"although business travellers might be willing to pay top notch to fly last minutes on a loco for a 2 hours flight, why would they want to pay the same high economy fare for a no service airline when they could go to BA
This is a primary reason why a TATL LoCo won't work - the current full-service players already supply an overabundance of low-fare seats, depriving the LoCo of a sizeable niche in which to turn a profit.
Additionally, longhaul flying involves high fixed costs and operational constraints which do not allow LoCos to maintain a meaningful cost advantage against the full-service carriers - a LoCo 762 on PAR-EWR
will spend just as much time on the ground going through customs and cleaning as a CO
762 on the same route. Therefore, the LoCo loses the advantage of fast turnarounds and increased utilization vis-a-vis its full-service rivals.
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