A. Vidović, S. Steiner, R. Škurla Babić IMPACT OF LOW-COST AIRLINES ON THE EUROPEAN AIR TRANSPORT MARKET IMPACT OF LOW-COST AIRLINES ON THE EUROPEAN AIR TRANSPORT MARKET Andrija Vidović, Sanja Steiner University of Zagreb Faculty of Transport and Traffic Sciences Vukelićeva 4, 10 000 Zagreb, Republic of Croatia avidovic@fpz.hr, ssteiner@fpz.hr Ružica Škurla Babić University of Zagreb Faculty of Transport and Traffic Sciences Vukelićeva 4, 10 000 Zagreb, Republic of Croatia skurla@fpz.hr ABSTRACT The European air transport market has been recently swamped by the low-cost airlines. Currently there are 50 such airlines operating in Europe and their number is increasing daily. The share of low-cost airlines is expected to rise by the end of 2006 to more than 30 per cent among air carriers. The cheapest fares on the flights advertised by low-cost airlines (LCA) are sold out months in advance, and this gives rise to a justified question whether the cheap air tickets so alluringly offered to passengers on the internet pages are merely a marketing ploy and what are the real benefits of travelling by low-cost airlines. This paper will analyze the positive and negative impacts of low cost carrier operations on Croatian air traffic. 1 INTRODUCTION Low-cost air airlines offer in fact nothing more but the seats in the aircraft. Cheap air tickets can be found only if they are reserved months in advance; otherwise, travelling by such airlines costs almost as much or just a little bit less than travelling by "traditional" air carriers. During flight no beverages or food are served, and the comfort has been reduced because of greater number of seats and maximum utilization of the passenger cabin. Another disadvantage is that the aircraft of low-cost airlines mainly land at less frequented airports, which allows great savings to these companies, but the passengers have the additional costs because these airports are often even more than 50 kilometres away from the city centre. There is no doubt that such air carriers are needed in the Republic of Croatia, but they are primarily ideal for persons who have excess time and do not care when they will reach their destination and whether the journey there will take two or twenty hours, but the crucial thing is to have it cheap. However, it would be wrong to claim that the low-cost airlines can replace the scheduled airlines since today safety plays an important factor in selecting the air carrier. Besides, the appearance of low-cost airlines has positively influenced the pricing policy of regular carriers who, whether they like it or not, have to introduce new tariff systems with significantly lower fares.