Fly Low Cost

What is Low Cost

This site has been called "Fly Low Cost" because it focuses on those business and/or pleasure travelers that consciously control their travel costs and on the airlines that characterize themselves as being "Low Cost" or "Low Fares" airlines, because of their pricing concept.

History

Twenty-nine years ago, Rollin King and Herb Kelleher got together and decided to start a different kind of airline. They began with one simple notion:

If you get your passengers to their destinations when they want to get there, on time, at the lowest possible fares and make darn sure they have a good time in doing so, people will fly your airline.

And you know what? They were right. Within 28 years, Southwest Airlines became the fifth largest major airline in America, flying more than 57 million passengers a year to 57 great cities (58 airports) all over the Southwest and beyond. And they do it over 2,600 times a day. Southwest has more than 330 of the newest jets in the nation, with an average age of 8.4 years.

In May 1988, Southwest were the first airline to win the coveted Triple Crown for a month - Best On-time Record, Best Baggage Handling, and Fewest Customer Complaints. Since then they've won it more than thirty times, as well as five annual Triple Crowns for 1992, 1993, 1994, 1995, and 1996.

Southwest has become the classical example for the later low costs airlines to be founded and for some of the low costs – low fares spin offs of various major airlines.

Currently low cost airlines can be found in North America, Europe, Africa, Australia (Oceania) and Asia, and new low budget airlines are still being established. As far as we know now, no low cost airlines are being operated in Central America, South America, the Caribbean and the Middle East. The main countries currently operating low cost airlines are Canada, the USA, Australia, Japan, Thailand, South Africa, the UK, the Netherlands, Belgium and Germany.

The reason for the success of the new low cost carriers is very simple – they move the maximum number of passengers at the minimum of cost. Traditionally, airlines have concentrated on selling expensive first or business class tickets. The new carriers have a different business model. They have done way with first/business and economy class. Instead, all passengers are free to sit where they choose. Also done away with is the traditional in-flight catering.  Passengers are most welcome to buy a snack or a drink from the selection available from the cabin crew. I am even assured that you are free to take your own sandwiches on board!

Also revolutionized to keep costs to a minimum is the way in which flights are booked. Gone are the traditional travel agent and printed ticket. Instead our operators rely on a high tech system based on Internet and telephone booking. All airlines have proved to be very adept at pioneering on-line booking on their websites. Using the net, the customer has access to a vast array of timetabling and fare information. They are then free to select the most appropriate flight at the cost that suits her or him most.

Questions 

asked

When talking about low cost airlines, first reactions and questions often are:

“How can they do it?”

“Do I have to stay through Sunday?”

“Are they flying old planes?”

“Do they have well trained and qualified personnel?”

“Do they maintain their fleet sufficiently?”

“What service can one expect?”

“Do they fly on time?”

“Would you recommend such an airline to a friend?”

“Do they really offer the cheapest deals?”

Such misconceptions are not surprising, given the fact that scheduled, low-fare flights are a relatively new phenomenon in the world.

Low cost airlines are based on the idea that people would fly a lot more often if it were more affordable. The airline’s main mission is to make air travel the most simple, convenient and inexpensive form of transportation in the world.

How can they offer such low fares?

Low cost airlines offer great value fares, which can only be achieved by keeping costs to a minimum by e.g. cutting out unnecessary "frills”.

Ticketless airlines. Less hassle for the customer, who doesn't have to worry about collecting tickets before traveling, and cost-effective for the airlines (paper, printing, distributing).

No free meals. Passengers are given the choice as to whether they wish to buy themselves drinks or snacks on board. Customer feedback illustrates that passengers do not want a meal on board a short-haul flight. They prefer to pay less for the flight and have a choice to purchase snacks on board if desired.

No newspapers. There is no table, nor a hanging newspaper bag by the aircraft's door with a choice of various local and foreign newspapers. Travelers will have to bring their own newspaper.

One type of aircraft. Pilots, flight attendants, mechanics and operations personnel are specialized in a single type of aircraft, which means, among others, that there is no need for costly re-training of staff, for maintaining a stock with parts for different types of aircraft, for knowledge and skills in order to operate and maintain different types of aircraft with their own characteristics, or for new work requirements.

Internet or Call Center booking. Mostly bookings of flights can only be done via the airline’s call center or via the internet, whereby the fares are paid using a credit card. Only a very few of these low cost airlines have the possibility to book a flight through a travel agent (e.g. Virgin Express, Southwest Airlines). This means that the airlines do not pay any commission to a travel agent, which would otherwise have been reflected in the fares. Also, as they do not use travel agents, they do not use, nor participate in the world wide reservation systems and thus save costs, which again are reflected in their pricing.

Appropriate Airports. Low cost carriers mostly fly to and from airports that are not necessarily the busiest, for example, London - Stanstead rather than London - Heathrow. These are often referred to as secondary airports, though this rather disparaging title can be something of a misnomer as they can often be far more convenient. Operating from so called secondary airports is cheaper than from the bigger major airports and they are also a lot less congested and “turnaround times” for aircraft are a lot shorter. For instance, to minimize fees Ryanair fly into Bromma airport 15km from Stockholm. The airport deemed to be the primary one in the Swedish capital, Arlanda, is a far less accessible 35kms from the city. 

Airline Connectivity. No arrangements have been made with other airline companies on connecting flights, on possibilities of flight transfers, nor on having the luggage labeled and passed through from one flight to another.

Check-in. Generally, there will be no seats reserved nor allocated. Passengers receive a generic boarding pass and they will have to take any of the available seats. Only luggage is checked-in to be taken on board.

Costs 

comparison

The operational costs between a regular airliner and a low cost airline flying the same type of aircraft are similar for the following cost centers:

• Telesales staff

• Advertising

• Cabin crew economy class

• Pilots

• Ground handling

• Insurance

• Airport landing and parking fees

• Aircraft ownership costs

• Air traffic control fees

• Maintenance

• Fuel

The main difference in costs between the two types of airliners can be found in the additional overhead a regular airline has for:

• The loss of a number of seats because of their first and/or business class configuration

• In flight catering

• Additional cabin crew to attend first and/or business class passengers

• Commissions to travel agents (some low cost airlines do pay commissions as well)

• Ticketing costs

• Computer reservation fees

• Use of more expensive airports

• Lower aircraft utilization because of delays at congested airports

So, what do they spend their money on?

Low cost airlines invest in the most essentials:

• Aircrafts (currently one of the youngest fleet in the world).

• Experienced pilots.

• Qualified ground personnel.

• Top aircraft maintenance.  

Who flies low cost?

Basically everybody, business, pleasure and other cost-conscious travelers.

How are low budget fares structured?

Unlike other airlines, low cost fares are not based on complicated restrictions. All fares are quoted one way to allow customers the flexibility to choose where and when they would like to fly. Also, where most traditional airlines will only offer cheap flights if the customer stays a Saturday night, or even a Sunday night, and therefore cheap fares will not be available for a one-way or a day-return business or shopping trip. Such a condition does not apply to low cost airlines. So, generally speaking, the earlier you book the cheaper the fare will be.

Would one recommend such an airline to a friend?

According to a survey on the best and worst airlines carried out in the UK in 2000 by Holiday Which, low cost airlines are winning over consumer and soaring ahead of charter services and short haul scheduled airlines. Using the question "Would you recommend this airline to a friend?" as a starting point, airlines were also assessed on; cabin air quality, cabin crew, catering, check-in staff, cleanliness, entertainment, leg room, seat allocation, seat comfort and value for money. 

Readers rate budget airlines so highly that over half of those who have flown with one recently, would definitely recommend it to a friend. In order from best to worst, where easyJet made it into the top rated group, the top scores were for:
   

easyJet
Ryanair
British Midland
British European
Go
British Airways
Manx Airline  

Do low cost airlines offer the cheapest deals?

No, not always.

Ryanair, one of Europe's largest and most profitable low cost airline, claims it sells 70% of its seats at its two lowest fares. easyJet says that up to 50% of passengers could have paid the lowest fare." That might be as little as $25 for a flight from Amsterdam to Geneva on easyJet or $32 from Brussels to Dublin on Ryanair, excluding taxes and handling fees.

What low cost airlines are less eager to talk about is how many seats they sell at fares that are markedly higher than their cheapest offerings. Ryanair has about eight price categories; easyJet around 10. It doesn't take a math genius to work out that between 30% and 50% of their passengers could be at the higher end, paying $300-plus per ticket. Suddenly, the so called budget airlines no longer look cheap.

Nearly all airlines nowadays use a complicated system called yield management to juggle prices up and down according to demand as a means of maximizing revenue. So the more seats that have been booked on a flight, the higher the remaining ticket prices rise. Unlike traditional airlines, low-cost carriers can't rely on first- or business-class travelers to boost profits, so their yield-management systems tend to be more finely tuned.  Certain times of the day or the year call for more yield management. For example, now that business travelers have discovered budget airlines, an early morning flight from London to Paris or Amsterdam is likely to be more expensive than a midmorning one. A weekend flight to Geneva in winter will probably be more expensive than in summer.

A few tips........

These days there are no hard-and-fast rules to landing a bargain fare. But here are some tips that might help:

Book via the Internet or a Call Center. Since an online order cuts out the commission airlines have to pay travel agents, you should save. Some of the lowest fares are available only on the website and some airlines offer an additional saving on every return ticket booked online.

Be flexible about when you can travel. This will maximize the number of flight and fare options available and enable you to choose the one that suits you most.

Reserve as far in advance as possible. The closer you get to your desired departure date, the fewer cheap options you will find.

Look out for promotional offers. They are real but apply only to flights on which there are still lots of empty seats. Book immediately - they usually last for as little as 48 hours.

Welcome new routes. Low cost airlines expand and introduce new routes. Until new routes become embedded in public consciousness, both demand and fares are likely to remain low.

Transportation to and from the airport. If you are intending to use public transport to and from the departure airport, where possible book it with your flight reservation as many of the airlines have negotiated discounted rates to get their passengers to the airport.

Remember that some low cost airlines keep costs low and turnaround times high by flying in and out of secondary airports that are often a long way from city centers. So factor in the cost and inconvenience of a long bus, train or taxi ride if necessary. And don't forget that there's no such thing as a free lunch on a low cost airline.

If you bag what seems like a bargain, leave it at that. Don't ask the passenger next to you what he paid for his seat. He may have got that $7 ticket you thought should be yours.