¨I really don’t know one plane from the other. To me they are just marginal costs with wings.¨
Alfred Kahn, 1977
In the 2000s, budget airlines became a fact of life throughout the airline industry worldwide. Today, they even provide 50% of the air traffic in Europe.
As a result of budget carriers, air travel has become more accessible worldwide. There are more and more first-time flyers (particularly in Emerging Countries), and many young and lower-income people are flying more often.
Like Southwest previously, budget carriers worldwide are beginning to look more like legacy carriers by:
- expanding their network into the transatlantic and transpacific flights;
- developing additional services to attract business clientele;
- launching their frequent flyer programs; and
- using more major city airports.
Budget Airline Tickets
Budget airlines (also called low cost carriers) charge twenty to thirty percent less fares than legacy carriers. Then, they add additional fees for everything from baggage, seat selection, carry-on luggage, beverages and food, etc. Often, budget airlines also do not have on-board entertainment systems. (If they do have them at all, they cost extra). If you are not careful, you can pay as much for a budget airline as for a legacy carrier once you take into account these fees.
Conversely, like what happened in the US twenty years ago, large overseas carriers are becoming more and more like the budget airlines to remain competitive. I suspect that similar to what happened in the US, we will also see the following changes throughout the world:
- some budget airlines will disappear,
- more national airlines will consolidate,
- increased ticket prices from budget carriers (especially as their staff and planes get older), and
- large budget carrier will join alliances with the legacy carriers.