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7. How do budget airlines cut costs to offer such low fares?

Anthony Goadsby

Hey! That's a great question. Budget airlines are able to offer such low fares by cutting costs in a number of ways.

Firstly, on-board services are often reduced or eliminated altogether. For example, snacks and drinks on a flight may not be included in the ticket price, or will be available for purchase separately. This may not seem like a huge expense, but over a large number of flights, it can add up. Similarly, entertainment systems may be removed from the seats, as these can be expensive to both install and maintain.

Another way that budget airlines reduce costs is by operating smaller, more fuel-efficient aircraft. These planes have lower operating costs than larger planes, as they use less fuel and require fewer staff to operate. This means that the airline can offer more flights and routes at a lower cost, which in turn allows for lower fares.

Additionally, budget airlines typically have lower overhead costs than traditional carriers. They often operate out of smaller airports where the fees are lower, and may use remote stands for boarding and disembarking passengers, rather than boarding bridges. This reduces the time that the aircraft spends on the ground, which saves money on airport fees and staff costs.

Labour costs are also kept low by budget airlines. Staff may be paid lower wages than their counterparts at traditional carriers, and in some cases may work longer hours or be on less favourable contracts. This can save the airline money on salaries and benefits, which can be passed on to customers in the form of lower fares.

Finally, budget airlines rely heavily on technology to keep costs down. This includes streamlined booking processes, which often require passengers to do much of the work themselves, and automated check-in and boarding systems. These systems can reduce the need for staff, which in turn reduces costs.

Overall, the key to budget airlines' low fares is their ability to keep costs down across the board. By reducing the number of on-board services, operating smaller aircraft with lower overheads, keeping labour costs low, and relying on technology, budget airlines are able to offer flights at a fraction of the cost of traditional carriers. However, it's worth noting that these lower fares usually come with more stringent terms and conditions, such as strict baggage allowances and limited flexibility to change travel dates, so it's important to weigh up the pros and cons before booking.