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History of low-cost airlines in India

March 14, 2008
Which was the world's first low-cost carrier?

Low-cost airlines offer air travel at normally very low rates by cutting down on expensive customary in-flight passenger services. They are also referred to as no-frills airlines or budget carriers.

Low-cost Carriers (LCCs) get this tag primarily due to their low operating cost structure. However, irrespective of their cost structure, budget airlines are today recognised because of their low ticket fares and limited services.

The idea of LCC originated in the US. Founded in Dallas Texas on June 18, 1971 by Herb Kelleher, Southwest Airlines offered tickets that worked out to be cheaper than a car or coach ride. It is the fourth largest US airline in terms of domestic customers carried annually. It has been profitable every year since 1973.

Budget airlines have been enthusiastically accepted by the Indian passengers. Generically, few things on their agenda are: fleet expansion, increased connectivity and low fares.

The business model of an LCC broadly includes the following features: a single passenger class; a single type of aircraft for lesser maintenance and servicing costs; flying to cheaper, less congested secondary airports; flying early in the morning or late in the evening to avoid air traffic delays and take advantage of lower landing fees; short flights and fast turnaround times; emphasis on direct sales of tickets, especially over the Internet, hence avoiding agent commissions; employees working in multiple roles; optional paid-for in-flight food and drink; aggressive fuel hedging programmes; and segregation of ancillary charges. Read on...

Text: Kanishka Ramchandani
Image: Airplane models on display at an air show.
Photograph: Roslan Rahman/AFP/Getty Images
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