What is a Low-Cost Carrier?
A Low-Cost Carrier is an airline that does not offer traditional services that are normally included as part of the fare, thereby offering lower fares at the expense of fewer comforts. This usually means that baggage is not provided, or the food and drinks that are offered by other more premium carriers. The offering varies from one carrier to the next.
What makes a Low-Cost Carrier cheaper?
Low-cost carriers have a lower operating cost structure than other airlines. These companies offer decreased ticket prices to passengers, but recoup those losses by charging for a range of extras such as food, priority boarding, seat allocation, and baggage.
A variety of other techniques are used which do not impact directly on the customer experience. This includes maintaining a fleet with just a single aircraft type and thereby reducing training and maintenance costs. The sourcing and re-selling of aircraft is also essential to the business model of these airlines.
These operators use a range of different names such as “low-cost airlines”, “budget airlines”, or “discount airlines”:
How many Low-Cost Carriers are there?
There are a range of low-cost carriers around the world, serving various populations and routes. The top 25 are ranked here, according to the number of passengers moved each year:
- Southwest Airlines
- Air Asia Group
- Lion Air Group
- Gol Transportes Aéreos
- Norwegian Air Shuttle ASA
- Pegasus Airlines
- Wizz Air
- Cebu Pacific
- Spirit Airlines
- Allegiant Air
- Virgin America
Do corporate travelers have to use Low-Cost Carriers?
This depends entirely upon the company and the Corporate Travel Policy it has in place. In an effort to reduce traveling costs, some companies may require that staff fly exclusively using low-cost carriers. On the other hand, some companies might prioritize the comfort of travelers and permit for larger budgets.
Does the LLC business model create legal issues?
In some countries, passengers have complained that the costs of flights are not transparent enough. While the final cost may appear attractive, some passengers are unhappy that basic needs are charged for, and that the price can rise significantly.
Some passengers also complain that the itinerary information is misleading. Some airlines, for example, offer flights to “Barcelona” when in fact the flights land some 90 kilometers away in neighboring Girona.
Are there airlines cheaper than LLCs?
Ultra low-cost carriers (ULCCs) have emerged in recent years and differentiate themselves from low-cost airlines by offering significantly cheaper prices but with a greater number of add-on fees. The business model remains largely the same, but pushed to an extreme.