

Why cheap airlines are so cheap - kierank
http://www.flickr.com/photos/metrobest/3491197426/sizes/o/in/set-72157617478192160/

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bemmu
If you are interested in learning more about Ryanair, check out the book
Michael O'Leary - A Life in Full Flight. One fun story from that book is when
Ryanair started competing with the "official" airline Aer Lingus, who
basically thought all airport equipment belonged to them and were annoyed by
the new upstart, to settle their differences they had a soccer match between
the employees! However since they weren't really familiar yet with all of
Ryanair's employees, Ryanair imported some pro outside players and won the
match and thus their approval to share some of the equipment.

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dazzawazza
I'm 6'2" and I don't fit in Ryan Air or Easy Jet planes :( I took and Easy Jet
from London to Berlin (~1 hour) and I had to sit at an angle much to to
consternation of the poor bloke sitting next to me.

I'm happy to pay for the more expensive carrier to get a better user
experience. You can tell I'm a mac user can't you ;)

It's interesting to see how they save money. As well as hacking the system I
think the LCC hacked the public in to thinking travelling like cattle is good.
When they travel like cattle on the London Underground they all complain!

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randallsquared
"You can tell I'm a mac user can't you"

I'm not sure there's a correlation. I'm a Mac user, but always travel the
lowest-cost airline I can. I'm easily willing to pay an extra thousand USD for
a better user experience over ~4000 hours, but until I make a LOT more money,
I'm not willing to pay an extra hundred for a better user experience over ~2
hours. That is, per-hour, the expensive airlines are two orders of magnitude
more expensive than Apple. It's the difference between quality pricing and
luxury pricing. :)

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scscsc
I think you took the wrong direction of reasoning. He says we can tell he's a
Mac user because he is willing to pay more even for the two hours of a flight.
Therefore, next to the flight expense, the Mac sounds like a cheap box.

~~~
randallsquared
Indeed. Whooosh. :)

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fauigerzigerk
Something I find astonishing is that the passenger/employee ratio of no-frills
airlines is more than 10 times that of traditional airlines, yet all the
labour related savings together seem to make up a relatively small part of
overall savings. Any explanation for that?

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arihelgason
My guess is that it's because labour is not a very large % of overall costs.

A similar example is the car industry. Car manufacturing plants are often
located in high wage countries, simply because labour does not represent a
large % of the overall cost of producing a car.

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mediaman
Labor is actually a substantial part of airlines' expenses.

Southwest's most recent SEC filing indicates that its 35,000 employees
represent 32% of its total operating costs, or about $3.4bn. These employees
served about 101.9 million passengers. [1] That's about 2,911 passengers per
employee, or $33 of labor cost per passenger.

A traditional airline such as American Air, with 70,900 employees, has labor
costs of $5.9bn, serving just 98 million passengers [2], which is 1,382
passengers per employee or $60 labor cost per passenger. So costs per
passenger are almost 2X.

That makes me question the data in this chart. The only two data points
related to labor are crew costs (3% of savings) and administration (2%). But
actual labor costs appear to be a much more substantial part of the savings.

[1]
[http://www.sec.gov/Archives/edgar/data/92380/000119312509015...](http://www.sec.gov/Archives/edgar/data/92380/000119312509015591/d10k.htm)

[2]
[http://www.sec.gov/Archives/edgar/data/4515/0000004515090000...](http://www.sec.gov/Archives/edgar/data/4515/000000451509000008/aa120810k.htm)

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fauigerzigerk
There's probably some labour cost hidden in other categories as well, like
station costs and reservation costs. But still, I'd expect labour to rank much
higher considering that 10:1 productivity advantage.

There's actually another thing that's surprising. Low cost airlines, at least
in europe, have a younger fleet of aircraft using less fuel. That doesn't seem
to figure in the chart either.

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sfphotoarts
I really don't care how (un)comfortable I am when I fly for two hours. I walk
off the plane and don't give it another thought. You are paying for the A to B
ness of the utility, if you want comfort then stay home with the bigscreen and
sofa :) Seriously though, for anyone that sits on a commuter bus/train/subway
every morning a quick trip in a cramped plane is really nothing.

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bemmu
In case you also wondered what the "station costs" are, it means "costs
associated with providing ground staff, check-in staff, equipment, business
lounges, office space and related facilities at each of the airports served by
an airline". From <http://www.amazon.com/gp/product/0415346150>

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matthewking
How about rickety old planes that make all sorts of dodgy noises on take off?
That's my experience of one of the cheap airlines in particular. Is there any
information out there to show the average age of their planes? if they are
different then that's a major factor that should be in the comparison.

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seanos
I don't know about the others, but Ryanair has the youngest aircraft fleet in
the world. I'm guessing the others will have fairly new planes too because
they are cheaper to run.

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hjnghgbi
And you get a very nice discount if you go to Boeing when the rest of the
industry is in a downturn an order 500 737s. Even better if like Ryan you do
it while also talking about buying Airbuses instead.

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sdfx
_Average_ fares are hard to compare. For one, LCCs and regular airlines are
using different airports and at least the LCCs in europe are only covering
certain high traffic routes. I would love to know where they got their numbers
from and whether they include any additional fees (airport, luggage etc.).

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darshan
From the footer: _Data based on information by ELFAA "Variations in Airport
Charges", Jan Skeels - Secretary General, Aviation Industry Group - 2nd Annual
Managing Airline Operating Costs Conference, Dublin 7 December 2005_

Also see <http://bib.irb.hr/datoteka/260325.ICTS_06_vidovic.pdf> , which uses
the same source (among others) and goes into greater detail than the image.

Also note that "Cheaper airports / landing fees" was calculated in the image
to amount to 6% of the savings of LFAs. Only covering certain high traffic
routes is a good point, and doesn't seem to be mentioned.

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scscsc
I have never used the so-called low cost airlines. However I have problems
fitting my knees even in high cost economy class. I would imagine there is a
business opportunity for airlines which are willing to cut costs in every way
other than safety and passenger space (i.e. we don't need those lounges).

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look_lookatme
" I would imagine there is a business opportunity for airlines which are
willing to cut costs in every way other than safety and passenger space"

Are you implying the current crop of low cost carriers are somehow "unsafe"?
You would be very wrong (at least in the US).

Also, such a carrier exists. It's called Jet Blue.

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bendotc
"Discount air carrier Southwest Airlines flew thousands of passengers on
aircraft that federal inspectors said were 'unsafe' as recently as [March
2007]."

<http://www.cnn.com/2008/US/03/06/southwest.planes/index.html>

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tptacek
Uh huh. Compare the incident records of Southwest and any major carrier, and
then get back to us.

The real cost/safety tradeoff in air travel is between national carriers and
the rebadged regional carriers that do the short-hop fights for the nationals.
Southwest doesn't have any such arrangements, but all the majors do.

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bendotc
First, you don't need to be condescending.

Second, are you claiming that because no accidents _happened to occur_ , that
Southwest was in the right to fly passengers in planes that safety inspectors
deemed unsafe or which were two and a half years overdue for an inspection? Or
perhaps your point is that over-all, Southwest has a better track record than
other airlines, to which I must ask, what is the probability that Southwest's
spotless record (in terms of deaths) actually indicates that they're safer
than the other airlines, and what is the probability that it's just dumb luck?
I would be quite interested in the answer to this question, though it seems
airline crashes are both fairly rare, even for airlines with poor safety
records.

The point is, while I'm certainly not saying that their safety record is
meaningless, I think it would be foolish to overlook things such as flying
planes which have either failed inspection or which are years overdue to be
inspected, especially given the low number of data points in the form of
commercial airline crashes.

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ghshephard
With enplaned passengers at 101.9 million/year, it's not dumb luck that
defines a safety record, but basic probability.

We must also consider the possibility that there is a bias against Southwest
by the safety inspectors, and that perhaps Southwests safety record is a more
accurate representation of how safe they are.

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quizbiz
Title seems unrelated to Hacker News but this is a wonderful break down of the
differences between standard airlines and low fare.

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kierank
In my opinion Ryanair and Easyjet "hacked" the aviation industry creating a
whole new class of low-fare product by cutting costs significantly.

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vinutheraj
But is safety still high on their priority list though ?!

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patio11
The worst airline in the world is still safer than your drive to the airport.
Is safety on _your_ priority list? (Humans are _terrible_ at judging relative
risks.)

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scscsc
I doubt it. And I guess safety is on everyone's priority list.

