Economization Methods Used by Low-Cost Airlines – An Overview

Abstract

Purpose:The crisis caused by the pandemic has forced airlines (both full-service carriers (FCC) and low cost carriers (LCC)) to review their business models and look for opportunities to make up for losses. The goal of this paper is to review the cost optimization methods used by LCC airlines and to identify the activities of LCC that were taken to reduce costs. Design/Methodology/Approach: The analysis of the areas of economization of activities undertaken by the LCC carried out in the article is the result of a literature review of business models used by LCC carriers. Findings: The conducted literature analysis allowed for the identification of seven main areas in which measures are taken to reduce the costs of the LCC line. Practical Implications: Economization methods implemented by LCC lines at the strategic level reduce the carrier's costs and can be adapted to the market in which it operates. Originality/Value: Although the business models used by LCC lines are not a new topic, the review of economization methods from a strategic perspective presented in the article has not been discussed in the literature.