Why Long-Haul Low-Cost Airlines Always Go Bankrupt

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Writing by Sam Denby
Research by Sam Denby and Tristan Purdy
Editing by Alexander Williard
Animation by Josh Sherrington
Sound by Graham Haerther
Thumbnail by Simon Buckmaster
Select footage courtesy the AP Archive


  1. Alestra
    2 dagen geleden

    Im sure TUI and Condors passengers are around 80% people who booked a whole Holiday with TUI or another company. Only a little percentage is booking only the flight which is why i wouldnt call them low-cost Airlines

  2. DOM solanke
    DOM solanke
    8 dagen geleden

    As a Canadian we all know Westjet is not a low cost longhaul Airline, its literally the same prices as the legacy carrier Air Canada

  3. NekoRocket
    10 dagen geleden

    Aircraft Utilization also has a high R2 at 0.1439. Is there a reason this isn't considered in this analysis?

  4. Dukie Blade
    Dukie Blade
    16 dagen geleden

    You need to show us the regression because we need to see whether your linear model fulfills core assumptions in order for us to believe you inferences.

  5. Noah
    18 dagen geleden

    More ✈️ Plane ✈️ Videos!!! ✈️

  6. Serg
    22 dagen geleden

    "statistics" on a dozen of observations

  7. Arya Pourtabatabaie
    Arya Pourtabatabaie
    23 dagen geleden

    Please do a collab with TIK on the logistics of the WWII Eastern Front.

  8. aswler
    24 dagen geleden

    So interesting and clearly explained! I stopped travelling on a few European low-cost carriers because they started charging even for your standard-sized carry-on bag, only allowing a "purse" for free. I do not like this approach that they force me to reduce the size of my baggage even more. I am talking about Wizzair and Ryanair.

  9. jasonsuresh
    25 dagen geleden

    Norwegian made this mistake in the north of the UK. They started flights from Manchester, the most saturated market in the north of England, rather than going to nearby big cities that had no long haul flights (Leeds/Liverpool) where they could have swept up a burgeoning market. The airline industry is often held back by not enough out the box thinking and too much focused on the tried and tested - where success has been achieved it has been through changing the system like with Ryanair going into all the smaller airports that flag carriers hadn't even given a second thought to.

  10. Milan Svitek
    Milan Svitek
    25 dagen geleden

    R.I.P. Wow Air... Flying between Canada and Europe for a hundred bucks... Was nice while it lasted :(

  11. Chris Rebehn
    Chris Rebehn
    26 dagen geleden

    Loving this video, but you should have had a look at ownership and alliances, which appear to be a huge success factor besides network design. What sets TUI and Condor apart is that they are part of massive, fully integrated tourism companies. That means that when you go to a TUI travel agent, they will likely book you into a TUI-owned hotel and in a chartered seat on a TUI flight. Now, logically, the flights will go from where their customers are to where their hotels are while schedules and capacities are closely linked. I would assume that they fill most if not all of their seats throught this channel; I've literally never seen a TUI flight publicly sold online, you have to get a charter seat from your travel agent. Consider also that the highly profitable Condor had to be bailed out when their parent company (with its tour operators, hotels, and travel agencies) went out of business and the charter seats were lost. They also don't really have a hub model, they just depart from as close as they can to as many of their customers as possible. At the same time, Scoot, Jetstar, Azul and WestJet have codeshare and interline agreements with mainline carriers (the parent companies for the former two, and a whole lot of international airlines for the latter) which creates synergies between both business models and gifts the LCC with additional passengers who use them to connect to their final destination; the LCC owned by full service carriers are even strategically used to service low-frequency routes or leisure destinations to expand the mainline network. Lufthansa has used this logic to cut cost (and prices!) in the short-haul market when it transferred all routes outside their main hubs to Eurowings and had them open some to holiday destinations. Other LCCs partner with foreign airlines looking to expand their market access in certain regions without having to open new routes themselves - Air Berlin's fateful Etihad partnership was one of those. AirAsia X likely tried to emulate that model trusting in their own substantial route network in the region but failed to take into account that most of their feeder markets already have direct long haul flights (from BKK, SIN, CGK, HKT, DPS, etc.)

  12. GoinManta
    26 dagen geleden

    Got a question I havent seen answered yet.. In June ticket to Berlin is a one stop for $800 DC thru Frankfurt. Frankfurt Nonstop from DC is $1800. Guess what ?? Same flight to Frankfurt. Also when I try to get a one way ita cheaper to get a round trip... Can you Explain that..?

  13. fighter5583
    27 dagen geleden

    So from my understanding, when Norwegian tried doing Low cost long haul flights, they were setting themselves up to fail given the numerous carriers flying those same routes. Not to mention dealing with 3 huge airline groups.

  14. Gregor Alexander
    Gregor Alexander
    Maand geleden

    Damn, watching this in 2029 remembering when covid was harmless compared to now. 2020- the good ol’ days

  15. Serenity17
    Maand geleden

    I'm so sad wow air went out of business. The cost to go to Amsterdam is now 2.5x what is used to be... I didn't know how good I had it back then.

  16. karebu2
    Maand geleden

    So low cost long haul airlines are just messing with passengers by selling them food on a cart when it actually doesn’t cost them much

  17. tim berry
    tim berry
    Maand geleden

    Tui Is not really an airline. The vast majority of tui passengers are on package holidays booked with TUI therefore generating passengers that generally wouldn't exist without the package holiday.

  18. henanigans
    Maand geleden

    3:15 why are all of these regressions linear? I would think you'd get a better r²-value for at least some of them if you tried different graphs (exponential for example)

  19. Remco F. Gerritsen
    Remco F. Gerritsen
    Maand geleden

    So much math

  20. Cássio Lins
    Cássio Lins
    Maand geleden

    The fun thing is that Azul is actually the most expensive (in average) airline for domestic flights in Brazil.

  21. Double - You
    Double - You
    Maand geleden

    The sole reason West Jet is profitable is because Air Canada is just so damn bad, the could serve shit sandwiches for lunch and people would still fly West Jet.

  22. Jack McLane
    Jack McLane
    Maand geleden

    TUI is also a full scale vacation corporation with travel agencies, resorts and everything related to (upper) middle class vacationing. They can fill their planes also with their own customers. You can see that they primarily connect semi-exotic vacation destinations to europe. Other than vacationing, long haul flights are MOSTLY for business travellers... those that don't ultimately care about 50€ cheaper ticket prize, because it's not them that pay it. They prefer a juicy bonus program, lounge access and status miles. There are not that many people with intercontinental family ties.

  23. Thomas Gibbons
    Thomas Gibbons
    Maand geleden

    Ryan air??? Low cost????????

  24. Sailor
    Maand geleden

    tl;dr, blue ocean strategy good.

  25. Robert Andrews
    Robert Andrews
    Maand geleden

    What's the point of these subscription based learning programs? If passing a class doesn't help get a job, how can it benefit someone taking the classes? I'm guessing it's just if you want to learn something, if only the classes would help with credential.

  26. Charlie
    Maand geleden

    Jet star is owned by QANTAS, and does both long and short haul flights in Australia. It also helps that the biggest competitor to Qantas went under first with Ansett and then Virgin

  27. Aviraj Singh Mehta
    Aviraj Singh Mehta
    Maand geleden

    The R square values are a joke All the variables are not at all useful

  28. Kevin Lombardo
    Kevin Lombardo
    Maand geleden

    In the time since this has come out, norwegian has also gone under for long haul.

  29. Tim Thompson
    Tim Thompson
    Maand geleden

    Low cost in words! A myth, but not in price!...All added extras/baggage/food/seating...etc...Adds up to high cost scheduled travel.. Reason for Banktruptcy!

  30. Tegos
    Maand geleden

    Azul Airlines operated long-haul flights at reduced costs until 2019, I believe. I remember their flight from São Paulo to Fort Lauderdale was a lot cheaper than other flights from Brazil to the US. But from what I've seen in 2019 and 2020, they raised their prices to match other airlines in Brazil. I'm pretty sure the lower prices was a wonderful PR move for them, though. They've been regarded as the best airline in Brazil for a while now. PS: good job on your pronunciation of "Recife".

  31. Khalid Abdulghani
    Khalid Abdulghani
    Maand geleden

    Ironic how after this video was released Norwegian has permanently suspended long haul operations with their Dreamliner. 😢 hopefully not more to come though 🤞

  32. Shian
    Maand geleden

    3:15 Label your damn axes 🤦‍♀️

  33. hitempguy
    Maand geleden

    While the r2 of a linear regression can vary in the result, anything as low as 15% is for all intents and purposes useless. Not that I'd expect anything less from this channel. Pushing pseudo-knowledge of topics is not the same as being an expert, always hilarious when you run off the cliff of not knowing shit from shinola

  34. Lee247
    Maand geleden

    I see a Tui 787-9 every month at kingston BA competes with them with the 777 200ERs i would rather fly tui to where it goes in UK rather than BA

  35. Sergei Garbar
    Sergei Garbar
    Maand geleden

    Only Sami Puro knows the answer. )))

  36. ChrisYeoh
    Maand geleden

    Norwegian Long Haul is now kaput! The next one would be AirAsia X.

  37. LP Pokefan
    LP Pokefan
    Maand geleden

    Who is here after Norwegian decided to cancel it's long-haul business?

  38. tuban body slammer
    tuban body slammer
    Maand geleden

    R^2 of .36, .16 or .15 is not correlated at all, also the .36 you should remove the high leverage point at the top right. this video is rediculus

  39. Guilherme Moritz
    Guilherme Moritz
    Maand geleden

    By Brazilian standards AZUL is not a low-cost carrier, it is actually the expensive one, even in the long haul market. Brazilian's low-cost carrier is GOL.

  40. Pétrou Velteau
    Pétrou Velteau
    Maand geleden

    9:58 what the hell is that woman doing

  41. WithTheWorks
    Maand geleden

    Recognizing that 'data' is plural and using the appropriate grammar is my kink

  42. Lars Gravdal
    Lars Gravdal
    Maand geleden

    Here after Norwegian quitting long-haul to even stay afloat. Take a look at its share price to see how much they're struggling, efficiently bankrupt.

  43. Roberth Sjonøy
    Roberth Sjonøy
    Maand geleden

    Norwegian has just announced that they getting out of the long -haul business.

  44. Violan Miro
    Violan Miro
    Maand geleden

    Your method in using statics is fundamentally flawed. A R2 of 0.36 is not conclusive. Linear regression with only one variable is not the standard procedure. If you absolutely want to make a regression, you should do one with multiple variables and try different models. But you shouldn't even try using regression methods first, because you can't be sure that your variables are independent. Onr method that would be the more adequate if you think that your meaningful variables are linear dependent would be PCA. And even that would not be conclusive, bexause the size of the sample is so small. I am not an expert in statistics (geometric toplogy which is far off), but I am quite sure that what you did is a mathematical nonsense. You should read undergrad level statistics and you woukd understand what are the issues and with postgraduate books I am sure that you can find a method more effective.

  45. Shinbaal99
    Maand geleden

    I really miss long haul travel corona be damned!

  46. Alex Zetsu
    Alex Zetsu
    Maand geleden

    P-values not R squared should be used. An extreme case is if you only had 2 airlines to study, everything would be perfectly correlated. Likewise, as you get more data (or... maybe not since that would mean more low-cost airlines opening up and that would distort data by adding competition and making existing airlines less profitable rather than complementing existing data) other factors you dismissed as unimportant like GDP per capita of origin, aircraft utilization, aircraft capacity, might actually turn out to be important. Or maybe you'll find they still aren't imporant.

  47. Jake Day Williams
    Jake Day Williams
    2 maanden geleden

    All in on charters.

  48. Douglas
    2 maanden geleden

    Latam is a merge between TAM and LAN Airlines. TAM was always about quality, so you could consider it a full service. LAN I don't know since its from Chile. But one thing I can say for sure: LATAM is none of them: neither quality or cost, that is why Azul is growing a lot. Azul is cost AND quality. With a horrible competitor like that you definitely gets a fair share of the market.

  49. Douglas
    2 maanden geleden

    To summarize: flying still very expensive for a lot of people and they are already talking about tourism to Mars.

  50. Jordan
    2 maanden geleden

    Where did you find the dataset? Is it publicly available anywhere?

  51. Nihonium Mapping
    Nihonium Mapping
    2 maanden geleden

    It's pronounced Cebu Pacific, not Ceebu Pacific. Sorry, I can't stand it when the city I'm in is pronounced wrong.

  52. Nerte
    2 maanden geleden

    The auto-generated subtitles are completely messed up and unusable. Please, add actual subtitles to your videos - you probably read your script from the written form anyway.

  53. Zhi Han Lee
    Zhi Han Lee
    2 maanden geleden

    Scoot does short-haul low-cost flying too, after TigerAir in Singapore was merged into it in 2017 (it's Australian & Taiwanese subsidiaries were sold to VA & China Airlines respectively IIRC, who continue to retain it's original branding). Also Scoot might be relatively more financially secure as it's under SIA, with it's financial backing, & their low-cost & full-service flights respectively are also more co-ordinated, reducing canibilisation of each other's markets for flight routes e.g. Scoot flies from SIN to numerous smaller cities not (or formerly) served by SIA e.g. Nanjing

  54. Fernando Campos
    Fernando Campos
    2 maanden geleden

    Simply nailing the pronunciation of "Recife", I'm impressed! Hahaha

    2 maanden geleden

    R^2 values are extraordinarily low to draw strong conclusions here my dudes

  56. Allie Gottuso
    Allie Gottuso
    2 maanden geleden

    The distinct tomato minimally squeak because jute proximately chop alongside a delicate whorl. bawdy, slippery bail

  57. pipiligrama
    2 maanden geleden

    Can’t even imagine how would it be to fly NY to Sidney with a fucking mask on...

  58. Max M.
    Max M.
    2 maanden geleden

    Great Video

  59. Shivang Yadav
    Shivang Yadav
    2 maanden geleden

    This person sounds like half n intersting channel person but with not humour

  60. Agon G
    Agon G
    2 maanden geleden

    I wouldn't call westjet "low cost" given for all their routes I've flown they are exactly the same cost as air canada or even more expensive sometimes.

  61. Isip
    2 maanden geleden

    Cebu Pacific: does everything that they should not do Also Cebu Pacific: profit

  62. Maximiliano Leon
    Maximiliano Leon
    2 maanden geleden

    So its more profitable to find your niche than to compete with the big boys

  63. Artur Castro
    Artur Castro
    2 maanden geleden

    Calling R squares of 0.16 and 0.36 very significant is a bad analysis at best

  64. AleParmi
    2 maanden geleden

    I'm not entirely sure that creating demand is the only key factor for success in this case. Condor and TUI have a very strong connection to tourist platforms and agencies. People buy holiday packages with the flight included. This is proven by the fact that buying a flight tickets only, with TUI and Condor, is much more expensive than purchasing it within a package.

  65. Max
    2 maanden geleden

    woah you sound just like half as interesting, like literally the same wtf

  66. Lars Vos
    Lars Vos
    2 maanden geleden

    Tui has another thing that works in their "favour" the flights they operate are (mostly) part of a package deal they offer, since they also own a lot of the resorts/hotels at their destination. So they are just feeding their own destinations. Yes they also sell seperate tickets but most people fly them because they booked a package deal with them. They kinda create their own demand, and since they oparate all over europe its easy for them to switch/send aircraft to where demand is more needed. (All pre-covid offcourse) during covid they were offering a lot of flights to places where it was still allowed/safe to travel like the Canary islands, Aruba, Bonaire and Curaçao where they would be feeding their own destination. And they could easily adjust demand depening on the status of their destination (green,yellow or red)

  67. Steindele
    2 maanden geleden

    Thanks for your awesome videos!!

  68. Šimon Vávra
    Šimon Vávra
    2 maanden geleden

    9:48 omg that beautiful Prague!!

  69. Andrey Kelip
    Andrey Kelip
    2 maanden geleden

    in 2020 ALL airlines go bankrupt.... ((((

  70. Professor Sandwich
    Professor Sandwich
    2 maanden geleden

    Anybody know what is the equivalent of a low demand, low competition job in electrical engineering? Asking for a friend 👀

    1. andrei lin
      andrei lin
      2 maanden geleden

      Male escort👀

  71. Justice Warrior
    Justice Warrior
    2 maanden geleden

    You did better RND than high paid CEOs in these companies!!!

  72. Harsh Deep
    Harsh Deep
    2 maanden geleden

    Stat people in the comments: ???? all these correlations are hella weak.

  73. Chris Skuse
    Chris Skuse
    2 maanden geleden

    West jet is not low cost or at least they’re trying to leave that market/reputation

  74. little boy man
    little boy man
    2 maanden geleden

    and ill KEEP flying westjet because one time a westjet flight attendant complimented my totoro necklace

  75. Stairway to Motivation
    Stairway to Motivation
    2 maanden geleden

    I appreciate your efforts put into the research and analysis. It's really great to see the aviation-related topic in the form of substantive video material that others can share and easily understand. However, your work is missing some crucial factors that answer why some airlines are successful, and some are not. Condor and TUI are in fact leisure and charter airlines, most of their seats were sold to tour operators, with TUI Airways (and subsidiaries) being a part of TUI Group, a tourist tycoon. Condor was owned by Thomas Cook, before its bankruptcy, then a new owner was sought, which was not found, the airline also had an affair with LOT Polish Airlines (in conjunction with the Polska Grupa Lotnicza), and 30% of the passengers were delivered by the Lufthansa Group, which was a feeder to Condor. It is not entirely appropriate to compare them with the other low-costs. It is a different business model. Eurowings was looking for its recipe for success, and the Germans did not really know what to do with it. The airline was successful on short-haul routes but unsuccessful on long-hauls. Before the COVID-19, Lufthansa Group was planning to launch new long-haul leisure, charter carrier, to replace Eurowings. Jetstar is a part of Qantas Group, while Scoot of Singapore Airlines Group, they are utilizing budget niche on their markets. Cebu and Azul are successful examples of low-cost airlines, but this is due to the markets they serve. Norwegian and Air Asia X sought success unsuccessfully, with the Norwegians effectively burning money on long-haul routes. WestJet was transitioning to a full-service carrier and launched its ULCC subsidiary - Swoop, flying only short and mid-haul. WOW Air failed, as Iceland market was not enough for two carriers, and they were not able to duplicate Icelandair's hybrid business model and strategy. So that is how it should be described, but you were right in the end. The clue is that the only scalable way for low-costs to succeed on long-hauls was to serve the tourist traffic, with charters and leisure routes, in cooperation with large tourist partners.

  76. Bernard von Schulmann
    Bernard von Schulmann
    2 maanden geleden

    I think having WestJet on this list is not really correct. WestJet flys almost all its flights within Canada, which by nature makes their flights long but they are the only serious competition within Canada to Air Canada. WestJet uses the low-cost airline model but in this case in a very restricted market. WestJet will add and drop routes within Canada depending on demand, and they do this rather quickly. They will try a route for six months and then drop it, or make it only seasonal. WestJets international flights are almost in the winter months from Canada to warn holiday destinations. This has always been a very large charter market within Canada with low-cost flights. Because of the size of Canada and the linear nature of where the population lives, even with a population of only 37,000,000, the country has a lot of air travel across the nation. The restrictions against non Canadian airlines means the market here is well suited to an airline duoploy

  77. Max T.
    Max T.
    2 maanden geleden

    norwegian is blessed honestly

  78. MadsPlayz
    2 maanden geleden

    RyanAir: Are you sure about that???

  79. Liviu Dnistran
    Liviu Dnistran
    2 maanden geleden

    Great content. One small mention about TUI and Condor. The majority of their passengers buy those seats with a holiday package attached. TUI and Condor fly mostly as part of a holiday package and that's why they are the only company flying MUC-CUN(one exampe) direct in the middle of european winter. Even though they sell tickets to the mass market, most of the plane is full of holidaymakers going to a warm place in winter.

  80. Starchy
    2 maanden geleden

    *mentions Cebu Pacific* Filipinos: Thou have summoned us!

  81. Reza Pratama
    Reza Pratama
    2 maanden geleden

    English subtitle please, i dunno why the automated translate is only vietnamese

  82. brickson98moto
    2 maanden geleden

    Just for reference, I’m watching this while taking a shit on a southwest flight. And I just heard the seatbelt light come on. Time for some shitty turbulence! Lol

  83. Sahil Singh
    Sahil Singh
    2 maanden geleden

    More Give me more videos this isn't enough for me

  84. John von Shepard
    John von Shepard
    2 maanden geleden

    Taishou hi

  85. YQR Aviation
    YQR Aviation
    2 maanden geleden

    WestJet isn't low-cost anymore. They've got a full business class and economy premium layout on their new Boeing 787-9's and launched Swoop as a low-cost alternative. I'm surprised you didn't include Air Transat though

  86. ricardo gurgel
    ricardo gurgel
    2 maanden geleden

    Azul (from Brazil) aren't a LOW COST, NO WAY

  87. Marcus Bates
    Marcus Bates
    2 maanden geleden

    Who is here after the Reddit post in Bad Economics? 😂

  88. Qatar001
    2 maanden geleden

    Thats why AirAsia X is not that cheap

    1. Qatar001
      2 maanden geleden

      @madscientist 666 nice

  89. Jose Luis
    Jose Luis
    2 maanden geleden

    Nice video!

  90. Josh Thiele
    Josh Thiele
    2 maanden geleden

    Jetstar isn't just a long-haul airline though, they pretty much are the EasyJet of Australia, and most people tend to fly with Jetstar if they want the cheap flights domestically.

  91. Craig Martin
    Craig Martin
    2 maanden geleden

    Westjet certainly started out by doing all the right things, cherry-picking high-profit, low-competition routes in under-served markets. Now they still do a lot of that but more recently just compete directly with Air Canada and are no longer low-cost.

  92. Papi
    2 maanden geleden

    Emirates is essentially a long haul low cost airline and it's spectacularly successful

  93. Daye Bajela
    Daye Bajela
    2 maanden geleden

    Joon wasn't a LCC, it was an AF subsidiary whose business model never really made sense and so it was pulled during a restructure

  94. Justin Santiago
    Justin Santiago
    2 maanden geleden

    The decisive anthony july wriggle because unshielded paradoxically label between a uttermost pvc. temporary, equable saxophone

  95. B Nurse
    B Nurse
    2 maanden geleden

    Why would I want to fly a cramped budget airline long haul with no legroom and no IFE when I can fly in comfort on a full service carrier? Maybe that could be behind why long haul budget airlines keep losing money.

  96. castlerock58
    2 maanden geleden

    Westjet is a short-haul, high quality airline that has recently added some long-haul high quality routes. It used to be Canadian Pacific which had long-haul flights and an excellent reputation for service. It sold its long-haul routes but still had a good reputation for service. It has recently started doing some long-haul routes again. I have never heard it called low cost. It doesn't belong in this video.

  97. Patricia Sabay
    Patricia Sabay
    2 maanden geleden

    Cebu Pacific has always been reliable imo even when we still lived in the Philippines. It makes sense for us to travel from one island to another with Cebu Pacific (w/ the same # of hours) than travelling with Philippine Airlines. Also, Cebu Pacific always go on sale with their airplane tickets.

  98. Ajit
    2 maanden geleden

    Thomas Cook wasn’t really Long Haul Low Cost, it was a holiday maker that sold package deals like TUI, and they went bust because of Retail side of the company. At the time Thomas Cook went bust, the airline arm was actually generating profit, not much something like £1m annually.

  99. xamdun
    2 maanden geleden

    Westjet is definitely not a low cost airline, it's just Air Canada lite. Exact same ticket prices for most routes.

  100. Matthew Drummond
    Matthew Drummond
    2 maanden geleden

    1:32 *He said the C word.* YT is going to be upset. 😏