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/

 

 

3,133 thoughts on “Budget Airlines – How do they do it?”

  1. Hydraulic hose repairs are crucial for maintaining the performance and safety of hydraulic systems. Whether it’s a damaged hose or a leak, timely repairs are necessary to prevent costly downtime and equipment damage. Skilled technicians can diagnose and fix hydraulic hose issues efficiently and effectively, ensuring your equipment operates at its best.

    Reply ↓

  2. A plumber is a skilled tradesperson who installs, maintains, and repairs pipes and plumbing fixtures. They work with water, gas, and sewage systems to ensure that they function properly. Plumbers are essential for keeping our homes, businesses, and cities running smoothly. Whether you need a leaky faucet fixed or a new plumbing system installed, a qualified plumber can help.

    Reply ↓

  3. Truck batteries are essential for powering heavy-duty vehicles used in transportation and logistics. These batteries are designed to withstand harsh conditions, such as extreme temperatures and constant vibration. Regular maintenance and proper usage can extend their lifespan and ensure reliable performance.

    Reply ↓

  4. An orthopedic surgeon is a medical professional who specializes in the diagnosis and treatment of conditions related to the musculoskeletal system. These doctors are highly trained in surgical techniques and often work closely with physical therapists to help patients recover from injuries or surgeries.

    Reply ↓

  5. An SEO agency is a company that provides professional digital support for websites established for commercial, profit or corporate purposes. Not every company allocates a budget to employ staff for SEO work. Even if it is employed, it needs experts in the field to supervise the SEO work performed by the employee.

    With SEO agencies, websites are entrusted to experienced and expert people. SEO agencies provide professional support to meet the necessary needs with packages prepared for every budget. There are many advantages to working with SEO agencies.

    http://www.vallettasoft.com

    Reply ↓

  14. Consistency is key to the success of financial planning, and this is often achieved through the utilization of modern and comprehensive financial analysis. Similarly, the accounting industry can also provide exceptional services without breaking the bank. If you are looking for reliable and affordable accounting and tax services such as tax planning, bookkeeping, or financial analysis, look no further than 3Kshami.com. We are committed to providing the finest financial services available at an affordable cost. Contact us today to learn more and experience the best financial planning possible.

    Reply ↓

  18. There are two types of dwelling structures in the construction industry. Standard – grade building projects primarily consist of single – family dwellings and small multi – unit residential properties. Construction Commercial provides an array of services to help build a strong foundation for standard grade projects which include floor framing, electrical service and plumbing pull boxes. The work that we do will add value to your investment and help make it appreciably more profitable.
    https://skyblueconstruction.ca/commercial-construction/

    Reply ↓

  19. Apply a strong, durable Magnetic Shielding coating to metal surfaces for added protection against magnets. This unique product offers superior performance over traditional magnetic – shielding coatings by providing full polarization free of unwanted ferrous (metal) surface attraction and magnetism. This process results in little or no observable reduction in the operating performance of any magnetic field source (field strength only) already present on a coated surface.
    https://skyblueconstruction.ca/nuclear-shielding-services/

    Reply ↓

  22. Ontario glamping is an experience that brings the comfort of home to a luxury camping getaway. An ideal complement to your holiday in Ontario, our accommodations provide all the amenities you need to enjoy your time away from home. We have four glamping sites available in Niagara Region, including one at Rainbow Beach Resorts.
    https://www.lpfun.ca/lodging

    Reply ↓

  25. Electronic commerce, or e-commerce, as it is known, is the name given to the type of commerce where products and services are brought together with consumers on the internet. In e-commerce business, the sale, distribution, payment, and advertising processes of products are carried out over the internet. A kind of e-commerce is the name given to the realization of traditional commerce methods on the internet or mobile platforms.
    One of the first questions that people and businesses who want to sell products and services on the internet with e-commerce in Malta are looking for an answer is how to do e-commerce business.
    Today, people and businesses that want to sell products on the internet with e-commerce started to sell by establishing an e-commerce site or through e-commerce marketplaces. It is known that some businesses sell through both e-commerce websites and marketplaces.

    https://vallettasoft.com/

    Reply ↓

  28. What is SEO?
    The word SEO consists of the initials of the phrase “Search Engine Optimization.” If we examine the SEO work; As the name suggests, we can describe it as a study that makes internet projects suitable for search engines with specific rules and thus ensures that the sites rise to the top in search engines. With SEO, websites become more visible in all search engines, especially Google, and traffic increases.

    How is Google SEO Work done?
    Since the most used search engine today is “Google,” the organization that determines SEO and internet rules has also been “Google.” “Google” always prioritizes quality and popular sites in its search results. We call quality on-site optimizations, technical structure, and text content. The issue of popularity is also considered as work done outside the site. SEO work actually has preliminary preparation and planning. Projects that progress in line with the right preliminary analysis can consistently achieve success. To give an example of these preliminary analyzes, we can show keyword research, competitor analysis and sector analysis.
    https://vallettasoft.com/

    Reply ↓

  31. E-commerce companies need to determine a business structure before establishing an e-commerce site and starting to sell online. Firms that determine their business structures correctly have the opportunity to be more successful in this sector. To do this;
    First, determine the departments in your company. Prioritize product, stock, quality control, delivery, accounting, and marketing departments when determining your departments.
    Identify who the people who will work in the departments are and how they should serve your business.
    Determine how interdepartmental relations will be handled.
    When determining your business structure, consider how your business will work and what it will focus on to add value to itself.
    Thus, you can determine the business structure of your e-commerce company more easily and increase the cooperation within your company by strengthening the communication between the departments.

    http://www.vallettasoft.com

    Reply ↓

  33. ardakanglass
    ویژگی های پنجره دو جداره
    پنجره دوجداره از شیشه های دو جداره با فریم UPVC تولید می شود. یو پی وی سی نوعی جایگزین برای آلیاژهای فلزی و غیر فلزی در ساخت درب و پنجره می باشد.از ویژگی های بارز این پنجره ها می توان به وزن سبک، مقاومت بسیار بالا در برابر تغییرات جوی و عدم اشتعال پذیری اشاره نمود. اساس پنجره دو جداره بر پایه شیشه دو جداره است.در این نوع پنجره شیشه اردکان یزد دو یا چند لایه شیشه به کمک نوار اسپیسر که دور تا دور آن ها قرارگرفته از همدیگر جدا شدند و فضای بین شیشه ها با هوا یا گاز آرگون و یا SF6 پر می شود.اسپیسرها اصولا از جنس آلومینیوم هستند که درون آن ها با ماده سیلیکا ژل که نوعی رطوبت گیر است و رطوبت هوای بین دو شیشه را جذب می کند پرشده است.

    Reply ↓

  34. What does an SEO agency do?
    An SEO agency is a company that provides professional digital support for websites established for commercial, profit or corporate purposes. Not every company allocates a budget to employ staff for SEO work. Even if it is employed, it needs experts in the field to supervise the SEO work performed by the employee.

    With SEO agencies, websites are entrusted to experienced and expert people. SEO agencies provide professional support to meet the necessary needs with packages prepared for every budget. There are many advantages to working with SEO agencies.

    Advantages of Contracting with Vallettasoft SEO Agency
    Vallettasoft is a Malta-based SEO agency. Working with Vallettasoft SEO agency is more reassuring than working with a single expert. You can easily choose the service you want from the wide variety of SEO packages it includes. Thus, you do not have to pay more than the required budget. The contract with Vallettasoft can determine the duration of the work. Experienced and fast in areas that need to appeal to a wide customer base in Malta, Vallettasoft meets the necessary needs in an agile manner. At the same time, a more favorable price can be agreed upon if comprehensive services are preferred. It can examine processes transparently and clearly with required intervals and requested periodic reports.

    http://www.vallettasoft.com

    Reply ↓

  35. انواع شیشه پنجره
    از مهم‌ترین موارد استفاده شیشه می‌توان به صنایع ساختمانی اشاره کرد. از گذشته تاکنون از شیشه به عنوان پوشش درب و پنجره استفاده‌های مفید و فراوانی می‌شود. به همین دلیل توجه ویژه‌ای به تولید شیشه برای صنایع ساختمانی شده‌ است و این امر باعث شد تا رقابت ویژه‌ای در ساخت و تولید شیشه در کارخانه‌های مختلفی در سراسر جهان شکل بگیرد. امروزه به جز درب و پنجره لیست قیمت شیشه سکوریت ، از شیشه در موارد مختلف ساختمانی مورد استفاده قرار می‌گیرد به‌طوری که هم در ساختار کلی و هم زیبایی داخلی و خارجی تاثیر بسیار فراوانی دارد.امروزه به دلیل افزایش انواع شیشه‌ها، تشخیص شیشه مناسب در هر زمینه کار نسبتا دشواری شده‌است. از این‌رو شناخت انواع شیشه پنجره، قابلیت‌ها و کاربردهای آن‌ها می‌تواند نقش مهمی در استفاده بهینه از این ماده مهم، چه در افزایش بهره‌وری و چه در افزایش زیبایی ساختمان داشته باشد.
    اگر بخواهیم انواع شیشه پنجره را در یک دسته‌بندی کلی قرار دهیم می‌توانیم به صورت زیر بنویسیم:
    شیشه تخت
    شیشه سکوریت
    شیشه خم
    شیشه لمینت یا ضد گلوله
    شیشه دوجداره

    Reply ↓

  40. دکتر تعمیرکار مرکز تخصصی تعمیرات لوازم خانگی است که با استعانت از خداوند متعال و با تکیه بر تجربه ۱۵ ساله و تیم متخصص ، دوره دیده و با تجربه و همچنین دسترسی به قطعات اورجینال بهترین خدمات تعمیرات لوازم خانگی را به هم میهنان عزیز ارائه میکند ، گارانتی تعمیرات که توسط دکتر تعمیرکار ارائه میشود گواه اطمینان ما به صحت تعمیرات و اصل بودن قطعات مورد استفاده خود است.
    https://drtamirkar.com

    Reply ↓

  41. عالی قاپو بزرگترین مرکز خرید انواع فرش در سایزهای مختلف ۷۰۰ شانه ,۱۰۰۰ شانه, ۱۲۰۰ شانه, ۱۵۰۰شانه, ماشینی و دستباف، کودک، فانتزی, مدرن – تابلو فرش میباشد . تمام جزئیات فرش از جمله ( تراکم عرضی (شانه) – تراکم طولی – ساده / برجسته – رنگ زمینه – تعداد رنگ به کار رفته – جنس نخ – ارتفاع نخ خاب ) در سایت عالی قاپو کامل درج شده است و بازدید کننده محترم با توجه به اطلاعات فوق خرید مناسبتری خواهد داشت .
    https://aliqapo.com

    Reply ↓

  42. Are you seeking a better way to manage your business operations? Look no further than Professional Kitchen Cabinet Painting Toronto Service, an easy to set up and operate bar services company that will take care of all your beverage service needs. From event – based as well as full – time business setups in Burnaby BC, our exceptional staff has years of industry experience behind them. We’ve also made it super simple for you to get started with the Launch App on your phone or tablet. You just need to download the app to start booking parties, events and special occasions immediately.

    Reply ↓

  43. A Branding iron heats up to 12 in. and beyond, measuring scales from 1/4 in to 10 ft. This professional tool can be used for a variety of assignments, including transferring embroidery to fabric, leather, wood and other surfaces.

    Reply ↓

  44. A Branding iron heats up to 12 in. and beyond, measuring scales from 1/4 in to 10 ft. This professional tool can be used for a variety of assignments, including transferring embroidery to fabric, leather, wood and other surfaces.

    Reply ↓

  45. Muslims, entrepreneurs and professionals are looking for partners to join their cause. If you’re an enterprising entrepreneur who’s looking for investment or partnership opportunities in the United Biz in your niche, check out these Muslim Business Listing Sites – we’ll help you connect with local resources: Jigsy, Majda and StartupMakr.

    Reply ↓

  46. Muslims, entrepreneurs and professionals are looking for partners to join their cause. If you’re an enterprising entrepreneur who’s looking for investment or partnership opportunities in the United Biz in your niche, check out these Muslim Business Listing Sites – we’ll help you connect with local resources: Jigsy, Majda and StartupMakr.

    Reply ↓

  47. If you’re looking for a top-notch Botox NYC experience in the heart of New York City, look no further than . Their experts specialize in providing results-driven treatments like Botox to help their clients achieve their desired look.

    Reply ↓

Leave a Reply

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