A low-cost carrier or low-cost airline (also known as a no-frills, discount or budget carrier or airline or cheap flight) is an airline that generally has lower fares and fewer comforts. To make up for revenue lost in decreased ticket prices, the airline may charge for extras like food, priority boarding, seat allocating, and baggage etc.
The term originated within the airline industry referring to airlines with a lower operating cost structure than their competitors. While the term is often applied to any carrier with low ticket prices and limited services, regardless of their operating models, low-cost carriers should not be confused with regional airlines that operate short flights without service, or with full-service airlines offering some reduced fares.
In due course, some airlines have actively sought to market and advertise themselves as low-cost, budget, or discount airlines while maintaining products usually associated with traditional mainline carrier’s services which often result in increased operational complexity. Among these products which tend to increase complexity and reduce efficiency are: preferred or assigned seating, catering other items rather than basic beverages, differentiated premium cabins, satellite or ground based wifi internet, and in-flight audio video entertainment.
Low-cost airline principles
Low-cost airlines all differ in their service offerings but by definition feature some or most of the following principles:
- Standardized fleet (lower training, maintenance costs; purchasing aircraft in bulk)
- Remove non-essential features (non-reclining seats, no frequent flyer schemes)
- Use of secondary airports (lower landing fees, marketing support)
- Rapid turnaround (less time on the ground, more flights per day)
- Online ticket sales (no call centres or agents)
- Online check-in (fewer check-in desks)
- Impose baggage charges (fewer bags mean faster loading of aircraft and allow for extra revenue for checked bags)
- Do not use jet-ways (avoiding extra airport charges)
- Have staff do multiple jobs (cabin crew also check tickets at the gate, clean aircraft)
- Hedge fuel costs (buying fuel in advance when it is cheaper)
- Charge for all services (including on-board services, reserved seating, and extra baggage)
- Do not use reserved seating (which slows down the loading of the aircraft)
- Charge for checked bags (which slows down loading of the aircraft)
- Charge for last minute baggage check-in (which slows down loading of the aircraft)
- Fly point to point (passenger transfers to other flights are not accommodated)
- Keep aircraft on the ground for very short time (lower airport charges)
- Carry very little extra fuel (reducing the weight of the aircraft)
- Have the plane outfitted with cost-cutting modifications as winglets
- Route planning before aircraft arrives at airport (saving time on the ground)
Most low-cost carriers operate aircraft configured with a single passenger class, and most operate just a single type of aircraft. In the past, low-cost carriers tended to operate older aircraft purchased second-hand, such as the McDonnell Douglas DC-9 and older models of the Boeing 737. Since 2000, fleets generally consist of newer, more fuel efficient aircraft, commonly the Airbus A320 or Boeing 737 families. These are extremely efficient aircraft in terms of fuel, training, maintenance and crew costs per passenger.
In 2013, ch-aviation published a study about the fleet strategy of low-cost carriers. They summarized that major LCCs that order aircraft in large numbers get huge discounts and due to this they sell their aircraft just a few years after delivery at a very high price. That saves a lot in operative costs.
Aircraft often operate with a minimum set of optional equipment, further reducing costs of acquisition and maintenance, as well as keeping the weight of the aircraft lower and thus saving fuel. Ryanair seats do not recline and do not have rear pockets, to reduce cleaning and maintenance costs. Others have no window shades. Pilot conveniences may be excluded such as ACARS. Often, no in-flight entertainment systems are made available, though many US low-cost carriers do offer satellite television or radio in-flight. It is also becoming a popular approach to install LCD monitors onto the aircraft and broadcast commercials on them, coupled with the traditional route – altitude – speed information. Most do not offer reserved seating, hoping to encourage passengers to board early and quickly, thus decreasing turnaround times. Some allow priority boarding for an extra fee in lieu of reserved seating, and some also allow only the emergency exit rows to be reserved, again at an extra cost. The emergency exit seats have longer leg room.