Low Cost Carriers or LCC, are
those Airline companies which provide Flight services at very cheap prices.
Most of their routes are Domestic or Short-Haul. Their Business model is
entirely different from Premium Carriers. LCCs are for those people who just
want cheap tickets, and are ready to compromise on some luxuries of Normal
Carriers. The LCC model is now gaining popularity in many parts of the world.
Some popular LCCs are Air Asia, Ryan Air, Easy Jet, Indigo and Fly Dubai. In this Blog,
we will share some characteristics of Low Cost Carriers. These features not
only make them cheaper, but also profitable for their owners. Let’s get started…..
1. Cheap Fares: LCCs usually cut
down on manpower cost, catering cost, airport charges, turn around costs, etc.
to provide cheap fares to its customers. Most of LCCs don’t have entertainment
systems and reclining seats, which cuts back their aircraft purchase cost.
Similarly, the ground staff at check-in may be the same on boarding or baggage
handling. This cuts cost of extra manpower. These are some ways by which they
are able to offer reasonable fares.
2. Food Selling: LCCs don’t provide
Food or drinks on board. Instead they sell Food and Drinks In-flight. This not
only reduces Catering and Food cost, but also helps them earn money on Food
sales. Many times the Food on board is wasted. This method allows them to
reduce waste and cost.
3. Baggage Cost: Some LCCs sell
tickets with only cabin baggage allowance. If the passenger has more bags, they
charge at the airport on per kg basis. This is win win for both Airline and
passengers. Airline will regulate its take-off weight and buy fuel accordingly,
whereas the passengers will pay only for what they are carrying.
4. Small Jets: As LCCs are for
short routes, they invest in only small jets. Usually LCCs have A320s and B737s
in their fleet. The purchase and training cost of these jets are minimal. Also,
they save on Pilot Training as they have to train them for only one aircraft.
5. Small Airports: LCCs reduce
their cost in every way possible. They usually land on small airports to cut on
landing and parking charges. For example - All LCCs to London prefer landing at Gatwick
Airport, and Not Heathrow. This is because landing charges at Heathrow are high
as compared to Gatwick. This is the reason why Heathrow Airport is flooded with
Premium Carriers.
6. Less Connecting Flights: The
cheapest LCC doesn’t provide connections. This is because offering connecting
flights add up to the cost of ground crew for transfer of Bags, and cost of
reimbursing missed connections. This also reduces delays and the cost involved
in them.
7. Unusual Timings: As discussed
above, LCCs don’t land on expensive airports. If they have to land on expensive
airports, they choose timings and slots that are less busy. This is because
landing charges are low at that time. Similarly they land on less busy time at
small airports.
8. Negotiating Power: LCCs have
high Negotiating Power. They negotiate with airports, aircraft manufactures and
oil companies. They usually approach small airports and negotiate heavily to
transform it to their Hub. These Airports in search of Business agree to their
terms.
9. High Load Factor: The Load
Factor on a LCC is high. Almost 90% of the plane is full. This is mainly due to
cheap fares and quick point-to-point connections. Their Load Factor is higher
than the Normal Carriers.
10. Multiple Trips: A single plane
of a Low Cost Carrier may undertake 6-7 flights in a day. The Turnaround time
is very small, around 45 minutes. They save time by just loading and unloading
passengers and their cargo. Cleaning is rarely done.
11. No Perks: LCCs are just flights.
No Food, No Drinks, No Generous Baggage Allowance, No Airport Lounges or No Frequent
Flyer miles. In fact, most of them have only Economy Class while dispensing
with first and Business Class.
12.No Boarding Bridges: LCCs use
Stairs instead of Boarding Bridges. This not only reduces cost, but also at
least 5-6 minutes an hour. This extra time can accommodate another short flight
in the day.
These were the main characteristics
of Low Cost Carriers. They are the best for short haul routes. If Price is what
you consider, they can be a good option. If you wish to add more to this Blog,
comment down below…..
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