Low-cost carrier
Encyclopedia
A low-cost carrier or low-cost airline (also known as a no-frills
No frills
No-frills or no frills is a term used to describe any service or product for which the non-essential features have been removed to keep the price low. The use of the term "frills" refers to a style of fabric decoration...
, discount
Discounts and allowances
Discounts and allowances are reductions to a basic price of goods or services.They can occur anywhere in the distribution channel, modifying either the manufacturer's list price , the retail price , or the list price Discounts and allowances are reductions to a basic price of goods or services.They...
or budget
Budget
A budget is a financial plan and a list of all planned expenses and revenues. It is a plan for saving, borrowing and spending. A budget is an important concept in microeconomics, which uses a budget line to illustrate the trade-offs between two or more goods...
carrier or airline or cheap flight) is an airline
Airline
An airline provides air transport services for traveling passengers and freight. Airlines lease or own their aircraft with which to supply these services and may form partnerships or alliances with other airlines for mutual benefit...
that generally has lower fares and fewer comforts. 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.
Business model
Low-cost carrier business modelBusiness model
A business model describes the rationale of how an organization creates, delivers, and captures value...
practices vary widely. Some practices are more common in certain regions, while others are generally universal. The common theme among all low-cost carriers is the reduction of cost and reduced overall fares compared to legacy carriers.
Common practices
Some low-cost carriers operate aircraft configured with a single passenger class, and most operate just a single type of aircraft. In the past, low-cost carriers tended to operate older aircraft, such as the McDonnell Douglas DC-9McDonnell Douglas DC-9
The McDonnell Douglas DC-9 is a twin-engine, single-aisle jet airliner. It was first manufactured in 1965 with its maiden flight later that year. The DC-9 was designed for frequent, short flights. The final DC-9 was delivered in October 1982.The DC-9 was followed in subsequent modified forms by...
and older models of the Boeing 737
Boeing 737
The Boeing 737 is a short- to medium-range, twin-engine narrow-body jet airliner. Originally developed as a shorter, lower-cost twin-engine airliner derived from Boeing's 707 and 727, the 737 has developed into a family of nine passenger models with a capacity of 85 to 215 passengers...
. Since 2000, fleets generally consist of smaller, newer, more fuel efficient aircraft, commonly the Airbus A320
Airbus A320 family
The Airbus A320 family is a family of short- to medium-range, narrow-body, commercial passenger jet airliners manufactured by Airbus Industrie.Airbus was originally a consortium of European aerospace companies, and is now fully owned by EADS. Airbus's name has been Airbus SAS since 2001...
or Boeing 737
Boeing 737
The Boeing 737 is a short- to medium-range, twin-engine narrow-body jet airliner. Originally developed as a shorter, lower-cost twin-engine airliner derived from Boeing's 707 and 727, the 737 has developed into a family of nine passenger models with a capacity of 85 to 215 passengers...
families, reducing training and servicing costs.
Like the major carriers, many low-cost carriers develop one or more hubs to maximize destination coverage and defend their market Many, like Southwest Airlines
Southwest Airlines
Southwest Airlines Co. is an American low-cost airline based in Dallas, Texas. Southwest is the largest airline in the United States, based upon domestic passengers carried,...
, do not operate a traditional hub in any market. Southwest operates point-to-point service, with focus cities serving as mini-hubs for passenger connections to other cities.
Aircraft often operate with a minimum set of optional equipment, further reducing costs of acquisition and maintenance, as well as keeping the weight of the aircraft lower and thus saving fuel. Pilot conveniences may be excluded such as ACARS and autothrottle. Often, no in-flight entertainment
In-flight Entertainment
In-flight entertainment refers to the entertainment available to aircraft passengers during a flight. In 1936, the airship Hindenburg offered passengers a piano, lounge, dining room, smoking room, and bar during the 2½ day flight between Europe and America...
systems are made available, though many US low-cost carriers do offer satellite television or radio in-flight. Some do not offer reserved seating, hoping to encourage passengers to board early and quickly, thus decreasing turnaround times. Some airlines even use only non-reclining seats, or operate aircraft with no window shades.
Airlines often offer a simpler 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. Often, the low cost carriers fly to smaller, less congested secondary airports and/or fly to airports in off-peak hours to avoid air traffic delays and taking advantage of lower landing fees. The airlines tend to offload, service and re-load the aircraft (turnaround) in shorter time periods, allowing maximum utilization of aircraft.
In Europe and early in Southwest's history, luggage is not automatically transferred from one flight to another, even if both flights are with the same company. This saved costs and is thought to encourage passengers to take direct flights. Modern US-based low-cost carriers generally transfer baggage for continuing flights, as well as transferring baggage to other airlines.
In many cases, low cost carriers generate ancillary revenue
Ancillary revenue
Ancillary revenue refers to airline revenue from non-ticket sources, such as baggage fees and on-board food and services, and has become an important financial component for low-cost carriers in Europe, the United States and other global regions...
from a variety of activities, such as à la carte features and commission-based products. Some airlines may charge a fee for a pillow or blanket or for carry-on baggage. In Europe, it is common for each and every convenience and service to have an additional charge. In other regions this practice is more limited.
Low-cost carriers are intended to be low-cost, so in many cases employees work multiple roles. At some airlines flight attendants also clean the aircraft or work as gate agents (limiting personnel costs). Southwest Airlines is well known for using fuel hedging
Hedge (finance)
A hedge is an investment position intended to offset potential losses that may be incurred by a companion investment.A hedge can be constructed from many types of financial instruments, including stocks, exchange-traded funds, insurance, forward contracts, swaps, options, many types of...
programs to reduce its overall fuel costs. Some airlines eschew the use of gates that include jetways, since these generally cost more to lease.
Where permissible, some airlines have a disinclination to handle Special Service passengers, for instance by placing a higher age limit on unaccompanied minor
Unaccompanied minor
An unaccompanied minor is a child without the presence of a legal guardian. This term is used in immigration law and in airline policies. The specific definition varies from country to country and from airline to airline.-Immigration Law:...
s than full service carriers. Often these airlines offer no refunds or transfers to later flights in the event of missed flights; 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.
Differentiation
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. Other airlines are limited on what points they can implement based on local laws, such as RyanairRyanair
Ryanair is an Irish low-cost airline. Its head office is at Dublin Airport and its primary operational bases at Dublin Airport and London Stansted Airport....
cannot remove window blinds from its aircraft as they are required to be fitted by the Irish Aviation Authority. As supply increases, this sort of differentiation by brand is one of the most important criteria for the future success of low-cost-carriers, since price-competition alone is not believed by many experts to be enough given the number of carriers.
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
Frontier Airlines
Frontier Airlines, Inc., is an American airline headquartered in Indianapolis, Indiana, United States. The carrier, which is a subsidiary and operating brand of Republic Airways Holdings, operates flights to 83 destinations throughout the United States, Mexico, and Costa Rica and maintains hubs at...
and JetBlue Airways
JetBlue Airways
JetBlue Airways Corporation is an American low-cost airline. The company is headquartered in the Forest Hills neighborhood of the New York City borough of Queens. Its main base is John F. Kennedy International Airport, also in Queens....
advertise satellite television. Advertiser-supported Skybus Airlines
Skybus Airlines
Skybus Airlines Inc. was a privately held airline based in Columbus, Ohio, United States. It operated as an ultra-low-cost carrier modeled after the European airline Ryanair, and aimed to be the least expensive airline in the United States...
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.
Pricing policy
The price policy of the low cost carriers is usually very dynamic, with discounts and tickets in promotion. Like other carriers, even if the advertised price may be very low, it often does not include charges & taxes. With some airlines, some flights are advertised as free (plus applicable taxes, fees and charges). Depending on the airline, 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.Most airlines charge additional taxes and fees on their tickets. Some low-cost airlines have been known to charge fees for the seemingly ridiculous, such as levying a credit card charge where credit card is the only payment method accepted. Many consumers and governments consider this to be fraudulent, but some still allow this and similar practices.
Traditional perceptions of the "low-cost carrier" as a stripped-down, no-frills airline, as seen on Southwest Airlines
Southwest Airlines
Southwest Airlines Co. is an American low-cost airline based in Dallas, Texas. Southwest is the largest airline in the United States, based upon domestic passengers carried,...
, have been changing as new entrants to the market adapt the business model in new ways. AirTran Airways
AirTran Airways
AirTran Airways, a subsidiary of the Dallas, Texas-based Southwest Airlines, is an American low-cost airline headquartered in Orlando, Florida. AirTran operates over 650 daily flights , primarily in the eastern and midwestern United States...
and Spirit Airlines
Spirit Airlines
Spirit Airlines is a United States ultra low-cost carrier operating scheduled flights throughout the Americas. The airline is headquartered in Miramar, Florida, in the Miami metropolitan area. Spirit currently maintains a base in Fort Lauderdale, Florida...
offer a premium cabin while Frontier
Frontier Airlines
Frontier Airlines, Inc., is an American airline headquartered in Indianapolis, Indiana, United States. The carrier, which is a subsidiary and operating brand of Republic Airways Holdings, operates flights to 83 destinations throughout the United States, Mexico, and Costa Rica and maintains hubs at...
and JetBlue
JetBlue Airways
JetBlue Airways Corporation is an American low-cost airline. The company is headquartered in the Forest Hills neighborhood of the New York City borough of Queens. Its main base is John F. Kennedy International Airport, also in Queens....
offer live in-flight television, sometimes for an extra fee. AirTran has XM Satellite Radio
XM Satellite Radio
XM Satellite Radio is one of two satellite radio services in the United States and Canada, operated by Sirius XM Radio. It provides pay-for-service radio, analogous to cable television. Its service includes 73 different music channels, 39 news, sports, talk and entertainment channels, 21 regional...
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
Virgin America
Virgin America, Inc. is a United States-based low-cost airline that began service on August 8, 2007. The airline's stated aim is to provide low-fare, high-quality service for "long-haul point-to-point service between major metropolitan cities on the Eastern and West Coast seaboards." San Francisco...
.
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 TradingOffice of Fair Trading
The Office of Fair Trading is a not-for-profit and non-ministerial government department of the United Kingdom, established by the Fair Trading Act 1973, which enforces both consumer protection and competition law, acting as the UK's economic regulator...
(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 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. Ryanair requires that passengers' airport purchases fit within their carry-on bag. "Hidden" charging has been satirised by the vocal trio Fascinating Aida
Fascinating Aida
Fascinating Aïda is a British comedy singing group and satirical cabaret act, which has retired twice, most recently in 2004. After the death in 2007 of the group's pianist and musical director, Russell Churney, all plans for a new show were shelved. Some of their most famous songs include...
in a song called "Cheap Flights", describing a fictional flight from Stansted Airport in England to Tralee in Ireland, that was especially popular at the Edinburgh Festival Fringe
Edinburgh Fringe
The Edinburgh Festival Fringe is the world’s largest arts festival. Established in 1947 as an alternative to the Edinburgh International Festival, it takes place annually in Scotland's capital, in the month of August...
in 2011.
History
While tour and package operators have been offering lower-priced, lower frilled traveling for a large part of modern airline history, not until during the post Vietnam WarVietnam War
The Vietnam War was a Cold War-era military conflict that occurred in Vietnam, Laos, and Cambodia from 1 November 1955 to the fall of Saigon on 30 April 1975. This war followed the First Indochina War and was fought between North Vietnam, supported by its communist allies, and the government of...
era did this business model really escalate and take off. Through various ticket consolidators, charter airlines, and innovators in lower frills flying, such as Channel Airways
Channel Airways
Channel Airways was a private airline formed in the United Kingdom in 1946 as East Anglian Flying Services.The newly formed airline initially operated aerial joy rides with a single, three-seater aircraft from an airstrip on the Kent coast...
, and Court Line
Court Line
Court Line was a prominent British holiday charter airline during the early 1970s based at Luton Airport in Bedfordshire. It also provided bus services in Luton and surrounding areas....
, the traveling public had been conditioned to want to travel to new and increasingly further away and exotic locations on vacation, rather than short-haul junket
Junket
Junket can refer to:*an excursion for the purpose of pleasure at public or company expense *Junket , a dessert made of flavoured, sweetened curds*Junket , a brand name of rennet tablets and dessert mixes...
s to nearby beach resorts.
The first low-cost airline was Southwest Airlines
Southwest Airlines
Southwest Airlines Co. is an American low-cost airline based in Dallas, Texas. Southwest is the largest airline in the United States, based upon domestic passengers carried,...
which started flying in 1971.
The first airline offering no-frills transatlantic service was Freddie Laker
Freddie Laker
Sir Frederick Alfred Laker was a British airline entrepreneur, best known for founding Laker Airways in 1966, which went bankrupt in 1982...
's Laker Airways
Laker Airways
Laker Airways was a wholly private, British independentindependent from government-owned corporations airline founded by Sir Freddie Laker in 1966. It originally was a charter airline flying passengers and cargo worldwide...
, which operated its famous "Skytrain" service between London
London
London is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...
and New York City
New York City
New York is the most populous city in the United States and the center of the New York Metropolitan Area, one of the most populous metropolitan areas in the world. New York exerts a significant impact upon global commerce, finance, media, art, fashion, research, technology, education, and...
during the late 1970s. The service was suspended after Laker's competitors, British Airways
British Airways
British Airways is the flag carrier airline of the United Kingdom, based in Waterside, near its main hub at London Heathrow Airport. British Airways is the largest airline in the UK based on fleet size, international flights and international destinations...
and Pan Am
Pan American World Airways
Pan American World Airways, commonly known as Pan Am, was the principal and largest international air carrier in the United States from 1927 until its collapse on December 4, 1991...
, were able to price Skytrain out of the market.
In the United States, airline carriers like America West Airlines
America West Airlines
America West Airlines corporate offices were in Tempe, Arizona and the main hub was at Phoenix Sky Harbor International Airport. The airline became part of the US Airways Group after a merger in 2005....
which commenced operations after 1978, soon realized a cost of available seat mile
Available seat miles
An available seat mile is the fundamental unit of production for a passenger-carrying airline. A unit in this case is one seat, available for sale, flown one mile. For example, an aircraft with 300 seats available for sale flying 1,000 statute miles would generate 300,000 ASMs for that particular...
advantage in relation to the traditional and established, legacy airlines
Legacy carrier
A legacy carrier, in the United States, is an airline that had established interstate routes by the time of the route liberalization which was permitted by the Airline Deregulation Act of 1978 and was thus directly affected by that act...
such as Trans World Airlines
Trans World Airlines
Trans World Airlines was an American airline that existed from 1925 until it was bought out by and merged with American Airlines in 2001. It was a major domestic airline in the United States and the main U.S.-based competitor of Pan American World Airways on intercontinental routes from 1946...
and American Airlines
American Airlines
American Airlines, Inc. is the world's fourth-largest airline in passenger miles transported and operating revenues. American Airlines is a subsidiary of the AMR Corporation and is headquartered in Fort Worth, Texas adjacent to its largest hub at Dallas/Fort Worth International Airport...
. Often this CASM
Available seat miles
An available seat mile is the fundamental unit of production for a passenger-carrying airline. A unit in this case is one seat, available for sale, flown one mile. For example, an aircraft with 300 seats available for sale flying 1,000 statute miles would generate 300,000 ASMs for that particular...
advantage has been attributed, solely to the lower labor costs of the newly hired and lower pay grade workers of new start up carriers, such as PeopleExpress Airlines, Valujet, Midway Airlines, and their like. However, these lower costs, can also be attributed to the less complex aircraft fleets, and less complex route networks these new carriers began operations with, as well as the vastly less costly and freshly trained labor force.
To combat the new round of low cost and start up entrants into the very competitive and deregulated United States airline industry, the mainline
Mainline (flight)
A mainline flight is a flight operated by an airline's main operating unit, rather than by regional alliances, regional code-shares or regional subsidiaries...
major carrier
Major carrier
Major carrier or major airline carrier is a designation given by the United States Department of Transportation to U.S.-based airlines that post more than $1 billion in revenue during a fiscal year.As of 2010, there were 19 major carriers....
s and network legacy carriers
Legacy carrier
A legacy carrier, in the United States, is an airline that had established interstate routes by the time of the route liberalization which was permitted by the Airline Deregulation Act of 1978 and was thus directly affected by that act...
strategically developed no frills divisions within the main airlines brand and corporate structures. Among these were Metrojet
MetroJet
MetroJet was a no-frills "airline within an airline" brand operated as a division of US Airways from 1998 to 2001.-History:After the conclusion of painstaking labor negotiations in 1997, US Airways sought to head off burgeoning competition from low-cost carriers in its strongest region, the U.S....
and Continental Lite
Continental Lite
Continental Lite was a short lived "airline within an airline" brand of Continental Airlines established in 1993. The airline folded in 1995 after losing was has been reported in the press as between $140 million or $300 million....
. These so called airlines within an airline however, proved to be very short lived, for the most part and a financial burden which were quickly disposed off when economic rationalization or competitive pressures subsided.
No-frills long-haul flights
It has been suggested that the Airbus A380Airbus A380
The Airbus A380 is a double-deck, wide-body, four-engine jet airliner manufactured by the European corporation Airbus, a subsidiary of EADS. It is the largest passenger airliner in the world. Due to its size, many airports had to modify and improve facilities to accommodate it...
, able to hold up to 853 passengers in an all Economy layout, 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
Aer Lingus
Aer Lingus Group Plc is the flag carrier of Ireland. It operates a fleet of Airbus aircraft serving Europe and North America. It is Ireland's oldest extant airline, and its second largest after low-cost rival Ryanair...
lowered its prices to compete with companies such as Ryanair
Ryanair
Ryanair is an Irish low-cost airline. Its head office is at Dublin Airport and its primary operational bases at Dublin Airport and London Stansted Airport....
on shorthaul, however it maintains a full service on transatlantic flight
Transatlantic flight
Transatlantic flight is the flight of an aircraft across the Atlantic Ocean. A transatlantic flight may proceed east-to-west, originating in Europe or Africa and terminating in North America or South America, or it may go in the reverse direction, west-to-east...
s. Late in 2004 the Canadian airline Zoom Airlines
Zoom Airlines
Zoom Airlines Inc. was a Canadian low-fare scheduled transatlantic airline with its headquarters in the Place Bell Canada building in Ottawa, Ontario...
also started selling transatlantic flights between Glasgow, UK; Manchester, UK; and Canada for £89.
Australia's Jetstar Airways
Jetstar Airways
Jetstar Airways is an Australian low-cost airline headquartered in Melbourne, Australia. It is a subsidiary of Qantas, created in response to the threat posed by low-cost airline Virgin Blue...
has operated international flights since 2005, when it began services to Christchurch
Christchurch
Christchurch is the largest city in the South Island of New Zealand, and the country's second-largest urban area after Auckland. It lies one third of the way down the South Island's east coast, just north of Banks Peninsula which itself, since 2006, lies within the formal limits of...
, New Zealand
New Zealand
New Zealand is an island country in the south-western Pacific Ocean comprising two main landmasses and numerous smaller islands. The country is situated some east of Australia across the Tasman Sea, and roughly south of the Pacific island nations of New Caledonia, Fiji, and Tonga...
. In late 2006, more international services began. Departing from Sydney
Sydney
Sydney is the most populous city in Australia and the state capital of New South Wales. Sydney is located on Australia's south-east coast of the Tasman Sea. As of June 2010, the greater metropolitan area had an approximate population of 4.6 million people...
, Melbourne
Melbourne
Melbourne is the capital and most populous city in the state of Victoria, and the second most populous city in Australia. The Melbourne City Centre is the hub of the greater metropolitan area and the Census statistical division—of which "Melbourne" is the common name. As of June 2009, the greater...
and Brisbane
Brisbane
Brisbane is the capital and most populous city in the Australian state of Queensland and the third most populous city in Australia. Brisbane's metropolitan area has a population of over 2 million, and the South East Queensland urban conurbation, centred around Brisbane, encompasses a population of...
, it flies to popular tourist destinations within 10 hours of Australia such as Honolulu, Japan
Japan
Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...
, Vietnam
Vietnam
Vietnam – sometimes spelled Viet Nam , officially the Socialist Republic of Vietnam – is the easternmost country on the Indochina Peninsula in Southeast Asia. It is bordered by China to the north, Laos to the northwest, Cambodia to the southwest, and the South China Sea –...
, Thailand
Thailand
Thailand , officially the Kingdom of Thailand , formerly known as Siam , is a country located at the centre of the Indochina peninsula and Southeast Asia. It is bordered to the north by Burma and Laos, to the east by Laos and Cambodia, to the south by the Gulf of Thailand and Malaysia, and to the...
and Malaysia. With the delivery of new aircraft, it hopes 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 and concluded that a number of Asian carriers, including AirAsia
AirAsia
AirAsia Berhad is a Malaysian-based low-cost airline. AirAsia is Asia's largest low-fare, no-frills airline and a pioneer of low-cost travel in Asia. AirAsia group operates scheduled domestic and international flights to over 400 destinations spanning 25 countries. Its main hub is the Low-Cost...
, were closest to making such a model work. On November 2, 2007, AirAsia X
AirAsia X
AirAsia X is a long-haul, budget airline based in Malaysia. The airline is operated by AirAsia X Sdn. Bhd. . It commenced operations on 2 November 2007. Its first service flew from Kuala Lumpur International Airport, Malaysia, to Gold Coast Airport in Australia...
, a subsidiary of AirAsia and Virgin Group
Virgin Group
Virgin Group Limited is a British branded venture capital conglomerate organisation founded by business tycoon Richard Branson. The core business areas are travel, entertainment and lifestyle. Virgin Group's date of incorporation is listed as 1989 by Companies House, who class it as a holding...
flew its inaugural flight from Kuala Lumpur
Kuala Lumpur
Kuala Lumpur is the capital and the second largest city in Malaysia by population. The city proper, making up an area of , has a population of 1.4 million as of 2010. Greater Kuala Lumpur, also known as the Klang Valley, is an urban agglomeration of 7.2 million...
, Malaysia to Gold Coast
Gold Coast, Queensland
Gold Coast is a coastal city of Australia located in South East Queensland, 94km south of the state capital Brisbane. With a population approximately 540,000 in 2010, it is the second most populous city in the state, the sixth most populous city in the country, and also the most populous...
, Australia
Australia
Australia , officially the Commonwealth of Australia, is a country in the Southern Hemisphere comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands in the Indian and Pacific Oceans. It is the world's sixth-largest country by total area...
. AirAsia X claims that it is the first true low-cost long-haul carrier since the end of Sir Freddie Laker era.
In August 2006, Zoom Airlines announced that it was to establish a UK subsidiary, to offer low-cost long-haul flights to the USA and India
India
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...
. The company suspended all its operations from 28 August 2008 due to financial problems related to high fuel prices.
On 26 October 2006, Oasis Hong Kong Airlines
Oasis Hong Kong Airlines
Oasis Hong Kong Airlines Limited is a now-defunct long-haul low-cost airline that was based in Hong Kong. It operated scheduled services to London Gatwick Airport and Vancouver International Airport from its hub, Hong Kong International Airport....
started flying from Hong Kong to London Gatwick Airport
London Gatwick Airport
Gatwick Airport is located 3.1 miles north of the centre of Crawley, West Sussex, and south of Central London. Previously known as London Gatwick,In 2010, the name changed from London Gatwick Airport to Gatwick Airport...
. 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
Vancouver
Vancouver is a coastal seaport city on the mainland of British Columbia, Canada. It is the hub of Greater Vancouver, which, with over 2.3 million residents, is the third most populous metropolitan area in the country,...
, British Columbia
British Columbia
British Columbia is the westernmost of Canada's provinces and is known for its natural beauty, as reflected in its Latin motto, Splendor sine occasu . Its name was chosen by Queen Victoria in 1858...
was started. The company ceased operations on 9 April 2008, after over a billion Hong Kong dollar
Hong Kong dollar
The Hong Kong dollar is the currency of the jurisdiction. It is the eighth most traded currency in the world. In English, it is normally abbreviated with the dollar sign $, or alternatively HK$ to distinguish it from other dollar-denominated currencies...
s in losses.
In late 2007, Cebu Pacific
Cebu Pacific
Cebu Air, Inc., operating as Cebu Pacific Air, is based on the grounds of Ninoy Aquino International Airport , Pasay City, Metro Manila, the Philippines. It offers scheduled flights to both domestic and international destinations...
, the Philippines
Philippines
The Philippines , officially known as the Republic of the Philippines , is a country in Southeast Asia in the western Pacific Ocean. To its north across the Luzon Strait lies Taiwan. West across the South China Sea sits Vietnam...
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.
On March 11, 2009, AirAsia X started its first low cost long-haul service into Europe; to London Stansted, England
England
England is a country that is part of the United Kingdom. It shares land borders with Scotland to the north and Wales to the west; the Irish Sea is to the north west, the Celtic Sea to the south west, with the North Sea to the east and the English Channel to the south separating it from continental...
. 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.
No-frills shortest-haul flight
On September 9, 2011, Easy Sky started operations in Honduras, using the low cost model, serving continental City of La Ceiba and the Island of Roatan in the Western Caribbean using a B-737-232. Flight time 8 minutes (40 NM). $ 24.95.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. Aircraft are generally configured for a single class of service, initially on transatlantic routings. Similarly, Midwest Express (later Midwest AirlinesMidwest Airlines
Midwest Airlines was a U.S.-based airline and was also an operating brand of Republic Airways Holdings based in Oak Creek, Wisconsin. operating from Milwaukee's General Mitchell International Airport...
) operated this model for its domestic US routes until it was absorbed into Frontier Airlines
Frontier Airlines
Frontier Airlines, Inc., is an American airline headquartered in Indianapolis, Indiana, United States. The carrier, which is a subsidiary and operating brand of Republic Airways Holdings, operates flights to 83 destinations throughout the United States, Mexico, and Costa Rica and maintains hubs at...
in 2010.
Probably best described as "fewer frills" rather than "no frills", the initial entrants in this market utilized second-hand, mid-sized, twin jets such as Boeing 757
Boeing 757
The Boeing 757 is a mid-size, narrow-body twin-engine jet airliner manufactured by Boeing Commercial Airplanes. Passenger versions of the twinjet have a capacity of 186 to 289 persons and a maximum range of , depending on variant and cabin configuration...
and Boeing 767
Boeing 767
The Boeing 767 is a mid-size, wide-body twin-engine jet airliner built by Boeing Commercial Airplanes. It was the manufacturer's first wide-body twinjet and its first airliner with a two-crew glass cockpit. The aircraft features two turbofan engines, a supercritical wing, and a conventional tail...
in an attempt to service the lucrative London-US Eastern Seaboard market:
- Eos AirlinesEos AirlinesEos Airlines, Inc. was an American all-business class airline headquartered in Purchase, New York, with its flights from John F. Kennedy International Airport, New York...
, which ceased operating on 27 April 2008 - Maxjet, which has ceased its scheduled business flights, but is planning to restart as a luxury charter carrier
- SilverjetSilverjetSilverjet was a British all-business class airline headquartered at London Luton Airport, Luton, Bedfordshire, England, that, prior to the suspension of operations on 30 May 2008, operated services to Newark Liberty International Airport and Dubai International Airport...
, which ceased operations on 30 May 2008
External links
- Information about discount airlines and cheap air travel at WikitravelWikitravel-External links:* *...