Low-cost carriers offer low fares by eliminating traditional passenger services like free food and drinks. They originated in the United States in the early 1990s and later spread to Europe and elsewhere. Low-cost carriers have a lower cost structure than full-service carriers. Examples of successful low-cost carriers include Ryanair and Southwest Airlines. In India, major low-cost carriers include IndiGo, SpiceJet, and GoAir. These carriers have benefited from factors like economic liberalization policies, a growing middle class, and increasing air travel. They employ strategies like direct online ticket sales and multi-tasking employees to keep costs low.

1. Low Cost Carriers
By
Nitish Kankal
Roll no:145
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2.  Low-cost airline (also known as nofrills, discount or
budget carrier or airline) is an airline that offers generally
low fares in exchange for eliminating many traditional
passenger services.
 Origin United States then spread to Europe in the early
1990s and then in rest of the world.
 Refers to airlines with a lower operating cost structure
than their competitors.
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3. World Scenario - Low Cost Airlines
 The successful low cost airlines are more profitable than
established carriers
 Ryanair has a market capitalisation of about £3 billion
 Globally, the largest and most successful low cost airline is
Southwest in the US
 Operating Margins of different international airlines:
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4.  A low-cost airline offers a point to point service model
 Full service airlines follows hub and spoke model
 The aircraft flies out from the airport only when all the connecting
flights come in.
 While in the point-to-point model a passenger travelling on two
separate connecting flights is issued two separate tickets.
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5. LIST OF LOW COST
AIRLINES
 KINGFISHER AIRLINE
(Air Deccan)
 INDIGO
 JETLITE
 SPICE JET
 GOAIR
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6. Market Share in LCC Segment
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7.  Main Factors :
Political
Economic
Socio-cultural
Technological
 Other Factors :
Demographic
Natural Environment
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8. Political :
 Deregulations in different spheres
 Open Sky Policy
 Low entry barriers
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9. Socio-cultural :
Growing middle class :
1993-1999 : 39.5 m to 56.7
households
2005 : 300 m
2010 : 400 m (Estimated)
Increase in leisure travel by tourists
Foreign tourists in 2006 : 3.2 million
Status symbol to travel in plane
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10.  Growing middle class income
 Consistent GDP growth
 Hikein average salary 14%(highest) in the
world
 Tourism industry growth
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11.  Modernization & Privatization of Airports
Modern Technology for efficient handling of
aircraft, passenger and cargo.
 Developing Greenfield Airports with Private
Sector
Example : Bangalore Airport Corporation Ltd.
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12. Demographic and Natural Environment
 Changing pattern of consumers
 Highest percentage people of age group 20-25
 Educational environment
 Shift towards Nuclear family concept
 High energy cost
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13. A single Passenger class
A single type of airplane reducing training
and service cost
 No frills such as free food/drinks, lounges etc
 Direct
sale of ticket through Internet avoiding fee
and commission paid to travel agents
 Employees working in multiple roles
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14. S
E
R
V
I
C
E
PRICE
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15.  The projection for Indian Aviation for 2020 is
estimated at:
o400 million passengers
oIncluding 180 million domestic passengers
o1,000 aircraft in the civil aviation sector
Likely to follow of International Low Price Carriers
e.g. Air Arabia, Southwest Airlines etc.
More emphasis will be on Arabian and South-East
Asian circuits.
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16.  Constraints :
Infrastructure constraints
Shortage of airport facilities
Parking bays
Air traffic control facilities
Takeoff and landing slots.
Less than 100 airports having more than one
daily service.
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17. Article of Mr. S Sharma, Oct 2007
Business News from Hindustan Times Daily
Report on ‘Study of the Indian Aviation Industry’ on
www.foolonahill.com
www.findarticles.com
Economic servey, 2008
Remote Access Aviation System – RAAS
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