The Low Cost Carrier – Part One – September 04, 2009

This week, we discuss the Low Cost Carrier, LCC, and the demise of the Legacy Carriers. No, I can’t blame the LCC because the blame lies with the CAB and the bureaucrats of Washington. So, let’s take a look at how the business model came about and what the future may hold for the LCC. As always I would like all aviators to connect with their roots and one of the ways they can do that is by using the “Third Dimension Blog” as a resource.

Quote of the Week

Science, freedom, beauty, adventure: what more could you ask of life? Aviation combined all the elements I loved. There was science in each curve of an airfoil, in each angle between strut and wire, in the gap of a spark plug or the color of the exhaust flame. There was freedom in the unlimited horizon, on the open fields where one landed. A pilot was surrounded by beauty of earth and sky. He brushed treetops with the birds, leapt valleys and rivers, explored the cloud canyons he had gazed at as a child. Adventure lay in each puff of wind.

I began to feel that I lived on a higher plane than the skeptics of the ground; one that was richer because of its very association with the element of danger they dreaded, because it was freer of the earth to which they were bound. In flying, I tasted a wine of the gods of which they could know nothing. Who valued life more highly, the aviators who spent it on the art they loved, or these misers who doled it out like pennies through their antlike days? I decided that if I could fly for ten years before I was killed in a crash, it would be a worthwhile trade for an ordinary life time.” —Charles A. Lindbergh “The Spirit of St. Louis” 1953

The Low Cost Carrier

Lower fares and more frequent flights will yield even lower fares, more frequent flights and a happy consumer—right?

Sir Frederick Laker, who founded the first long-haul no frills airline in 1977 between London and New York, said that the 20^th century belonged to the traditional high-cost airlines but the 21^st century would be the domain of the low-cost no frills airline. It is easy to see why he would say this in 2002, based on historical evidence, but perhaps the traveling public will begin to grow tired of the bus lines called “Low Cost Carriers” and demand something better. This will not occur in the short-term so all we can really do is tighten the seatbelt/harness and hold on.

The original concept for the LCC came about in 1971 when the founder of Southwest Airlines mapped out the route and cost structure for his airline, which at the time was an intra-state airline flying in Texas. As a result of this simple strategy, Southwest Airlines has grown to become one of the most successful airlines in America. This strategy was copied internationally by carriers in the UK, Europe and beyond, and continues to spread as the world community demands cheaper fares and more frequent flights.

There is a lot to be said about the business models being used by the LCCs, but it is not effective to become entwined with the minutiae. Instead, let us look at the characteristics that define a LCC followed by a question that may make you think about what the possibilities for change really are.

Next week we will continue our series on the “Low Cost Carriers” and look specifically at the finer points of the business model. So, until then take some time to look back, connect with your past and remember as an aviator you are a “Gatekeeper of the Third Dimension.”

Protect your profession, your future and the future of your fellow aviators.

Robert Novell

September 4, 2009