The early days of flight were characterised by the sort of luxury that passengers had become used to on ocean liners and it is only relatively recently that airlines have competed solely on price.

It was the emergence of Southwest Airlines in the United States that made entrepreneurs realise that they could offer a different sort of flying experience.

Southwest, which began flying from Dallas in 1967, developed a model that focused on reducing the cost of operation rather than competing on the services provided to passengers.

Southwest standardised everything, flying one type of aircraft to reduce maintenance and training costs and doing away with seat assignment so it could get passengers on and off planes more quickly.

Southwest’s no-frills approach allowed fares to be cut and passenger demand took off. The company has grown into the largest airline in the world, carrying more than 100 million people a year, and it has spawned imitators around the world.

The European versions of Southwest had to wait until rules governing which airlines could fly to which country were eliminated in the 1980s before they introduced their own low-cost operations.

The most successful has been Ryanair, which started as a small Irish carrier but embraced the budget model in the early 1990s and has since become Europe’s largest airline.

Ryanair has pushed the budget concept farther and harder than anyone else and it has overtaken Southwest as the defining example of this business model.

Ryanair is so focused on costs that it has even done away with fabric seat covers and seat-back pockets for magazines in order to speed plane cleaning.

However, there is one cost that cannot be cut and that is fuel. The budget airlines can do little about the rising cost of oil and Ryanair has given warning that it may lose money this year, while easyJet has predicted that its profits could halve.

These airlines will have to raise their fares to survive but will passengers be willing to pay more for a no-frills service? The answer to that question will define the shape of global aviation for the next generation.

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