![Ryanair Wizz (7141688277)](https://upload.wikimedia.org/wikipedia/commons/1/19/Ryanair_Wizz_%287141688277%29.jpg)
A low-cost carrier or low-cost airline (occasionally referred to as ''
no-frills'', ''budget'' or ''
discount carrier'' or ''airline'', and abbreviated as ''LCC'') is an
airline
An airline is a company that provides civil aviation, air transport services for traveling passengers and freight. Airlines use aircraft to supply these services and may form partnerships or Airline alliance, alliances with other airlines for ...
that is operated with an especially high emphasis on minimizing operating costs and without some of the traditional services and amenities provided in the fare, resulting in lower fares and fewer comforts. To make up for revenue lost in decreased ticket prices, the airline may charge extra fees – such as for carry-on baggage. As of April 2020, the world's largest low-cost carrier is
Southwest Airlines
Southwest Airlines Co., typically referred to as Southwest, is one of the major airlines of the United States and the world's largest low-cost carrier. It is headquartered in Dallas, Texas, and has scheduled service to 121 destinations in the U ...
, which operates primarily in the United States, as well as in some surrounding areas.
![2013-05-06 Airbus A319 of Germanwings and Airbus A320 of Air Berlin at ZRH](https://upload.wikimedia.org/wikipedia/commons/5/5d/2013-05-06_Airbus_A319_of_Germanwings_and_Airbus_A320_of_Air_Berlin_at_ZRH.jpg)
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.
Some airlines advertise themselves as low-cost while maintaining products usually associated with traditional
mainline carrier's services. These products include preferred or
assigned seating
In live entertainment, there are several possible schemes for the seating assignment of spectators—including completely unassigned seating. There are several schemes which are most commonly used, though there are no hard and fast rules and alter ...
, catering, differentiated
premium cabins, satellite or ground-based
Wi-Fi
Wi-Fi () is a family of wireless network protocols, based on the IEEE 802.11 family of standards, which are commonly used for local area networking of devices and Internet access, allowing nearby digital devices to exchange data by radio wave ...
internet
The Internet (or internet) is the global system of interconnected computer networks that uses the Internet protocol suite (TCP/IP) to communicate between networks and devices. It is a '' network of networks'' that consists of private, pub ...
, and
in-flight audio and video entertainment. More recently, the term "ultra low-cost carrier" (ULCC) has been used, particularly in North America and Europe to refer to carriers that do not provide these services and amenities.
Business model
![Wizz Air A321 (HA-LXD) @ GVA, Aug 2019](https://upload.wikimedia.org/wikipedia/commons/2/2b/Wizz_Air_A321_%28HA-LXD%29_%40_GVA%2C_Aug_2019.jpg)
The low-cost carrier
business model
A business model describes how an organization creates, delivers, and captures value,''Business Model Generation'', Alexander Osterwalder, Yves Pigneur, Alan Smith, and 470 practitioners from 45 countries, self-published, 2010 in economic, social, ...
practices vary widely. Some practices are more common in certain regions, while others are generally universal. The common theme among all low-cost carriers is the reduction of cost and reduced overall fares compared to legacy carriers.
Traditional airlines have also reduced their cost using several of these practices.
Common practices
Aircraft
Most low-cost carriers operate aircraft configured with a single passenger class, and most operate just a single aircraft type, so cabin and ground crew will only have to be trained to work on one type of aircraft, however some low-cost carriers choose to operate more than one type and configure their aircraft with more than one passenger class. This is also beneficial from a maintenance standpoint as spare parts and mechanics will only be dedicated to one type of aircraft. These airlines tend to operate short-haul flights that suit the range of
narrow-body
A narrow-body aircraft or single-aisle aircraft is an airliner arranged along a single aisle, permitting up to 6-abreast airline seat, seating in a aircraft cabin, cabin less than in width.
In contrast, a wide-body aircraft is a larger airliner ...
(single aisle) planes. As of lately however there is also a rise in demand for long range low-cost flights and the availability of next generation planes that make long haul routes more feasible for LCCs.
In the past, low-cost carriers tended to operate older aircraft purchased second-hand, such as the
McDonnell Douglas DC-9
The McDonnell Douglas DC-9 is an American five-abreast single-aisle aircraft designed by the Douglas Aircraft Company. It was initially produced by the developer company as the Douglas DC-9 until August 1967 and then by McDonnell Douglas.
After ...
and older models of the
Boeing 737
The Boeing 737 is a narrow-body aircraft produced by Boeing at its Renton Factory in Washington.
Developed to supplement the Boeing 727 on short and thin routes, the twinjet retains the 707 fuselage width and six abreast seating with two un ...
. Since 2000, fleets generally consist of the newest aircraft, commonly the
Airbus A320 family
The Airbus A320 family is a series of narrow-body airliners developed and produced by Airbus.
The A320 was launched in March 1984, first flew on 22 February 1987, and was introduced in April 1988 by Air France.
The first member of the famil ...
and
Boeing 737
The Boeing 737 is a narrow-body aircraft produced by Boeing at its Renton Factory in Washington.
Developed to supplement the Boeing 727 on short and thin routes, the twinjet retains the 707 fuselage width and six abreast seating with two un ...
. Although buying new aircraft is usually more expensive than second-hand, new planes are cheaper to operate in the long run since they are extremely efficient 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 large discounts for doing so, and due to this they can sell their aircraft just a few years after delivery at a price high enough to keep their operating costs relatively low.
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
Ryanair is an Irish ultra low-cost carrier founded in 1984. It is headquartered in Swords, Dublin, Ireland and has its primary operational bases at Dublin and London Stansted airports. It forms the largest part of the Ryanair Holdings family ...
seats do not recline and do not have rear pockets, to reduce cleaning and maintenance costs. Others have no window shades. Pilot conveniences, such as
ACARS
In aviation, ACARS (; an acronym for Aircraft Communications Addressing and Reporting System) is a digital datalink system for transmission of short messages between aircraft and ground stations via airband radio or satellite. The protocol was des ...
, may be excluded. Often, no
in-flight entertainment
In-flight entertainment (IFE) refers to the entertainment available to aircraft passengers during a flight. In 1936, the airship ''LZ 129 Hindenburg, Hindenburg'' offered passengers a piano, lounge, dining room, smoking room, and bar during the ...
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 advertisements 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 instead of reserved seating, and some allow reserving a seat in an emergency exit row (for longer leg room) at an extra cost.
Bases
![Norwegian 737-800 acsending](https://upload.wikimedia.org/wikipedia/commons/a/ad/Norwegian_737-800_acsending.jpg)
Like the major carriers, many low-cost carriers develop one or more bases to maximize destination coverage and defend their market. Many do not operate traditional
hubs, but rather
focus cities.
Simplicity
![Spring Airlines aircraft with passenger boarding stairs @ PVG](https://upload.wikimedia.org/wikipedia/commons/1/1b/Spring_Airlines_aircraft_with_passenger_boarding_stairs_%40_PVG.jpg)
Airlines often offer a simpler fare scheme, such as charging one-way tickets half that of round-trips. Typically fares increase as the plane fills up, which rewards early reservations.
In Europe (and early in Southwest's history) luggage is not transferred from one flight to another, even if both flights are with the same airline. This saves costs and is thought to encourage passengers to take direct flights. Tickets are not sold with transfers, so the airline can avoid responsibility for passengers' connections in the event of a delay. Low-cost carriers often have a sparse schedule with one flight per day and route, so it would be hard to find an alternative for a missed connection. Modern US-based low-cost carriers generally transfer baggage for continuing flights, as well as transferring baggage to other airlines. Many airlines opt to have passengers board via stairs, since
jetways
A jet bridge (also termed jetway, jetwalk, airgate, gangway, aerobridge/airbridge, skybridge, finger, airtube, expedited suspended passenger entry system (E-SPES), or its official industry name passenger boarding bridge (PBB)) is an enclosed, ...
generally cost more to lease.
Often, low-cost carriers fly to smaller, less congested secondary airports and/or fly to airports during off-peak hours to avoid air traffic delays and take advantage of lower
landing fee
A landing fee is a charge paid by an aircraft operator to an airport company for landing at a particular airport. Landing fees can vary greatly between airports, with congested airports, ones where most of the landing slots are held by airlines ...
s. This is why
Ryanair
Ryanair is an Irish ultra low-cost carrier founded in 1984. It is headquartered in Swords, Dublin, Ireland and has its primary operational bases at Dublin and London Stansted airports. It forms the largest part of the Ryanair Holdings family ...
flies to
Gatwick Airport
Gatwick Airport (), also known as London Gatwick , is a major international airport near Crawley, West Sussex, England, south of Central London. In 2021, Gatwick was the third-busiest airport by total passenger traffic in the UK, after H ...
,
Luton Airport
London Luton Airport is an international airport located in Luton, Bedfordshire, England, situated east of the town centre, and north of Central London. The airport is owned by London Luton Airport Ltd (LLAL), a company wholly owned by L ...
, and
Stansted Airport
London Stansted Airport is a tertiary international airport serving London, England, United Kingdom. It is located near Stansted Mountfitchet, Essex, England, northeast of Central London.
London Stansted serves over 160 destinations acros ...
in the London area and how easyJet is able to fly to
Paris-Charles de Gaulle
Paris Charles de Gaulle Airport (french: Aéroport de Paris-Charles-de-Gaulle, ), also known as Roissy Airport or simply Paris CDG, is the principal airport serving the French capital, Paris ( and its metropolitan area), and the largest intern ...
, and
Amsterdam Airport Schiphol
Amsterdam Airport Schiphol , known informally as Schiphol Airport ( nl, Luchthaven Schiphol, ), is the main international airport of the Netherlands. It is located southwest of Amsterdam, in the municipality of Haarlemmermeer in the province ...
. In London's case however, low-cost carriers would not be able to use Heathrow anyway as the airport is running at near capacity, so there is no room to build a base. The airlines tend to offload, service and re-load the aircraft (turnaround) in shorter time periods and don't wait for late passengers, allowing maximum utilization of aircraft.
Non-flight revenue
Low-cost carriers generate
ancillary revenue Ancillary revenue is revenue that is derived from goods or services other than a company's primary product offering. Examples include concessions at sporting events, baggage handling or seat selection revenue received by airlines, restaurant revenue ...
from a variety of activities, such as à la carte features and commission-based products. Some airlines may charge a fee for a pillow or blanket or for carry-on baggage. In Europe, it is common for each and every convenience and service to have an additional charge.
AirAsia
Capital A Berhad, () operating as AirAsia (stylized as ''airasia'') is a Malaysian multinational low-cost airline headquartered near Kuala Lumpur, Malaysia. It is the largest airline in Malaysia by fleet size and destinations. AirAsia operate ...
, for example, generates revenue by courier services and hotels as well as flights.
Limit personnel costs
Low-cost carriers intend to be low-cost, so in many cases employees work multiple roles. At some airlines flight attendants also work as gate agents or assume other roles, thereby limiting personnel costs.
Southwest Airlines
Southwest Airlines Co., typically referred to as Southwest, is one of the major airlines of the United States and the world's largest low-cost carrier. It is headquartered in Dallas, Texas, and has scheduled service to 121 destinations in the U ...
is well known for using
fuel hedging
Fuel hedging is a contractual tool some large fuel consuming companies, such as airlines, cruise lines and trucking companies, use to reduce their exposure to volatile and potentially rising fuel costs. A fuel hedge contract is a futures contract ...
programs to reduce its overall fuel costs. Check-in at the gate of luggage requires fees, as it requires addition to the weight calculation and last-minute baggage handling.
Online check-in is becoming common, again in the interest of avoiding personnel costs.
Where permissible, some airlines have a disinclination to handle Special Service passengers, for instance by placing a higher age limit on
unaccompanied minor
An unaccompanied minor (sometimes "unaccompanied child" or "separated child") is a child without the presence of a legal guardian.
The UN Committee on the Rights of the Child defines unaccompanied minors and unaccompanied children as those "who ...
s than full-service carriers. Often these airlines don't offer connecting tickets, since the airline will have to pay for ground crew to transfer luggage. A customer may create a connection manually by purchasing two separate tickets, but these are considered separate contracts, and the passenger bears the risk if a delayed inbound flight causes a missed connection.
When most countries had national monopolies, crews could negotiate pay raises and good pension benefits (something that costs money for the airlines only in the long term). During this period, most passengers were business travelers who paid high fares that covered these costs. After deregulation, which led to lower fares, many airlines remained bound to these salary agreements and pensions, whereas new low-cost carriers employed new staff with lower salaries, especially for cabin crew, keeping personnel costs low and allowing for competitive fares. In some cases airlines have gone bankrupt (e.g.,
Alitalia
Alitalia - Società Aerea Italiana Società per azioni, S.p.A., operating as Alitalia (), was an Italian airline which was once the flag carrier and largest airline of Italy. The company had its head office in Fiumicino, Metropolitan City of ...
,
Sabena
The ''Societé anonyme belge d'Exploitation de la Navigation aérienne'' (French; ), better known by the acronym Sabena or SABENA, was the national airline of Belgium from 1923 to 2001, with its base at Brussels National Airport. After its ba ...
, and
Swissair
Swissair AG/ S.A. (German: Schweizerische Luftverkehr-AG; French: S.A. Suisse pour la Navigation Aérienne) was the national airline of Switzerland between its founding in 1931 and bankruptcy in 2002.
It was formed from a merger between Bal ...
), and new airlines replaced them.
Traditional carriers followed the low-cost carriers by enabling web check-in, encouraging machine check-in at the airport, and generally reducing ground personnel cost. Ryanair is unique because it primarily operates at secondary airports without any competition, so it can easily negotiate large cost reductions and deals with the airport owners.
The number of
crew members
Crewman is a generic term for a crew member serving in the operation of an aircraft, naval vessel, or train. The term may also refer to individuals serving in a military capacity on weapon system platforms, such as those operating a tank.
In so ...
follow international conventions that require one flight attendant per 50 passenger seats and two pilots. No carrier can save money by reducing flight crew, but they can reduce ground crew.
Carriers like Ryanair hire pilots through third-party agencies based in low-tax countries without benefits for sick pay, pensions or health insurance.
Traditional carriers have also started to try this, including starting their own low-tax agencies. These agencies can easily find less experienced co-pilots and cabin crew, as the profession is popular, but there are problems for low-cost carriers to recruit and keep captains who have to be experienced.
Principles of operation
At
IATA
The International Air Transport Association (IATA ) is a trade association of the world's airlines founded in 1945. IATA has been described as a cartel since, in addition to setting technical standards for airlines, IATA also organized tariff ...
, a LCC operation is defined as including the following characteristics, at least to some degree:
* Primarily point-to-point operations
* Short-haul routes, often between regional or secondary airports
* Strong focus on price-sensitive traffic, mostly leisure passengers
* Typically a single service class, with no (or limited) customer loyalty programmes
* Limited passenger services, with additional charges for some services (e.g., on-board catering)
* Low average fares, with a strong focus on price competition
* Different fares offered, related to aircraft load factors and length of time before departure
* A very high proportion of bookings made through the Internet
* High aircraft utilisation rates, with short turnaround between operations
* A fleet of just one or two aircraft types
* Private-sector companies
* A simple management and overhead structure with a lean strategic decision-making process
While low-cost airlines differ in service offerings, by definition they feature most of the following:
* Standardized fleet (lower training, maintenance costs; purchasing aircraft in bulk)
* Absent non-essential features (reclining seats,
frequent flyer
A frequent-flyer program (American English) or frequent-flyer programme (British English) is a loyalty program offered by an airline.
Many airlines have frequent-flyer programs designed to encourage airline customers enrolled in the program ...
schemes)
* Use of secondary airports for lower
landing fees
A landing fee is a charge paid by an aircraft operator to an airport company for landing at a particular airport. Landing fees can vary greatly between airports, with congested airports, ones where most of the landing slots are held by airlines ...
and marketing support
* Avoidance of airports with high costs
* Rapid turnaround (less time on the ground, more flights per day)
* Fly also less convenient times of the day, which price sensitive tourists accept (while business travellers want to fly at times suiting their schedule)
* Online ticket sales to avoid the cost of
call centre
A call centre ( Commonwealth spelling) or call center (American spelling; see spelling differences) is a managed capability that can be centralised or remote that is used for receiving or transmitting a large volume of enquiries by telephone. ...
s or agents
* Online check-in (fewer check-in desks), charge for desk check-in
* Baggage charges for checked bags to offset baggage handling and loading costs
* Passenger loading via stairs rather than
jetway
A jet bridge (also termed jetway, jetwalk, airgate, gangway, aerobridge/airbridge, skybridge, finger, airtube, expedited suspended passenger entry system (E-SPES), or its official industry name passenger boarding bridge (PBB)) is an enclosed, ...
s
* Use staff for multiple jobs (cabin crew also check tickets at the gate, clean aircraft)
* Hedge fuel costs (buying fuel in advance when cheaper)
* Charge for all services (including on-board services, reserved seating, and extra baggage)
* Do not use reserved seating (which slows down boarding), or charge extra for reserved seating or early boarding.
* Fly point-to-point (passenger transfers to other flights are not accommodated, no compensation for missed connections)
* Carry little extra fuel (reducing aircraft weight )
* Outfit plane with cost-cutting modifications, such as
winglets
Wingtip devices are intended to improve the efficiency of fixed-wing aircraft by reducing drag. Although there are several types of wing tip devices which function in different manners, their intended effect is always to reduce an aircraft' ...
*
Route planning
A journey planner, trip planner, or route planner is a specialized search engine used to find an optimal means of travelling between two or more given locations, sometimes using more than one transport mode. Searches may be optimized on different ...
before aircraft arrives at airport (saving time on the ground)
* Market destination services such as hotels and rental cars for commissions
Innovative practices
![Nok Air Boeing 737-800 taking off from Phuket International Airport](https://upload.wikimedia.org/wikipedia/commons/4/48/Nok_Air_Boeing_737-800_taking_off_from_Phuket_International_Airport.jpg)
Some airlines resort to very innovative practices. Many airlines these days work with aircraft manufacturers, but airlines such as AirAsia goes a step further, working with airports to develop specially designed
low-cost terminals that require far less overhead. Lower costs are passed on to the airline, and in turn to the customer. Ryanair generally make the airports accept their boarding passes which passengers print themselves, although at some airports (where Ryanair is not dominating) passengers have to replace it with a normal boarding pass from the airport. Other practices that reduce expenses are the use of
UAVs
An unmanned aerial vehicle (UAV), commonly known as a drone, is an aircraft without any human pilot, crew, or passengers on board. UAVs are a component of an unmanned aircraft system (UAS), which includes adding a ground-based controlle ...
for aircraft checkups, tablet PCs instead of logs on paper (reduces airplane weight), and smartglasses for the pilot.
Differentiation
Not every low-cost carrier implements all of the above points. For example, some try to differentiate themselves with allocated seating, while others operate more than one aircraft type, still others have relatively high operating costs but lower fares.
JetBlue
JetBlue Airways Corporation (stylized as jetBlue) is a major American low cost airline, and the seventh largest airline in North America by passengers carried. The airline is headquartered in the Long Island City neighborhood of the New York C ...
, for instance, has in-flight entertainment in every passenger seat. Other airlines are limited on what points they can implement based on local laws. For example,
Ryanair
Ryanair is an Irish ultra low-cost carrier founded in 1984. It is headquartered in Swords, Dublin, Ireland and has its primary operational bases at Dublin and London Stansted airports. It forms the largest part of the Ryanair Holdings family ...
cannot remove window blinds from its aircraft, as they are required by the Irish Aviation Authority. As supply increases, this sort of differentiation by brand is an important criteria for the future success of low-cost carriers, since many experts believe price competition alone is not enough, given the number of carriers.
As the number of low-cost carriers has grown, these airlines have begun to compete with one another in addition to the traditional carriers. In the US, airlines have responded by introducing variations to the model. JetBlue advertises satellite television. Advertiser-supported
Skybus Airlines
Skybus Airlines Inc. was a privately held airline based in Columbus, Ohio, United States. It operated as an ultra low-cost carrier modeled after the European airline Ryanair, and aimed to be the least expensive airline in the United States. ...
launched from Columbus in 2007, but ceased operations in April 2008. In Europe, the emphasis has remained on reducing costs and no-frills service. In 2004, Ryanair announced proposals to eliminate reclining seats, window blinds, seat headrest covers, and seat pockets from its aircraft.
Air India Express
Air India Express is an Indian low-cost airline headquartered in Kochi, Kerala. It is operated by Air India Express Limited, a wholly owned subsidiary of Indian flag carrier airline Air India. It operates around 649 flights per week to 33 desti ...
offers a complimentary meal with beverages on most of its flights.
file:Boeing 737-86Q, Air-India Express AN0918733.jpg,
Air India Express
Air India Express is an Indian low-cost airline headquartered in Kochi, Kerala. It is operated by Air India Express Limited, a wholly owned subsidiary of Indian flag carrier airline Air India. It operates around 649 flights per week to 33 desti ...
Boeing 737-800
Ultra low-cost carrier
A secondary term "ultra low-cost carrier" (ULCC) has been used to differentiate some low-cost airlines whose model deviates further from that of a standard low-cost carrier, with ultra low-cost carriers having minimal inclusions in the fare and a greater number of add-on fees.
In the US market,
Spirit Airlines
Spirit Airlines Inc. (stylized as spirit) is a major ultra-low-cost U.S. carrier headquartered in Miramar, Florida, in the Miami metropolitan area. Spirit operates scheduled flights throughout the United States, the Caribbean and Latin Ameri ...
and
Allegiant Air
Allegiant Air (usually shortened to Allegiant) is an ultra low-cost U.S. carrier that operates scheduled and charter flights. It is a major air carrier, the fourteenth-largest commercial airline in North America.
Allegiant was founded in 1 ...
have been most commonly referred to as Ultra Low-Cost carriers, with
Frontier Airlines
Frontier Airlines is a major ultra-low-cost U.S. airline headquartered in Denver, Colorado. It operates flights to over 100 destinations throughout the United States and 31 international destinations, and employs more than 3,000 staff. The ca ...
repositioning as ultra low-cost in 2015.
In Europe,
Ryanair
Ryanair is an Irish ultra low-cost carrier founded in 1984. It is headquartered in Swords, Dublin, Ireland and has its primary operational bases at Dublin and London Stansted airports. It forms the largest part of the Ryanair Holdings family ...
and
Wizz Air
Wizz Air, legally incorporated as Wizz Air Hungary Ltd. ( hu, Wizz Air Hungary Légiközlekedési Zrt.) is a Hungarian ultra-low-cost carrier with its head office in Budapest, Hungary. The airline serves many cities across Europe, as well as s ...
are the most prominent ULCCs. Following the appointment of former Allegiant Air COO Jude Bricker as their new CEO,
Sun Country Airlines
Sun Country Airlines is an American ultra-low-cost passenger and cargo airline, and the eleventh largest in the US by passengers carried. Based at Minneapolis–Saint Paul International Airport with headquarters on airport property, Sun Coun ...
began transitioning to an ultra low-cost carrier model in 2017.
In Canada,
Lynx Air
Lynx Air, legally incorporated as 1263343 Alberta Inc., is a Canadian ultra-low-cost carrier based in Calgary, Alberta. It previously operated as Enerjet and was rebranded as Lynx Air on November 16, 2021. The first flight under the Lynx Air n ...
launched service in 2022.
Swoop is an ultra low-cost carrier owned by
WestJet
WestJet Airlines Ltd. is a Canadian airline headquartered in Calgary, Alberta, near Calgary International Airport. It is the second-largest Canadian airline, behind Air Canada, operating an average of 777 flights and carrying more than 66,130 ...
.
Pricing policy
![EI-DAM (7191368918)](https://upload.wikimedia.org/wikipedia/commons/6/6f/EI-DAM_%287191368918%29.jpg)
The pricing policy of the low-cost carriers is usually very dynamic, with discounts and tickets in promotion. Like other carriers, even if the advertised price may be very low, it often does not include charges and taxes. With some airlines, some flights are advertised as free (plus applicable taxes, fees and charges). Depending on the airline, perhaps as many (or as few) as ten percent of the seats on any flight are offered at the lowest price and are the first to sell. The prices steadily rise thereafter to a point where they can be comparable or more expensive than a flight on a full-service carrier.
Most airlines charge additional taxes and fees on their tickets. Some low-cost airlines have been known to charge fees for the seemingly ridiculous, such as levying a credit card charge if credit card is the only payment method accepted.
Criticism
Some elements of the low-cost model have been subject to criticism by governments and regulators; and in the UK in particular, the issue of "unbundling" of ancillary charges by both low-cost carriers and other airlines (showing airport fees or taxes as separate charges rather than as part of the advertised fare) to make the "headline fare" appear lower has resulted in enforcement action. Considering that this amounts to a misleading approach to pricing, the United Kingdom's
Office of Fair Trading
The Office of Fair Trading (OFT) was a non-ministerial government department of the United Kingdom, established by the Fair Trading Act 1973, which enforced both consumer protection and competition law, acting as the United Kingdom's economic ...
(OFT) in February 2007 gave all carriers and travel companies three months to include all fixed non-optional costs in their basic advertised prices. Although the full-service carriers had complied within the specified timescales, the low-cost carriers have been less compliant in this respect, leading to the prospect of legal action by the OFT.
Some destination cities lie relatively far from the airports that low-cost airlines use to save costs. Examples of this are
Hahn,
Weeze
Weeze (, Dutch: ''Wees'') is a municipality in the Lower Rhine (Niederrhein) region, in the northwestern part of North Rhine-Westphalia in the district of Kleve in the region of Düsseldorf.
The municipality consists of the town of Weeze and th ...
and
Girona
Girona (officially and in Catalan language, Catalan , Spanish: ''Gerona'' ) is a city in northern Catalonia, Spain, at the confluence of the Ter River, Ter, Onyar, Galligants, and Güell rivers. The city had an official population of 103,369 in ...
airports—which low-cost airlines advertise as the destinations for
Frankfurt
Frankfurt, officially Frankfurt am Main (; Hessian: , "Frank ford on the Main"), is the most populous city in the German state of Hesse. Its 791,000 inhabitants as of 2022 make it the fifth-most populous city in Germany. Located on its na ...
,
Düsseldorf
Düsseldorf ( , , ; often in English sources; Low Franconian and Ripuarian: ''Düsseldörp'' ; archaic nl, Dusseldorp ) is the capital city of North Rhine-Westphalia, the most populous state of Germany. It is the second-largest city in th ...
, and
Barcelona
Barcelona ( , , ) is a city on the coast of northeastern Spain. It is the capital and largest city of the autonomous community of Catalonia, as well as the second most populous municipality of Spain. With a population of 1.6 million within ci ...
, respectively—even though these airports are 50 to 90 kilometres away. This has drawn criticism, mostly from competing airlines that fly closer to the destinations.
IAG CEO
Willie Walsh found established airlines arrogant facing the LCC model. For instance,
Aer Lingus
Aer Lingus ( ; an anglicisation of the Irish , meaning "air fleet" compare Welsh 'llynges awyr') is the flag carrier of Ireland. Founded by the Irish Government, it was privatised between 2006 and 2015 and it is now a wholly owned subsidiary ...
turned down the opportunity to buy
Ryanair
Ryanair is an Irish ultra low-cost carrier founded in 1984. It is headquartered in Swords, Dublin, Ireland and has its primary operational bases at Dublin and London Stansted airports. It forms the largest part of the Ryanair Holdings family ...
for ''£''29 million
Irish pound
The pound (Irish: ) was the currency of the Republic of Ireland until 2002. Its ISO 4217 code was IEP, and the symbol was £ (or IR£ for distinction). The Irish pound was replaced by the euro on 1 January 1999. Euro currency did not begin cir ...
s (€ million). The company further stated that it would not have developed Ryanair and instead would have shut it down.
History
While tour and package operators have offered lower-priced, lower-frilled traveling for a large part of modern airline history, not until during the post–
Vietnam War
The Vietnam War (also known by #Names, other names) was a conflict in Vietnam, Laos, and Cambodia from 1 November 1955 to the fall of Saigon on 30 April 1975. It was the second of the Indochina Wars and was officially fought between North Vie ...
era did this business model escalate. Through various ticket consolidators,
charter airline
Air charter is the business of renting an entire aircraft (i.e., chartering) as opposed to individual aircraft seats (i.e., purchasing a airline ticket, ticket through a traditional airline).
Regulation
Charter – also called air taxi or ad h ...
s, and innovators in lower-frills flying, such as
Channel Airways
Channel Airways was a private airline formed in the United Kingdom in 1946 as East Anglian Flying Services.
The newly formed airline initially operated aerial joy rides with a single, three-seater aircraft from an airstrip on the Kent coast. Sc ...
and
Court Line
Court Line was a 20th-century British tramp shipping company that was founded in 1905. In the 1960s it diversified into shipbuilding and charter aviation. Its merchant shipping interests were based in London. Its shipyards were at Appledore in ...
, the traveling public had been conditioned to want to travel to new and increasingly further away and exotic locations on vacation, rather than short-haul trips to nearby beach resorts.
The world's first low-cost airline was
Pacific Southwest Airlines
Pacific Southwest Airlines (PSA) was a regional U.S. airline headquartered in San Diego, California, that operated from 1949 to 1998. It was the first large discount airline in the United States. PSA called itself "The World's Friendliest Airl ...
, which started intrastate flights connecting Southern and Northern California on 6 May 1949. PSA's light-hearted atmosphere and efficient operations were a runaway success early on, and inspired a number of low-cost start-ups across the United States, beginning in the mid-60s.
Herb Kelleher
Herbert David Kelleher (March 12, 1931 – January 3, 2019) was an American billionaire airline businessman and lawyer. He was the co-founder, later CEO, and chairman emeritus of Southwest Airlines until his death in 2019.
Early life
Kelleher w ...
studied the success of PSA, and copied their culture closely when he established
Southwest Airlines
Southwest Airlines Co., typically referred to as Southwest, is one of the major airlines of the United States and the world's largest low-cost carrier. It is headquartered in Dallas, Texas, and has scheduled service to 121 destinations in the U ...
in 1971.
The first airline to offer cheaper transatlantic fares was Icelandic airline
Loftleiðir
Loftleiðir HF, internationally known as Icelandic Airlines (abbreviated IAL) or Loftleiðir Icelandic, was a private Icelandic airline headquartered on the grounds of Reykjavík Airport in Reykjavík, which operated mostly trans-atlantic fligh ...
in 1964, often referred to as "the Hippie Airline". Many young Americans travelled to Europe after graduation, to experience the "old-world culture", and they were more concerned with getting there cheaply than comfortably or even exactly on time. Loftleiðir were not famous for speed or punctuality, but flying with the company became a sort of rite of passage for those young "hippies", one of whom was
Bill Clinton
William Jefferson Clinton ( né Blythe III; born August 19, 1946) is an American politician who served as the 42nd president of the United States from 1993 to 2001. He previously served as governor of Arkansas from 1979 to 1981 and agai ...
, later US President.
![THE NEW CEMENT LITTER BASKETS ON FIFTH AVENUE ARE DESIGNED TO BE THEFT-PROOF AND TO PAY FOR THEMSELVES THROUGH THE](https://upload.wikimedia.org/wikipedia/commons/5/59/THE_NEW_CEMENT_LITTER_BASKETS_ON_FIFTH_AVENUE_ARE_DESIGNED_TO_BE_THEFT-PROOF_AND_TO_PAY_FOR_THEMSELVES_THROUGH_THE..._-_NARA_-_549812.jpg)
The first airline offering no-frills transatlantic service was
Freddie Laker
Sir Frederick Alfred Laker (6 August 1922 – 9 February 2006) was an English airline entrepreneur, best known for founding Laker Airways in 1966, which went bankrupt in 1982. Known as Freddie Laker, he was one of the first airline owners to a ...
's
Laker Airways
Laker Airways was a private British airline founded by Sir Freddie Laker in 1966. It was originally a charter airline flying passengers and cargo worldwide. Its head office was located at Gatwick Airport in Crawley, England.
It became the seco ...
, which operated its famous "Skytrain" service between London and New York City during the late 1970s. The service was suspended after Laker's competitors,
British Airways
British Airways (BA) is the flag carrier airline of the United Kingdom. It is headquartered in London
London is the capital and List of urban areas in the United Kingdom, largest city of England and the United Kingdom, with a populati ...
and
Pan Am
Pan American World Airways, originally founded as Pan American Airways and commonly known as Pan Am, was an American airline that was the principal and largest international air carrier and unofficial overseas flag carrier of the United States ...
, were able to price Skytrain out of the market.
In the United States, airline carriers such as
Midway Airlines and
America West Airlines
America West Airlines was a major American airline, founded in 1981, with service commencing in 1983, and having reached US$1 billion in annual revenue in 1989, headquartered in Tempe, Arizona. At the time of its acquisition of US Airways, Americ ...
, which commenced operations after 1978, soon realized a
cost of available seat mile (CASM) advantage in relation to the traditional and established,
legacy airlines such as
Trans World Airlines
Trans World Airlines (TWA) was a major American airline which operated from 1930 until 2001. It was formed as Transcontinental & Western Air to operate a route from New York City to Los Angeles via St. Louis, Kansas City, and other stops, with F ...
and
American Airlines
American Airlines is a major airlines of the United States, major US-based airline headquartered in Fort Worth, Texas, within the Dallas–Fort Worth metroplex. It is the Largest airlines in the world, largest airline in the world when measured ...
. Often this CASM advantage has been attributed solely to the lower labor costs of the newly hired and lower pay grade workers of new start-up carriers, such as
ValuJet
ValuJet Airlines, later known as AirTran Airlines after joining forces with AirTran Airways, was an ultra low-cost U.S. airline, headquartered in unincorporated Clayton County, Georgia, that operated regularly scheduled domestic and interna ...
,
Midway Airlines, and their like. However, these lower costs can also be attributed to the less complex aircraft fleets and route networks with which these new carriers began operations, in addition to their reduced labor costs.
To combat the new round of low-cost and start-up entrants into the very competitive and deregulated United States airline industry, the
mainline major carrier
The United States Department of Transportation defines a major carrier or major airline carrier as a U.S.-based airline that posts more than $1 billion in revenue during a fiscal year, grouped accordingly as "Group III".
Airlines
According to FY20 ...
s and
network legacy carriers strategically developed no-frills divisions within the main airlines brand and corporate structures. Among these were
Continental Lite
Continental Lite was a short-lived subsidiary brand of Continental Airlines established in 1993. The airline folded in 1995 after losing what has been reported in the press as between $140 million or (US) $300 million.
History
Continental Lite w ...
,
Delta Express,
MetroJet
MetroJet was a low-cost carrier, no-frills airline brand operated as a wholly owned division of US Airways from 1998 until 2001.
History
After the conclusion of painstaking labor negotiations in 1997, US Airways sought to head off burgeoning ...
,
Shuttle by United,
Song
A song is a musical composition intended to be performed by the human voice. This is often done at distinct and fixed pitches (melodies) using patterns of sound and silence. Songs contain various forms, such as those including the repetitio ...
, and
Ted
TED may refer to:
Economics and finance
* TED spread between U.S. Treasuries and Eurodollar
Education
* ''Türk Eğitim Derneği'', the Turkish Education Association
** TED Ankara College Foundation Schools, Turkey
** Transvaal Education Depa ...
. However, most of these "airlines within an airline" were short-lived and quickly disposed-of when economic rationalization or competitive pressures subsided.
Taking a page from the mainline, major, or legacy carriers' desire to reduce costs in all ways possible in regards regional route networks by outsourcing regional operations to the lowest expense airline bidder capable of operating regional aircraft, a new generation of low-cost airlines (in name only) soon evolved in the US with varying levels of success. Among these varieties of low-cost and discount operators were noteworthy starts-ups that managed to get off the ground by using the larger aircraft services of established charter airlines. Among this group were the
virtual airlines;
Direct Air
Southern Sky Air Tours, d/b/a Direct Air was an airline business based in Myrtle Beach, South Carolina, United States. Direct Air started in 2007 and leased aircraft with charter airlines. Its main base was Myrtle Beach International Airport. Dire ...
,
PeoplExpress,
Western
Western may refer to:
Places
*Western, Nebraska, a village in the US
*Western, New York, a town in the US
*Western Creek, Tasmania, a locality in Australia
*Western Junction, Tasmania, a locality in Australia
*Western world, countries that id ...
, and those that never began service such as
JetAmerica
Sun America, Inc., d/b/a JetAmerica, was a proposed American low-cost scheduled public charter airline headquartered in unincorporated Pinellas County, Florida. On March 10, 2009, the airline announced a number of public scheduled charter flights ...
.
In Japan, low-cost airlines made major inroads into the market in 2012 when
Peach
The peach (''Prunus persica'') is a deciduous tree first domesticated and cultivated in Zhejiang province of Eastern China. It bears edible juicy fruits with various characteristics, most called peaches and others (the glossy-skinned, non-fu ...
,
Jetstar Japan
is a Japanese low-cost airline headquartered in Narita, Chiba. Initially planned to commence flights in late 2012, it launched ahead of schedule on 3 July 2012. The airline serves destinations across the Asia-Pacific region, using a fleet of ...
and
AirAsia Japan
was the name of two incarnations of a Japanese low-cost airline, which had operated as a joint venture between AirAsia of Malaysia and Japanese partners.
AirAsia Japan's first incarnation was founded in July 2011, and was based at Tokyo's Na ...
began operations, each with financial sponsorship by a domestic legacy airline and one or more foreign investors. By mid-2013, these new LCCs were operating at a unit cost of around 8 yen per seat-kilometer, compared to 10–11 yen per seat-kilometer for domestic legacy airlines. However, their unit cost was still much higher than the 3 yen per seat-kilometer for
AirAsia
Capital A Berhad, () operating as AirAsia (stylized as ''airasia'') is a Malaysian multinational low-cost airline headquartered near Kuala Lumpur, Malaysia. It is the largest airline in Malaysia by fleet size and destinations. AirAsia operate ...
in
Malaysia
Malaysia ( ; ) is a country in Southeast Asia. The federation, federal constitutional monarchy consists of States and federal territories of Malaysia, thirteen states and three federal territories, separated by the South China Sea into two r ...
, due to the higher cost of landing fees and personnel in Japan.
Market share
![Top European LCC group with a large fleet size](https://upload.wikimedia.org/wikipedia/commons/9/91/Top_European_LCC_group_with_a_large_fleet_size.png)
By 2017, low-cost carriers had achieved market share of 57.2% in South Asia and 52.6% in Southeast Asia. Market share remained somewhat lower in Europe at 37.9% and North America at 32.7%.
For the
European Commission
The European Commission (EC) is the executive of the European Union (EU). It operates as a cabinet government, with 27 members of the Commission (informally known as "Commissioners") headed by a President. It includes an administrative body o ...
, the LCCs market share (44.8%) exceeded legacy carriers (42.4%) in 2012: between 2002 and 2017, LCC
share of
international
International is an adjective (also used as a noun) meaning "between nations".
International may also refer to:
Music Albums
* ''International'' (Kevin Michael album), 2011
* ''International'' (New Order album), 2002
* ''International'' (The T ...
seat capacity rose from 23% to 57% in the UK, from 10% to 55% in Italy and from 9% to 56% in Spain but have still room for growth in
domestic
Domestic may refer to:
In the home
* Anything relating to the human home or family
** A domestic animal, one that has undergone domestication
** A domestic appliance, or home appliance
** A domestic partnership
** Domestic science, sometimes cal ...
seat-capacity In France with 19% and in Germany with 25% in 2017, compared with 66% in the UK, 48% in Spain and 47% in Italy.
By early 2019, there were more than 100 LCCs operating 6,000 aircraft, doubled from 2,900 aircraft at the end of 2009, while seat capacity reached nearly 1.7 billion in 2018.
LCCs accounted for 33% of intra-regional seat capacity in 2018 with 1.564 billion, up from 25% in 2008 with 753 million, and 13% of seat capacity between regions with 101 million, up from 6% in 2009 with 26 million.
In 2018, penetration rate was 41% of seats within Europe, 36% within Latin America, 32% within North America, 29% within Asia Pacific, 17% within the Middle East and 12% within Africa.
Long-haul low-cost
![McDonnell Douglas DC-10-10, Laker Airways Skytrain AN1849847](https://upload.wikimedia.org/wikipedia/commons/4/45/McDonnell_Douglas_DC-10-10%2C_Laker_Airways_Skytrain_AN1849847.jpg)
A long-haul low-cost operation would be harder to
differentiate from a conventional airline as there are few
cost
In production, research, retail, and accounting, a cost is the value of money that has been used up to produce something or deliver a service, and hence is not available for use anymore. In business, the cost may be one of acquisition, in which ...
savings possibilities, while the seat costs would have to be lower than the competition. Long-haul aircraft scheduling is often determined by
time zone
A time zone is an area which observes a uniform standard time for legal, Commerce, commercial and social purposes. Time zones tend to follow the boundaries between Country, countries and their Administrative division, subdivisions instead of ...
constraints, like leaving the
US East Coast
The East Coast of the United States, also known as the Eastern Seaboard, the Atlantic Coast, and the Atlantic Seaboard, is the coastline along which the Eastern United States meets the North Atlantic Ocean. The eastern seaboard contains the coa ...
in the evening and arriving in
Europe
Europe is a large peninsula conventionally considered a continent in its own right because of its great physical size and the weight of its history and traditions. Europe is also considered a Continent#Subcontinents, subcontinent of Eurasia ...
the following morning, and the longer flight times mean there is less scope to increase aircraft
utilization as in short-haul. The
business model
A business model describes how an organization creates, delivers, and captures value,''Business Model Generation'', Alexander Osterwalder, Yves Pigneur, Alan Smith, and 470 practitioners from 45 countries, self-published, 2010 in economic, social, ...
is
financially risky, and many companies have entered
bankruptcy
Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the debtor ...
, like
Laker Airways
Laker Airways was a private British airline founded by Sir Freddie Laker in 1966. It was originally a charter airline flying passengers and cargo worldwide. Its head office was located at Gatwick Airport in Crawley, England.
It became the seco ...
.
History
In 2004, Irish
Aer Lingus
Aer Lingus ( ; an anglicisation of the Irish , meaning "air fleet" compare Welsh 'llynges awyr') is the flag carrier of Ireland. Founded by the Irish Government, it was privatised between 2006 and 2015 and it is now a wholly owned subsidiary ...
maintains a full service on
transatlantic flight
A transatlantic flight is the flight of an aircraft across the Atlantic Ocean from Europe, Africa, South Asia, or the Middle East to North America, Central America, or South America, or ''vice versa''. Such flights have been made by fixed-wing air ...
s while it lowered its prices to compete with
Ryanair
Ryanair is an Irish ultra low-cost carrier founded in 1984. It is headquartered in Swords, Dublin, Ireland and has its primary operational bases at Dublin and London Stansted airports. It forms the largest part of the Ryanair Holdings family ...
on short haul.
Late in 2004,
Oasis Hong Kong Airlines
Oasis Hong Kong Airlines Limited () was a long-haul, low-cost Asian airline. It operated scheduled services to London Gatwick Airport and Vancouver International Airport from its hub, Hong Kong International Airport. The airline offered low ...
offered
London
London is the capital and largest city of England and the United Kingdom, with a population of just under 9 million. It stands on the River Thames in south-east England at the head of a estuary down to the North Sea, and has been a majo ...
to
Hong Kong
Hong Kong ( (US) or (UK); , ), officially the Hong Kong Special Administrative Region of the People's Republic of China ( abbr. Hong Kong SAR or HKSAR), is a city and special administrative region of China on the eastern Pearl River Delt ...
flights from £199, and Canadian
Zoom Airlines
Zoom Airlines Inc. was a Canadian low-fare scheduled transatlantic airline with its headquarters in the Place Bell Canada building in Ottawa, Ontario. Zoom operated year-round scheduled services to Europe, and charter services to South A ...
started selling transatlantic flights between the
UK and Canada for £89. In August 2006, Zoom announced a
UK subsidiary to offer low-cost long-haul flights to the United States and India, but suspended its operations from 28 August 2008 due to high fuel prices inducing financial problems.
In 2005,
Emirates
Emirates may refer to:
* United Arab Emirates, a Middle Eastern country
* Emirate, any territory ruled by an emir
** Gulf emirates, emirates located on the Persian Gulf
** Emirates of the United Arab Emirates, the individual emirates
* The Emirat ...
'
Tim Clark viewed long-haul low-cost as inevitable, flights could be operated on 760 seats all-economy
Airbus A380
The Airbus A380 is a large wide-body airliner that was developed and produced by Airbus. It is the world's largest passenger airliner and only full-length double-deck jet airliner.
Airbus studies started in 1988, and the project was annou ...
s, or 870 for an hypothetical A380 stretch.
Since 2005, Australia's
Jetstar Airways
Jetstar Airways Pty Ltd, operating as Jetstar, is an Australian low-cost airline (self-described as "value-based") headquartered in Melbourne. It is a wholly owned subsidiary of Qantas, created in response to the threat posed by airline Virgi ...
operates international flights, starting with
Christchurch
Christchurch ( ; mi, Ōtautahi) is the largest city in the South Island of New Zealand and the seat of the Canterbury Region. Christchurch lies on the South Island's east coast, just north of Banks Peninsula on Pegasus Bay. The Avon River / ...
, New Zealand. In late 2006, others followed from
Sydney
Sydney ( ) is the capital city of the state of New South Wales, and the most populous city in both Australia and Oceania. Located on Australia's east coast, the metropolis surrounds Sydney Harbour and extends about towards the Blue Mountain ...
,
Melbourne
Melbourne ( ; Boonwurrung/Woiwurrung: ''Narrm'' or ''Naarm'') is the capital and most populous city of the Australian state of Victoria, and the second-most populous city in both Australia and Oceania. Its name generally refers to a met ...
and
Brisbane
Brisbane ( ) is the capital and most populous city of the states and territories of Australia, Australian state of Queensland, and the list of cities in Australia by population, third-most populous city in Australia and Oceania, with a populati ...
, to popular tourist destinations within 10 hours like
Honolulu
Honolulu (; ) is the capital and largest city of the U.S. state of Hawaii, which is in the Pacific Ocean. It is an unincorporated county seat of the consolidated City and County of Honolulu, situated along the southeast coast of the island ...
, Japan,
Vietnam
Vietnam or Viet Nam ( vi, Việt Nam, ), officially the Socialist Republic of Vietnam,., group="n" is a country in Southeast Asia, at the eastern edge of mainland Southeast Asia, with an area of and population of 96 million, making i ...
,
Thailand
Thailand ( ), historically known as Siam () and officially the Kingdom of Thailand, is a country in Southeast Asia, located at the centre of the Indochinese Peninsula, spanning , with a population of almost 70 million. The country is bo ...
and
Malaysia
Malaysia ( ; ) is a country in Southeast Asia. The federation, federal constitutional monarchy consists of States and federal territories of Malaysia, thirteen states and three federal territories, separated by the South China Sea into two r ...
. With new aircraft deliveries, it hopes to fly to the continental
US and
Europe
Europe is a large peninsula conventionally considered a continent in its own right because of its great physical size and the weight of its history and traditions. Europe is also considered a Continent#Subcontinents, subcontinent of Eurasia ...
.
In April 2006, the industry magazine ''
Airline Business
RELX plc (pronounced "Rel-ex") is a British multinational information and analytics company headquartered in London, England. Its businesses provide scientific, technical and medical information and analytics; legal information and analytics; ...
'' analysed the potential for low-cost long-haul service and concluded that a number of Asian carriers, including AirAsia, were closest to making such a model work.
On 26 October 2006,
Oasis Hong Kong Airlines
Oasis Hong Kong Airlines Limited () was a long-haul, low-cost Asian airline. It operated scheduled services to London Gatwick Airport and Vancouver International Airport from its hub, Hong Kong International Airport. The airline offered low ...
started flying from
Hong Kong
Hong Kong ( (US) or (UK); , ), officially the Hong Kong Special Administrative Region of the People's Republic of China ( abbr. Hong Kong SAR or HKSAR), is a city and special administrative region of China on the eastern Pearl River Delt ...
to
London-Gatwick
Gatwick Airport (), also known as London Gatwick , is a major international airport near Crawley, West Sussex, England, south of Central London. In 2021, Gatwick was the third-busiest airport by total passenger traffic in the UK, after Hea ...
. The lowest prices for flights between
Hong Kong
Hong Kong ( (US) or (UK); , ), officially the Hong Kong Special Administrative Region of the People's Republic of China ( abbr. Hong Kong SAR or HKSAR), is a city and special administrative region of China on the eastern Pearl River Delt ...
to
London
London is the capital and largest city of England and the United Kingdom, with a population of just under 9 million. It stands on the River Thames in south-east England at the head of a estuary down to the North Sea, and has been a majo ...
could be as low at £75 (approximately US$150) per leg (not including taxes and other charges) for economy class and £470 (approximately US$940) per leg for business class for the same route. From 28 June 2007, a second long-haul route to Vancouver,
British Columbia
British Columbia (commonly abbreviated as BC) is the westernmost province of Canada, situated between the Pacific Ocean and the Rocky Mountains. It has a diverse geography, with rugged landscapes that include rocky coastlines, sandy beaches, ...
was started. The company ceased operations on 9 April 2008, after over a billion
Hong Kong dollar
The Hong Kong dollar (, currency symbol, sign: HK$; ISO 4217, code: HKD) is the official currency of the Hong Kong, Hong Kong Special Administrative Region. It is subdivided into 100 cent (currency), cents or 1000 Mill (currency), mils. The H ...
s in losses.
On 2 November 2007,
AirAsia X
AirAsia X (previously known as ''FlyAsianXpress Sdn. Bhd.''), is a long-haul budget airline based in Malaysia, and a sister company of AirAsia. It commenced operations on 2 November 2007 with its first service flown from Kuala Lumpur Internatio ...
, a subsidiary of
AirAsia
Capital A Berhad, () operating as AirAsia (stylized as ''airasia'') is a Malaysian multinational low-cost airline headquartered near Kuala Lumpur, Malaysia. It is the largest airline in Malaysia by fleet size and destinations. AirAsia operate ...
and
Virgin Group
Virgin Group Ltd. is a British multinational venture capital conglomerate founded by Richard Branson and Nik Powell in February 1970.
Virgin Group's date of incorporation is listed as 1989 by the Companies House, who class it as a holding c ...
flew its inaugural flight from
Kuala Lumpur
, anthem = '' Maju dan Sejahtera''
, image_map =
, map_caption =
, pushpin_map = Malaysia#Southeast Asia#Asia
, pushpin_map_caption =
, coordinates =
, su ...
, Malaysia, to
Gold Coast
Gold Coast may refer to:
Places Africa
* Gold Coast (region), in West Africa, which was made up of the following colonies, before being established as the independent nation of Ghana:
** Portuguese Gold Coast (Portuguese, 1482–1642)
** Dutch G ...
, Australia. AirAsia X claims that it is the first true low-cost long-haul carrier since the end of
Skytrain.
In late 2007,
Cebu Pacific
Cebu Air, Inc., operating as Cebu Pacific (), is a low-cost airline of the Philippines. Founded in 1988, it is Asia's oldest low-cost airline. It offers scheduled flights to both domestic and international destinations. The airline operates fl ...
, the
Philippines
The Philippines (; fil, Pilipinas, links=no), officially the Republic of the Philippines ( fil, Republika ng Pilipinas, links=no),
* bik, Republika kan Filipinas
* ceb, Republika sa Pilipinas
* cbk, República de Filipinas
* hil, Republ ...
' largest low-cost carrier, announced non-stop flights from the Philippines to the
United States West Coast
The West Coast of the United States, also known as the Pacific Coast, Pacific states, and the western seaboard, is the coastline along which the Western United States meets the North Pacific Ocean. The term typically refers to the contiguous U.S ...
and other US cities from mid-2009. The airline also intends to launch low-cost service to
Middle East
The Middle East ( ar, الشرق الأوسط, ISO 233: ) is a geopolitical region commonly encompassing Arabian Peninsula, Arabia (including the Arabian Peninsula and Bahrain), Anatolia, Asia Minor (Asian part of Turkey except Hatay Pro ...
, where around a million Filipinos are based, and in Europe. As of October 2017, it operates flights to Dubai daily and Guam three times a week.
On 11 March 2009, AirAsia X started its first low-cost long-haul service into Europe, to
London Stansted
London Stansted Airport is a tertiary international airport serving London, England, United Kingdom. It is located near Stansted Mountfitchet, Essex, England, northeast of Central London.
London Stansted serves over 160 destinations acros ...
. The daily flights are operated by two leased
Airbus A340
The Airbus A340 is a long-range, wide-body passenger airliner that was developed and produced by Airbus.
In the mid-1970s, Airbus conceived several derivatives of the A300, its first airliner, and developed the A340 quadjet in parallel with ...
-300s. A one-way economy-class ticket often costs £150, and the premium-class one-way often costs £350. On 12 January 2012, AirAsia announced that it would be suspending services to
London
London is the capital and largest city of England and the United Kingdom, with a population of just under 9 million. It stands on the River Thames in south-east England at the head of a estuary down to the North Sea, and has been a majo ...
on 1 April 2012.
Low-cost European airline,
Norwegian Air Shuttle
Norwegian Air Shuttle Aksjeselskap, ASA, trading as Norwegian, is a Norway, Norwegian Low-cost carrier, low-cost airline and Norway's largest airline. It is the fourth largest low-cost carrier in Europe behind Wizz Air, easyJet and Ryanair, the ...
, started long-haul low-cost operations in May 2013 under their
Norwegian Long Haul
Norwegian Long Haul AS was a division of Norwegian Air Shuttle that operated long-haul flights between Europe, Asia, and North America with an all-Boeing 787 Dreamliner fleet.
Norwegian Long Haul was registered in Dublin, Ireland, and was mana ...
arm. Norwegian initially operated flights to Bangkok and New York from Scandinavia using leased Airbus A340 aircraft, switching to new
Boeing 787
The Boeing 787 Dreamliner is an American wide-body jet airliner developed and manufactured by Boeing Commercial Airplanes.
After dropping its unconventional Sonic Cruiser project, Boeing announced the conventional 7E7 on January 29, 2003, ...
s in the second half of 2013 after Boeing resumed deliveries following extensive problems and delays. It served direct routes from the United States (
Los Angeles
Los Angeles ( ; es, Los Ángeles, link=no , ), often referred to by its initials L.A., is the largest city in the state of California and the second most populous city in the United States after New York City, as well as one of the world' ...
,
Fort Lauderdale
A fortification is a military construction or building designed for the defense of territories in warfare, and is also used to establish rule in a region during peacetime. The term is derived from Latin ''fortis'' ("strong") and ''facere'' ...
,
New York City
New York, often called New York City or NYC, is the List of United States cities by population, most populous city in the United States. With a 2020 population of 8,804,190 distributed over , New York City is also the L ...
,
Oakland-San Francisco,
Boston
Boston (), officially the City of Boston, is the state capital and most populous city of the Commonwealth of Massachusetts, as well as the cultural and financial center of the New England region of the United States. It is the 24th- mo ...
and
Orlando
Orlando () is a city in the U.S. state of Florida and is the county seat of Orange County. In Central Florida, it is the center of the Orlando metropolitan area, which had a population of 2,509,831, according to U.S. Census Bureau figures rele ...
) into
Scandinavia
Scandinavia; Sámi languages: /. ( ) is a subregion#Europe, subregion in Northern Europe, with strong historical, cultural, and linguistic ties between its constituent peoples. In English usage, ''Scandinavia'' most commonly refers to Denmark, ...
(
Oslo
Oslo ( , , or ; sma, Oslove) is the capital and most populous city of Norway. It constitutes both a county and a municipality. The municipality of Oslo had a population of in 2022, while the city's greater urban area had a population of ...
,
Stockholm
Stockholm () is the Capital city, capital and List of urban areas in Sweden by population, largest city of Sweden as well as the List of urban areas in the Nordic countries, largest urban area in Scandinavia. Approximately 980,000 people liv ...
,
Copenhagen
Copenhagen ( or .; da, København ) is the capital and most populous city of Denmark, with a proper population of around 815.000 in the last quarter of 2022; and some 1.370,000 in the urban area; and the wider Copenhagen metropolitan ar ...
). In January 2021 Norwegian announced the immediate cessation of their long-haul operations, along with a large-scale reduction of its fleet of
Boeing 737
The Boeing 737 is a narrow-body aircraft produced by Boeing at its Renton Factory in Washington.
Developed to supplement the Boeing 727 on short and thin routes, the twinjet retains the 707 fuselage width and six abreast seating with two un ...
aircraft and operations.
In March 2017,
International Airlines Group
International Consolidated Airlines Group S.A., trading as International Airlines Group and usually shortened to IAG, is an Anglo-Spanish multinational airline holding company with its registered office in Madrid, Spain, and its global headqua ...
established
Level
Level or levels may refer to:
Engineering
*Level (instrument), a device used to measure true horizontal or relative heights
*Spirit level, an instrument designed to indicate whether a surface is horizontal or vertical
*Canal pound or level
*Regr ...
, a long-haul low-cost
virtual airline based in
Barcelona Airport
Barcelona ( , , ) is a city on the coast of northeastern Spain. It is the capital and largest city of the autonomous community of Catalonia, as well as the second most populous municipality of Spain. With a population of 1.6 million within ci ...
and serving destinations in North and South America.
Long-haul low-cost carriers are emerging on the
transatlantic flight
A transatlantic flight is the flight of an aircraft across the Atlantic Ocean from Europe, Africa, South Asia, or the Middle East to North America, Central America, or South America, or ''vice versa''. Such flights have been made by fixed-wing air ...
s market with 545,000 seats offered over 60 city pairs in September 2017 (a 66% growth over one year), compared to 652,000 seats over 96 pairs for
Leisure airlines and 8,798,000 seats over 357 pairs for
mainline carriers.
Ex American Airlines CEO
Bob Crandall
Robert Lloyd "Bob" Crandall (born December 6, 1935 in Westerly, Rhode Island) is an American businessman who is the former president and chairman of American Airlines. Called an industry legend by airline industry observers, Crandall has been the ...
thinks the legacy carriers will force Long-haul LCCS to lose too much money and will continue to dominate.
While Asian carriers like AirAsia X,
Scoot
Scoot Pte Ltd, operating as Scoot, is a Singaporean low-cost airline and a wholly owned subsidiary of Singapore Airlines. It began its operations on 4 June 2012 on medium and long-haul routes from Singapore, predominantly to various airports t ...
, Cebu Pacific and Jetstar Airways are successful, the October 2018 demise of
Primera Air
Primera Air Scandinavia A/S, trading as Primera Air, was a Danish airline owned by Primera Travel Group. It provided scheduled and charter passenger services from Northern Europe to more than 40 destinations in the Mediterranean, Middle East ...
and its $99 transatlantic flights illustrates the difficulties of the model, as the US
World Airways
World Airways, Inc. was a United States airline headquartered in Peachtree City, Georgia in Greater Atlanta. The company operated mostly non-scheduled services but did fly scheduled passenger services as well, notably with McDonnell Douglas DC ...
will be relaunched in 2019.
Low-cost business-only carriers
A trend from the mid-2000s was the formation of new low-cost carriers exclusively targeting the long-haul business market. Aircraft are generally configured for a single class of service, initially on transatlantic routings.
Similarly, Midwest Express (later
Midwest Airlines
Midwest Airlines (formerly Midwest Express) was a U.S.-based airline headquartered in Oak Creek, Wisconsin, that operated from Milwaukee Mitchell International Airport between 1984 and 2010. For a short time, it also operated as a brand of ...
) which operated from 1984 until it was absorbed into
Frontier Airlines
Frontier Airlines is a major ultra-low-cost U.S. airline headquartered in Denver, Colorado. It operates flights to over 100 destinations throughout the United States and 31 international destinations, and employs more than 3,000 staff. The ca ...
in 2010, and
Legend Airlines
Legend Airlines was an airline headquartered at Dallas Love Field in Dallas, Texas, United States. Legend operated nonstop flights from its Love Field hub to Washington D.C., Las Vegas, Los Angeles and New York City, the first carrier to fly fr ...
which ceased operations in late 2000 were also founded on this operating model.
Probably best described as "fewer frills" rather than "no frills", the initial entrants in this market utilized second-hand, mid-sized, twin jets, such as
Boeing 757
The Boeing 757 is an American narrow-body airliner designed and built by Boeing Commercial Airplanes.
The then-named 7N7, a twinjet successor for the 727 (a trijet), received its first orders in August 1978.
The prototype completed its mai ...
and
Boeing 767
The Boeing 767 is an American wide-body aircraft developed and manufactured by Boeing Commercial Airplanes.
The aircraft was launched as the 7X7 program on July 14, 1978, the prototype first flew on September 26, 1981, and it was certified on ...
, in an attempt to service the lucrative London-US Eastern Seaboard market:
*
Eos Airlines
Eos Airlines, Inc. was an American all- business class airline headquartered in Purchase, New York, with its flights from John F. Kennedy International Airport in New York. On 26 April 2008 Eos Airlines announced its plans to file bankruptcy on ...
, which ceased operating on 27 April 2008
*
MAXjet
MAXjet Airways was an American, transatlantic, all-business class airline that operated between 2003 and 2007. Its headquarters were located on the grounds of Washington-Dulles International Airport, and in the Dulles area of Loudoun County, Vir ...
, which ceased its scheduled business flights in December 2007 and was unable to transition to charter as planned.
*
Silverjet
Silverjet was a British all- business class airline headquartered at London Luton Airport in Luton, Bedfordshire, England, that, prior to the suspension of operations on 30 May 2008, operated services to Newark Liberty International Airport an ...
, which ceased
operations on 30 May 2008.
*
La Compagnie
La Compagnie, legally incorporated as DreamJet SAS, is a French boutique airline founded by Frantz Yvelin and based at Orly Airport in Paris, with headquarters in Le Bourget in the Paris metropolitan area. It offers all-business class flight ...
See also
*
Low cost carrier terminal A low-cost carrier terminal or LCCT (also known as a budget terminal) is a specific type of airport terminal designed with the needs of low-cost airlines in mind. Though terminals may have differing charges and costs, as is common in Europe, the con ...
*
List of low-cost airlines
The following is a list of low-cost carriers organised by home country. A low-cost carrier or low-cost airline (also known as a no-frills, discount or budget carrier or airline) is an airline that offers generally low fares in exchange for elim ...
References
Sources
* Gross, S./Schroeder, A. (Eds.): Handbook of Low Cost Airlines – Strategies, Business Processes and Market Environment, Berlin 2007
*
External links
Oleksandr Laneckij Trends of the European Aviation Market: Seven Themes from the CONNECT 2016 ConferenceSpecialised low-cost air tickets search engine
{{Authority control
Airline types
Business models