While Orion is already booked for the first three years (charter services), the airline initially wants to focus on keeping costs down and maximizing profits through ancillary activities (such as advertising on board, selling duty-free items).
The company has negotiated significant discounts on landing and handling fees with the airports.
The success of a low-fare airline relies on maintaining a low cost structure. We believe the cost advantage of a low-fare airline is underpinned by the following points compared to traditional airlines:
A traditional airline is trying to cover many different market segments with a single flight. This means that there is usually a first-class and / or a business class, which causes significant additional costs. In addition, other service packages such as meals, frequent flyer programs and airport lounges are offered. Although this offer adds value to some customers, low-fare carriers do not seek to compete in this market, but rather offer a base offer, ensuring lower costs and high system reliability. However, as we offer charter flights, we are ready to accommodate any requests our customers might have, such as various meals on board, VIP service throughout the flight, etc.
A low-fare airline achieves much higher aircraft utilization than a traditional airline by operating with an optimized fleet (easyJet operates only Airbus 320 family aircraft, Southwest operates B737 aircraft), by keeping the service offered simple and targeted avoids congested airports. This reduces piece costs and capital tie-up compared to competitors.
Most low-cost airlines and charter flight operators are willing to use smaller airports to keep costs down.
Traditionally, sales of flights were handled by GDS (Amadeus, Worldspan, Galileo, Saber), and currently this item accounts for 10 to 15% of the cost base of traditional airlines.
With our online reservation system, our company will save the above costs. The booking system will be designed to give our customers the freedom and flexibility to make as many changes as they want, even up to 2 hours before departure; just before the check-in at the airport is opened.
The decisive cost advantage is the constantly high utilization of the aircraft and the minimization of intermediaries between the customer and the airline. Although different accounting and disclosure practices, as well as different network structures make the comparison of different cost bases inaccurate, the graph below shows the cost per passenger at British Airways, Ryanair and easyJet.
The low-fare companies have a big cost advantage per passenger compared to the traditional airlines due to shorter route lengths and higher capacity utilization. This clearly suggests that traditional airlines should not even try to compete with the low-fare companies for the majority of customers traveling on low-cost flights.