The Philosophy Of Low Cost Airlines

Numerous people have argued that low cost airlines are significantly contributing

to the demise of our planet, by encouraging people to fly to various locations for such a cheap price. With the ethics aside, it's perhaps perplexing how such companies can afford to fly people to these foreign destinations, and yet charge such a pitiful amount for the pleasure. Instead, these low cost airlines depend on what is called, ancillary revenue.

Due to the inevitable fact that low cost airlines lose a considerable amount of their profit by selling highly discounted tickets, they have to make money elsewhere to make up for the loss. Typically an airline has to first purchase the aircrafts they intend to fly, which can already cause a considerable debt for the company, for an Airbus A320 alone can cost anywhere from $55 million USD to $65 million USD, depending on the layout and other additional factors. Their recurring costs come from the actual flights they operate; this includes the following unavoidable charges: fuel and insurance surcharge, air passenger duty, terminal use charge, passenger service charge, security charge, and any other taxes imposed on the company by the government from the country of origin.

Low cost airlines don't often use deceptive techniques, however, one trick in which they could potentially use, and sometimes do, is to not include the tax when displaying the prices. Often a little footnote will point out this omission. The idea behind this deceptive technique is that people will be taken aback by the phenomenally low cost, and once realising tax was not included in the first place, continue with their purchase nonetheless. This, however, is not usually a technique employed by the low cost airlines, since the assumption that people will continue isn't something which a company can rely on.

The ancillary revenue as aforementioned tends to be a much more reliable technique. The majority of the low cost airlines are based upon this business model. It involves a long list of assumptions that can be relied on to a certain degree. Such as, it is assumed that at least some of the passengers will purchase food and drinks on the plane, for which the price will set so as to make enough profit to make the flight worthwhile. Even if nobody buys a single drink or tray of food on one flight, the assumption is that this would be made up by passengers on another flight. Other such services for which you would be expected to pay an additional cost for would be priority boarding, seat allocation. These, however, are to be expected, to a certain degree. One additional cost that few people tend to consider when flying with a low cost airline is that additional charges are imposed for baggage. For almost each and every low cost airline, no luggage is allowed by default until one pays for the amount of luggage one expects to take on the flight.

Therefore, whilst low cost airlines tend to be preferred by most people flying on short haul flights, the charges for all the additional extras that usually come as standard are non-existent on low cost airlines. The old adage is that, you get what you pay for. One unfounded worry by people who have never flown on a low cost airline is that the planes are made out of paper -- fortunately, this is absolutely untrue. Low cost airlines do not and never will reduce such important procedures for the interest of profit.

by: Ryan Sheldon

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