Eureka! Institutional Repository

Air travel remains a large and growing industry. It facilitates economic growth, world trade, international investment and tourism and is therefore central to the globalization taking place in many other industries. The most remarkable change in the aviation field, over the past 40 years, is that the journey from a high cost good addressed to a few in the 1960s, transformed in the 1990s in the main mean of transport for medium and long distances, while addressed to average and low income classes. The emergence of low cost airlines in the aviation market contributed to this change and also created a new trend in the aviation and tourism in general. Tourists now have the ability to make frequent trips with fares that can often be zero. The success of the low cost model led to an increase in the number of low cost airlines while forced the full cost carriers to create low cost airlines within them. However like any other new idea, it also has its negative points and weaknesses. In order for the companies to achieve lower operations costs, they reduced their services, applied restrictions in fares and baggage, while they charge for any extra service. Low cost airlines fly to and from secondary airports, often in remote areas, bringing the total cost of the journey higher than expected. The airlines offer minimum to none compensation in case of a cancelled flight. When selecting an airline the passenger should always have in mind the total cost of the journey and not the single price of the flight. In many occasions the selection of a low cost airline means additional costs, often higher than the price of a ticket in a full service carrier. Nowadays, most of the low cost companies have differentiated their product and services from the traditional model in order to attract more passengers and increase their revenues.