Low cost, or ‘no-frills,’ carriers, are modeled on the phenomenally successful Southwest Airlines in the United States. They are characterized by low distribution costs (they pioneered on-line booking), point-to-point services, high utilization of aircraft (tight turnaround times), and one-way pricing, enabling travelers to buy one-way tickets, and charging for food and drinks.
The crucial challenge they have posed to full service, ‘legacy’ or network carriers, has not been so much their low fares, but their low one-way fares, that allow travelers almost total flexibility, breaking the tyranny of the Saturday-night stay rule, designed deliberately to – therefore attracting business as well as leisure travelers.

Traditional carriers have responded to the no-frills challenge on European routes by abandoning their old pricing convention that low fares must come with onerous conditions (remember the old Saturday-night stay nonsense?) deliberately designed to frustrate their use by ‘must-fly’ business travelers, and matching no-frills fares, especially for late booking. Web sites such as BA.com and Airfrance.fr, now show a range of one-way fares, depending on the date and time of day and time, allowing you to compose a trip by combining the best fare out with the best fare back. Both no-frills and traditional carriers offer on-line booking and ability to print your own boarding passes; and both now typically charge for checking luggage.

As traditional network carriers shed their full-service character by adopting the low-cost pricing model on short-haul routes, to compete with the low-cost, or no-frills, upstarts, it is hard to tell the difference in price, or quality of service, between, say British Airways, and EasyJet, on European routes. Indeed, if you’re booking close to departure, you can often get a better price on a traditional carrier than a no-frills competitor.
Within Europe, we are seeing segmentation within the no-frills sector. While Ryanair remains brutally basic with minimal comfort and service, EasyJet offers optional frills, such as ‘speedy’ boarding, and use of airport lounges; while remaining true to the no-frills philosophy.

Once in the air, there is not much to choose between EasyJet and cattle class in British Airways and other legacy carriers, with similar legroom in the same types of plane. BA provides only Spartan snacks and beverages; ‘Sorry, only beer or wine, no, we can’t sell you a Scotch.’ While EasyJet has a good choice of drinks and sandwiches on sale. So much for full-service ‘frills.’

With all carriers offering similarly low fares and standards of comfort and service in the air, competition tends to be driven by the airport experience. In Europe, no-frills airlines often fly from small, and arguably more user-friendly, airports such as London Luton or Stansted, rather than the dreaded Heathrow.