Low-Cost Carrier Model

The low-cost carrier model, also called a budget or discount airline model, is a business model in which an airline is operated with an emphasis on minimizing operating costs, sacrificing some traditional airline comforts in exchange for cheaper fares. To make up for the resulting drop in ticket revenue, a low-cost carrier commonly charges extra fees for services such as carry-on baggage. The term originated within the airline industry to describe carriers with a lower operating cost structure than their competitors and is now often applied more loosely to any airline with low fares and limited service, regardless of its underlying operating model, though it should be distinguished from a regional airline flying short-haul routes without such service or a full-service airline offering some reduced fares.