Aviation Industry - Cost Airlines

The aviation industry has seen massive changes since the first commercial jet operated in 1952 but no more so than low cost/ no frills/ budget airlines.

SouthWest Airlines has been regarded as the pioneer for low cost travel, starting the concept in 1971 however it has been said that Alfred E. Kahn, who recently died on the 28th Dec 2010 was:

"the economist- turned-regulator whose moves to end U.S. government controls on airlines in the late 1970s set the stage for today's cheap fares....He argued that airlines could serve consumers and business best by competing with each other, a novel notion at a time when prices and routes were government- controlled. It was under pressure from Kahn and Carter that Congress passed the Airline Deregulation Act of 1978." (Swardson, 2010, [Online])

and from the airline deregulation act of 1978 the low cost airline boom began.

Low cost airlines have developed all over the world and tend to operate short haul routes in order to maximise the use of the aircraft. "flight sectors are short and so revenue per kilometre flown is relatively high" (Page, 2009, kindle location 4454-69).

Low cost long-haul airlines have been least successful as there is fewer cost saving options available. Zoom Airlines, a Canadian based airline and Oasis Hong Kong Airlines tried to introduce low cost transatlantic flights and failed however Air Asia, Malaysia's Low cost airline has been operating transatlantic flights with success.

The EU boasts approximately 40 low cost airlines and the top contenders Ryanair (est. in 1985) and easyJet (est. in 1995) have radicalised low cost air travel.

Low cost airlines work on the following objectives; to keep expenditure as low as possible.

This is achieved by:

• One class, one service.

• Inexpensive flight prices with no extras included such as baggage allowance or complimentary food or drinks.

• No allocated seating - Free seating works on the principle that the passengers will board quicker therefore reducing the time on the ground, reducing ground costs.

• No in-flight entertainment.

• Destinations are smaller lesser known airports further away from city centres.

• Limited liability and minimal compensation. Passengers will only receive the required amount specified by law.

• On-line purchasing, e-tickets incurring no travel agents commission, allows dynamic packaging.

• Passengers must print their own boarding passes.

• Minimal cabin crew operating flights.