Most of us if not all have always wondered how some airlines make huge profits in spite of the low cost of their flight tickets. Well, wonder no more. Such type of carriers is known as Low-Cost Carriers. For example, Ryanair in Europe, Southwest Airlines in the US, Indigo Airlines in India, etc. So, what exactly is the business model for such an airline company? (1) It buys all their aircraft of the same type. So, it does not have to spend more resources on the training of pilots, flight attendants, maintenance and service crew. And most importantly, it can get a good deal while placing a big order from a single aircraft manufacturing company. (2) Generally, planes are on lease. So, it instantly makes a profit from the difference between purchase and lease. Because planes are bought in huge numbers, discount comes into play. And then these planes are sold to leasing companies at a higher price and taken back on lease to operate. (3) It operates from a smaller ai
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