Digital Natives: LCCs still rule in online engagement

This analysis initially appeared as a guest post on travolution, entitled Low-cost carriers still rule in online engagement

One innovation that low-cost carriers brought to the airline industry is a staunch focus on direct online sales, at a time when the established full-service carriers still relied largely on the GDS. But strategy differences are narrowing, with Lufthansa looking to slap a surcharge on indirect bookings, and Ryanair opening up their seat inventory for sales partners.

What does this strategy shift mean for airline online engagement? Do LCCs have a towering lead in online visits, or did the legacy carriers catch up with their direct brand traffic?

To address these question we extend our earlier findings on airline digital performance and put the business model in the spotlight, distinguishing between full-service and low-cost carriers. We use the same dataset of 40 leading airlines – including the top 10 in the world and most European LCCs – and online traffic data from SimilarWeb. To keep the analysis simple we use a linear regression model to control for differences in airline size (as measured by 2014 annual passenger numbers).

What is an LCC?

LCCs is a highly heterogeneous group. To get a better understanding of the difference in online engagement between FSCs and “real” LCCs we have identified three low cost subcategories: LCCs by birth, Spin-off LCCs and low cost charters. LCC by birth, a “real” LCC established to or turned to the low cost model at the early stage. This group includes also those low cost airlines that have been purchased by a FSC group. Spin-off LCCs are the low cost airlines established and owned by traditional airlines. Finally the last category, charters, includes airlines that combine scheduled operations with charter flights.

LCCs by birth have 56% more online engagement than the FSCs

To show how different are the digital strategies between those categories and how “real” LCCs outperform full service carriers we have prepared the following plot.


The dashed lines represent the model predictions for FSCs and LCCs by birth. Logarithmic scale allows to interpret the distance between the lines as a percentage difference.

  • LCCs by birth 56%
  • “Real” LCCs, when separated from their digitally sluggish cousins, prove to keep a strong, 56% advantage in online engagement over the FSCs. Direct traffic gives those airlines possibilities to upsell during the booking or to push ancillaries in the online check-in process. They are clearly not missing out on this opportunity.

  • Charters 53%
  • A number of LCCs combines scheduled and charter flights. They stand out as a group with comparatively few online visits – not surprising, given that their flights are typically sold indirectly as part of a larger holiday package. Monarch, a British carrier, lifts this category up. The airline, despite initial troubles, successfully switched from operating mainly charter to flying over 80% of scheduled operations and succeeds to attract online traffic at FSC level.

  • Spin-off LCCs 69%
  • Low-cost spin-offs founded by FSC struggle to establish an online brand, trailing far behind their corporate parents. But it is not the ownership that prevents them from spreading their digital wings. LCC airlines that are fully owned by FSCs parents but started independently manage to keep attracting visitors to their websites. They do so even if they operate flights for the parent company (as for example Germanwings).

Top FSCs dominate social media

While the wide LCC group performs on par with the FSC, the “real” LCCs lead is unquestionable. However, a number of FSCs can already compete with the leading LCCs in attracting visitors to their websites. Unsurprisingly, those greenish dots above the upper blue line on the figure, are the airlines that dominate social media usage of all travel companies – KLM and Emirates.

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