Can the Budget Airline Model Succeed in Asia?

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  • Topic: Low-cost carrier, Southwest Airlines, Airline
  • Pages : 3 (830 words )
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  • Published : June 30, 2009
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Can the Budget Airline Model Succeed in Asia?

1. What opportunities exist in the Asia-Pacific region for the entrance of new low-fare airlines? How might demand for low-fare service differ in the Asia-Pacific region and in North America and Europe? The Asia-Pacific region offers many opportunities for the entrance of new low-fare airlines. Analyst revealed that low fares are often the deciding factors for budget-conscious travelers in Southeast Asia. The Pacific Asia region represents a huge population, which offers low-fare airlines a vast market with promising profits. China’s huge population alone offers a great market for low-fare airlines. Demand may differ for low-fare services between the Asia-Pacific region and in North America and Europe. In the Asia Pacific region low airfare is the main driving force for choosing an airline carrier. In European and American customers look for a more traditional airline which offers factors such as comfort, food, cleanliness, etc…

2. Do governments pose a significant obstacle to the expansion of low-fare airlines in Asia? Yes Governments do pose a significant obstacle to the expansion of low-fare airlines in Asia. Government airline regulations in Asia prohibit competition to take place amongst airline carriers, allowing the government opportunities to be manipulated and bribed. The manipulation of the government by competing airlines can limit the growth for alternative airlines to offer service to Asia-Pacific regions, leading Asia to have few choices amongst air carriers.

3. Compare AirAsia’s strategy with the strategies of Southwest and Ryanair. How is it similar to and different from the strategies of those carriers? Southwest Airlines was the leading pioneer in adopting a budget airline model. Southwest practices core strategies focusing on the customer, having more of a “people strategy.” Ryanair is more technical and focuses on their operational strategies. All three airlines have their own...
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