General information on low cost airlines
Low cost airlines and their fares deeply changed the flight sector. A low cost (or no frills, or low fares) is an airline company that offers flights at very competitive prices (Cheap Flights) by not offering or by selling most of passenger services (like on-board meals, seats bookings, etc.). Cheap flights were born in USA in 1971 with Southwest Airlines, and started spreading in Europe at the beginning of the ’90s with Ireland’s Ryanair.
Statistics and history in brief
To point out the strong growth of low cost flights we will show a few stats: in 1994 about 3 million passengers flew low cost, most of them with Ryanair, and in 1995 they reached 17,5 million.
In 1995 British Airways founded their cheap flights division named Go, operating from London Stanstead airport in 1998. The same year Go started operating form London Luton as well. In the year 2000, Go was sold to EasyJet.com with an operational loss of over 21 million Pounds. In 2000 KLM also entered the low cost world with Buzz, which was bought over by Ryanair in 2003 with very high losses. Currently EasyJet.com and Ryanair are among the most successful European low cost airlines, and operate over several hundred routes.
Today’s market situation sees a strong and constant growth of the cheap flights sector, new routes being opened every day by all main airlines, In the future a strong growth of low cost companies it is foreseen also in the long range flights segments.
Why low cost flights are such
Low cost airlines are very flexible and efficient organizations with a cost structure that is very different from the one of traditional airlines. Cutting many costs allows them to offer very competitive prices.
Costs are optimized mainly in the following areas:
– Tickets sales are direct, Internet being the main channel. By shortening the intermediation chain, costs can be deeply reduced.
– Smaller and cheaper airports are used, that are also less jammed by traffic.
– On-board services and crews. No meals are served. Fewer crew members are used, and airplanes need less cleaning.
– Full usage of aircraft capacity. Airplanes always fly full charge and fly more often to amortize costs. They have faster load/download times (25/35 minutes vs. 2 hours of traditional companies).
– Newer and all equal aircraft. Low cost companies fleets are made all of the same make of planes, all new ones and easy to service, in order to have them all at maximum efficiency.
Characteristics of low cost companies
To operate cheap flights, airlines must have specific characteristics to allow them to keep prices as low as possible. The basic ones are:
– A single passenger class, with free choice of the seating place.
– A single airplane make (in order to optimize service costs), such as Airbus A320s or Boeing 737s (for instance: Ryanair uses Boeing 737 series, EasyJet favors both Boeing 737s and Airbus A319s).