In the news report dated October 31, 2024, it was mentioned that budget airlines offer much cheaper ticket prices compared to regular airlines. In order to survive and make a profit, these airlines must reduce costs. So, how do they manage to do so?
According to aviation news website “Simple Flying,” Southwest Airlines in the United States is the world’s largest low-cost airline. The low-cost operating model pioneered by Southwest has served as a blueprint for other carriers to follow, such as Ryanair and JetBlue.
These low-cost airlines offer significantly lower ticket prices. For instance, a flight from the capital of Bulgaria, Sofia, to the capital of Germany, Berlin, around mid-December by a traditional carrier like SAS could cost around $250, whereas Ryanair offers tickets for just $134.
One of the main strategies these airlines employ to compete with rivals at low prices is by:
– Operating a single aircraft type to save on maintenance and pilot training costs.
– Offering different services for loyal customers versus other passengers can incur additional costs in IT systems and personnel training.
– Opting for single-class cabins with non-reclining seats and limited amenities to maximize seating capacity and reduce maintenance.
Southwest Airlines, for example, operates a fleet of 776 Boeing 737 aircraft, and Ryanair operates 311 Boeing 737 aircraft. By focusing on cost-saving strategies like these, airlines can drive down operational costs while maximizing revenue.
Additionally, low-cost carriers often charge for onboard food and beverages, and some even sell merchandise or lottery tickets to generate extra income. Optimizing staff responsibilities to include multiple roles onboard reduces personnel costs.
By minimizing turnaround times and utilizing smaller airports to avoid hefty fees associated with major hubs, these airlines aim to increase aircraft utilization and lower operational expenses. Implementing an open seating policy like Southwest Airlines helps expedite boarding procedures and reduce ground idle time.
In conclusion, low-cost airlines strategically cut costs in various operational aspects to offer budget-friendly fares, emphasizing efficiency and revenue generation.