Budget-friendly air travel has opened up the skies to millions of passengers worldwide, largely thanks to the rise of low-cost and ultra-low-cost carriers. While both offer more affordable flights compared to traditional full service airlines, the distinctions between these two models are not always clear (and sometimes fuel for an interesting conversation).
We have had a go at breaking what we see as the key differences between low-cost carriers (LCCs) and ultra-low-cost carriers (ULCCs), which airlines fall into each category, and what you might expect when flying with each. Will you agree with us?
Defining Low-Cost Carriers (LCCs)
Low-cost carriers, sometimes referred to as no-frills or budget airlines, operate with a business model that focuses on reducing operational expenses while providing lower fares than legacy airlines. LCCs like Southwest Airlines (WN/SWA), JetBlue (B6/JBU) and easyJet (U2/EZY) achieve this by employing cost-saving measures such as operating a single aircraft type and using secondary airports, where landing fees are lower.
Despite the focus on affordability, LCCs do typically offer some basic services. Some passengers may get a full size trolley bag, or even carry-on luggage included in the ticket price. Some short-haul flights may come with light refreshments. Additionally, LCC sometimes combine point-to-point travel with the traditional hub-and-spoke model used by full-service airlines. This structure helps to keep operations efficient and fares low.
What Makes ULCCs Different?
Ultra-low-cost carriers take the cost-cutting measures of LCCs even further, offering the absolute lowest base fares by unbundling almost every aspect of the flying experience. ULCCs like AirAsia (AK/AXM) Spirit Airlines (NK/NKS), Allegiant Air (G4/AAY), and Frontier Airlines (F9/FFT) sell tickets that cover only the seat and the flight itself. Anything beyond that, from carry-on luggage to seat selection and in-flight refreshments, comes with an extra fee.
This “bare-bones” approach allows ULCCs to offer some of the cheapest fares available, but the trade-off is that passengers pay for additional services that may have been included with an LCC. ULCCs also maximize revenue through higher-density seating, quick aircraft turnarounds, and a heavy reliance on ancillary fees to keep ticket prices low while maintaining profitability.
Asia has seen a significant proliferation of both LCCs and ultra-low-cost carriers ULCCs, transforming the region’s aviation landscape. The demand for affordable air travel, driven by rising middle-class populations and increasing tourism, has led to rapid growth in budget airlines. Carriers like AirAsia (AK/AXM), Lion Air (JT/LNI), and IndiGo (6E/IGO) have expanded their operations across Southeast Asia and beyond, offering low fares and point-to-point service that bypasses traditional airline hubs.
Key Differences Between LCCs and ULCCs
While both types of airlines aim to offer more affordable travel, the experience differs in several key areas:
- Pricing Structure: LCCs provide lower fares compared to traditional airlines, often with some services included, such as carry-on baggage. ULCCs offer the lowest possible base fare, but nearly everything else—baggage, seat assignments, and refreshments—comes at an extra cost.
- Ancillary Fees: ULCCs generate more of their revenue from additional fees. LCCs, while also charging for certain services, tend to have more included in the base fare.
- Comfort and Service: Passengers flying with an LCC might experience more comfort and fewer fees than with a ULCC, where the priority is keeping costs down and squeezing as much efficiency from the operation as possible.
‘Hybrid’ airlines
It’s important to note that there is some crossover between these two categories. Some airlines that identify as LCCs may incorporate ultra-low-cost elements, such as charging for certain add-ons or prioritizing ancillary revenue. For example, Ryanair (FR/RYR), which is typically categorized as an LCC, operates with many ULCC practices by charging for seat selection, baggage, and priority boarding. This blurring of lines means that passengers may encounter aspects of both models within a single airline, depending on the route and the region.
Some airlines have even taken the term ‘Hybrid’ to heart, with Korea’s newest airline Air Premia (YP/APZ) calling itself “the First and Only HSC (Hybrid Service Carrier) Airline in Korea”. Its ticket offering and pricing structure broadly replicates that of other low-cost-long-haul carriers. If we compare a basic economy fare with Norse Atlantic (N0/NBT), we find that Premia includes 23kg of checked baggage compared to a 10kg cabin bag on Norse, but both carriers charge for advance assigned seating.
What are your experiences of flying with low cost, ultra low cost, and hybrid carriers? Let us know in the comments.
Cover photo: HA-KLS, JetPhotos.
