Low Cost Airlines: Strategies and Evolution

This assignment provides a comprehensive overview of low-cost airlines, including their history, business models, and competitive advantages. It also explores the strategies employed by these carriers to maintain their market share, such as cost-cutting measures, efficient operations, and targeted marketing. The analysis delves into the impact of low-cost airlines on the aviation industry, including the growth of global capacity, changes in consumer behavior, and the emergence of new business models. The assignment is suitable for students studying aviation management, economics, or related fields.

Introduction
Over the past quarter-century, Low-Cost Carriers have been a vital role in this huge expansion of
aviation. They have converted the air travel market by stopping the traditional world of the legacy
flag-carriers and starting a revolution in air travel service.
Over the past quarter-century, Low-Cost Carriers have been a vital role in this huge expansion of
aviation. They have converted the air travel market by stopping the traditional world of the
legacy flag-carriers and starting a revolution in air travel service.
The low-cost carriers are the airlines that reduce all their kinds of costs such as operating cost
and some service and facilities cost to offer the same ticket for a much lower price compared to
other airlines.
Low-cost carriers have different names as discount airlines, No-frills airlines, Prizefighters, or
Low-cost airlines.
Loftleiðir was the first airline to introduce a low-cost travel concept in Iceland. The first low-
cost airline launched in 1944 and obtained the rights to fly to the US in 1948. Then it began to
take advantage of Iceland’s unique location between North America and Europe by the 1960s.
Due to lower costs, the fares became lower, and young Americans were enthusiastic to try low-
cost airlines to explore Europe via Iceland, so it became very popular with them. And, the first
airline applied the cost reduction techniques that used today such as reduced thrust takeoff and
weight reductions were Laker Airways, which introduced a Sky train service between the US
and the UK in the late 1970s.
A brief history of the low-cost carrier from around the world
In North America: Since the deregulation in the 1970s, the creating of the low-cost concept in
the United States can be described as a series of renovation and integrations. For that, a lot of
low-cost carriers such as Pacific Southwest entered the market of which, but some of them were
able to survive the competition, but others did not. Some of the main carriers as well began their
own subsidiaries under the low-cost flag in for regaining their lost market share.
In Europe: In 1995, Ireland and the UK started the low-cost carrier idea which is based on the
Southwest model with the introduction of Ryanair and EasyJet.
In Asia: It was thought that Asia's strict restrictions proceed and government control will not
authorize suitable conditions for low-cost carriers to flourish. But, there are some factors that
helped the low-cost concept to appear in Asia such as the prompt demographic and economic
progress, crowded hub airports beside underutilized airports, and the need to encourage their
tourism and trade outside the capital cities.
In Australia: Airlines such as Compass Airlines and compass Mk II started low-cost operations,
after the Australian domestic market deregulation, However, they were absorbed into the Qantas
group because of the financial strength Qantas had over the low-cost airline. Nowadays, the only
remarkable low-cost innovation still continues to operate is Virgin Blue.
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Why Low-Cost Airlines are so Successful?
In the 1950s flying was something that only the rich could bear. Since then
though the aviation industry has changed very quickly and now seems to cater
to nearly anyone. one of the main transformations during this industry happened
when the no-frills concept grabbed hold to Southwest Airlines within us. This was
the primary successful no-frills carrier that paved the way for future low-cost
airlines like Ireland’s Ryanair and therefore the UK’s Easy jet.
These low-cost airlines have many things that make them
successful like :
 flying just one sort of airplane. Ryanair only flies Boeing 737 and also EasyJet
only uses Airbus planes. This helps hamper costs in maintenance, repairs,
training pilots, and room to receive deals from manufacturers.
 the Landing times are kept as short as possible. The shorter the landing time,
the quicker the turnaround. More trips equal more work for the staff, more
passengers, and extra money coming into the airline.
 keeping the hold luggage to a minimum. This takes time and adds weight to the
flight which increases the landing time and refueling time. To combat this
there's often a charge for excess luggage for passengers.
 Overheads also are kept to a minimum. instead of flying into large airports and
paying higher fees to land, budget airlines find smaller airports in between large
airports.
 They also buy fuel when it's cheap,
 charge for non-essential services like food and drink,
 offers eleventh-hour bargains to form sure the flights are full,
 only offer direct bookings to avoid paying travel agents, and far more.
The effect of low-cost airlines on the aviation industry
The impact of low-cost carriers has been huge for the aviation business. The
rapid penetration of low-cost airlines has resulted in traditional carriers chopping
routes, closing down hubs and even giving up service to some cities. In the past
few years, with high fuel prices and a rapid global economy taking into account
the profit margins of larger carriers, only budget airlines have reported
systematically
SWOT Analysis of Low-cost carriers
Strength Weakness 
-low operational cost by having single aircraft type
- Low operating cost because it is "no frill’
-all reservations are online
-A very unexploited potential market, especially for
business travelers and the "first-time" sector.
-increase in cost happen due As a result of the
increase I n the price of fuel sometimes.
-Domestic air travel is a very competitive industry.
As more and more airlines enter the low-cost
market, the market share of a particular airline, or
the leader, is declining.
Threat Opportunities
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-State-owned airlines has a major threat to low cost
carriers .
-Air diseases or terrorist attack anywhere in the
world can negatively affect air travel.
-The air cargo sector can be explored.
-Differentiation from the old low-cost airline models
by adding customer service or operating as a full-
service airline at low prices.
Market Share
As is the name, low-cost companies aim to offer discount travel tickets to travelers, which certainly
attracts them.
In Europe, LCCs Recorded a number of passengers that traveled with them It is estimated around
140milion in 2006
LCCs seats capacities portion rised to 16.5% at over the Middle East from 14.9% in 2019
In 2015 The aviation industry succeeded in carrying passengers Estimate about 3.5 billion
passengers in 2015 Of them, about 984 million were traveling through low-cost companies
This number is believed to be double by 2030
According to The International Civil Aviation Organization (ICAO) The LCCs played a major role
in increasing the total number of passenger who travels around the world
Low-Cost Carrier Strategies And services
Low-cost companies rely on reducing costs to provide a competitive price to attract more customers
and to attract more customers companies follow different strategies
in-Flight purchase:
Companies rely on reducing costs by reducing the services provided within the ticket price and
compensating them for in-plane purchases of these services: food, drink, and other services until
some companies have moved to provide a toilet service on the plane after paying fees
Network:
Companies avoid high landing costs by using non-major airports, which will affect the cost and,
consequently, the final price of the ticket

Marketing and HR : Companies need to cut advertising and marketing costs, so most tickets are
sold through websites, which reduces commissions for ticket sales agencies. Companies also aim to
reduce their workforce to reduce costs, salaries, etc.
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Examples 1 of low cost carrier (Easy jet airline)
 The history of Easy jet airline
Easy jet airline is considered the largest low cost air line in united kingdom (UK) , and second
largest in Europe . It was founded by Stelios Haji lonnanou , he was business man
The headquarter of easy jet in Luton airport . The first flight was in 1995 which from
Luton to Glasgow and Edinburgh .
When easy jet launched it called it self that they are low cost to passenger , and for that easy jet
make flights outside UK around Europe in 1997 from luton to Amsterdam , Nice and Barcelona , it
have now 600 routes around 30 countries , and also easy jet take air operating certificate to open
second airport in Liverpool .
Easy jet employs 8000 people between piolets and cabin crew
Easy jet to make cost low it follow some strategy like
 Use only one type of class
 Food and beverage are in flight but you should to purchase
 Newspaper and magazine available , but you have to purchase
 Awards of easy jet air line :
Easy jet in its history of flights it take many of awards such as
 In 1999 , the best low cost air line
 In 2000 , International flight catering association
 In 2001 , Travel Award
 In 2004 , the Annual world travel Award
 In 2008 , The Hitwise UK 2007 Award

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Examples 2 of low cost carrier (Ryanair)
Ryanair 90.5 million, +10.8%
Driven by magnetic CEO Michael O'Leary, Ryanair is Europe's biggest player by traveler number in
the ease section. Its armada of 317 narrow bodies is completely comprised of 737s, bar a couple of
Airbus A320s it has rented in, and another 268 of the Boeing type are on firm request. With a
fundamental base at London Stansted air terminal, the transporter presently travels to 182 goals.
Ryanair Holdings plc, Europe's biggest aircraft gathering, is the parent organization of Buzz, Lauda,
Malta Air and Ryanair DAC.
Conveying 154m visitors p.a. on in excess of 2,400 every day departures from 82 bases, the
gathering interfaces more than 200 goals in 40 nations on an armada of more than 470 airplane,
with a further 210 Boeing 737s on hand, which will empower the Ryanair Group to bring down tolls
and develop traffic to 200m p.a. by FY25.
Ryanair has a group of more than 19,000 profoundly gifted avionics experts conveying Europe's
No.1 on-time execution, and an industry driving 34-year security record. Ryanair is Europe's

greenest cleanest aircraft gathering and clients changing to fly Ryanair can diminish their CO₂
outflows by up to half contrasted with the other Big 4 EU significant carriers
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Conclusion
Low-Cost Carriers have an important role in this huge expansion of aviation by
launching a revolution in air travel service. The low-cost carriers are the airlines that
reduce all their kinds of costs to offer the same ticket for a much lower price
compared to other airlines. Loftleiðir and Laker Airways were pioneers in the low-
cost world. Loftleiðir airline became very popular with young Americans looking to
explore Europe via Iceland due to their lower fares. Laker Airways were the first
airline to apply the cost reduction techniques that used today such as reduced
thrust take off and weight reductions.
But Low-Cost Airlines are so Successful as it have many things that make them
successful such as flying just one sort of airplane,the Landing times are kept as
short as possible. ,Overheads also are kept to a minimum,They also buy fuel when
it's cheap and more other reasons . as In the 1950s flying was something that only
the rich could bear. Since then though the aviation industry has changed very
quickly and now seems to cater to nearly anyone.and for all these reason we could
conclude The enormous impact of low-cost carriers on the aviation business as The
deep penetration of low-cost airlines caused typical carriers to chop flights, shut
hubs, and even abandon service to some cities,so we use SWOT Analysis to
determine the Strength,Weakness,Threat and Opportunities of low cost carriers .
Low-cost companies rely on reducing cost by reducing services, so these companies
follow several strategies such as reducing costs, increasing the number of seats,
reducing the number of workers as much as possible and making unnecessary
services on-demand on the plane, which reduces the final price of the ticket.
also For sure if we are going to talk about we should mention the examples of the
most important low-cost companies such as easyJet in the UK is, and then became
famous in Europe and then in the world and its history, its first back and the prizes
that it got. EasyJet works to reduce the price in order to attract travelers to it, and it
does so through an act of saving . also Ryanair holdings , Europe’s biggest aircraft
gathering , is the parent organization of BUZZ,lauda,malta air And Ryanair DAC.