A low-cost carrier or low-cost airline (also known as a no-frills, discount or budget carrier or

airline) is an airline that generally has lower fares. To make up for revenue lost in decreased
ticket prices, the airline may charge for extras like food, priority boarding, seat allocating, and
baggage etc.

The term originated within the airline industry referring to airlines with a lower operating cost
structure than their competitors. While the term is often applied to any carrier with low ticket
prices and limited services, regardless of their operating models, low-cost carriers should not be
confused with regional airlines that operate short flights without service, or with full-service
airlines offering some reduced fares.

Low-cost carrier business model practices include:

 a single passenger class

 a single type of aircraft (commonly the Airbus A320 or Boeing 737 families), reducing
training and servicing costs
 a minimum set of optional equipment on the aircraft, further reducing costs of acquisition
and maintenance, as well as keeping the weight of the aircraft lower and thus saving fuel:
o no AVOD etc.; often excluding conveniences such as ACARS and autothrottle
o no in-flight entertainment systems made available
o no seat recliners, seat pockets, window blinds or seat headrest covers
 a simple fare scheme, such as charging one-way tickets half that of round-trips (typically
fares increase as the plane fills up, which rewards early reservations)
 flying to cheaper, less congested secondary airports and flying early in the morning or
late in the evening to avoid air traffic delays and take advantage of lower landing fees
 fast turnaround times (allowing maximum use of aircraft)
 unreserved seating (encouraging passengers to board early and quickly, thus further
decreasing turnaround times)
 simplified routes, emphasizing point-to-point transit instead of transfers at hubs (again
enhancing aircraft use and eliminating disruption due to delayed passengers or luggage
missing connecting flights)
 encourage the use of direct flights. Luggage is not automatically transferred from one
flight to another, even if both flights are with the same company.
 generation of ancillary revenue from a variety of activities, such as à la carte features and
commission-based products
 emphasis on direct sales of tickets, especially over the Internet (avoiding fees and
commissions paid to travel agents and computer reservations systems)
 employees working in multiple roles, for instance flight attendants also cleaning the
aircraft or working as gate agents (limiting personnel costs)
 a disinclination to handle Special Service passengers, for instance by placing a higher age
limit on unaccompanied minors[1] than full service carriers
 aggressive fuel hedging programs
 passengers paying charges for extras, such as hold luggage, online check in and priority
boarding
  avoiding using jetways to board and alight passengers by using a mobile stairway which
is a cheaper alternative.
 not supplying meals in a flight, but offering snacks, sandwiches and drinks instead to
purchase on board
 no refunds or transfers to later flights in the event of missed flights, i.e. if the aircraft
leaves on time without a passenger who arrived late, he will have to buy a wholly new
ticket for the next flight.

Not every low-cost carrier implements all of the above points. For example, some try to
differentiate themselves with allocated seating, while others operate more than one aircraft type,
still others will have relatively high operating costs but lower fares. JetBlue for instance has in-
flight entertainment (i.e. LiveTV) in every passenger seat.

T he price policy of the low cost carriers is usually very dynamic, with discounts and tickets in
promotion. Even if the advertised price may be very low, sometimes it does not include charges
& taxes.

As the number of low-cost carriers has grown, these airlines have begun to compete with one
another in addition to the traditional carriers. In the US, airlines have responded by introducing
variations to the model. Frontier Airlines and JetBlue Airways advertise satellite television.
Advertiser-supported Skybus Airlines launched from Columbus in 2007, but ceased operations in
April, 2008. In Europe, the emphasis has remained on reducing costs and no-frills service. In
2004, Ryanair announced proposals to eliminate reclining seats, window blinds, seat headrest
covers, and seat pockets from its aircraft.[2]

The budget airlines frequently offer flights at low prices – often flights are advertised as free
(plus applicable taxes, fees and charges.) Perhaps as many (or as few) as ten percent of the seats
on any flight are offered at the lowest price, and are the first to sell. The prices steadily rise
thereafter to a point where they can be comparable or more expensive than a flight on a full-
service carrier.

Additional expenses charged can border on the fraudulent, such as levying a credit card charge
where credit card is the only payment method accepted.

Traditional perceptions of the "low-cost carrier" as a stripped-down, no-frills airline, as seen on

Southwest Airlines, have been changing as new entrants to the market adapt the business model
in new ways. AirTran Airways and Spirit Airlines offer a premium cabin while Frontier and
JetBlue offer live in-flight television, sometimes for an extra fee. AirTran has XM Satellite
Radio available at every seat. Frontier, JetBlue, and AirTran all use assigned seating. Some
airlines even have services not available on some legacy carriers, such as mood lighting, found in
Virgin America.

[edit] Criticism
Some elements of the low-cost model have been subject to criticism by Governments and
Regulators, and in the UK in particular the issue of "Unbundling" of ancillary charges by both
low-cost carriers and other airlines (showing airport fees, taxes as separate charges rather than as
part of the advertised fare) to make the "headline fare" appear lower has resulted in enforcement
action. Believing that this amounts to a misleading approach to pricing, the Office of Fair
Trading (OFT) in February 2007 gave all carriers and travel companies three months to include
all fixed non-optional costs in their basic advertised prices. Although the full service carriers had
complied within the specified timescales, the low-cost carriers have been less successful in this
respect, leading to the prospect of legal action[3] by the OFT.

Many low-cost carriers show a zero cost for some flights. Most charge additional fees for airport
check-in, baggage check-in, 'handling charges', seat allocation and credit card processing. These
charges are non-refundable even in the case of cancellation by the airline. Low-cost carriers
regularly weigh carry-on bags, check them for size and impose high penalty charges for any
carry-ons exceeding their stipulations. Ryanair requires that passengers' airport purchases fit
within their carry-on bag.

[edit] No-frills long-haul flights

The first airline offering no-frills transatlantic service was Freddie Laker's Laker Airways, which
operated its famous "Skytrain" service between London and New York City during the late
1970s. The service was suspended after Laker's competitors, British Airways and Pan Am, were
able to price Skytrain out of the market.

It has been suggested that the Airbus A380, able to hold up to 853 passengers in an all Economy
layout,[4] would enable true low-cost long-haul service. While the per-seat costs of such an
aircraft would be lower than the competition, there are fewer cost savings possible in a long-haul
operation and therefore a long-haul low-cost operator would find it harder to differentiate itself
from a conventional airline. In particular, low-cost carriers typically fly their aircraft for more
hours and flights each day, scheduling the first departure early in the morning and the last arrival
late at night. However, long-haul aircraft scheduling is more determined by timezone constraints
(e.g. leaving the US East Coast in the evening and arriving in Europe the following morning),
and the longer flight times mean there is less scope to increase aircraft utilization by adding one
or two more short flights each day.

In 2004 the Irish company Aer Lingus lowered its prices to compete with companies such as
Ryanair and also started offering no-frills transatlantic flights for just above €100. Late in 2004
the Canadian airline Zoom Airlines also started selling transatlantic flights between Glasgow,
UK; Manchester, UK; and Canada for £89.

Australia's Jetstar has operated international flights since 2005, when they began service to
Christchurch, New Zealand. In late 2006, more international services began. Departing from
Sydney, Melbourne and Brisbane, they fly to popular tourist destinations within 10 hours of
Australia such as Honolulu, Japan, Vietnam, Thailand, Malaysia and more. With the delivery of
new planes, they hope to fly to the continental US and Europe.

In April 2006, the industry magazine Airline Business analysed the potential for low-cost long-
haul service[5] and concluded that a number of Asian carriers, including AirAsia, were closest to
making such a model work. On November 2, 2007, AirAsia X, a subsidiary of AirAsia and
Virgin Group flew its inaugural flight from Kuala Lumpur, Malaysia to Gold Coast, Australia.
AirAsia X claims that it is the first true low-cost long-haul carrier since the end of Sir Freddie
Laker era. [citation needed]

In August 2006, Zoom Airlines announced that it was to establish a UK subsidiary probably
based at Gatwick Airport, to offer low-cost long-haul flights to the USA and India. The company
suspended all its operations from 28 August 2008 due to financial problems related to the high
fuel price.

On 26 October 2006, Oasis Hong Kong Airlines started flying from Hong Kong to London
Gatwick Airport (delayed by one day because Russia suspended fly-over rights for that flight an
hour before the flight's scheduled departure). The cheapest prices for flights between Hong Kong
to London could be as low at £75 (approximately US$150) per leg (not including taxes and other
charges) for economy class and £470 (approximately US$940) per leg for business class for the
same route. From 28 June 2007, a second long-haul route to Vancouver, British Columbia was
started. The company ceased operations on 9 April 2008, after over 1 billion HKD of losses.

In late 2007, Cebu Pacific, the Philippine based low cost carrier, announced intentions to launch
non-stop Pacific flights from the Philippines to the United States West Coast and other US cities
by around mid-2009.[6]

On March 11 2009, AirAsia X started its first low cost long-haul service into Europe to London
Stansted, England. The daily flights to Stansted are operated by two leased Airbus A340-300
aircraft. A one way economy class ticket often costs £150 and the Premium class one way often
costs £350.

US Airways calls itself a low-cost airline, however usually its international fares are equal to
other major carriers.

[edit] Low-cost business only carriers

A trend from the mid-2000s was the formation of new low-cost carriers exclusively targeting the
long-haul business market, with aircraft configured for a single class of service, initially on
transatlantic routings. Probably best described as "fewer frills" rather than "no frills", the initial
entrants in this market utilised second-hand, mid-sized, twin jets such as Boeing 757 and Boeing
767 in an attempt to service the lucrative London-US Eastern Seaboard market: