Two weeks ago, I posted a video on why flying
is so expensive, and, people seemed to like it, however, they wanted to know, how are
budget airlines so cheap? Well it’s another complex answer but an interesting one. For
the purposes of simplicity, and to keep our European friends from feeling left out, we’ll
focus on the European model of budget airlines. While there are low-cost carriers in North
America, South Africa, India, Asia, and plenty of other places, budget airlines really were
first successful in Europe and that’s where they’re still most prominent today. The
magnitude to which airlines like Ryanair and EasyJet reduce the cost in Europe is also
much more significant. Budget airlines in the US might be 10 or 20% less expensive than
their traditional competitors while in Europe a fare on a budget airline might only cost
half or a third of what you would pay to a normal airline. You can regularly find 2-3
hour flights on budget airlines for less than 10 euros
So how do they work? Well, unsurprisingly, budget airlines essentially take every expensive
part of the flight and make them less expensive. The most essential thing an airline needs
is airplanes and it is possible to spend less on those. In the months and years following
9/11, the growth of air travel stalled and most airlines were simply fighting to survive.
Meanwhile, Ryanair was thriving and placed a massive order of 151 737’s from Boeing
at unbelievably low-prices. A circumstance like that luckily isn’t frequent but budget
airlines can place large orders at any time which gives them a bulk discount. It might
seem weird that a budget airline would buy brand new airplanes, but the newest planes
are the most efficient which saves fuel. The fuel efficiency of new aircraft offsets the
higher purchase price, so EasyJet (4.0), JetBlue (4.7), Ryanair (5.0), and Spirit Airlines
(5.7) all have younger fleets than any major airline (KLM 9.4, Air France 11.5, Lufthansa
12.4). Budget airlines will also typically have only one type of plane. Ryanair only
operates 737’s and EasyJet only operates the a320 family. Having only one type of Aircraft
means that pilots, flight attendants, mechanics, and ground staff only need to be trained on
one type of aircraft which saves an enormous amount of time and money. Within the planes,
budget airlines will often avoid luxuries to keep costs down. Ryanair seats, for example,
don’t recline because that increases the initial purchase price for seats and also
requires more maintenance. The seat design also saves time for flight attendants since
there are no seatback pockets to clean between flights.
Flight attendants on budget airlines are often in the beginning of their careers and receive
little training. Of course they’ll get the required safety training but only minimal
hospitality training. They’ll also often serve multiple roles. While on the ground,
some of the flight attendants might go to the gate and check tickets while others clean
the airplane. Through this, the airline eliminates three or four positions that they regularly
would pay for. Onboard, flight attendants are of course responsible for food and drinks
which are almost never free. Onboard service can be an excellent way for the airline to
make money. Many budget airlines also do duty free sales and Ryanair even sells lottery
tickets. Let’s talk Airports. You’re never going
to see Ryanair fly to London Heathrow or Paris Charles de Gaulle because those airports are
expensive. There’s only a set amounts of flights per day that can operate out of them
so supply and demand dictates that landing fees are high and slots are regulated. Instead,
Ryanair flies to Gatwick, Stansted, or Luton in London or Beauvais in Paris, which, by
the way, is a 80 minute bus ride away from Paris, isn’t even technically in the same
region of Paris, and has a website that looks like this! In a lot of cases, Ryanair or other
budget airlines are the only or one of a few airlines flying out of an airport which gives
them huge negotiating power. Often they will take a small regional airport a ways away
from a city and rebrand it as another city airport. They can ask for lower landing and
takeoff prices and, if the airport doesn’t comply, just leave and the airport will essentially
cease to exist. If there isn’t a viable cheap airport available around a city, budget
airlines can also fly to regular airports at less busy times when landing fees and the
chance of delay might be lower. Now let’s get into the nitty-gritty—the
small details. The planes of budget airlines tend to operate all day non-stop. For example,
in one day, this Ryanair plane went from Brussels to Copenhagen, Copenhagen to Brussels, Brussels
to Prague, Prague to Brussels, Brussels to Nimes, Nimes to Brussels, Brussels to Trevioso,
then finally Trevioso to Brussels. Budget airlines will schedule only 30-45 minutes
between the landing of one-flight to the take-off of another which often leads to delays and
leaves very little time to clean the aircraft. This does, however, mean that the airplane
is always making money and passengers are not paying for the time it’s sitting around.
Ever wonder why Southwest doesn’t have reserved seating? Well by having a first come first
serve system for seats, people almost always show up to the gate early and line up in an
orderly line. This way, less time is spent on the ground boarding and more time in the
air flying. Another principle of budget airlines is the point-to-point model. Most traditional
airlines have hubs where most or all of their flights go in and out of. British Airlines
has London, Air France has Paris, KLM has Amsterdam. To get to most places on these
airlines, you have to connect through their hubs. Budget airlines, on the other hand,
try to have a lot of destinations from everywhere. That does mean, however, that many destinations
are served only a few times per week. The cheapest budget airlines don’t even allow
for connections between their flights. Allowing connections adds cost because then you have
to pay for ground crews to transfer bags, create a more complicated ticketing system,
and pay to rebook a passenger if a delay in their first flight makes them miss their second.
Speaking of ticketing, there’s often no way to get a ticket from a real person on
budget airlines. Ryanair charges 45 pounds if you fail to print your boarding pass at
home and EasyJet and some other carriers have almost all their check-in’s handled by machines.
This, once again, cuts down on personnel costs. At the airport, these budget airlines won’t
bother using jetways because they’re expensive. They’ll use steps and just have passengers
walk across the tarmac or take a bus to the plane.
Budget airlines make a lot of money, if done right. EasyJet (11.15%), Ryanair (24.10%),
and Wizz Air (10.2%) all have higher profit margins than Lufthansa (4.03%), British Airways
(7.09%), and Air France (2.15%). Many of the traditional airlines have unionized workers
with salary agreements that cannot be changed while the budget airlines can hire anyone
and train them in a few months. It’s also hard for these traditional airlines to grow.
Any route they make has to be one with a lot of preexisting demand since much of their
business comes from business travelers. Since budget airlines are targeted more towards
tourists, any destination that Ryanair, for example, opens up in will become a popular
destination just because it’s possible to go there for so cheap. Some traditional airlines
in Europe are opening their own budget airlines to get in on this profit. Air France created
Transavia and Lufthansa created Eurowings, both of which are losing massive amounts of
money. What they seem to forget is that the US went through this budget airline within
an airline phase a couple decades ago. Delta created Song, which failed. US Airways created
MetroJet, which failed. United created Shuttle, which failed, then they went into bankruptcy
and decided they should try again and make Ted, which failed. None of these worked! Traditional
airlines can’t get away from their labor agreements, honest business practices, and
devotion to their hubs. The reason Ryanair and EasyJet are able to succeed where others
have failed is largely because they are so large and flexible. They have hundreds of
planes, hundreds of destinations, thousands of employees, and negotiating power that allows
them to overpower competitors. In the end, for us consumers, any competition is good
competition. Even failing budget airlines will bring down the cost of traditional airlines
and allow us to travel the world for less. Thank you for watching. I hope you enjoyed
this video. Make sure to click subscribe and follow me on twitter @wendoverpro. If you
want to discuss this video with me and others, I’ll link the first reddit thread of my
video here. I’ll be back next week with another episode from That Wikipedia List.

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100 thoughts on “How Budget Airlines Work”

  1. What if the terrorist knew that flying would die down giving other people chances just to prove how sick it is or something but a chance to do what

  2. I live in america and I commonly flights for just a few cents on spirit and frontier. The main cost of the flights are taxes

  3. but thats like only ryanair from or to the UK… every other 'budget' airline is still expensive as fuck, at least compared to ryanair

  4. I just had my first flight with RyanAir (which went all well and good) and was amazed that they literally have 15 minutes between passengers to leave the plane and passengers for next flight to board the plane. Timing is just… incredible. The first thing I noticed was about the pockets on the seats and I tought to myself: "My God, it's so clever!" Because you either give away all your trash to flight attendant ('cause you just don't have anywhere to put it) or leave it in the seat, and it's much easier to pick up. Besides the way they deal with luggage is very flexible and convinient. Of course you have to pay for it, but if you go for 5-6 days you really don't need that 20 kg bag, which is "included" with your ticket for regular air lines.

  5. Not all of this info is 100% accurate though, easyjet flies to more expensive aiports and uses jetbridges and not just steps. But tbh, although it uses a similar model to Ryanair in its essence, the way they do business is largely different.

  6. Little did you know, that some major airports like Heathrow don't want Ryanair to land there because their landings would break the runway. Considering Heathrows 2 runway system with lots of planes.

  7. ryanair have 2 kind of planes not one i been the the 2 and in a lot of the planes the set does have a pocket to where you can put your stuff a lot of things wrong with this video and some things right (one of their planes has more leg room and is bigger but not used as much in Ireland )

  8. Flight from Helsinki to Ivalo(2h flight) was 170€ on Finnair, while a flight from Stockholm to Lisbon(4h flight) on WizzAir was only 17€. Damn i love budget airlines.

  9. The issue here is the overuse of aircraft. When an aircraft is doing 10 flights a day that is 20 times that the cabin pressurizes and depressurizes. When this happens the cabin physically expands and contracts, you can think about it like this. You can only blow up and empty a balloon so many times before it pops. After 10 or 15 or 20 years of constent use, the aircraft could suffer an explosive decompression when it attempts to pressurize. An example of this is Aloha Airlines flight 243.

  10. You need the most important factor. How for instance Ryanair's business model is working. They are mostly looking for new inexperienced firstofficers with 0 hrs on the jet aircraft. In that way it's a win win for Ryan air and the pilot. The pilot PAYS to fly , 30.000 euro to Ryan air for a job with them. He gets the experience and can when he has enough hours to look for a job at an airline with good benefits and non tax fraud salary. This is how they take advantage of the situation.

  11. i've been on a plane 9 times in my life and i never knew jetways were a thing wtf i thought everyone just walked up those steps

  12. Any competition is good competition. Even failing airlines will bring down the cost … so long as you're not amongst the poor bastards on that failing flight.

  13. Rember when flying Ryanair …Wear noise-cancelling headphones unless you want to be bombarded every five minutes with announcements and advertisements

  14. Ryanair and Easy Jet is HORRIBLE! NEVER USE A BUDGET AIRLINE!!! NOT TO MENTION THAT BUDGET AIRLINES ARE DANGEROUS WITH A VERY HIGH RISK OF FAILURE AND ACCIDENTS!!

  15. You forgot to mention that some airports even pay Ryanair to open new routes, just because they can earn more on parking fees and other services at the airport.

    BTW Air France did not create Transavia. Transavia is an old airline from the Netherlands that became part of KLM, which slowly turned it into a low cost airline in the past 15 years.

  16. Anyone else remember the one picture with 1 Thomas cook plane and just watched the new video so they came here for that picture?

  17. Slag Ryanair all you want but their low cost have enabled so many people to travel and see places that traditionally couldn’t, they have to be a bit cheeky to keep the cost down but it’s not a terrible service for what you pay for

  18. damn why is everyone one shitting so hard on ryanair?? I've been in a couple of ryanair flights and they where just fine
    the only thing noticeably wrong i could think of is the food prices, but it's as simple as DON'T BUY THE FOOD YOU MORONS – eat before boarding.

  19. I got on a flight from England to Denmark for £2. That is just amazing😂

    Edit: It was a 2 way ticket so each flight was effectively £1

  20. i work close with Ryanair and i get to know some fun things, their pilots have shit earnings, like 600 euros a month and they just do it to get flight miles in order to get to better companies, while Ryanair most of the time rent a single room for a full crew.
    they are very stingy with their fuel, they make calculations and dont rl put that much more fuel then what its needed, i saw they jumping in line to other planes to land coz they went into fuel emergencies
    while they now got their own line of handlers in my country, before that they had an agreement that if the handling company couldnt get all bags out and put the new ones in 20 min, then they wouldnt pay for that
    another funny thing, their workers went on a strike to demand for them to pay their overtime as it was by law (most companies dont and just pay everything after a court battle when the employee leaves, since a lot of employees wont go to court since they either dont want to bother or just arent sure of what the company owns them), and they ended up losing their parking spaces
    edit: also, unlike other companies they dont pay for inside airport transportation for their crew, i mean they dont even use their own man and vehicles, instead their crew has to walk a decent chunk even if its raining XD (yep i did saw them with their YELLOW jackets on rainy days just walking on the airstrip)

  21. Ryanair is a good company, I traveled with them 4 times this week and everything was fine and I enjoyed the flight 🤗

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