By Rajan Datar Presenter, BBC Fast Track

Flight EZY 8909 is welcomed to Amman with a water cannon salute

Jordan is the latest destination for budget carrier Easyjet and arguably another milestone in the story of low-cost carriers. Their arrival in the 90s was a wake up call for the rest of the industry but today the divisions are increasingly blurred.

Easyjet is now 15 years old and wants to take on the grown-ups as the first no-frills carrier to go from Europe to the Middle East, entering a new phase of expansion and sending a message to customers, rivals and governments.

With some exceptions, it does seem that low-cost carriers increasingly want to compete on customer service with the old boys.

But with no in-flight entertainment, some customers may not see it that way.

"On any flight today, most people have their own entertainment; they have their DVDs, they have their earpieces, they have their iPods," argues Carolyn McCall, Easyjet's CEO. She believes that providing no entertainment is a better option.

MORE FROM FAST TRACK What will airports of the future look like? On board the Airbus A380 A day in the life of BA CEO Willie Walsh How passenger planes of the future might look Is there a future for business class travel?

The budget airlines have created new local economies based around the routes they have opened up over the years, and with this in mind, Easyjet's new hosts in Jordan are enthusiastic about their arrival.

Tourism makes up 15% of the country's economy and it wants to sell itself as an oasis of calm in a troubled region.

"We're looking at it as a long partnership - a partnership that we would like to see growing in the coming years and expanding to other destinations," says Nayef Al-Fayez, managing director of Jordan's tourism board.

Price dripping

The flight for early bookers on Easyjet to Amman can be as little as $150 (£91) return. But book later, tot up all those extra charges and prices creep far closer to the premium carriers. It is a practice all low-cost airlines use, known as price dripping.

"The general perception is that the whole low-cost model is riddled with ancillary charges and airlines have to be careful that that doesn't kill the goose that laid the golden egg," says Tim Jeans, former commercial director at Ryanair.

Easyjet are tapping into the business travel market

America is 20 years ahead of the curve in low-cost travel, with the likes of South West creating the blueprint for the low-fare gate-crashers.

But today, South West is going upmarket with 400 planes and three million customers. And on some routes it provides a choice of six flights a day.

Studies in the US reveal the old divisions between legacy carriers and the budget airlines are becoming blurred. The gap in prices between the two models is now only 14% on domestic flights.

"In the United States they have never been this close," says aviation expert Oliver Fainsilber.

"The low-cost airlines used to have a cost advantage from having very modern fleets that did not require maintenance in the early years.

"They had their pick of routes where they could thrive, but as you grow and have to chase new markets - it's difficult."

Direct competition

In Amman and on other routes, Easyjet is attracting passengers from the so-called "visiting friends and relatives market" - with some making eight or nine trips a year.

Low-cost travel is not at an end, but the era of ultra-low cost travel - the 50p (81c) fares, the £5 ($8.16) fares - most probably is Tim Jeans, former commercial director at Ryanair

But Easyjet is now especially keen to target the business traveller market with new flexible fares offering free luggage, check-in and priority boarding.

"They are beginning to appoint a corporate sales force. If anything was a sign of stealing the clothes of British Airways, that is," says Mr Jeans.

Many low-cost carriers are turning to primary airports and hubs, seduced by lower landing charges.

Air Berlin is increasing its longer-haul routes and its hub at the city's airport. Iceland Express now flies to Boston, Chicago and New York.

Meanwhile, the rising costs of taxes and oil are hitting some budget airlines in Europe disproportionately hard and closing the cost gap with the legacy carriers.

"Low-cost travel is not at an end, but the era of ultra-low cost travel - the 50p (81c) fares, the £5 ($8.16) fares - most probably is, not least because taxation is bearing down on air travel in a disproportionate way compared with other modes of transport," says Mr Jeans.

The legacy carriers are cost-slashing by chopping fleets, routes and employees.

And their coffers are being boosted by charging for insurance, sports gear, seat selection and food - no longer taboo for the premium carriers on short haul anyway.

Core business

We're good value, we're not always cheap, we are sometimes but not always - we are cheerful Carolyn McCall, CEO Easyjet

In moving to destinations like Amman, Easyjet is opening access to tourist honeypots like the Dead Sea, the Wadi Rum desert, Petra's Roman ruins and Jordan's diverse nature and ecology.

But how far can it go - literally?

"It's difficult for a low-cost airline to go long distances because you start adding complexity to your system," says Mr Fainsilber.

"If your crews have to sleep overnight somewhere, if you need technical support in far away places, you are essentially changing your business model."

So far there are no indications of Easyjet entering the very long haul market like India. Its core business is still short haul.

Is Easyjet happy to be called cheap and cheerful? "No," says CEO Ms McCall.

"I think low fares with great service. I'd be happy with that. We're good value, we're not always cheap, we are sometimes, but not always. We are cheerful. I'm happy with that bit."

You can watch Fast Track on BBC World News on Saturday at 0430, 1230 and 1930 and Sunday at 1930 GMT

E-mail this to a friend

Printable version