compare with legacy airlines
What's often forgotten is one of the basic planks of the low cost model - the transfer of responsibility for and costs of disruption from airline to individual passengers. About 6 years ago I wrote this to the CEO of the Consumers Association when he complained about the effect on passengers of airline cancellations. Didn't get a reply of course..... Anyway, here's what I said then, with a few additional thoughts.
"Bad weather, ATC strikes, aircraft technical problems, etc., always have and always will disrupt air travel. Airlines are probably unique in having a "product" - moving seats from A to B - made on a "production line" where a huge range of aspects are, and will always be, completely outside their control. While the airline industry can predict and plan for disruption on a long timescale - e.g. "there will some fog at Heathrow and Milan in November" we can't do it at the detail level - which day in November? Which days are French ATC on strike this month? So exactly which flights disruption will affect can't be predicted.
Historically, airlines accepted that it was THEIR responsibility to deal with these issues. They had standby crews and aircraft, and airports were pressed to install bad weather landing systems. But having such people and equipment available "just in case" was regarded by many as inefficient and it cost money, which was reflected in higher fares for all passengers. And of course passengers (and consumer associations) complained about these high fares, especially after SouthWest started competing with legacy carriers in the US, with a network where a lot of factors that disrupt European shorthaul operations are absent. (E.g. for its first 12 years I believe SWA only operated within Texas and hence was not subject to Federal regulations, as well as not experiencing much freezing fog and having a unified ATC system!
Since only a tiny minority of flights are actually affected by disruption, if new airlines wanting to copy SWA simply abandoned any obligation to resolve it themselves they could offer the vast majority of most passengers lower fares, without ever explaining where much of the reduction has come from. But disruptions - and their associated cost - never went away. However, instead of being shared among all passengers, the entire cost (not just financial but emotional and organisational) is just dumped on the tiny minority of individuals directly affected - now including Mrs Vicary-Smith, the Consumer Association CEO's wife. And for some people these associated costs may be extremely high - e.g. the consequences of missed hospital appointments or life events. (And of course now they have transferred many other "cost-incurring" elements to the individual).
These lower "headline" fares result in organisations such as the Consumer Association now wanting legislation to make airlines compensate passengers, because they no longer do what was absolutely normal in the "bad old days" of fares they thought were too high. Beware of unintended consequences!"
As I said, no reply back then, and the situation has, for a growing minority, got a lot worse ....