What Is A Low Cost Carrier?

Web: www.thetravelstrategist.com — E-Mail: fish@flyingwithfish.com

29/06/2009 –What Is A Low Cost Carrier?

It is not often I set off to write a post on Flying With Fish where I ask a question that I not only don’t have an answer to, but haven’t the slightest idea how define an answer.

As the line between full-service airline and low cost carriers becomes blurred there is one question that is no longer easily defined…”What is a low cost carrier?

Traditionally low cost carriers have been well… low cost and no frills. In contrast to low cost carriers a full-service carrier was…well…full service and offered its passengers additional amenities.

While many airlines are removing the basic ‘amenities’ of airlines travel, more commonly referred to as ‘unbundling‘ of airfares, it is becoming more common for these ‘bundled amenities’ to only be made available from airlines defined as ‘low cost carriers.’

An example of this can be directly found in airline checked baggage fees.

The top two ‘low cost carriers’ in the United States, Southwest Airlines and JetBlue Airways, offer passenger free checked baggage (Southwest allows passengers two pieces of checked baggage at no fee). The ‘big five’ legacy airlines in the United States all charge for all checked baggage with fees ranging between US$15-to-US$20.

Low cost carrier Southwest Airline allows passengers to book tickets on the phone with a live human for absolutely no fee, while all of the ‘big five’ carriers have fees ranging between US$15-to-US$30 to book a flight with a live human.

So while some airlines such as Ireland’s Ryanair claim to be low cost carriers, while actually not being low cost once all the fees are added up, as I detailed here: 18/05/2009 – Ryanair’s New Fee To ‘Check In’ & The Real Cost Of Some Low Cost Carriers, and other airlines claim to be a low cost carrier such as US Airways that maintains a full ‘legacy airline’ with none of the attributes of a low cost carrier…I am left with these questions…

Is a low cost carrier one that offers cost savings to passengers? Is a low cost carrier one simply with low base-cost airfares? Is a low cost carrier one that maintains a lower cost of operations?

“What is a low cost carrier?”

Happy Flying!

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Comments

  1. It’s my understanding that that the “cost” in “low-cost carrier” refers to the airline’s operating cost (CASM), not the passengers’ fare cost.

  2. Paul,

    While an LCC may refer to the airlines CASM, there are some airlines that operate within an LCC structure but are certainly not LCCs. On the other hand there are quite a few airlines that refer to themselves as an LCC while in no way operating as an LCC.

    This blur in terminology alters much of how we view an LCC in this current state of the industry.

    Happy Flying!

    -Fish

  3. When they started a LCC was an airline that offered a base ticket price, and added all the extra services and products in at the passengers discretion.

    I think this still remains true today.

    There are some legacy carriers that are moving on to the LCC structure, particularly in these times, however until they change to a base ticket price on all routes, I don’t think they can be considered LCC – but just copying the LCC strategy.

    But it is up to each airline’s own branding us to how their customers are going to perceive what they are.

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