Budget Airlines – How do they do it?

Posted on by

EasyJet and Ryanair are two of the largest European low-cost airlines.

 

In my opinion, one of the more interesting trends in modern transportation systems is the emergence of the budget airline as an effective and reliable means of transportation. Passenger airlines have been around for decades, but these companies have typically marketed themselves as the providers of a luxury service that includes novelties such as complementary meals served by flight attendants. Only recently has the low-cost business model truly taken hold, with companies such as Southwest and JetBlue in the US and Ryanair and EasyJet in Europe. It has been so effective, in fact, that many large, “traditional” carriers have, with mixed success, tried their hand at the establishment of low-cost subsidiary airlines.

When it comes to the success of the low-cost airline business model, the question “How do they do it?” inevitably comes to mind. The answer: In a nutshell, by cutting costs.

Before I delve into explaining how these companies do cut costs, I’d like to offer the assurance that this cost-cutting business strategy in no way implies that low cost airlines are unsafe. Budget airlines, like any airline, must comply with national and international safety standards. In fact, for reasons to be explained later, many low-cost airlines have fleets primarily composed of fairly new planes.

How then do these airlines cut costs? Budget airlines utilize a variety of cost-cutting techniques in order to provide lower fares to their customers. Although some of these techniques are directly visible to the customer, many of them are behind-the-scenes and deal with internal company workings. Here are a few examples of cost-saving techniques that budget airlines use:

  • Perhaps the most obvious way in which low-cost airlines save money is by eliminating “luxury” customer services, such as complimentary in-flight food services. Exactly what services are cut varies from carrier to carrier. Many budget airlines have only economy class seating (more seats = more revenue), and allow seat reservation only at an additional charge. The uniformly arranged cabin operates on a first-come, first-served basis. This simplification reduces the number of personnel required to clean a plane and eliminates the need for expensive ticket-booking software. In addition, budget airlines often place strict limits on passenger baggage. This allows them to speed up the loading process and charge for extra bags/weight.
  • Another major way that budget airlines save money is by cutting labor costs. This can be done by training employees to perform multiple tasks. For example, a flight attendant may help to clean the plane after a flight, or a pilot may help load baggage.
  • Low-cost carriers can also save money by only selling tickets to customers directly through their website or ticket counter, instead of through travel agents and third-party websites. This technique of “avoiding the middleman” allows airlines to earn the sale price (less tax) of a ticket without some portion of the sale price going to another party.
  • Because fuel represents a large portion of an airline’s operating cost, airlines employ several techniques to reduce their fuel costs and fuel-associated costs. For example, because longer flights require more fuel, budget airlines typically fly short, direct flights rather than long flights with many connections that require passengers to transfer planes en-route. Because the price of jet fuel fluctuates greatly, low-cost airlines also speculate on the price of fuel. When the price of fuel is low, an airline may enter an agreement with a fuel provider to “lock in” a certain price for a specified length of time, wagering on the expectation that fuel prices will rise over that period of time. Airlines Budget airlines have typically had great success saving money in these ways.
  • Budget airlines also choose flight routes that save them money. This often means flying to secondary airports rather than a city’s main airport. Secondary airports typically charge carriers a smaller fee for using their facilities, even if they are no further from the city than the main airport. (This airport fee can also be reduced by scheduling flights at off-peak hours, such as the early morning.) In addition, as explained above, low-cost airlines also typically offer primarily point to point service, rather than having a main hub that serves as a transfer point for a large number of flights. This decreases the miles flown (think gas) while maximizing the number of flights offered. In addition, by limiting the number of connections, budget airlines reduce the frequency of compounded flight delays. This reduced “turn time” allows low-cost carriers to schedule more flights per day, which earns them additional revenue. (The lack of complementary food service and the cross-training of staff also decrease “turn time.”)
  • One of the most effective techniques that budget airlines use in order to cut costs is the utilization of a homogeneous fleet of fairly new airplanes. In the airline industry, maintenance is an especially costly necessity. In fact, many engine companies make no money (or even take a loss) on the sale of a new engine, but generate the majority of their revenue through the maintenance and repair of aging engines. For this reason, it is in the best interest of airlines to decrease their maintenance costs as much as possible. By having only one or a few types of planes in their fleet, budget airlines can avoid buying and stockpiling costly spare parts for numerous plane models. Low-cost airlines typically purchase new planes and resell their “old” planes after only several years of heavy use. The large amount of flight time that these planes have seen (due to quick “turn time”) and the moderate resale value of the planes make up for the cost of constantly purchasing new planes. An additional benefit to using only one type of plane is that budget airlines only need to train their pilots and maintenance crews to operate and repair one type of plane. (Some low-cost airlines even train their own staff.) This saves on labor costs, and increases “turn time.”

The advent of the budget airline may herald a new era of global transportation. In the 19th century, the steam locomotive revolutionized the way people thought about transportation by making it possible for many poor and middle class people to move great distances. This fundamental change in the world’s notion of a transportation system helped to restructure society itself. In many ways, the automobile had the same effect a century later. Will the airplane be the revolutionary technology of the 21st century? If the plane becomes easily accessible to vast numbers of people who could previously not afford air travel, one can only guess what effect it will have. It will challenge not only our ideas about transportation, but also our concept of the world itself.

 

 

———————————————————————————————————————

 

 

http://money.howstuffworks.com/personal-finance/budgeting/budget-airline.htm

http://www.low-cost-airline-guide.com/en/articles/about-low-cost-airlines.htm

http://www.dnaindia.com/money/interview_how-can-a-low-cost-airline-not-work_1379995

http://money.cnn.com/magazines/moneymag/moneymag_archive/2004/05/01/367265/index.htm

http://en.wikipedia.org/wiki/Low-cost_carrier

http://www.reidsguides.com/nfa/how.html

http://professor-murmann.info/index.php/site/fullarticle/290/

http://money.cnn.com/magazines/fortune/fortune_archive/2002/12/30/334574/

 

 

2,748 thoughts on “Budget Airlines – How do they do it?”

  2. seo
    سئو را مي‌توان مجموعه‌اي از روش‌ها براي تغيير استراتژيک وب سايت‌ها دانست. سئو اصفهان | سئو سایت در اصفهان را به چه تیمی بسپاریم اين فرآيند به بيان مهمترين عوامل مرتبط صفحه و افزايش اهميت آن در صفحه نتايج جستجو، مي‌پردازد.سئو فرآيند ساده‌اي نيست که به راحتي پياده‌سازي شود زيرا نيازمند دانش زياد، علم پيش زمينه‌اي و صبر است. موتور‌هاي جستجو با تغيير مداوم الگوريتم‌هاي رتبه‌بندي خود غير قابل پيش‌بيني هستند؛ بنابراين وظيفه مهندسين سئو بروز نگه داشتن اطلاعات خود در اين زمينه است.

    Reply ↓

  3. thanks for your website and your article
    سئو را مي‌توان مجموعه‌اي از روش‌ها براي تغيير استراتژيک وب سايت‌ها دانست. سئو اصفهان | سئو سایت در اصفهان را به چه تیمی بسپاریم اين فرآيند به بيان مهمترين عوامل مرتبط صفحه و افزايش اهميت آن در صفحه نتايج جستجو، مي‌پردازد.سئو فرآيند ساده‌اي نيست که به راحتي پياده‌سازي شود زيرا نيازمند دانش زياد، علم پيش زمينه‌اي و صبر است. موتور‌هاي جستجو با تغيير مداوم الگوريتم‌هاي رتبه‌بندي خود غير قابل پيش‌بيني هستند؛ بنابراين وظيفه مهندسين سئو بروز نگه داشتن اطلاعات خود در اين زمينه است.
    thanks for your website and your article

    Reply ↓

  6. I think your writing is the best I’ve ever seen. It’s a very interesting and touching article. Thanks to your writing, I think my life can develop into a better life. Thank you. I look forward to your continued support. 메이저토토

    Reply ↓

  7. I did so many searches on this subject. As a result, this article is one of the top three articles I want to recommend to people. I know how accurate this article is because I have worked in this field for years. If you are curious about the contents, please feel free to visit my blog. 메이저토토

    Reply ↓

  8. We serve with 14 years Seo experience with our Malta Seo Agency team, handing many different projects and digital marketing campaigns in Malta.

    SEO service in Malta is carried out somewhat gradually for a newly established site that is not yet recognized by search engines. It is important for the site to have original content and to be decorated with high-quality images for indexing.

    In addition, mobile optimization is ensured, so that the website can be used easily from any smart device. In addition to these, making SEO settings for the site is among the factors that increase the visibility of the site. The high level of readability and the creation of a consistent text within itself increase the followability of the site. High quality of images is an important criterion, but originality is also important in order not to get banned.

    Reply ↓

  9. In web and mobile application design studies, ValettaSoft uses the most modern design tools, robust working processes and performs a comprehensive target audience analysis & sector analysis to provide your site exactly what it needs.

    We are confident that you need a company that carries out design works focusing on data and analysis today, where the meaning of your presence in the Malta digital world is highly related to your competitors’ strength in the industry. -Hey, only in this way can you gain competitive power!

    We coordinate with our company’s software and web design teams to modernize our design systems and maintain a company-wide component catalogue.

    Reply ↓

    • تولید میوه خشک و چیپس میوه یکی از محبوب‌ترین مشاغلی‌ست که روش کره گیری با دستگاه کره گیر بکردانه در تمام فصول رونق زیادی دارد و بسیاری از افراد به خصوص باغدارها تصمیم می‌گیرند قسمتی از محصولات خود را با دستگاه میوه خشک کن به چیپس میوه تبدیل کنند. دستگاه میوه خشک کن یکی از تجهیزاتی است که هم می‌تواند در منازل به عنوان میوه خشک کن خانگی و برای تولید چیپس میوه خانگی استفاده شود و هم برای خشک کردن میوه‌ها در ابعاد وسیع و صنعتی.

      Reply ↓

  12. BUSINESS WEB DESIGN FOR YOUR NEEDS

    Move your business online with Vallettasoft today. You can choose the one that meets your needs from our website packages or order a custom design.

    Do you want a website with more detailed functions? If you want a website that is designed and coded completely for you, our talented design and software team is ready to roll up their sleeves! Tell us everything you need and get a special price quote for you.

    Reply ↓

  18. Budget airlines have managed to stay afloat by catering to a niche market. They offer low-cost flights, but often lack the amenities of larger airlines. These airlines often rely on low fares and minimal service to attract customers.

    Reply ↓

  23. آیا به دنبال بازسازی خانه و یا آپارتمان خود هستید؟ آیا همیشه این آرزو را داشته‌اید که خانه قدیمی‌تان را برای خود شبیه یک پناهگاه امن شخصی کنید؟ به کمک تیم توانمند و مجرب شرکت ما، این رؤیای شما به واقعیت می‌پیوندد. سپس این شما هستید و خانه‌تان و دنیای زیبایی که در آنجا برای خود ساخته‌اید. ما به این باور رسیده‌ایم که داشتن یک خانه با طراحی ساختمانی زیبا و دلنشین قطعاً در ایجاد حس شادی و رفاه افراد ساکن در آن نقش زیادی دارد؛ لذا این دلیل تلاش‌های خستگی‌ناپذیر ماست تا به استانداردهای لازم دست یافتیم. چنانچه تصمیم داشته باشید که یک یا دو اتاق ساختمان مسکونی خود را بازسازی کنید یا اینکه نیاز به بازسازی کامل ملکتان داشته باشد، تجربیات گسترده ما در این زمینه در تمامی مراحل طراحی، ساخت و مدیریت کامل پروژه ساختمانی همراه شماست تا بتوانید به کمک بازسازی ساختمان، طراحی زیباتری از ساختمان مسکونی خود داشته باشید. زمانی که طراحی مورد نظر در زمینه بازسازی ساختمان مسکونی شما صورت گرفت و بودجه پروژه بازسازی خانه اختصاص یافت، دیگر فاصله‌ای تا تحقق آرزوی داشتن یک خانه زیبا و رؤیایی باقی نمانده است.
    آدرس وبسایت شرکت سازین
    sazin.co

    Reply ↓

  25. Bahman Technical Services Company is ready and available to empty sewage wells of Tehran buildings 24 hours a day using tankers and all kinds of pumps. If you encounter signs of a sewer well being filled, it is better to call the sewage well discharge number before taking any action.

    Reply ↓

  31. content-writing-at-home
    به هر چیزی که برای انسان قابل درک است کار تولید محتوا در منزل و در بستر کانال‌های دیجیتال یا غیر دیجیتال قابل انتشار هستند محتوا می‌گویند.پس در جواب سوال تولید محتوا چیست می‌توانیم بگوییم:تولید محتوا یعنی خلق هرچیز قابل درک برای انسان‌ها

    Reply ↓

  35. Sewage gas refers to a complex mixture of toxic and non-toxic gases. Sewage gas is formed as a result of decomposition of domestic and industrial waste. The most toxic compounds include hydrogen sulfide and ammonia, but they can also include methane, carbon dioxide, sulfur dioxide, and nitrogen oxides. Symptoms and causes of sewage gas poisoning

    Reply ↓

  37. Adding a مستربچ رنگی is the most common method of producing colored accessories from plastic materials. Colored masterbatches are a plastic compound consisting of pigment and polymer, which if we want to describe more fully, it is a large percentage of pigment that is mixed with a small amount of polymer and it brings it to the desired and desired color.

    Reply ↓

  38. The price of masterbatches depends on various factors according to its type. Among the important factors that determine the price of colored masterbatch, the following can be mentioned.
    The percentage of pigment used, its type, and the country of pigment production affect the final price.
    Another important factor in determining the price is the type of color. That is, different colors have different prices. For example, dark red and light red do not have the same finished cost.

    Reply ↓

  39. رThe price of masterbatches depends on various factors according to its type. Among the important factors that determine the price of colored masterbatch, the following can be mentioned.
    The percentage of pigment used, its type, and the country of pigment production affect the final price.
    Another important factor in determining the price is the type of color. That is, different colors have different prices. For example, dark red and light red do not have the same finished cost.

    Reply ↓

  42. I’m really happy to meet you. I have also written several articles similar to your article topic. I found your article more interesting because you have similar opinions and others don’t. I would like to use your article on my blog. Of course, leave your blog address as well. https://totoright.com/

    Reply ↓

  44. I always find and read your articles. I think you are really trying to share your knowledge and thoughts. I understand how hard it can be to write a blog post. I want to applaud your efforts. I’d love to see your article. I will bookmark it. Thank you. https://totoilmi.com/

    Reply ↓

  47. “پرینت آنلاین سیاه سفید و رنگی با بهترین قیمت و تضمین کیفیت به همراه ارسال رایگان به سرتاسر شهرهای ایران، همین حالا جزوات و کتاب های خود را به چاپ برسانید.پرینت رنگی ، پرینت انلاین ، پرینت سیاه سفید ، کو پرینت

    “

    Reply ↓

  48. زیرپوش یکی از سایت های خوب جهت خرید لباس زیر بانوان است. ایت سایت اطلاعات لازم جهت مقایسه و خرید انواع لباس زیر را در اختیار شما قرار داده و به شما کمک می کند تا لباس زیری مناسب برای خود تهیه کنید.

    Reply ↓

  50. سیمان ماده ای چسبنده است که برای ترکیب مصالح و ساخت بتن از آن به فراوانی در ساخت و ساز استفاده می شود. قیمت سیمان پاکتی 50 کیلویی امروز هرمزگان سیمان را می توان از مواد مختلفی تهیه کرد، اما به تنهایی قابل استفاده نیست. در حقیقت، سیمان رومی با آهک سوخته، خاکستر آتشفشانی و مکمل های آجر خرد شده درست می شود. سیمان فقط به خاطر خاصیت چسبندگی محبوب نیست بلکه قیمت آن نیز بسیار مناسب است و یکی از کم هزینه ترین مواد در سراسر جهان است.

    Reply ↓

Leave a Reply

Your email address will not be published. Required fields are marked *