Low Cost Carrier in Airlines: In Terms of Cost Perspective

Abstract

This study aims to determine the implementation of the LCC airline in reducing and minimizing costs accrued by the company and the impact of the implementation of LCC. In order to achieve this goal, the data were collected using interview techniques with key informants and secondary data analysis. The type of research used is descriptive exploratory method aimed to explore the implementation of LCC on airlines. Data sources used primary data obtained through interviews with informants from employees of PT. Citilink and PT. Garuda Indonesia, while secondary data were collected from information presented on the website and other related information and reports of LCC on the internet. The results of this study indicated that there are at least 3 forms of reduction / minimization of flight costs, namely the first minimization at operational per service / per flight. Second, cost minimization in the overall operations of the company. Third, minimization with government policy facilities related to the rules regarding flights and fixed rates. These results are evidence by Cost per unit for production (cost per Available Seat Kilometer/CASK) of FSC airline was 6.16 US¢, meanwhile the cost of LCC airline was just 0.06 US¢ for easyJet, Air Asia had 3.07 US¢ and Citilink had the highest position compared to easyJet and Air Asia for 4.71 US¢. Therefore, the implementation of LCC has the effect on the opening opportunities for the middle and lower classes to choose flights as a mode of transportation and the presence of LCC can have a positive impact on the economy, especially in the tourism sector.

How airline service post COVID-19 pandemic? Domestic LCC passenger perception in Indonesia

“…Besides using only one aircraft type, most LCCs operate narrow-body airliners, so most LCCs only offer short and mediumhaul flights. This business model aims to reduce costs [11]. However, with the development of technology and the emergence of a new generation of small aircraft that can cruise far, most LCCs have begun to offer long-haul flights at affordable prices.…”