Friday, 4 November 2016

The World of Low Cost Carriers (LCC)

Air Asia
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…..

Fly Dubai

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.
Easy Jet

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.
Ryan Air

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.
South West Airlines

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…..

Have a Nice Trip!
LCC Boarding

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