There are some flag carriers operating low cost airline subsidary to compete with the true low cost airlines, like Air Canada's Tango & ZIP to compete with Westjet, United Shuttle (closed since Oct 2001), Delta Express, US Airways Shuttle, Continental Airtrain to compete with Southwest, Buzz of KLM & Go of British Airways (now sold to independent owners) to compete with Easyjet & Ryanair. These airlines offers service similar to the true low cost airlines, like not offering free meals, charging for alcoholic drinks (and non-alcoholic drinks for some carriers), charging for headsets. Passengers cannot travel both the flag carriers & the low cost subsidaries with the same ticket.

But unlike the true low cost airlines, passengers travelling the low cost subsidiaries of the flag carriers can get mileage for their flag carrier frequent flyer plan, so passengers can get free tickets once sufficient points are got. For example, passengers taking Tango or ZIP of Air Canada can get Aeroplan mileage and hence can redeem Air Canada tickets.

So these airlines are popular among the people flying intercontinental trips frequently.

Strangely Qantas did not have plan to operate a low cost subsidary to compete with Virginblue, thus allowing passengers to travel Australia domestic trips at low price while getting mileage for the frequent flyer plan, and maybe better service like more seat pitch, having entertainment & free drinks. This is not quite good for passengers, as passengers have to take either expensive Qantas flights or uncomfortable Virginblue flights.

What do you think?