Right place, right price: The entry of low-cost carriers has transformed air travel

Since the liberalisation of the Moroccan aviation market and the signature of an aviation agreement with the EU in the mid-2000s, low-cost flights between Europe and the kingdom have played a major role in the growth of the Moroccan tourism industry. The advent of the era of low-cost flights has facilitated access to tourism destinations and low-cost carriers (LCCs) continue to expand into less-used airports. SEGMENT DEVELOPMENT The first European LCCs to fly to Morocco were easyJet and Ryanair, which both launched services to the kingdom in 2006. The development of the segment is largely a result of a the liberalisation of the Moroccan aviation market in 2004 and the subsequent signature in 2005 of an aviation agreement between Morocco and the EU – the first such agreement between the bloc and a non-European country – that went beyond traditional open skies accords and removed all capacity restrictions on flights. The agreement was implemented in 2006 and, according to the EU, contributed to 65% of the growth in aviation between the bloc and Morocco in 2004-11, as well as leading to a 37% fall in fares. While the agreement allowed for unimpeded access to the kingdom by all European airlines, most of the growth has been generated by LCCs. Efficiency at local airports has been a key factor to persuade budget airlines to expand their operations to Morocco. “What helps to attract LCCs is to ensure that turnaround times between landing and take-off are short. In Marrakech, this has been reduced to 25 minutes,” Dalil Guendouz, CEO of the National Office of Airports, told OBG. LCC market share has grown rapidly, rising from 9.5% of the market in 2005 to 39.8% in 2009, according to figures from the CAPA Centre for Aviation. Market share has stabilised at roughly that level since then; LCC penetration stood at 39.7% in 2011.

BENEFITS: The benefits for the tourism segment of LCC expansion in Morocco have been significant. By reducing prices and increasing capacity, the segment has played an important role in underpinning growth in tourist arrivals. The industry has also improved access to major tourism destinations in the kingdom. Before budget airlines started servicing the country, there were few direct scheduled flights from most European countries except France to cities other than Casablanca and, to a lesser extent, Marrakech. Now, however, travellers from Europe can fly direct to numerous cities, and LCCs continue to open up the hinterlands, with services from Europe now operating to airports such as Oujda in the east and Ouarzazate in the south.

MAJOR PLAYERS EXPANDING: Overall air passenger numbers in 2012 fell by around 3.6% to 15.1m, as a result of factors such as economic difficulties in EU countries. Ryanair is the largest LCC and the second-largest airline operating in the kingdom overall; as of the end of January 2013 it accounted for around 9% of weekly seat capacity, followed by fellow LCCs Jetairfly on 7.7%, easyJet on 7.2%, Air Arabia Maroc on 6.8% and Transavia on 1.5%. In January 2013, Ryanair announced plans to establish two new bases in the kingdom, in Fez and Marrakech, starting from the following spring.

PLAYERS: Other European LCCs operating in Morocco include easyJet, Transavia and Germanwings. The LCC easyJet operates out of five Moroccan airports (Agadir, Casablanca, Fez, Marrakech, and Tangier) to destinations in the UK, France, Germany, Italy and Switzerland, while Germanwings operates 22 routes to Austria, Croatia, Italy, Germany, Switzerland and the UK out of Casablanca, Nador and Tangier. Transavia of France operates of six airports in the kingdom: Agadir, Al Hoceima, Fez, Nador, Marrakech and Oujda.

In addition to the various European LCCs operating in the kingdom, Morocco also has a budget carrier of its own – AirArabia Maroc, a joint venture between Air Arabia and local investors that forms part of the Air Arabia group. The carrier’s hub is Casablanca’s Mohammed V Airport, from where it runs 13 routes, mostly to Western European countries, but also including flights to Istanbul and Alexandria. The firm is expanding quickly, having added six routes to its schedule in late 2012.