What is the definition of a low cost airline?

[Sumatra]

Low cost?

From a consumer point of view it seems to be whichever can advertise the lowest fare? Yet most of us realise the figure that appears on your credit card is what you really pay.

Some airlines seem to offer pretty good deals year round whilst others only if you travel out on a selected Tuesday off peak. So they are sometimes low cost but mostly high cost. Take Aer Lingus for example. They appear to have reduced their frequency on the Dublin to Lyon and Dublin to Marseilles routes this summer and take a look at their fares. Not low cost. Is this anything to do with creating better profit margins in an effort to float on the stockmarket or is it all down to supply and demand (especially since Ryanair gave up Dub to St Etienne) or has rising fuel costs really caught them short?

What is the definition of a low cost airline?

[Hansol]

Don't get confused a low cost airline is not one that has to sell its tickets cheaply. A low cost airline is one that works to keep its operating costs per pax down to a minimum.

[robo283]

Hansol

Quite right Hansol. Any carrier can dump a few surplus seats at next to nothing as the marginal cost of 'producing' the seat is very low on an otherwise full aircraft (even leaving aside the issue of cross-subsidisation).

Low cost carriers don't generally have high yield business products to pay the sector costs (leaving low fares to contribute to overheads) so they have to start off with low costs in the first place. The only way this is sustainable is to give the pax the option of bolting on any extras (food, drinks, better seats etc) at an add-on cost. The moral justification is 'Why pay for something you don't want?'. Few pax have ever starved to death because they didn't have a full meal whilst flying between here and Spain!

[harrogate]

robo283

The core characteristics of the LoCo model are:
-A single passenger class
-A simple fare scheme (with advantages the earlier you book)
-Fast turnaround times.
-A single type of aircraft, although the emergence of a second and indeed further types in future is a logical progression for the model, if you take into account the coming together of disparate loco markets and the global trend of 'deregulation' of airspace. See Jet2 and Song. The loco borders are forever expanding.
-Unreserved seating (ensures the 'speed' ethic is even adopted by the passenger).
-Flying to cheaper, less congested secondary airports. This factor is subject to change as these 'secondary' hubs themselves become congested as the loco model takes hold.
-Simplified routes or 'point-to-point' travel. Factors such as baggage considerations for transferring passengers eliminated.
-Emphasis on direct sales of tickets (internet mainly), avoiding commision to externals or handling fees.
-Multi-tasking of staff (air stewards, gate reps, etc)
-In-flight bolt ons at additional cost
-Reactive fuel policies.
-Generally lower operating costs.

[robo283]

That appears to be a comprehensive definition. In reality though, how many lo-cos meet all those criteria? Jet2 meets some but not others (seats allocated, three a/c types, cabin staff not otherwise tasked (except as aircraft cleaners!), flying to major airports). The rest of model fits pretty well. Ryanair, on the other hand, appear far closer to the model than Jet2 so by implication, lo-cos can pick and choose dependent on competition, negotiating power and the whim of the Chairman!