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EDITORIAL
T
he main issue discussed at the
Low Cost Air Transport Sum- mit 2007 
was with no doubt the impact of environmentalissues on Low-Cost Carriers activities (p. 17). Indeed, a wayto limit global warming is to tax tickets which would directly risetheir prices (p. 11) and have therefore negative consequences onthe growth of LCCs. Each speaker, one after the other, had at leasta word on it, and
easyJet 
even hold a press conference to presentits future Eco-Jet. With its own business model,
easyJet 
has someassets to manage the slowdown of activity in the European LCCsector, that’s why
Air Scoop 
has realized a SWOT of the carrier (p.6) in order to present its strengths and weakness.One signal of the slowdown of the market is the current wave of consolidations occurring through Europe.
Air Scoop 
had the oppor-tunity to interview
Maunu Von Lueders 
and
Daniel Skjelman 
(p.2) about the recent acquisition of 
FlyNordic 
by
Norwegian 
. Face tothese mergers and acquisitions, our team has analyzed the effective-ness of LCCs mergers (p. 21) and their limits.Another sign of the slowdown of LCCs is definitely the global fall of LCCs shares (p. 14).
Ryanair, easyJet, Air Berlin, Vueling 
… theirshares all has followed the same falling trend these weeks. In thistensed context, many analysts predict a “bloodbath” among LCCssoon (p. 13). The market has reach its limits in terms of activityand the slowdown will lead to few strong carriers and the death of others.As usual, in each issue,
Air Scoop 
makes a focus on a Central/Eas-tern Europe market. After Hungary, the Czech Republic and Slova-kia, we have analyzed the Romanian LCCs market (p. 16). Bulgariaand Poland will be our next markets…
Highlights in this Issue
Vueling 
: Competition Cannot but Bites
 p. 5 
SWOT Analysis of
easyJet 
 
 p. 6 
Fifty LCCs in Europe, and a « Bloodbath » Expected
 p. 13
Rough Times: Duty Rises – Shares fall
 p. 15 
The Analysis of the Romanian LCC Market
 p. 16 
Air Scoop 
- July 2007
www.air-scoop.com
The Low Cost Carriers Analysis Newsletter 
 
Air Scoop 
ANNOUNCEMENTS2007 Ancillary Revenue AirlineConference (ARAC 2007)
November 14 and 15 in Frankfurt 
Learn to boost your non-ticket revenues byattending the only conference dedicated tothis topic. Ancillary Revenue Airline Confer-ence - - ARAC 2007 - - will take place 14/15November 2007 in Frankfurt. The two-dayagenda offers more than 25 speakers, inclu-ding senior airline executives and top indus-try vendors working in the field. Confirmedspeakers include:
Air Canada - Sandra Lindala 
, Senior Direc-tor New Revenue Opportunities
Amadeus - Alberto Pozo 
, Managing Director-
Travel Service 
s & Leisure
Flybe - Militsa Pribetich-Gill 
, Ancillary Re-venue Manager
Lufthansa Systems - Roland Moor 
, FutureAirline Core Environment
Eurostar - Luke Kingsnorth 
, eCommerceManager
SkyEurope Airlines - Karim Makhlouf 
, Chief Commercial Officer
US Airways - John Reistrup 
, Director of Marketing Programs & Customer Loyalty
Visa - Kirk Stuart 
, Vice President Co-Bran-ding 
Vueling Airlines - Arturo de Perthuis 
, An-cillary Revenue ManagerVisit the
ARAC 2007 
web site to view theagenda and register: www.airlineinformation.org and click on the Conferences tab.The discounted early bird rate of 
$479
(forairline and transport providers) expires on 15 June.
Air Scoop 
subscribers qualify for thislow rate. Simply enter «Airscoop» as thepromotional code when you register for theconference.
Air Scoop 
- In the Air
Vueling 
: flyingwith Band-aid!«
Clickair 
unsafeto fly»
 
BIRD’S EYE VIEW
Air Scoop 
- July 2007
www.air-scoop.com
2
Interview of Maunu von Lueders(CEO of FlyNordic)
Maunu von Lueders 
(CEO of 
FlyNordic 
 )
‘‘
NORDIC CONSOLIDATION’’
Interview of Daniel Skjeldam(Director Network and Revenue of Norwegian)
Do you believe Norwegian is protected on its own Scan- dinavian market against other LCCs competitors? 
Yes, definitely. The reason is simple, it is because, on a lotof routes, 70% of the market is originated in Norway, Swe-den or Denmark. That’s why, with this outbound, domesticcarriers will always have the strongest positions. Our cus-tomers know our brand and check prices of our companywith the ones of our competitors. If we are competitive,we will sell the ticket; if they are competitive, they willsell it.
Now that Norwegian and FlyNordic are merged, what will be the main changes? What about the consolidation of the Scandinavian market? 
By acquiring 
FlyNordic 
, we get an interesting size to deve-lop in the future. We can use
FlyNordic 
fleet, staff, routesand of course its brands. This acquisition of 
FlyNordic 
givesus a lot of synergies which will be used for our growth. It isvery hard to say if there will be other consolidations in theScandinavian market as the sector is really fast moving.
How do you feel about the “price war” launched by Rya- nair? 
It doesn’t affect us at all. We are competing on quite a fewroutes, but the price difference must be very high to seeour customers changing their flying habits with us. We ac-tually see a boost in the routes on which we are competing with them, and not a decline. It attracts customers to thesedestinations because they spend more money on marke-ting. Our customers always check first if the home basecarrier doesn’t have a flight on this route, and they comparethe prices. If our competitors spend money on marketing,it also affects other routes in a good way.
What is the difference since Norwegian has acquired Fly- Nordic? 
First of all, our previous owner is a traditional airline anda member of a global alliance. We were a strategic tool forthem, but now for
Norwegian 
, we are a tool for expansionand to broaden their scope. Because
FlyNordic 
and
Norwe- gian 
are very similar in the way they function and in theirbusiness model, there are a lot of synergies. I think we aregoing to expand and grow much faster now than with ourtraditional owner. We will also gain from joint network,distribution and things like that.
As now you are a big player in Scandinavia, which car- riers are your tougher competitors in Scandinavia? 
We are competing with any carriers, not only LCCs, so
SAS 
 is our biggest competitor. We will definitely be a big oppo-nent to
SAS 
. First, we are going to cover some routes thatthey have, we will have some routes they don’t have, andwe will have a very customer friendly proposition. For alot of customers, the choice between
FlyNordic 
and
SAS 
 will be based on price, schedule… I cannot see what wecouldn’t do that
SAS 
is doing.
How do you explain the collapse of FlyMe? 
It was an overcapacity from them; you cannot swallow abigger piece than your mouth. It was an expecting thing,and we were wandering how they survive so long. You can-not keep growing without the resources necessary to growand without knowing if the grow will ever be profitable.Growing for the sake of growing doesn’t make sense.
How do you see your expansion in Scandinavian coun- tries? Outside Scandinavia? 
We are already in the Scandinavian countries. Denmark’smarket is very small while Norway domestic is huge. Swe-dish domestic market is important too, but only half of Norway. So by having our stronghold in Norway and in theSwedish market, it is a very powerful thing. Denmark isinteresting essentially because Copenhagen generates sometraffic and we can capture business travel there. As we arefocused on business travel, our schedules are designed tofit to these passengers. I’m sure
Norwegian 
and
FlyNordic 
 will cover major cities in Scandinavia any time soon.We don’t have any long-haul projects for the moment.The growing markets are Asia and Eastern Europe, so I’msure Central and Eastern Europe will be part of our ex-pansion strategy. It’s not much about regional targets butmore about specific interesting destinations, but definitelyEastern Europe is interesting. Local carriers there are moreknown in their home base, and in Scandinavia
FlyNordic 
 and
Norwegian 
are well known, so if you talk about trafficfrom Scandinavia to Eastern Europe, we have the strength.It mainly depends on the direction of the market.
Daniel Skjeldam 
(Director Network & Reve-nue of 
Norwegian 
 )
 
Air Scoop 
- July 2007
DOWN TO EARTH
www.air-scoop.com
3
Clicking on the cars, beds and cabs options opens a pageoffering more information and specific choices. The choi-ces made during booking do not provide a confirmed re-servation, but are offered on a “request” basis. Reservationdetails for cars, beds, and cabs are confirmed by telephoneor email within a defined time period. Fees for these ser-vices are paid separately by the traveler and are not inclu-ded in the price of the airline booking. This simplifies thetransaction for
Kulula 
, which receives commissions fromits travel partners. The car rental choice presents the consumer with a menuof options such as car sizes and features, standard or superinsurance waiver, and length of rental. The hotel choicepresents a variety of accommodations at different pricelevels, and includes a short description of each hotel.Taxi transfers are offered in a similar manner with pricesquoted on the basis of travel zones. The following imagedisplays some of the hotel choices offered for Johannes-burg. 
Kulula.com 
claims it is “South Africa’s biggest online re-tailer” with record sales of over 100 Million Euros.This self-described “quirky” airline recently announceda new slogan that invites customers to “Come fun withus.”
Kulula 
offers a unique brand positioning that pro-mises spontaneity and energy, laughter and life, but mostimportantly - - simplicity and honesty. This consumer-focused and light-hearted strategy also encourages trave-lers to purchase an array of additional services from theairline.
Kulula 
began flying in 2001 as South Africa’s first lowcost carrier. The airline has carried over 7 million pas-sengers and currently operates 300 flights per week on12 domestic routes.
Kulula 
’s online strategy drives 80%of its bookings and likely generates significant ancillaryrevenue. The booking process promotes the sale of ho-tel accommodations, car rentals, taxi transfers, and airportparking. Consumers may also donate to
Kulula 
’s chosencharity and are encouraged to apply for its co-brandedcredit card. All of these features are neatly integrated intothe
Kulula 
.com web site.The airline readily promotes itself as an online retailer,but its basic airline product is relatively simple. Two pie-ces of baggage can be checked without charge. Seat assi-gnments are provided at the time of check-in. Additionalfees are not charged for bookings or payment with a cre-dit card. Snacks can be purchased on board and includehot and cold drinks, sandwiches, muffins and more. Butits distinction as an online retailer becomes clear during the booking process.Brand personality supports the online sales strategyThe web site uses a natural conversational style by asking questions. Consumers are asked, “Where are you going?”instead of the usual drop-down menus to select an originand destination. The flight selection process is transpa-rent and consumer-friendly by highlighting lowest fares ina bold font. The conversational style continues by asking,“Would you like to book any extras?” Consumers canchoose from cars, beds and cabs. The airline dedicates aportion of the page to its charity initiative. Consumersare encouraged to “do your good deed for the day” by con-tributing to the
Childhood Cancer Foundation 
of SouthAfrica.
Kulula Strike a Unique Balance as a Low Cost Airlineand South Africa’s Largest Online Retailer
www.IdeaWorksCompany.com
by
Jay Sorensen 
(President of 
IdeaWorks 
 )
‘‘
IDEAWORKS AISLE’’
of 00

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