Strategies of Low-Cost Carriers


Category Strategy
On-board operations Optimum use of seating space (often maximum allowed).
Minimal crew.
Limited and paying cabin service.
In plane advertising and merchandise sales (duty free, phone cards, etc.)
Aircraft operations Few (often one) types of aircraft used to minimize maintenance costs.
Stair boarding instead of sky bridges.
Usage of both front and back doors for faster boarding.
Maximal usage of runway length (take-off thrust and braking on landing).
Fast turn around to maximize aircraft use.
No freight being carried.
Service network Point-to-point services.
Destinations commonly of less than two hours apart.
Usage of secondary airports (lower usage rates).
Booking Online booking to minimize transaction costs.
No travel agent commissions.
Active yield management.
Luggage fees.
Offer of ancillary services (hotels, car rentals, travel insurance).

Source: adapted from Graham, B. and T. Vowles (2006) “Carriers within carriers: a strategic response to low-cost airline competition”, Transport Reviews, Vol. 26, pp. 105-126.