ymincrement
Topic Author
Posts: 25
Joined: Thu Jul 05, 2012 3:33 pm

About Low Cost'S

Fri Sep 07, 2012 10:28 pm

hello everyone,

I am curious about how the low cost airliners decrease their spendings and increase their profit??

When I ask this question to myself I could not find the answer and searched in google also I check the forum I couldnot find a topic about it

Do they make their maintanence rare then the others do? I guess they can't because there are realy hard regulations about it I guess?

They use the same aviation fuel, they use the same runway and taxi places (pay same charges to airports as others), use same number of pilots and crews

The only thing that I could find they do not serve meals or drinks. ( you have to pay for them)

Only meal and drink can make such a big differences on ticket prizes? for ex I check a 3-4 airliners tonight Izmir to Venice a low costs were nearly half of the normal liners...

For me the most important criteria is safety in flights.. it passes through well maintanance. for me not meal ,not knee room, or exc are important...

Also if you have any information about who are biggest and well know maintanance firms which could repair all different types of planes for many airlines??

thanks a lot
Onur
 
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Polot
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Joined: Thu Jul 28, 2011 3:01 pm

RE: About Low Cost'S

Fri Sep 07, 2012 10:46 pm

Reputable LCCs do just as much maintenance work and are just as safe as traditional carriers. There are maintenance savings though in using only one fleet type, which most LCCs do, versus having a wide variety of planes that other airlines have. You are forgetting one of the biggest costs though: employee pay. LCCs traditionally pay their employees less or outsource some of the work instead of doing it in house.
 
Fabo
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Joined: Tue Aug 16, 2005 1:30 am

RE: About Low Cost'S

Fri Sep 07, 2012 10:50 pm

There are many articles and discussions on the topic, but they might be hard to find.

Regarding maintenance, LCCs can hardly afford to do less maintenance. Lower maintenance quality would in the end mean more downtime for their airplanes, which costs money. There is a good reason why LCCs top dispatch reliability and delay statistics. They might have cheaper maintenance though, either through more aggressive negotioations or they might be more willing to go out of the way to cheaper countries for maintenance.

LCCs do indeed use the same fuel, but they do not pay the same for airports as others do. Many LCCs will fly to cheaper secondary airports (BVA, BGY, Reus and Girona in place of BCN) or they negotiate better deals when flying to the same airport (on lowcost terminal, or they dont use airbridge, FR will only use one stairs...).

While they use the same number of crew, many times they pay them less, because they care less about things like service consistency, quality, etc.

Then there are things like lowcosts only selling through web and point to point. A big cost for normal airlines is distribution through global systems (amadeus, galileo, sabre), that IATA agents use or you can use at kayak, or matrix. Also, there is a cost of interlining, codeshares, transfering passengers, etc.
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Viscount724
Posts: 18974
Joined: Thu Oct 12, 2006 7:32 pm

RE: About Low Cost'S

Sat Sep 08, 2012 12:27 am

Many LCCs also have no pension plans which are a huge cost item for some legacy carriers.
 
tdscanuck
Posts: 8572
Joined: Wed Jan 11, 2006 7:25 am

RE: About Low Cost'S

Sat Sep 08, 2012 4:44 am

Quoting ymincrement (Thread starter):
Do they make their maintanence rare then the others do?

No. If anything they're better, for reasons that will become apparent in a second.

Quoting ymincrement (Thread starter):
I guess they can't because there are realy hard regulations about it I guess?

Correct.

Quoting ymincrement (Thread starter):
They use the same aviation fuel

They use the same physical fuel; they're not necessarily buying it at the same airports or paying the same price (fuel hedging gave Southwest a huge competitive advantage for years).

Quoting ymincrement (Thread starter):
use same number of pilots and crews

Actually, they tend to use more but have a more rational benefit structure (read: no giant pension obligations) and have far more flexible labour rules.

Quoting ymincrement (Thread starter):
The only thing that I could find they do not serve meals or drinks. ( you have to pay for them)

Although that's true, that difference between LCC's and legacy carriers is mostly gone.

The big thing the LCC's do is run their utilization up much higher by running the airplanes more and keeping more of them running (this is why they can actually need better maintenance). This also needs more crews to keep the aircraft moving. But their better labor struture and generally better operational model allow them to get more flights out of the same sized fleet, driving their CASM down.

Quoting ymincrement (Thread starter):
Also if you have any information about who are biggest and well know maintanance firms which could repair all different types of planes for many airlines??

Delta TechOps, Lufthansa Teknik, TAECO/HAECO, and AAR immediately come to mind.

Tom.
 
mandala499
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Joined: Wed Aug 29, 2001 8:47 pm

RE: About Low Cost'S

Sat Sep 08, 2012 7:18 am

LCCs do not always mean low fares.
It's a way of doing business to control your costs, and seek to pass value to your passengers as you see fit. It's a bottom-up approach.

Maintenance cannot be reduced, skipping on maintenance (where you can) will cost more later. So, LCCs really have a hard look at the aircraft configuration and determine what's the cheapest configuration to maintain. It's penny counting.

Same with how they fly the airplanes. A proper LCC will have a dynamic fuel savings team doing the analysis... from optimizing tankering, to the lowest trip cost calculation... what speeds they fly on, and provide means to anticipate air traffic flow delays, etc... all in the name of saving fuel (and maintenance). This is penny pinching, but this is where the money can be really saved! Some go the whole hog on fuel saving/optimization. Some even carefully calculate how much food they should bring on board to sell, based on the route based on past sales trends to ensure they're not carrying too much food.. Yes, it's probably only going to save they $1 per hour flight, but that could mean $3600 a year per aircraft!

If they do this right, then they may not need to operate from "cheap airports"... where I am, the LCCs fly to the same airports as the other carriers (no choice really), and one of them have the top 10 lowest operating cost per seat in the world.

Crew wise, don't be surprised if in some parts of the world, LCCs actually do have better pay and better working conditions... and they'd operate with legally minimum number of cabin crew per flight to reduce costs (in exchange for better pay).

As to the routing structure, point to point only is no longer an issue. Through booking / multisegment single itinerary is now possible for LCCs, but still, no interlining (except intra-group, within the same system)... And web-only LCCs are capping themselves... the ones who went back to the travel agencies, are reaping the benefits.

A lot of LCCs don't overnight away from their home bases... to reduce costs... and they do press on the utility... some aircraft by LCCs here fly about 14hrs a day... calls from some disciplined maintenance n planning.

Mandala499
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