Low Cost Carriers help to put Luxembourg on the map

If you were to ask most people to point to Luxembourg on a map of Europe, many would fail to correctly identify the small land-locked country. Sandwiched between Belgium, France and Germany and just under 1,000 square miles (2,585 square kilometres) in area, it may be home to a population of just 600,000, but is among the wealthiest countries in the world when measured on a gross domestic product (GDP) per capita basis.

Its capital, Luxembourg City, is, together with Brussels and Strasbourg, one of the three official capitals of the European Union and the seat of the European Court of Justice. This has helped it to sustain a limited schedule of passenger flights dominated by flag carrier Luxair and develop into a major freight centre through the activities of Cargolux. However, in recent years maturing low cost carriers (LCCs) have started to see its attractiveness to support not just a push for higher yield travellers, but also as a gateway into the Benelux region.

In a recent analysis on the country’s sole international air gateway, Luxembourg Findel International Airport, CAPA – Centre for Aviation identified through its airport charges database that costs (combined landing and terminal charges) were considerably lower than in neighbouring countries. This also highlights the increasing interest from the LCCs despite the limited home market.

It is approaching five years since easyJet became the first LCC to arrive in Luxembourg with flights from its London Gatwick base at the start of the winter 2012/2013 schedule. It is currently also offering flights to Lisbon, Milan and Porto and offering almost 300,000 seats in and out of the country and a link to Berlin will follow from October 2017.

Spanish carrier Vueling followed its rival into Luxembourg in May 2013 with a link from Barcelona and Ryanair introduced flights in September 2016, initially from London Stansted and Porto. It has subsequently grown its network to also include Bergamo, Lisbon and Madrid with flights to Barcelona scheduled to commence this winter.

The Blue Swan Daily analysis of OAG data shows that LCC penetration at Luxembourg Findel has now reached 14.8% based on summer 2017 schedules and is forecast to rise to 19.6% for the forthcoming winter 2017/2018 season, based on published schedules. This still remains low compared to peer airports in nearby countries such as Cologne/Bonn in Germany; Liege in Belgium; Maastricht-Aachen in the Netherlands; and Strasbourg in France, but represents a rapid rise in less than five years.

With its dominant presence in Luxembourg, national carrier Luxair has unsurprisingly been the hardest by the growth of the LCCs in the country with its own share of capacity slipping from 70+% ahead of their arrival to 55.1% this summer and down to an estimated 46.5% share in winter 2017/2018 as the LCCs grow their networks. The schedule variances are exaggerated by Luxair’s increased network during the summer season.

CHART – The rise in low cost carrier penetration in Luxembourg and its impact on flag carrier Luxair (summer 2007 – winter 2017/2018)Source: The Blue Swan Daily and OAG