Low-cost started as an almost marginal issue but, nowadays, some low-cost airlines have outgrown their traditional competitors. Of course, something like that does not happen by chance. A high growth rate for many years usually points to a serious business project. In this context, «serious» means the opposite to a «take the money and run» model, so common in many activities, including Aviation.

 Then, we should start with this fact: There are low-cost operators that did not come looking for easy money. This fact, evident in the behavior of some operators, asks for an analysis where respect is deserved and it is not going to be denied here.

 Once made clear that we do not speak about people looking for easy model, the business model linked to low-cost shows itself as very interesting, not only because of results but because of eventual hidden weaknesses. We’ll center our analysis in safety and potential impact over safety of low-cost practices:

First, a little bit of common sense: If an operator wants to get better prices, costs are the enemy to beat and safety can be translated into costs. Furthermore, since yield-management appeared, it is hard finding two passengers in a plane who have paid the same for their tickets and, whatever traditional operators can tell us, it is a way to sell below costs to beat low-cost operators with not-so-deep pockets. In this environment, differences in prices have to be really important to resist this kind of competition.

Common sense tells us, also, that decreasing costs in safety can be a hard-to-resist temptation. However, this should be a conclusion that requires a deeper analysis:

Low-cost operators are very conscious that this an easy to reach conclusion and, if true, it can damage them very seriously.

When someone notoriously better known than popular like Michael O’Leary, Ryanair CEO was asked for the risks in the Ryanair business model, he was quite explicit: The risk of making something stupid from our side or an accident in an important low-cost operator.

The investigation after an accident can discover inadequate practices in any airline. However, a low-cost operator has a different risk level: Inadequate practice, if discovered, should not be read in terms of negligence or error but as an usual practice to decrease costs and, hence, as a part of their business model.

Hence, low-cost operators are fully conscious that a single major accident can put at risk their business continuity at a bigger level than the one who should suffer traditional operators. They have tried to minimize this risk in different ways and with different success levels:

Public Relations people from low-cost operators tell anyone willing to listen to them that they are controlled under the same rules that every other. Of course, this statement tries to put in the mind of the listener the idea that they have the same safety level that any other. This statement is true but, without entering in the real capacity of rulemakers and inspectors, can be deactivated with a simple example: Rules for car-makers are the same. Does it mean that a Dacia Logan offers the same safety level that an Audi A8 since both share the same rules?

When there is a serious business project and, of course, big low-cost operators have it, safety cannot be reduced to craft ingenious slogans but has to go much further:

Southwest Airlines, still the most copied model among low-cost operators, based cost reduction in a very specific operating objective: 25 minutes from landing to take-off. This objective has to be hard to reach since other operators, like Jet-Blue, decide to leave it looking for the cost reduction in other places.

Southwest based this objective in a very deep knowledge by every single worker about how his activity was affecting others. Without trying the everyone makes everything started by People Express and hard to keep in the long term, Southwest kepts specialization but, at the same time, created an environment based in the ability of the workers performing the job to detect improvement opportunities.

Ryanair trajectory has been much tougher: Time between flights is only one of the ways to reduce costs. Many others, like who pays the uniform of the workers or the invitation to grab ballpoints from the hotel rooms or the price paid by the new recruits for the privilege of working there…Probably, O’Leary himself should not be offended if defined like a CFO that became CEO because since he is fully conscious of that.

O’Leary is so conscious of his importance in Ryanair as financial watchdog that he decided not to attend meetings where maintenance decisions are made. The decision, together with having someone with high technical profile as the Maintenance Head, is positive but it should be quite reasonnable asking ourselves if that is enough. It is extremely hard creating watertight compartments in any organization and, in this case, it seems that they try to create such a watertight compartment to have Maintenance out of pressure looking for cost reduction in any area in the organization.

However, it is easy forgetting that safety is not a function but a perspective covering all the operations in the organization. If an organization is known for a very specific perspective -cost reduction- asking what will happen when both perspectives clash is a must.

As an example, it is possible deciding to have a good spare parts stocks but, in a cost-reduction driven organization…what should happen if a maintenance work is delayed beyond expectations? what should happen if a pilot put more fuel than stricly legal requirements? what if a pilot, already delayed, does not want to speed-up tasks or make checklists faster than usual? We could find hundred of examples of clashing perspectives and, of course, having Maintenance isolated from cost decrease pressure is not enough. If lowering costs is the dominant perspective, that is something that will be over every decision that someone can take as well in a cockpit as in any other position. That, of course, will affect the real safety level that someone can reach.

 Low-cost operators are in the market time enough to be able to make differences among them. Possibly, a soft model, like the Southwest one, centered in cost-reduction in very specific ways, will be less sensible to safety issues than other operators more hard-nosed. These ones will pursue costs wherever they are to exterminate them and this attitude can drive them very often to conflict of perspectives.

For good of all of stake-holders, including passengers, it should be good for the most aggresive companies in their cost-reduction practices  to be able to solve the organizational problem that two conflicting perspectives bring, especially if one of them has always the winning hand.

The challenge will not be easy and it is going to require from very imaginative and energetic operators at least so much imagination and energy as the one they devoted to cost reduction and, perhaps, it will make them change some habits that they see as very important since they were an important part of their success.

We will know if they are successful in this effort or if they will make good the Drucker statement success makes obsolete the factors that made it possible. If so, the factor that could be obsolete even though it drove to the past success is precisely the fundamentalism in cost reduction. Fundamentalism, in this context, should be understood in its most literal meaning: Invasion of fields that are not theirs.