Ajitansh Kar, Gurugram, 20 February 2023
A while back I was surfing the internet for finding flight tickets between Delhi and Mumbai to travel in the month of March; the airline fares have increased significantly after the lockdown restrictions have ended.
The thing which amazed me most was the price difference between those of low cost carriers and that of traditional airlines. One would wonder the discounts would be massive on low cost carriers; but in reality, the discounts amounted to only about 3-5 % of the total fare. It does not make any sense to choose the former for such low discounts and deny oneself the value-added services offered by traditional airlines.
On the other hand, an airline based out of Europe has successfully cracked the code of being a successful low-cost airline and has revolutionized the entire sector. You guessed it right; the airline is Ryanair.
Ryanair offers flight tickets at almost a third of the rates which its competitors offer. They are able to do so because of a very cost effective and efficient business model which we will talk about in this article. The major cost for any airline is the cost of acquisition of aircrafts and fuel costs. Ryanair saved on the former by purchasing almost 150 aircrafts from Boeing after the events of 9/11 had occurred, which helped them buy the Boeing 737-800s at extremely low costs. A newer aircraft has more operational efficiency. The average fleet age of Ryanair is 4.8 years while many airlines across the world have an average fleet age between 12-15 years. Each aircraft in its fleet operates on an average 3 flights per day, which means more flying time leading to operational efficiency, as well as, economic efficiency (fuel efficiency) generating more profits for the airline.
On the ground, one of the major costs for any airline are the airport and parking charges. Ryanair avoids these costs by operating from airports which have lesser footfall and are farther away from the main city. This gives the airline an advantage in negotiating the tariffs and charges with the airport. In London, Ryanair operates from Luton airport instead of the busy and well-known Heathrow. Other charges include check in kiosks and ground staff personnel. The airline encourages its travelers to do self-check in before their departure through its website to save costs of operating check in kiosks at the airport. If one fails to do so, they have to pay a hefty fee for checking in at the airport. As Ryanair operates only one type of aircraft (737-800), it is easier to train the staff. The airline also has a set of personnel present at the airport who perform multiple tasks. A person from Ryanair’s team may check you in at the counter and also help you board the flight. There are no air bridges connected to the flight and passengers have to walk to the aircraft or use a bus to board the aircraft.
Inside the aircrafts, you will find a minimalistic cabin which has been arranged in such a layout to fit maximum passengers. The seats do not recline and have less leg room with no inflight entertainment system. Nothing on the flight is free and all other services such as meals and beverages have to be paid for. The only privilege you get is a seat to sit on for your journey. You are also not allowed to select your own seat or take any carry on luggage (except a small item) without actually paying for it.
All these measures have proven to be successful as Ryanair over the past three decades has emerged as one of the most successful low-cost airlines in the world.