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From Legacy to Low Cost: How Different Types of Airlines Work

Do you ever wonder why some airlines' tickets cost so much less than others, or why some charge more for baggage and seat selection? Every business in every industry is a little different than its competitors and airlines are no exception. Within aviation, airlines are generally grouped into three categories: legacy (or “network”) airlines, low cost carriers (LCCs), and ultra low cost carriers (ULCCs). While no two airlines are exactly alike, almost all of them fall into one of these categories.

Ultra low cost airlines like Allegiant, Spirit and  Frontier have the goal of offering the lowest ticket price possible. Their tickets can be described as “no frills” and things like bags, seat selection, and onboard food and drinks generally cost extra. They are extremely cost-responsible in their operations and management, which allows them to offer the lowest airfares. By not including the cost of a bag, snacks, drinks, in-flight entertainment, and other amenities in the ticket price, these airlines can often offer extremely low fares and high value. ULCC’s generally cater to people going on vacation or enjoying other forms of leisure travel, but each one does so differently. Frontier and Spirit almost exclusively fly between very large markets, with at least one roundtrip flight per day, and they don’t mind adding routes that other airlines already fly. Allegiant’s core model is to fly from small- or mid-sized communities (just like us) to very popular leisure destinations a few times per week. Many consider this a relatively new airline business model, but it’s more or less a refining of the low cost carrier model that some airlines have been using since the 1970s.

When we say “low cost carrier” the first airline that pops into your mind could very well be Southwest Airlines, as they’ve been flying since 1971 and touting low fares and friendly service as they’ve grown into the nation’s largest domestic airline in terms of the number of passengers carried. These days, however, the LCC category has become a bit less defined than it once was. The term actually has more to do with an airline’s operating costs than with its ticket prices, which are simply a result of the low operating costs. Frontier and Spirit were once LCCs but transitioned to become ULCCs. Other airlines in this category like JetBlue and Virgin America are regarded as low cost carriers by some and not by others. Some would say that the traditional LCC’s like Southwest and JetBlue have slowly transformed into carriers whose fares aren’t always “low” but are never “high” and include some amenities in their ticket price. As these airlines have matured, they’ve grown into having large networks with far more connecting traffic and have added passenger comforts like in-flight entertainment, which raises the cost to operate.

Last but not least, the network airlines are the mega-brands that have been around in one form or another since the dawn of commercial aviation. American, Delta, and United are the three U.S. network airlines. These are the most “evolved” airlines and have global route networks, huge hubs, huge fleets and multiple types of aircraft. With aircraft ranging from 50 to nearly 400 seats, network airlines can get you from Asheville to Shanghai, often in just one stop. They carry a wide array of passengers, including leisure and business passengers traveling domestically or internationally.  They have sophisticated products that cater to business and international travelers. First-class cabins, club lounges, in-flight entertainment and Wi-Fi have become core products for this group of airlines. They’ll happily connect you to Florida for vacation, as well as London or Boston on a last-minute business venture.

As the industry and the consumer both continue to evolve, so do the airlines. Throughout history, airlines of all types and sizes have come, grown, evolved, changed and gone. Once mighty legacy airlines like Pan Am have gone under and others like Piedmont have become part of the lineage of today’s airlines through mergers. The only constant is that regardless of your budget and destination, there will almost always be an airline built to cater to you.