Budget Airlines

Powerful Essays
Task Three: Budget Airlines

CONTENTS
• Who and what are budget airlines
• Marketing environment
- Micro environment
- Macro environment
• Sources of information
• Segmentation
• Targeting
• Positioning
• Marketing mix – price
• Questions

Budget Airline Definition

 Budget airlines don’t have free meals and entertainment
• Budget airlines don’t issue tickets
• Budget airlines have only one class – budget class
• Budget airlines use secondary airports to cut the cost
• Budget airlines sell directly to the public – no sale commissions
• Budget airlines promote journey ‘legs’ separately
• Budget airlines don’t reward frequent travellers with air miles

The concept of budget airlines was developed in 1971 by Rollin King and Herb Keller. They set up a ticketless airline, the Southwest Airlines, which offered the lowest possible prices. (1)

Looking at the definition of budget airlines above it may not be clear why the low cost carriers (LCC) are such a great success. It is because they met customer’s requirements by offering affordable fares and frequent flights from regional airports.

Market leaders between budget airlines are:

Other growing low cost carriers:

In 1986 a little known airline started service between Ireland and the UK. By copying American Southwest Airlines, in 1995 the small airline –Ryanair - was carrying around 2.4 million passengers per year. 1995 was also the first year for easyJet operating from Luton to Glasgow and Edinburgh with two leased Boeing 737s. In 2006 these two airlines, carried together over 30 million passengers on more than 200 routes from over 100 airports (Appendix 1). The revenue generated by UK airlines is estimated to have reached £16.74bn in 2006, compared with £15,36bn in 2005. The number of

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