity requires careful data analysis as well as thoughtful decisions about optimal commercial and operational agreements.
- We used public financials for major carriers at two European airports (Gatwick and Malpensa) to illustrate how this cooperation could work.
- Airlines that ignore this underutilized lever for improving their profitability risk leaving money on the table—something that they can't afford to do in today’s challenging business environment.