How do low-cost airlines make a profit?

When planning a trip, the first thing you consider, apart from your destination, is definitely the cost of the trip and, of course, the cost of air tickets. In recent years, low-cost airlines – such as Ryanair, Easyjet, etc. – have become particularly popular. But how do these companies make a profit, offering air tickets even at half the price of other airlines?

Over the years, aviation technology has developed rapidly, so planes are now quite large and can carry many passengers simultaneously and to quite distant destinations. This allows airlines to have a lower cost per passenger than in the past.

Low-cost airlines follow a series of actions to reduce the costs of each flight and achieve the highest possible profit. Firstly, although most people believe the opposite, low-cost airlines use the latest generation, brand-new planes, as these have the lowest possible fuel consumption – something that will allow them to increase their profit margins in the long run.

Furthermore, all low-cost airlines cut expenses and offer their passengers only the basics. They do not offer food or water on the flight, and if you want anything, you will have to pay for it. Also, with your air tickets, you only get a limited cabin bag for free. If you want a larger suitcase, you will have to pay extra for it.

If you have noticed, airlines that want to reduce their expenses, such as low-cost airlines, do not use all the amenities of an airport – such as the airbridge for passenger boarding and disembarking. They use buses, thus saving money on airport handling as well. Following this tactic, they do not use central airports in a city, but rather slightly more remote ones that have significantly lower usage fees. This way, on one hand, they use services with low fees, and on the other hand, they fill provincial towns and airports with people and tourists!

Moreover, a tactic used by many airlines, and even more so by low-cost carriers, is to take bookings for more seats than they have available. They are betting that either someone will not show up for their flight, or the compensation they will give to someone not to fly (so that someone else who booked at the last minute can fly) will be less than the ticket price paid by the last-minute passenger. Apart from these high last-minute charges, if you want to make changes to your air ticket such as the booking name, seat change, etc., then you will have to pay for it, and in some cases, it is more advantageous to issue a new air ticket than to change the fare you have already booked.

Finally, airlines always try to ensure their planes are full with over 90% occupancy and also that they are almost never on the ground. So, a plane that has just arrived at the airport is immediately prepared for loading once emptied, to depart for another destination. This way, airlines do not pay high fees at airports and also have high occupancy, which means greater profit!

These are the techniques typically used by low-cost airlines to reduce costs and increase their profits.