The Rise of Budget Airlines May Be Great for Travelers, but at the Cost of the Environment

Flying internationally is getting really cheap really fast

It’s now possible to fly one-way to Ireland or the United Kingdom from Boston or New York for $99 or from Los Angeles or Oakland for about double that price — far less than what legacy airlines once charged on those routes. Norwegian currently serves 15 airports in the United States with direct connections throughout Europe and the Caribbean with an expansion to Canada planned for July; WOW has flights from 13 US airports, as well as from Montreal and Toronto, to Reykjavik, where travelers can continue on to destinations across Europe. LEVEL, which currently serves three US airports, is planning to start service to Montreal and Newark in 2018; they also run a route between Barcelona and Buenos Aires. Primera Air is also poised to enter the transatlantic market in mid-2018 with flights from Toronto, New York, Boston, and Washington, DC to London, Paris, and Birmingham.

However, it’s not just North Americans who benefit from the low-cost carriers that have entered the transatlantic market. Europeans also get cheaper flights across the pond and, as LEVEL demonstrates, they’re also beginning to get budget routes to South America. Joon will be launching a flight from Paris to Fortaleza, Brazil in May, and Condor has affordable routes between Germany and Brazil, but they pale in comparison to Norwegian’s plans for Argentina.

The company launched its London to Buenos Aires route in February — its first to South America — and it plans to rapidly scale up operations in the middle of 2018 with approximately sixty planes designated for Argentina. The government has granted Norwegian permission to operate on 72 domestic and 80 international routes, and to fly from airports in major cities including Buenos Aires, Cordoba, and Mendoza. Flights to and within South America have traditionally been high compared to other regions of the world, but the expansion of low-cost airlines into the continent will bring down flight prices between Europe and South America, and Norwegian’s plans could do the same between North and South America while pushing domestic prices lower as well.

Prices have already declined significantly where routes have been launched, forcing legacy airlines to react to the threat to their business model. Transatlantic flights have traditionally been profit centers for legacy airlines with margins of 15 to 20 percent. However, low-cost carriers operate with a margin closer to 2 or 3 percent on long-haul routes, allowing them to offer significantly lower prices and forcing legacy players to do the same. Between 2016 and 2017, data from Kayak showed median airfares between the United States and 20 major European airports down at least 20 percent, though some markets dropped far more: prices to Barcelona were down 31 percent, Paris 35 percent, and Zurich 43 percent.

The big legacy airlines might have a tough time keeping up

It still remains to be seen whether legacy airlines can effectively offer lower-priced services that will be attractive to travelers. Air Canada’s low-cost rouge subsidiary has probably been most successful, with flights from destinations across Canada to the United States, Europe, Mexico, Central America, and the Caribbean; Westjet began offering low-cost flights from Canada to destinations in Europe a few years ago; major US carriers have begun offering their cheaper basic economy fares on transatlantic routes, though international basic economy, at least with Delta and American, allows travelers to place a carry-on bag in the overhead bin.

Similar to Air Canada, European legacy carriers are also setting up their own low-cost alternatives. LEVEL is owned by International Airlines Group, which is the parent company of Aer Lingus, British Airways, and Iberia; Joon is a millennial-focused, low-cost subsidiary of Air France; and Eurowings, which also has low-cost routes from Europe to the United States, is owned by Lufthansa. However, they do face additional challenges when competing with their low-cost rivals, since their fleets are often older, meaning they use more fuel and require more maintenance, and their workforces tend to be unionized, unlike those of budget airlines. That second issue may be changing, as Norwegian flight attendants in the United States unionized last year, and European budget giant Ryanair agreed to the unionization of its British pilots in January 2018.

This is good for travelers, but it might be bad for the environment

There’s no question that travelers have taken notice of these routes. Legacy carriers’ share of the transatlantic market is set to fall below 90 percent by mid-2018 and data from air travel analyst OAG indicated that Norwegian was the seventh largest transatlantic carrier in Winter 2017, having increased its capacity by 111 percent from the year before. And it’s not just tourists who are switching to low-cost airlines; Norwegian is also adding seats to the premium cabin of its transatlantic flights to serve growing interest from business travelers — the real profit center for airlines because they pay much higher prices for a bit more space and a few more amenities.

But what’s the bigger picture of this disruption? Travelers have little reason to worry about legacy carriers; complaints about service quality on many of those airlines have been growing for years and they could use the wake-up call provided by low-cost competition. There are also potential social benefits of allowing more people to visit other cultures and meet people in different countries, which could help increase support for international cooperation and empathy for foreigners.

However, as more people opt to take transatlantic flights as a result of lower prices, or at least take them more often, it would be irresponsible to ignore the environmental impact of increased air travel. Air travel currently accounts for 2.5 percent of global carbon emissions, but it could rise to 22 percent by 2050 as the emissions of other sectors decline. There are few other realistic choices for transatlantic travel than flying, but if we’re going to start taking more long-haul flights because they cost less, we have a responsibility to think about how emissions will be reduced in other areas, such as encouraging investment in green technologies and pushing for domestic high-speed rail to reduce the number of people taking short domestic flights.

The proliferation of low-cost airlines on transatlantic routes is great for travelers: they reduce the cost of flights and make international trips more accessible. However, as people who have larger carbon footprints as a result of that travel, we must keep the larger picture in mind and push governments to invest in ways to reduce the carbon emissions of transportation. Reducing the barrier to travel is a great goal, but it must always be done responsibly to protect the world we care about so deeply.