“Airplane travel is nature’s way of making you look like your passport photo.“
Reasons to Avoid Budget Airlines Occasionally
This blog was written before the COVID Pandemic. The COVID epidemics played havoc on the travel business. In 2022, Fifty Plus Nomad decided to focus on traveling and living in Mexico and language learning posts. We will only update these long-term travel-related posts on a time-permitting basis. We would appreciate your comments and updates on these posts.
History of Budget Airlines
In the 2000s, budget (low-cost) 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. More and more first-time flyers (particularly in Third World Countries), and many young and lower-income people fly more often.
Following the deregulation of the US airline industry in the 1970s, many new carriers formed to challenge the dominance of the so-called legacy carriers (United, American, etc.).
Most of these challengers attempted to undercut the legacy carriers’ prices. (Before deregulation, the government decided what routes the airlines would fly and determined the pricing system. Most tickets, by the way, were priced based on the number of miles traveled.)
In the first decade or two after deregulation, dozens of these challengers appeared and disappeared seemingly overnight. If consumers could buy a ticket on these airlines before the company went bankrupt, they could get a good deal. However, as a whole, these challengers entered and left the scene so quickly, and they only impacted the cost of the fares that most consumers paid.
Southwest Airlines History
In the 1990s, Southwest Airlines began to challenge these legacy carriers very effectively by developing an entirely different business structure. It:
- Simplified its pricing structure. Southwest usually has only three to five prices for each flight based on reasonably simple criteria such as:
- how many days in advance do you buy a ticket, and
- whether you buy a ticket online
- Hired nonunion labor and gave employees the ability to make decisions on the spot)
- Allowed passengers to pick their seats. They assign passengers a boarding group only. When they call your boarding group, you can choose any available place you want.
- Radically altered the industries’ traditional routing structure by:
- Using less-popular airports (such as Burbank in Los Angeles, Oakland in the San Francisco Bay Area, Islip in New York City, and Midway in Chicago)
- Specializing in short hops rather than long haul flights. (If you flew across the country, you made at least one, often two or three, stops on Southwest).
Southwest proved profitable. The legacy carriers, until the last seven or eight years, floundered.
As a result, the legacy carriers and Southwest became more alike. The legacy carriers adopted Southwest Airlines’ pricing strategies in the late 1990s and 2000s. In the meantime, Southwest started to look more like legacy carriers did in the past. They implemented a frequent flyer program and became the only major airline in the US that does not charge baggage fees.
Southwest, also in the last few years, has, like some other longer established budget airlines:
- Expanded its flight schedules to include destinations outside of the US,
- Began to fly longer-haul domestic flights,
- Provided more service between large US airports.
Budget Airline Tickets Today
Budget airlines (also called low-cost carriers) charge twenty to thirty percent fewer fares than legacy carriers. Then, they add additional fees for everything from baggage, seat selection, carry-on luggage, beverages, food, etc. Often, budget airlines also do not have onboard 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 a legacy carrier once you consider these fees.
Conversely, like what happened in the US twenty years ago, large overseas carriers are becoming more and more like 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).
- The large budget carriers will join alliances with the legacy carriers.
When is it Worth Using Budget Airlines?
During my five years traveling around the world as a Fifty Plus Nomad, I used a mixture of budget airlines and legacy carriers. Generally, budget carriers charge around 10-25% less than legacy carriers. The fare difference can be well worth the hassle outside of the US, especially on flights between continents. Usually, US-based budget airline tickets are not worth the trouble unless you have no luggage. (That said, Allegiant Air can be a good deal if you live in a small city far away from a large airport).
If the difference between flying a budget and a legacy carrier is:
- Less than $50 one-way on a flight within the same continent.
- $100 one-way between continents,
I will choose legacy carriers for the reasons described below. (Note: This assumes that the ticket terms are somewhat similar).
However, I expect that with time, the line between budget and legacy carrier will become fuzzier and that I may change this policy in the future.
See here for a list of budget airlines.
What are Traditional (Legacy) Carriers?
The large, traditional airlines (often called ¨legacy¨ carriers) are increasingly beginning to resemble budget airlines. Sometimes, budget airlines are similar enough to legacy carriers to be a good deal, and sometimes, they are not.
Legacy carriers are airlines that existed before airline deregulation. Most legacy carriers are also either:
- Large commercial airlines were founded before the 1970s (in the US, the legacy carriers are United, American, and Delta).
- Airlines that used to be run or highly regulated by the government.
Today, budget carriers represent a substantial share of the airline industry (50% of the European market) and are usually profitable. You will find budget airlines throughout the world, and they are becoming increasingly common throughout Latin America and Asia.
The differences between the essential economy bundle offered by legacy carriers and the services from budget airlines are often not significant.
However, there are some differences between legacy and budget carriers that are important for consumers to understand:
Benefits of Flying Legacy Carriers
There are some slight benefits to the legacy carriers, including:
- Budget airlines are more likely to be in the farthest reaches of the airport with uncomfortable, overcrowded lounges.
- Often you will need to take a shuttle from the plane to the airport on a budget airline. (Shuttles are usually crowded and uncomfortable, particularly if the weather is terrible).
- You may have fewer options if a flight is delayed or canceled on a budget airline than on a legacy carrier. (Note: You do not have that much recourse even on a legacy airline).
- Since budget carriers only fly regionally and don’t partner with anyone, you can’t use them on your round-the-world ticket.
- Some budget airlines use lesser-known, further out airports like Luton in London and Islip in New York City. Sometimes, the costs of the additional fare to get to the airport may be more than your cost savings on your tickets. (Fortunately, more and more budget carriers are using major airports). That said, always check to see where the airport is on both ends before booking the ticket.
- Budget airline seats are small and generally cannot recline.
- Most flights between different continents (i.e., Cross Atlantic/Pacific, flights between North and South America, etc.) on legacy carriers include in-flight entertainment, meals, and beverage service (often including free alcoholic drinks). The budget airlines usually either charge extra for these services or do not include them.
- You must pay a fee if the airline needs to print a ticket. Easy Jet, for example, charges a fee if they have to print your ticket. Therefore, to avoid the fee, you must print your ticket before boarding some budget airline, which can be difficult on the road.
- Sometimes budget airlines charge a high fee for check-in baggage. I have paid as much to check a bag on Easy Jet as for the fare itself. Also, you can sometimes save money by paying for your baggage fee when you purchase the ticket.