How low cost flight companies manage to keep prices low

  • They buy planes in bunches, getting discounts. Ryanair once bought 151 planes together.
  • They upgrade planes more often, new planes are cheaper to run (less fuel consumption)
  • They buy the same plane models, saving money in training stuff for different type of planes
  • They don’t use reclining seats, as they tend to break more often
  • No pockets in seats, so less time spent in cleaning them
  • They avoid big and expensive airports (e.g. Ryanair only uses Stansted and Luton in London)
  • They tend to use small airports and be the major companies working there, in order to have more power of negotiation with fees
  • The same planes does multiple routes on the same day, with breaks of only 30-45 minutes between flights. The delays of course are more frequents than other flight companies
  • No flight connections, too complicate with tickets and baggages and refund for delays
  • They only use stairs to board people, cheaper than tunnels
  • The open new routes and steal clients from other popular expensive routes
  • Profit margin very high: Ryanair 24%, EasyJet and Wizzair around 10%, Lufthansa, BritishAirways, AirFrance only 2-7%.
  • Big companies created their own low cost, but they failed because they couldn’t compete with the economy of scale of other companies
  • On a flight costing £40 for the client, the average client buys £13 of food, resulting into a £51 income for each client. The cost of the flight per client is £45 (half of which is the fuel, and other half the staff, cost of plane, airport fees). That means the earning is around 6£ per flight.

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