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Last Updated: Thursday, 7 September 2006, 09:36 GMT 10:36 UK
Will there be 99p flights to New York?

Hong Kong
Is Hong Kong going to become a budget airline destination?

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The Magazine answers...

An airline is announcing budget prices for flights from London to Hong Kong. Could the low-cost airlines shift to long-haul routes?

Are we going to see 99p flights to New York? The launch of a budget airline service to Hong Kong has raised the prospect that the no-frills approach to air travel could be applied to long-haul trips.

From next month, Oasis Hong Kong is promising flights from London Gatwick to Hong Kong from £75 one way.

This brings travel to the Far East into the kind of price bracket more usually associated with weekend breaks across Europe, and the carrier says it hopes to run to more destinations in the future.

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But as with other budget airlines, before packing your bags there is the small print to check. The headline price does not include taxes and a fuel charge - which will add another £68 in each direction. So the basic price for a return is going to be £286.

And only 10% of the seats on the Hong Kong route will be guaranteed at this lower price.

Nonetheless, a return to Hong Kong for less than £300, is still considerably cheaper than many competitors - where £500 return would be at the discount end of the market.

Fuel risks

But before heralding a boom in cheap long-haul flights, there are a number of obstacles that might get in the way.

In particular, the volatility of fuel prices could damage long-haul operators trying to apply a low-cost model. And if the taxation of aviation fuel changed - currently, it's untaxed - in response to environmental concerns, that too would put pressure on any attempt to run cheap long-distance trips.

Oasis Hong Kong
Oasis Hong Kong says its fares will start from £75 plus taxes

And the factors that help to keep costs low for short-haul no-frill airlines might be less relevant to long-haul - such as very short turn-arounds, cutting out catering costs, having a single type of aircraft, last-minute online booking and low numbers of empty seats.

John Hanlon, secretary general of the European Low Fares Airline Association - which represents members such as Easyjet and Ryanair - says that it would be unlikely that low-fare operators in Europe would be able to apply the same model to long-haul destinations.

The economies of scale and the efforts to "strip out all the complexities" for short-haul budget airlines couldn't be readily transferred to long haul, he says.

Laker Skytrain

There has been a previous attempt to run cheap transatlantic services. In 1977, Sir Freddie Laker launched his Skytrain flights, selling tickets from London Gatwick to New York for £59 one way.

Freddie Laker
Sir Freddie Laker offered cheap flights to the US in the 1970s

And there is certainly a huge appetite for travel. The Association of British Travel Agents (ABTA) says that more than a million people flew from airports in the south-east of England over the recent bank holiday weekend.

Even though it's unlikely in the near future that European budget airlines will expand into long-haul routes, Mr Hanlon says that there is still scope for new competition which might challenge the existing operators.

"There are low-cost operators springing up in Asia - and it's not impossible that they might expand their horizons further. And the higher the fares remain from traditional carriers, the more the invitation is out there," says Mr Hanlon.


Add your comments on this story, using the form below.

Gosh, that global warming just keeps on getting stamped on, doesn't it?
Kat Brown, London, UK

Having flown on a 1hr Ryan air flight the thought of a 10-12hr version fills me with dread. Frankly I'd rather pack myself into a crate and go as cargo.
Peter, Nottingham

As usual, the airline industry is missing the point. Cheap air travel is not automatically good as it encourages people to travel and therefore increases greenhouse gas emissions. If I had my way each individual would have a carbon allowance that they could trade with other people in the same way that businesses do. That would help us achieve a cap on emissions and also lower noise and other disruption for people who live near airports.
Ben Jolly, London, UK

Please tax airline fuel or introduce a compulsory carbon-recapture tax (to buy tees to recover the carbon from the atmosphere). Stop cheap airtravel - or the planet gets it!
Ian Watson, Sandy, UK

The promotion by airlines of ever cheaper airfares, apparently justifiable only because they are currently economically viable, flies in the face of sustainable values. This is an example of supply creating demand, and will only serve to whet our appetite to consume yet more of the earth´s limited fossil fuel resources. In an age where we are supposedly encouraging society to act in a more environmentally responsible way, the message instead appears to be "eat, drink and be merry for tomorrow we fly."
Nick Rikker, Barcelona, Spain

The big operators wont allow this,a flight to some obscure airport outside Dortmund is one thing.A direct slot into Hong Kong international is quite another.The flag carriers will close ranks like the Laker slow death.
GERARD FLANNERY, HARTLEPOOL

The problem with taxing aviation fuel is that long haul flights will "pit-stop" at other airports en-route to take on more fuel. The net effect is that the airlines will burn more fuel, pay less and avoid paying the tax. It would therefore be as much use as the Kyoto agreement, which penalises Western nations but allows China to pollute without limit.
John Airey, Peterborough, UK

I was so delighted to hear about the budget airline flight LDN to HK, it will be great! However, i'm not sure about NY, considering the high security costs.
Chan, Hong Kong SAR, China

Putting aside the recklessness of trying to spew even more pollution into the atmosphere, isn't advertising a price of £75 when the true price is at least three times that amount an offense under Section III of the Consumer Protection Act 1987? Why does Trading Standards not act against this?
Duncan Hothersall, Edinburgh, Scotland

Is the world going mad? Surely environmentally-damaging air travel should be discouraged through high fares and tax on aviation fuel - not promoted through rock-bottom prices. And having flown to HK myself, I think you'd be mad to do it on a "no frills" basis - it's a long and uncomfortable journey even with frills.
Susan Grossey, Cambridge, England

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