One key thing to remember is that not all low cost carriers are created equal.
Their are some common trends, however. In general, SIMPLICITY is how sucessfull lo-co's drive down costs. FAIRNESS and CONSISTENCY towards employees and customers is how they win business. It really is that simple. IMHO these are the core aspects of the model....
-they tend to go for simpler fares, rules and yield management.
-They tend to not have meals and other "frills" that drive up costs.
-Also in the name of simplicity, they have only one class of service. Airtran is the only exception I can think of.
- They tend to value commonality - they operate one or at most two aircraft types. The exceptions tend to be carriers in transition, like ATA or Frontier.
- They tend to emphasize providing consistent, reliable service to ALL
customers. They don't get obsessed with treating their frequent fliers as kings - only to drive them away when there is a labor slowdown, etc.
- They tend to outsource more than traditional airlines do. However, the degree and kind of outsourcing will vary.
Some things that most people think of as low-cost carrier characteristics are not really so. People will look at their local lo-co and overgeneralize. To correct some misperceptions....
- Some LCC's have more or less industry standard wages, some are lower, some are actually higher. This can vary ammong employee groups. Some gain a cost advantage through low wages(Airtran?) and some through high productivity(WN) and some through a combination of the two(Jetblue, so far).
- Some LCC's are heavily unionized and some are not.
- Not every lo-co prefers secondary airports. This is a characteristic of Southwest and Ryanair, and since these two are so big - people think that all lo-co's prefer secondary airports. Most don't.
- LCC's are as a general rule just as hub based as the majors are. Southwest is an exception - it does operate mostly point to point route structure. Since WN
is so big, people think this is the general rule with Lo-co's in the US. It is not. In fact, the opposite is the case. Even with WN
, some stations grown so much that they have become defacto hubs.
- Some LCC's like WN
aim for a varied crowd. Some, like Airtran, focus more on the business traveler. Some, like ATA, focus more on vacationers. But the key is to aim to give reliable and consistent service to all travelers, regardless of why they are traveling.
- Not all lo-co's succeed. There have been some pretty spectacular failures. Most fail soon after starting up.
- There seem to be significant differences between American and European Lo-cos. Someone else would probably be more qualified to elaborate.
- Taken as a whole, Lo-co's have as good or better safety record than the majors. Perhaps one of the ways simplicity pays off in is safety.
- Not every smaller airline that flies large jets is properly classified as a low-co. Midwest Express is not a lo-co by traditional definitions. Alaska has some lo-co characteristics, but it varies enough from the core model that I would not call it one. Ditto for America West. These two are "hybrid" airlines - in many ways they are more like the majors than the lo-co's. In Europe - BMI
(British Midland) is not a lo-co.
- Not all lo-co's like to provide the kind of high-frequency service Southwest provides. Airtran, WestJet and many other Lo-Co's have as many thin, low-frequency routes as the majors do.
-Many of the larger Lo-Co's don't have assigned seating. Yet Jetblue does and so do many others. There are enough exceptions that I would not call the lack of assigned seating a defining characteristic of a low-co.
- Some non-aviation people will think of all low-co's as small startups. There are a handfull that have been arround for a long time, are very large, or both.