How come cheap airlines are so cheap?
Fastest growing segment of air travel are low fare airlines (LFAs), sometimes called low cost companies (LLC). LFAs now constitute 35% of scheduled intra-EU point to point traffic - and the cheap flights revolution in Europe only started in 1990 by Ryanair. In the USA it was the Southwest Airlines that has led the attack against high flights prices since 1971.
Low cost airline Regular airline
So how cheap are the cheap flights? Aver far (E)
Ryanair Easyjet Aer Lyngus Southwest Lufthansa Air France British Airways
44 65 94 106,60* 235 267 324
RYANAIR easyJet Aer Lingus SOUTHWEST Lufthansa AIR FRANCE BRITISH AIRWAYS
Higher seat density - 737-300; 148 seats, single class cabin 128 seats in a regular one
Fast turnarounds (up to 25 min.) - higher utilization of the plane Turanround slowed down by use of major airports with large amount of traffic (approx. 45 min.)
Direct flights - point to point, no transfers, short routes Transfers, long hauls
Smaller airports - cheaper; simple ground facilities. Bigger airports - more expensive.
Tickets sold directly, mostly by Internet (easyJet - 95%). Many tickets sold by travel agencies, incurring extra charges
No Frills - no additional costs. Entertainment programme, quick check in, lounges, paper tickets, business class, catering.
Standardised fleet (only one aircraft type) - cheaper maintenance, training. Various Aircraft.
High variable-proportion of salary (up to 26%), better HR utilisation High basic salaries (variable proportion up to 11%), trade union affiliation
The case of extreme productivity
Passengers per employee :
Easyjet : 6772 British Airways : 735
Ryanair : 9679 Air France\KLM : 715
Where do all those savings, on average, come from?
16% 3% 3% 6% 2% 10% 6% 6% 3% 2% 43%
Higher seat density
Higher aircraft utilization
Lower crew costs
Cheaper airports / landing fees
Single aircraft type
Minimal station costs
No inflight catering
No agents commission
Reduced sales / reservation costs
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