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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.
In this section, we address the following subjects:
At the end of this section you will find a
few tips. However, for comprehensive and detailed travel
information, in order to assist the @-Travelers in e.g. properly
prepare for their journey, finding the lowest fare, obtaining
the right flight information, booking the flight, packing
and what to do when things go wrong, please visit out Travel
Information pages.
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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.
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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.
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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.
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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
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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.
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Basically everybody, business, pleasure and
other cost-conscious travelers.
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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.
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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
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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.
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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.
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