The Secret Of Low Cost Airlanes

‘‘Value’’ or low-cost airlines, such as Southwest, JetBlue, America West, America Trans Air (ATA), AirTran (different from ATA despite similar yet confusing names!), Frontier, and Spirit have made it possible for the traveling public to save billions of dollars. Currently, 75 percent of Americans have the option of flying on a low-cost airline, although some travelers may need to drive as much as two hours from their home to the airport or from their destination airport. Southwest has trailblazed this market niche for over two decades, with its impeccable safety record and consistently profitable operations serving to enhance the reputation of low-cost airlines.

JetBlue, the best-funded airline startup ever, took the concept one step further, positioning itself as the low-cost airline with select frills, offering satellite television for every passenger and more leg room at most seats—but no meals (even on cross-country trips) or first-class cabin. Still, it’s much easier to pack a gourmet lunch than a multichannel TV set! Low-cost airlines are now recognized as the single biggest threat to the survival of the ‘‘big boys.’’ Recognizing this, most major airlines have at some point in time set up value subsidiaries—including Continental Airlines with its short-lived ‘‘Continental Lite,’’ United Shuttle on the West Coast, and US Air MetroJet on the East Coast. But none was able to replicate the operational prowess of Southwest, and each one was disbanded.

Nevertheless, several major airlines are vowing to try setting up low-cost subsidiaries all over again, with Delta’s Song and United’s Ted the first of several attempts by major airlines to address the growth of low-cost airlines!

The average amount of revenue major and low-cost airlines earn per mile transporting passengers is quite similar, typically being slightly higher for major airlines that also include first-class cabins. However, the biggest advantage low-cost airlines have over major airlines is significantly lower labor costs. Additional cost-saving benefits for low-cost airlines include factors such as purchasing new fuel-efficient aircraft, never providing meals, and using secondary airports which have cheaper landing fees and which are often less congested, thereby significantly decreasing operating expenses.

After the September 11 tragedies, which coincided with a slumping economy, business travelers were forced to scale back on high-priced fares, and major airlines came under relentless attack from low-cost airlines, resulting in the bankruptcies of US Airways and United Airlines in 2002, followed by Hawaiian Airlines in 2003. American Airlines came within hours of declaring bankruptcy in 2003. There is widespread agreement that the major airlines will have to restructure their entire business model if they are to survive the onslaught they face from low-cost airlines such as Southwest, JetBlue, and Frontier.

There are some drawbacks to flying low-cost airlines. If any of the following are important to you, you might want to steer clear of the low-cost carriers:

• Some do not have preassigned seating. This has been Southwest Airlines’ most significant weakness.
• In many instances, they fly into minor airports that can require significant travel time from central locations, for example, Jet Blue. (Long Beach rather than Los Angeles) and Southwest (Baltimore rather than Washington, D.C.; Providence or Manchester rather than Boston; Oakland rather than San Francisco). Several European carriers fly out of Stansted or Luton rather than Gatwick or Heathrow in London.
• Meal service is the exception (peanuts and pretzels are typically as good as it gets!), even when flying five or more hours cross-country.
• Some do not have frequent flyer programs, or the limited network of cities served reduces award redemption opportunities. (Hey— Southwest and JetBlue do not fly anywhere outside the U.S. mainland,so not even Hawaii is an option!)
• Few fly long distances—from one major airport to another— without at least one stop, although Southwest, JetBlue, and America West do have nonstops on a few of their cross-country routes.
• Southwest passengers who have purchased cheaper nonrefundable tickets must pay extra to go standby.
• Most do not have large fleets or extensive maintenance crews at all airports served, which can be a setback when an aircraft experiences a maintenance problem. Since tickets on low-cost airlines have limited transferability to other airlines, you may want to be cautious and plan for possible delays or cancellations by building in at least a two- to four-hour buffer between your scheduled arrival and a subsequent appointment.
• If your flight on a low-cost airline is canceled, you will almost always have to wait for another flight on the same airline or get a refund—but then you’re left trying to find a last-minute purchase on another carrier, which could be expensive. Conversely, major airlines do have agreements with competitor airlines, meaning that a major airline can validate your ticket to an alternative carrier in the event of cancellation. Major carriers may pay for a hotel room if the cancellation strands you overnight, whereas most low-cost airlines will not. Finally, if delay or cancellation of your low-cost airline flight results in a missed connection with another airline (such as when connecting to a cross-Atlantic flight), the responsible airline will owe you nothing. However, a missed connection when transferring flights within the same major airline will get you rescheduled to the next available flight at no extra charge.
• In Europe, low-cost airlines charge significant amounts for excess baggage. For example, Ryanair levies $6 per kilo for anything over 33 pounds. This restriction could mean that U.S. travelers, who are accustomed to a two-suitcase allowance, could incur a hefty baggage charge!
• With the exception of Southwest and JetBlue, low-cost airlines have been known to operate with precarious financial support. Names that disappeared around the turn of the century include ValueJet, Sun, Pro-Air, Kiwi, Tower, Vanguard, National, People Express, and Eastwind Airlines. Make sure you pay only with a credit card for travel within sixty days or less, so that you can dispute the transaction with your credit card company if the airline should suspend or discontinue service

ALERT : If a low-cost airline should disrupt service shortly before you travel, the cost of purchasing a last-minute fare on another airline may be prohibitive. Occasionally, a price break is given by another carrier to those who are victims of unusual circumstances, or there may be a law requiring other carriers who service the same route to pick up the slack, usually with some administrative fee tacked on. But don’t count on much sympathy from the major airlines!

Given the disadvantages described above, don’t blindly accept that a low-cost airline offers you the overall best deal. Before you go the value route, first compare prices and perks with your favorite large carrier(s). Where the prices are equivalent to the value carriers, we recommend you choose to fly on major airlines, such as United, American, Delta, Northwest, Continental, Midwest Express, or Alaska Airlines. The exceptions would be Southwest and JetBlue, which have managed to consistently combine excellent fares and on-time performance with financial stability.

Source From The Book : Guerrilla travel tactics : hundreds of simple strategies guaranteed to save road warriors time and money by Jay Conrad Levinson, Theo Brandt-Sarif.

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