Along with the Southwest Airline of United States leading the cheap flying revolution in the 1970s and Ryanair of Europe following the suit in 1990s, many Asian budget airlines like AirAsia, Jetstar and Tiger Airways are also plain sailing, driving growth in the aviation sector most of the last decade.
As the fastest growing segment of air travel, low fare airlines have continued to enjoy healthy profits, with the number of economy passengers doubling that of premium travelers, according to IATA.
How do most of these no-frills, discount airlines survive? Economies of scales play in as low fare airline have on average 148 seats and a single-class cabin unlike the regular airline with 128-130 seats and class distinction.
Generally these budget airlines have non-stop and direct flights with shorter and faster plane turnarounds of average 25-30 minutes. In contrast, due to high traffic at some of the busiest airports slowing down the turnaround to more than 45 minutes, the full service airlines and carriers have long hauls and transfers.
It is not just the on-board services. Airports facilities also stretch the cost borne by airlines, larger and regular airlines not only require more expensive ground facilities but also connectivity to larger airports. Cheaper and cost-effective airlines save money with linkages to simpler services and smaller airports.
And hence the concept of e-ticketing has emerged as a low-cost means of reservations. Unlike specialised and custom services provided by the travel agents on terms of extra charges for convenience, budget airlines cut on the airfare by mostly providing a facility of online ticketing.
Whether it is an executive trip, a vacation stroll or a regular flight, the travelers expect certain level of entertainment and preference from the waiting lounge till landing. This includes catering, on-board meals, internet facility in airport lounges, quick check-ins and executive or business class. All these additional frills and costs simply provide a way of cutting back on cost by the budget airlines.
Furthermore, with normally a standardised fleet consisting of similar aircrafts and cheaper maintenance, the salary structure for the employees of low-cost carriers is usually a more variable than a fixed one allowing pay for performance arrangement.
All in all, with a much higher passenger per employee, most of the savings for these discount carriers come from higher seat density and lower associate ground and on-board service costs which give them an average advantage ranging between 35 to 45 percent.