A good low-cost carrier low cost airline (also called a no-frills or discount carrier/airline) is an airline that offers generally low fares in return for the removal of traditional customer services. The idea comes from USA before spreading to Europe in the early 1990s and then to the rest of the world. The term comes from within the airline industry to refer to airlines with a lower operating cost structure than their competitors' competitors. Through the media, the term has since gone on to define any carrier that offers low fares and limited services regardless of operating costs.
Business model
Typically a low-cost airline has a business model that includes:
- Only one passenger class
- Use only one type of aircraft (usually Airbus A320 or Boeing 737), reducing training and operating costs.
Minimal optional equipment on board, often modern amenities such as ACARS, to further reduce purchase and maintenance costs.
A simple fare scheme, like charging a one-way fare ½ round-trip fare (typically fare increases as the plane is nearly full, rewards early registrants)
Reservations are not allowed (passengers are encouraged to check-in quickly and early)
Fly to cheaper, less congested secondary airports and fly early in the morning or late at night to avoid air traffic delays and take advantage of low landing fees.
Fast turnaround time (maximum use of aircraft)
Simplified routes, emphasizing point-to-point transportation rather than transit through a hub airport (increasing frequency of use of an aircraft and eliminating delays due to late arrivals or baggage) lost due to connecting flights).
Emphasis on direct ticket sales, especially over the Internet (avoiding fees and commissions paid to travel agents and Computer Reservation Systems).
E-tickets or no tickets are recommended
Employees take on many different roles such as flight attendants who also clean or work at the check-in gate (limiting personnel costs).
Free food and press services are eliminated. Those who want to be served must pay for themselves.
Aggressive fuel hedging programs.
"Unbundling" of ancillary charges (showing airport fees, taxes as separate charges rather than as part of the advertised fare) to make the "headline fare" appear lower.
Not every low-cost airline does all of the above. However, these are the general features that most low-cost airlines apply to them.