Today is a 4 July 2018. It’s a US Independence Day. We are discussing air ticket booking offers for Independence Day. Budget airlines have come up in the last few years and nearly every country in the world has two or three such companies. The airlines cut down on unnecessary expenses and they can provide air ticket booking offers that reduced the expenses involved with air travel. However, this is confusing and it is a little difficult to understand how the airline actually manages to make a profit. Effective airline management is the only way that a good airline can make a profit and this is critical to the functioning of other airlines as well.

Effective airline management for budget airlines
Budget airlines usually have a simple formula that contributes to their success. The company cuts out all unnecessary expenses and these lower costs mean that the company easily makes a profit. A few of the major cost-cutting steps that do work include the following —

1. Lower airline ticket prices — All budget airlines provide ticket booking online. As they do not have to maintain real-time offices and staff, they cut down on rental, electricity and salary expenses. Customers get this benefit in the form of lower ticket costs.

2. Convenience – As the booking is available online, most customers can book their tickets well beforehand or they can even do emergency bookings for flights. This means that the customer can easily get tickets at any time and this is much better than visiting a ticket booking office. As customers get 24-7 customer service they are more likely to be patronized by customers resulting in more business.

3. Pay for what you want — Budget airlines do have food and drinks online but these are expensive. By cutting down on free food, drinks and other amenities, the airline saves a lot of money. At the same time, they also earn money from customers who buy food and drink on the plane.

4. Shorter flights on common routes — It’s not possible for the airline to cut down on fuel costs and airport fees. As they usually recover their running costs by running frequent flights on busy routes. The airline also tries to ensure that the flight is not empty. Online booking also encourages booking and most of the time, flights are full even if they are short domestic jumps inside a country.

5. Fuel hedging — Fuel hedging is another way by which airlines manage to save money. For example, Southwest Airlines managed to save more than 3.5 billion in fees by aggressively managing their fuel costs. Airline management managed fuel costs by locking in the fuel price as per a contract. After the contract, fuel prices increased and Southwest was probably the only airline that managed to get their fuel at the fixed rate. They leveraged these profits into lower ticket prices and business boomed. Southwest quickly became the most popular budget airlines in the US and it still has a very strong hold on domestic customers.

6. Limited airplanes — This is another management trick that actually turned out to be quite effective in controlling costs. For example, airlines like Southwest Airlines now use simple Boeing 747s that are easy to maintain and have a very good fuel consumption rate.

However, you should know that not everything is possible through effective airline management. Top of the line airlines do close down regularly and the same thing does happen with budget airlines as well. In the last three years, more than 10 different budget airlines have shut down due to rising fuel and operating costs. These factors are out of management control and even cost management, lower fares and competitive rates could not keep these airlines up and running. Effective airline management can keep the airline up and running but this has to be combined with fuel management, staff cooperation, and effective advertising to ensure that business continues.

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