The coming of the Low Cost Carriers: Part 1 “Bakit ngayon lang ito. Matagal ko na hinihintay itong mga sandaling ito.”

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One would find it hard not to be affected by such an outburst of emotions coming from a traveler. But this is indeed what a Filipina cried out, as she alighted from an Air Asia 737, on its first landing at Clark in April 5 of 2005. Now many can travel more often; and more importantly, others who have never traveled by air, can do so. The era of the Low Cost/Fares Airline has started.

Southwest Airlines started the Low Cost (No Frills) Air Travel concept in the Continental USA in the 70s. Since then Southwest has become the most profitable airline in the US up to today. Ryan Air started using the same method in Europe during the 80s. In the Asia Pacific region, it was only in 2002 that the Low Cost Carriers (LCC) started flying across countries.

Data from the last Low Cost Airline Symposium in Singapore in January 2006 revealed that in the US mainland, 10 LCCs service 326 million potential travelers. In Europe, 50-60 LCCs compete for the 728 million prospective travelers. And in Asia, then, there were only five LCCs that would take on a big 3.8 billion potential travelers.   

Today, there are more Low Cost Carriers in the Asia Pacific Region and the forecasted number of travelers has grown to 5.3 billion. The Frost and Sullivan Chart that the Low Cost Carrier phenomenon in Asia started in the domestic front; and in 2000, the Philippines, Malaysia, Indonesia, Australia and Japan started this concept within their own borders. Cebu Pacific operated their DC9s around this model and today, with their newer Airbus 319s and 320s, is one of a few airlines with the highest growth rate. In the Asia Pacific, from just 37 airports, it is estimated that there would be 292 airports with low cost carrier operations in 2010.

Depending on the situation and place, this non-traditional airlines are defined by any of the following names: Low Cost Carriers (LCC), Low Cost Airlines (LCA), Budget Carriers (BC) or Low Fares Airlines (LFA). These type of airlines offer the lowest of fares because of low operating costs as a result of eliminating most traditional passenger services.

The LCCs travel short routes and are point-to-point as opposed to the traditional airlines that use long routes that connect hubs. As a result, there are no connecting flights for LCCs; and because the routes are short (3-4 hours), there are no in flight catering services.

Turnaround times on the ground are short, normally 30 minutes. This allows more use of aircraft and more passengers. It is therefore a practice to operate only on secondary and decongested airports where there is less traffic.

Emphasis is on direct sales of tickets and use of internet, eliminating the use of airline staff in various operating locations.

LCCs operate only a single type of airplane that offers the most efficient engines and operating systems for the short routes. Commonly used aircraft are the 150-seater Boeing 737 or the 180-seater Airbus 320. Because of this, aircrew are easy to train and always available.

LCCs use only a single passenger class type and no reserved seating

Employees work in multiple roles; for instance, flight attendants also perform the clean up of cabin between flights.

All these result in lower operating cost and therefore afford the lowest fares for the riding public.

Since the start of the LCC revolution in the 70s, there also emerged Low Cost Airports. In Europe, these are secondary airports very conveniently near the primary airports that were developed for the operation of the LCCs. In the Philippines, Clark benefited from being the point of destination of two foreign Low Cost Carriers: Air Asia Berhad of Malaysia and Tiger Airways of Singapore.

Because of the excellent geographical location of the Philippines in the Asia-Pacific, we stand to benefit much from the LCCs. While Clark is the airport of choice of Air Asia and Tiger Airways, Mactan Cebu International Airport is Cebu Pacific’s origin of operations. At present, a second Philippine Low Cost Carrier is operating at Mactan Cebu. Air Philippines has grown fast by also using  this business model in domestic operations.

Next week: The future of low cost travel and airports.