Simon Calder: Thank you, Stelios, for the no-frills democracy in the sky

'A friend routinely buys cut-price seats and decides whether to travel at the last moment'
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The Independent Online

Want a cheap flight to Madrid? Try Aerolineas Argentinas from Heathrow. Rome? You want Kenya Airways. Copenhagen? The Brazilian airline, Varig. But don't go direct, book through a bucket shop.

Want a cheap flight to Madrid? Try Aerolineas Argentinas from Heathrow. Rome? You want Kenya Airways. Copenhagen? The Brazilian airline, Varig. But don't go direct, book through a bucket shop.

Five years ago, that was precisely the advice I gave readers wanting budget flights within Europe. The traditional airlines could charge what they liked, because the only significant competition was aboard European legs of intercontinental flights on obscure airlines. British Airways' profits were flying high, and all was well within the cosy world of aviation. Yet in five years, our perceptions of travel in Europe have been comprehensively overturned.

The weather was blustery on 10 November 1994, and few people turned out to watch an absurd-looking Boeing 737 begin its take-off roll at the much-maligned Luton airport. The sight was as ridiculous as, say, attempting a diamond heist at the Dome. Someone had painted human-sized, bright orange digits along the fuselage. Closer inspection revealed they comprised a telephone number. The first part was the dialling code for Luton; the second component, 29 29 29, was telling people that the fare from Luton to Glasgow was £29. Edinburgh flights - same price, same absence of free newspapers and snacks - began the following day.

Stelios Haji-Ioannou, the man who had persuaded an affiliate of British Airways to lease him a couple of planes, realised that painting your phone number (or, these days, internet address) on the side of your planes saves on the marketing budget. The no-frills business hinges upon nailing costs down - by flying planes for more hours each day, using secondary airports where fees are low and turnarounds fast, eradicating tickets and dispensing with travel agents' commission.

It was not a new idea. Southwest Airlines developed the no-frills concept in Texas back in 1971, and has since become the most successful airline in the world. But Stelios, as the gregarious Greek millionaire prefers to be known, was first to introduce the concept in Europe.

Soon, across at Stansted, an Irish airline decided to take advantage of the EU's "open skies" policy (loosely defined: you can fly anywhere you like within Europe, as long as it doesn't include Heathrow) by setting up a base amid the wide open spaces of Norman Foster's lovely but empty Essex airport.

The new boys adopted unusual market-research techniques: one easyJet executive evaluates the leisure/business split on each flight by counting the proportion of passengers wearing ties. A Ryanair director explores the car parks, decoding car registration plates to determine his customers' catchment area. Every study shows that new entrants on air routes stimulate markets. Between London and Barcelona, for example, no-frills airlines have helped to treble traffic in the past five years. But they also force fares down, which spells trouble for airlines with a high cost base.

In response, British Airways started its own no-frills version ("clone", insists Stelios) of easyJet, called Go. In three years, Barbara Cassani, the American-born chief executive, has created an impressive operation. BA has pumped £25m into an offshoot that is now worth perhaps 20 times as much. So why would the airline want to put its high-achieving corporate child up for adoption? Why, especially, when Stelios has pronounced that "in 10 years' time, all aviation in Europe will be no-frills"?

Partly, because Go has been an unruly child, competing head on with BA alone on a couple of routes. Within the past week, Go has launched flights to Glasgow and Belfast that are sure to "cannibalise" the traditional Shuttle market. And because BA is betting that Stelios is wrong, and that the airline can command a premium for frequent, full-frills departures from Heathrow.

Half a billion pounds from the sale of Go will help BA's new boss, Rod Eddington, turn around an airline that has drifted off course. Yet by selling Go, he may unwittingly help to open up the airline business.

As venture capitalists start eyeing up the prospects in aviation, our philosophy towards travel is changing, too. A friend routinely buys up a flight whenever Ryanair has a cut-price seat sale, and decides at the last minute whether or not to travel - after all, her flight costs less than the ride on the Stansted Express out to the airport.

Some people have swapped a country cottage in the Cotswolds for a farmhouse in France or a finca in Majorca - the commuting time, and travel costs, are much the same, and the climate tends to be a tad more agreeable. The notion that aviation can be simplified, demystified and democratised has been wholeheartedly embraced by the travelling public, and we are not about to give it up and go back to the bucket shop.

* s.calder@independent.co.uk

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