Low cost airlines: how they cut costs

BOLGNA, ITALY - November 23, 2014: Ryanair Jet airplanes interior view. Ryanair is the biggest low-cost airline company in the w

Ryanair's Michael O'Leary is the self-styled the king of low-cost flying, generating lots of publicity for his company by hinting at all sorts of radical ways to cut costs, from charging more for being overweight to making us pay to use the toilets. Love him or hate him, he certainly knows how to get our attention (and after all, who isn't partial to a cheap holiday?). But quietly, and without fuss, every low cost airline in the world is engaged in a dramatic and aggressive battle to cut costs. Here are just some of the less-well-publicised cost-cutting measures.

1. They put more seats on the plane
Southwest Airlines in the US was the pioneer here, crushing legroom on planes, narrowing the aisles and shrinking the toilets - in order to get more rows in, and cut the price of tickets. The process it started more than 30 years ago continues today, and Boeing's new 737 jets will have even smaller toilets - removing the space behind the sink to make room for four extra seats.

2. They lose the weight
Fuel is a major part of the cost of flying, so the airlines will do whatever they can to reduce the weight of the plane - to save fuel. The seats, for example, have got lighter as well as smaller, the food trolleys have been replaced by lighter ones, and heavy log-books and instruction manuals have been replaced with tablets.

3. They pack the planes
This is both why they sell some of the seats for peanuts, and how they can afford to. The low-cost carriers have invested in the technology that makes their dynamic pricing incredibly effective. It means that they sell the first seats on each plane at a particularly low cost, then as they fill the plane, the tickets get more expensive. Once they have covered their costs, and the departure is only a few weeks away, they tend to move into the most expensive price brackets - to make more profit from those who have no other options.

4. They have a raft of extra charges
This is, of course, key to the model, as non-essential extras (like putting luggage in the hold) is not factored into the price, so you only pay for it if you want it. For those who don't mind checking in online, not being able to chose a seat, and traveling with hand luggage - they pay for exactly what they need and no more.

5. They redefine basic requirements as 'extras'
Features of flying that were previously offered for free, are now charged for as mini-upgrades. These include things like being able to book seats near the front, choosing aisle seats with extra legroom, or being able to board first. Airbus is even offering airlines the chance to sell rows of seats where two of the seats are slimmer than normal, and one is wider. This will enable them to sell the wider one at a premium.

6. They change the way we behave to make it cheaper for them
Ryanair goes further than this, because it structures its charges in order to change how people behave. So, for example, they have made it extraordinarily expensive to check in at the airport, or check baggage, so that the vast majority of people avoid doing either. This means they can employ fewer ground staff to check people in and move the baggage around - and save a small fortune.

7. They have faster turnarounds
Low-cost airlines are interested in keeping the planes in the air - where they make the money - and spending as little time on the ground as possible. Air Asia, for example, states that it is policy to fly as early as is commercially possible, and finish flying at midnight. It also has a 25-minute turnaround - compared with traditional carriers, which take an hour. It means that the airline estimates that each plane is in the air for 12 hours a day - while a traditional carrier manages just 8 hours.

8. They only use one kind of plane
Ryanair, for example, only flies Boeing 737s. It means that pilots, flight attendants, engineers, mechanics and operations staff don't need so much expensive retraining. They also can cut down dramatically on the number of spare parts they have to stock, and they can have standard operating procedures for every staff member - without having to train for each aircraft.

9. They fly to secondary airports
The fees for landing at major airports like Heathrow are astronomical, so the budget carriers will look for less popular airports in a city - or airports close to major destinations. Larger budget airlines also use their size to negotiate hard on fees with the smaller airports.

Choosing these airports not only cuts the fees, but because they tend to be less busy, it also reduces the number of delays and cuts turnaround times, so the airlines can spend more time in the air. Most low cost carriers will also run a point-to-point service, so won't have arrangements for you or your luggage to be moved onto connecting flights - all of which costs them money.

10. They only take direct bookings
Traditionally 'distribution' was an expensive business. Flights were sold through travel agents, who were paid commission by the airlines. It also meant that the computer systems of the airlines had to be made to work with those operated by the major travel agents. The low cost airlines are not interested in this: they sell direct. It means that everyone - whether a travel agent or an individual - must book the flight commission-free through the website.

11. They make money from in-flight sales
By not serving free food and drink, the airlines can bring the prices down. By selling food on board and charging premium prices (they charge around seven times what it would cost to bring your own food on board from the supermarket) they can cross-subsidise the cost of the seats.

12. They never stop thinking of ways to cut costs
Even Ryanair's fanciful notion of passengers paying less to stand could become a reality. Spring Airlines, based in Shanghai, is applying for government approval for standing-only seats, which could be sold for as little as £1.50 each way. Meanwhile, GoAir in India has announced it will only employ slim female flight attendants - to cut down on the weight carried by each plane, and save fuel.

A few decades ago, the thought of printing our own boarding pass, flying without luggage, or going without an in-flight drink, was unimaginable. It's safe to assume that some of the luxuries we take for granted on flights now will be a thing of the past in another decade or so. Maybe eventually we'll even be paying to use the toilets.