LCC Introduction

The Low cost airline concept began in America with Southwest Airlines in Dallas, Texas. The original South West low cost model consisted of the following :

Fares : Unrestricted and low price
Network : Point to point high frequency routes
Distribution : Travel agents and call centers, no tickets
Airport : Secondary airports with short turnaround times
Fleet: High utilization, same type of aircraft across the fleet

Southwest Airlines commenced customer service on June 18, 1971, with three Boeing 737 aircraft serving three Texas cities. In 1989 its revenue exceeded a billion-dollar. Southwest is now the biggest airline in the USA and the second biggest airline in the world.

Although the model is called “Low cost” and indeed providing low fares to passengers is an important part of the model, but the rest of the model should not be neglected.

Ryanair was the first European airline to use this model. It was stablished in 1985. It operated daily flights on a 15-seater aircraft, operating daily from Waterford in the southeast of Ireland to London Gatwick. It carried 5000 passengers in the first year.
Today Ryanair is Europe’s Number 1 airline, carrying over 130 million customers per year on more than 2,000 daily flights connecting 215 destinations in 37 countries on a set of 430 Boeing 737 aircraft.

Most Low cost airlines in Europe sell their tickets exclusively over their website or over the phone, and tickets are not available via travel agents. Most are ticketless; you simply turn up at the check-in desk or even just at the departure gate with your passport and confirmation number.

The pricing structure is complex, with fares fluctuating strongly according to demand, often on an hourly basis, but the same “charge as much as the passenger will pay” principle that was invented by traditional carriers applies. There are no hard and fast rules for obtaining the cheapest fares. In fact, fares can vary from as little as €1 or €2 on special promotions, right up to €700 – such as a London-Geneva return flight, during the February half-term weekend (winter holidays in most of the schools).

For most traditional airlines it is possible to book a flight from A to C with a connection at B on a single ticket. For many low-cost carriers, this is not possible as they only offer single “point to point” flights. To make a connection with a low-cost carrier, you need to purchase two separate tickets, one from A to B, and another from B to C, and these count as separate contracts.

Low cost airlines are often much stricter about their fares. For example, you have to pay an extra fee for your baggage, e.g. 25 € one-way at Ryanair. While in traditional airlines they usually allow some baggage over the weight limit.

Food is usually not served during the flight, or it is available for a fee. In-flight entertainment isn’t normally provided

Most Low cost airlines try to lower airport fees, so they often use smaller and more distant airports, sometimes quite far away from the city they state they fly to.

Low cost airlines do not wait for late running passengers, since an idle plane waiting for a passenger costs money. Check in desks shut promptly at the advertised time. If you are one minute late, they will not let you check in. Also, if you do not get to the boarding gate in time, you may find the plane gone and your luggage sitting on the ground. In these circumstances you will not get a refund, but you may get a transfer to a later flight if there is room.

our cost strategies

The Low Cost Airline Model Is Based On Managing & Minimizing Unnecessary Costs


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