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Keith T

'Ultra low cost carriers' - low cost redefined?

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http://www.latimes.com/news/la-fi-cheapfli...-tot-topstories

 

Airline ticket: $10; pillow: $15

Ultra-low-cost carriers cut freebies to keep fares low. Some flight attendants are paid partly on commission.

 

By Peter Pae, Times Staff Writer

May 29, 2007

 

How low can airfares go?

 

Try $10 for a one-way ticket from Burbank to Columbus, Ohio. Or $9 from Los Angeles International Airport to Ft. Lauderdale, Fla. Better yet, there is a 1-cent fare for flights from LAX to Guatemala.

 

Yes, those are actual fares offered by a new generation of carriers that are redefining budget travel by taking "low-cost, no-frills" service to new heights.

 

Such as $15 for a pillow. Or two bucks for water. Don't want a middle seat? You can pay $10 and you can jump ahead of the line to board a Skybus Airlines plane.

 

And the flight attendants are paid partly on commission based on in-flight sales.

 

"It's the extreme example of a la carte flying," said Michael Boyd, an airline industry consultant.

 

Even so, flights on these cheapie airlines, now officially dubbed ultra-low-cost carriers, can be a bargain and quite a trip even if you missed out on grabbing one of the limited number of $10 teaser fares.

 

"The seats were comfortable and the flight went pretty well," said Allyx Kronenberg, a Santa Monica resident who paid $105 for her round-trip ticket on an inaugural Skybus flight from Burbank to Columbus last week. "But you do have to pay for everything."

 

These flights have been around Europe for several years, but they are now making a splash in the U.S.

 

Skybus offers 10 seats on every flight for $10, with the vast majority of the fares ranging from $50 to $175 one way. That's about half the cost — or less — of other airlines flying to Columbus.

 

Spirit Airlines, which flies out of LAX, has promotional fares that range from 1 cent to $24, including the $9 tickets to Ft. Lauderdale and Detroit.

 

The Skybus fares were so much cheaper than other carriers' that Shahla Salamat decided to fly her family to Columbus and then drive eight hours to Atlanta for her cousin's wedding during Memorial Day weekend.

 

Renting a car and driving that distance with her sister and three sons — Andres, 8, Antonio, 4, and Adrian, 2 — was worth the estimated $2,000 savings, the Chino Hills resident said.

 

"It's kind of crazy, I know," Salamat said, explaining how she chose the $200-round-trip fares on Skybus.

 

The cheapest alternative she could find from Los Angeles to Atlanta was $600.

 

"But when you think about the savings," she said, "it doesn't sound too bad."

 

The savings were so substantial for the Salamats that they didn't mind paying $2 for bottled water.

 

Passengers are not allowed to bring food or beverages onto the plane. Besides, Skybus had warned them ahead of time in a stark reminder on the company's reservations website: "No, the drinks aren't free. Give us a break — some of you paid $10 for your seat."

 

Skybus says it will gradually expand its network to such places as Oakland and Seattle as it gets new Airbus A319 planes, which are on order. The airline hopes to be profitable within a year, even with its rock-bottom fares.

 

"We don't think the same way as everybody else," said Bill Diffenderffer, Skybus' chief executive and former attorney for now-defunct Eastern Airlines.

 

"Major carriers are going to say Skybus is going to have terrible service because you have to buy everything, but what makes passengers happy is having low fares and on-time, nonstop flights to their destinations. They don't need all that free stuff."

 

In many ways, Skybus doesn't seem much different from Ryanair, an Irish carrier that has shaken up European air travel by offering dirt-cheap fares with virtually no amenities or service. It is now the largest European airline.

 

Diffenderffer said that Skybus initially considered modeling itself after Ryanair and U.S. low-cost behemoth Southwest Airlines. But then it decided to start from "scratch and try to improve on everything."

 

To generate additional revenue, it will allow a company to paint a logo on its planes for $500,000.

 

To keep costs down, the airline doesn't have a telephone service center. Everything, from booking a flight to changing or canceling a reservation, must be done on its website.

 

The airline flies only to secondary, less-crowded airports that have lower fees and can turn Skybus planes around in less than 25 minutes.

 

Major carriers typically have their planes at the gate for about 45 minutes to an hour. The longer the plane stays on the ground, the less passenger revenue it generates.

 

Skybus also flies new,fuel-efficient Airbus planes, which keep maintenance and operation costs down. Its labor costs are among the lowest in the industry. It has one of the lowest hourly rates for flight attendants, but they get a 10% commission on what they sell on the plane.

 

With the commission and stock options, the overall compensation is higher than competitors', Skybus said.

 

"The result is that we have a cost structure that is so much lower than anyone else," Diffenderffer said. "That's why we can have fares that are half as low and make money."

 

Airline consultant Boyd said he was skeptical that the airline could survive, contending that low-cost carriers such as Southwest are going the other way by beefing up service and amenities.

 

"Once you start nickel-and-diming things and having flight attendants hawking food, passengers might not want to try it again," Boyd said. "It's novel, but most pipe dreams are."

 

Moreover, the eye-popping fares often have caveats that could create ill will. For instance, the 1-cent deal from LAX to Guatemala on Spirit Airlines was available only on certain days and didn't include a bevy of taxes that totaled $84.70.

 

A flight to Guatemala recently was available for 1 cent, but the return 1-cent fare was sold out. The next-best fare was $109.50. In the end, the total round-trip fare was about $200, or about half the prevailing fares at other airlines.

 

Even with the super-low fares some passengers wondered whether they had indeed saved as much money as they had initially thought.

 

As Andrew Jones of Thousand Oaks carried his 9-week-old infant son through airport security at Burbank airport, he began mentally adding up other costs, such as the $99 DVD player he bought before the flight for his 3-year-old son because the airline has no entertainment system. And then there was the $20 charge for checking in an infant seat and two pieces of luggage as well as snacks on board.

 

With the anticipated savings, the Joneses also decided to check into a hotel instead of staying with their family in Wheeling, W.Va.

 

"We saved $700 on the airfare," he said, "but at the end of the day, it'll probably come out about the same."

 

*

 

peter.pae@latimes.com

 

*

 

Begin text of infobox

 

Where you can save money

 

Cheap airlines flying in and out of Southern California:

 

Ultra-low-cost carriers

 

(Extra charges for everything including checked baggage, drinks and meals. No seating assignment, no in-flight entertainment system.)

 

Skybus Airlines (Burbank) http://www.skybus.com

 

Spirit Airlines (LAX) http://www.spiritair.com

 

Low-cost carriers

 

(Baggage check, nonalcoholic drinks and snacks free. Some have in-flight entertainment systems.)

 

Southwest Airlines (LAX, Burbank, Orange County, Ontario, San Diego) http://www.southwest.com

 

JetBlue Airways (Long Beach, Burbank, Ontario, San Diego) http://www.jetblue.com

 

ExpressJet (Ontario, Bakersfield, San Diego) http://www.expressjet.com

 

AirTran Airways (LAX, San Diego) http://www.airtran.com

 

Frontier Airlines (LAX, Orange County, San Diego) http://www.frontierairlines.com

 

ATA Airlines (LAX, Burbank, Ontario, San Diego) http://www.ata.com

 

Sun CountryAirlines (LAX, San Diego) http://www.suncountry.com *

 

Source: Times research

 

**

 

The extras

 

Here's a sample of extra charges you might incur on Skybus Airlines above and beyond the cost of your inexpensive ticket:

 

$5 - For each of first two checked bags ($50 for each additional )

 

$10 - Priority boarding pass (for first choice of seats)

 

$15 - Pillow (you get to keep it)

 

$8 - Blanket

 

$2 - Bottled water and soft drinks

 

$5 - Alcoholic beverages

 

$2 - Trail mix

 

$5 - Breakfast sandwich

 

$10 - Lunch sandwich

 

$10 - Meatloaf plate

 

 

 

Source: Times research

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"Here's a sample of extra charges you might incur on Skybus Airlines above and beyond the cost of your inexpensive ticket:

 

$5 - For each of first two checked bags ($50 for each additional )

 

$10 - Priority boarding pass (for first choice of seats)

 

$15 - Pillow (you get to keep it)

 

$8 - Blanket

 

$2 - Bottled water and soft drinks

 

$5 - Alcoholic beverages

 

$2 - Trail mix

 

$5 - Breakfast sandwich

 

$10 - Lunch sandwich

 

$10 - Meatloaf plate"

 

Pretty much similar to what Ryanair is doing here in Europe :blink:

Guess, they're ultra-low cost already ...

 

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"Here's a sample of extra charges you might incur on Skybus Airlines above and beyond the cost of your inexpensive ticket:

 

$5 - For each of first two checked bags ($50 for each additional )

 

$10 - Priority boarding pass (for first choice of seats)

 

$15 - Pillow (you get to keep it)

 

$8 - Blanket

 

$2 - Bottled water and soft drinks

 

$5 - Alcoholic beverages

 

$2 - Trail mix

 

$5 - Breakfast sandwich

 

$10 - Lunch sandwich

 

$10 - Meatloaf plate"

Pretty much the same as AK as well. I hope there is a second LCC in Malaysia. SS>DD = Fares drop ! :clapping:

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As if DJ wasn't enough of an LCC, even with the attempt to call itself a 'New World Carrier' and introducing lounges:

 

http://www.theaustralian.news.com.au/story...0-23349,00.html

 

Cut-price Virgin on the way

 

Geoffrey Thomas

June 01, 2007

 

HOW low can fares go? That is the question Virgin Blue, Australia's first truly successful low-cost carrier, is asking.

 

Faced with intense competition from Qantas subsidiary Jetstar and the imminent entry of Singapore-based Tiger Airways, the airline is re-examining its cost structure to set up an "even lower cost airline" within a "low-cost airline".

 

Virgin Blue chief executive Brett Godfrey confirmed that the lower cost operation would be up and running within three months.

 

The "Virgin Blue brand is heading upmarket", Mr Godfrey said this week.

 

It was courting business travellers and clear separation of brands was on the table.

 

Mr Godfrey likened the separation to that of Lexus and Toyota.

 

In recent years Virgin Blue has moved its product upmarket with lounges and a loyalty program, which add costs.

 

There are more costs coming in the form of a joint venture with its parent Toll Holdings, a long-haul fleet of 777-300ERs for international routes, and smaller regional jets.

 

The moves will all be part of what many suggest will be an airfare bloodbath later this year. Qantas chief executive Geoff Dixon has said his airline group - Qantas and Jetstar - will defend its 65 per cent market share "no matter what".

 

However, lower costs come at a price, as a survey this week by Choice magazine reveals.

 

Jetstar rated well below Virgin Blue in a customer survey, according to Choice.

 

In fact, of the major airlines Virgin Blue rated higher across most parameters, and the highest score of 77 per cent was in "value for money".

 

It's likely that the new Virgin Blue ultra-low-cost aircraft will have more seats, like Tiger Airways' aircraft - and thus less leg room - and will only operate between the big capital cities.

 

The drive to cut costs has reached new lows in Europe, with low-cost giant Ryanair stripping out seat pockets and window shades on aircraft to save weight and costs.

 

On Virgin Blue's aircraft the seats are set between 78.5cm and 84cm apart, while Jetstar's are 76cm and those of Tiger Airways just 72.5cm.

 

It is expected that Tiger will remove some seats to cater for taller Australians.

 

Separately, Mr Godfrey said the airline would launch a public competition to choose a name for Virgin Blue's new US offshoot, which will use Boeing 777-300ERs to fly from Australia to the US west coast.

 

Virgin Blue is not able to use the Virgin name outside Australia, because of an agreement that was part of the deal when Singapore Airlines took a 49 per cent stake in Virgin Atlantic in 2000.

 

Now hopefully we see Virgin Blue ups itself to become a real, full service airline if it's setting up a 'lower cost' brand. Such a move would truly provide choice and competition in Australia to those of us that do not want to fly LCCs and only have QF to choose from domestically after AN's demise.

 

 

Edited by Keith T

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This eLLCC (even Lower Low Cost Carrier :) ) phenomenon is getting real interesting - what next ?

Everyone gather at a designated airport gate, then from the pool of potential pax, someone has to volunteer to fly the bird, then try locate an available bird to actually fly the journey ? Oh, and everyone chips in for the fuel too !! :)

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No kidding, after Ryanair, now the following two LCC's in Europe follow suit:

 

EasyJet, Wizz to charge for all checked luggage

 

Monday August 6, 2007

EasyJet and Wizz Air last week announced that they will start charging for each piece of checked baggage.

 

The UK-based LCC said that in order to "reduce the number of passengers who travel with checked-in bags," it will be charging £2 ($4.06) per piece of hold baggage per sector from Oct. 1. Previously, easyJet did not charge for the first bag but levied £5 for each additional piece. Maximum weight per passenger remains at 20 kg.

 

Wizz Air likewise was charging only for additional pieces but said it now will charge €3 ($4.10) per bag at the time of the initial booking or €6 per bag if paid after the initial booking. The policy change is effective for travel from Oct. 27 unless already booked. Wizz will continue to charge €8 for each kg. over the 20-kg. allowance. "We are pursuing our philosophy of charging the passengers according to their needs and we are using this change to keep our airfares down," it said.

 

 

So, you'd be warned !!! :o

 

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There will be huge dissatisfaction among pax if AK were follow suit. Disabled pax hold strike before, dissatisfied pax might do that too.

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There will be huge dissatisfaction among pax if AK were follow suit. Disabled pax hold strike before, dissatisfied pax might do that too.

 

 

I agreed..let's just wait and see what's next on the long haul Airasia-x....hopefuly they wont do the same as other Low cost carrrier :rolleyes:

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