Preview

Low cost Carrier

Good Essays
Open Document
Open Document
2771 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Low cost Carrier
Introduction
The airline industry has been plagued by factors such as overcapacity, commoditization of offerings or competition, high level of rivalry, entry of low cost carriers. other factors include several macro-level socio economic troubles, SARS crisis, 9/11 attacks, bird flu, Asian Tsunami and other terrorism concerns, due to this there has been a big impact on airline profit.
As market condition is continuously changing, it is difficult to predict the future of the airline industry. the overall industry as we see it is in a weak position, even though the demand is rising. companies now are providing additional services at low cost and decreasing the fare to attract the customers. this assessment will underline the following issues and airline strategies, * Revenue and cost structures of full service network and low cost carriers. * financial challenges confronting the airlines * key factors affecting revenue and cost * approaches taken by airlines to maximize revenues and reduce costs * analyzing Singapore airlines past 5 years bank statements

Low cost Carrier
In a nutshell, low cost carriers are airlines that operate a point-to-point network, these airlines usually have a lower pay grade then the full service network airlines and the offer no extra services when on flight.
Full service network carriers
Full service network carriers or Legacy are airlines the focus on providing the customer an abundance of services either on flight (IFE) or at the airport (business lounges), they even include different service classes and connecting flights. these airlines are usually referred to as hub and spoke airlines. http://ec.europa.eu/transport/modes/air/doc/abm_report_2008.pdf Revenue and cost structures the operating costs of any airlines is divided into 2 section, which is operating and non operating costs, o operating costs are then further divided into direct and indirect costs.

You May Also Find These Documents Helpful

  • Powerful Essays

    Over the many decades, this industry has existed; several airlines have declared bankruptcy and struggled to stay alive once on the other end of the bankruptcy. Very few of these chapter 11 filing airlines have truly endured the hard times and succeeded. This industry is facing a financial predicament and the future for the airline industry does not look good. The predicament that these industry faces that were accelerated by external shocks. According to Wilson (2005) the war in Iraq, the terrorist attacks on 9/11, the outbreak of Stars, and the crash of the stock market bubble of the millennium is some of the causes of the financial crisis that the U. S. airlines are facing, which has led to a $32 billion loss for the industry.…

    • 2884 Words
    • 12 Pages
    Powerful Essays
  • Best Essays

    Mainline carriers are represented by network carriers, which have their own "hubs” which serve in the most efficient manner the greatest number of passengers and by low-cost carriers, which generally don 't have a hub and only offer flights between a limited number of cities. Another type of passenger airline is the regional carrier, that operates short-haul and medium-haul scheduled airline service and connects smaller communities with larger cities and hubs. Cargo can be carried in cargo holds of passenger airlines or on aircraft designed exclusively to carry freight. Cargo carriers in the air transportation industry provide only air transport from an airport near the cargo 's origin to an airport near the cargo 's…

    • 4943 Words
    • 20 Pages
    Best Essays
  • Good Essays

    I believe that a company’s biggest problem is the major airlines will become efficient and compete on cost with the company. In short-term, they enjoy success in low fare position with low cost for few years with the competitive advantage. In long-term, the competitors will learn how to decrease their cost so that the company will lose their position. In other words, they can not enjoy the competitive advantage. Finally, the problem can cause the company about a slowdown in entire company’s growth or they would downsize their business without proper preparation.…

    • 445 Words
    • 2 Pages
    Good Essays
  • Good Essays

    The U.S. Airline Industry

    • 1205 Words
    • 4 Pages

    Reliability of Service – An airline with a reputation for reliable service has a positive image among customers, which can lead to repeat business. Issues with reliability include mishandled baggage, the on-time arrival of flights, overbooking flights, and passenger complaints. Those airlines that are able to control these elements provide better service to the customer.…

    • 1205 Words
    • 4 Pages
    Good Essays
  • Good Essays

    Spice Jet

    • 706 Words
    • 3 Pages

    b. While the industry has to face a lot of competition, the industries that airlines have to deal with are highly monopolistic. As an article in The Economist puts it "Two firms-Airbus and Boeing-provide the majority of the planes, and airports and air-traffic control are monopolies." Given this, airlines are not always in the best position to control their costs.…

    • 706 Words
    • 3 Pages
    Good Essays
  • Better Essays

    The airline industry is facing one of its most difficult times in history. A worldwide recession along with the terrorist attacks of September 11, 2001 have led to a decrease in passenger traffic, reduction in revenue and rising fuel prices. Additionally, airline companies face the increase competition from new entrants. The shortage of pilots has also caused problems for the airline companies.…

    • 2432 Words
    • 10 Pages
    Better Essays
  • Powerful Essays

    Easyjet Assignment

    • 1755 Words
    • 5 Pages

    Along with the development of airline industry and the increase of air traveling demand, low cost flights become more and more common attracting much effort to research pricing strategies in this field in order to reach improvement opportunities. There are some different methods about the way carriers hold their flights. Studying this issue can help managers understand clearly how the prices of low cost airlines in fact could be opposed with normal ones, so they can adjust their oriented goal to achieve good performance…

    • 1755 Words
    • 5 Pages
    Powerful Essays
  • Powerful Essays

    At the same time, the airline industry exists in an intensely competitive market and it is extremely sensitive to costs, such as fuel, labour costs and airport taxes. Thus, recent changes in oil prices, new conditions of economic integration concerning governmental subsidies for airline companies and other changes have significant influence on the situation of the airline industry: merges and acquisitions take place simultaneously with the entry of new competitors such as discounters in the market. Therefore, the future for airlines holds many challenges, and the company’s success depends on how effective the company will…

    • 2190 Words
    • 9 Pages
    Powerful Essays
  • Satisfactory Essays

    The airline industry is so saturated that there is hardly space for a newcomer even to squeeze its way in. The main concern for this is the cost of entry. The airline industry is one of the most expensive industries, due to the cost of buying and leasing aircrafts, safety and security measures, customer service and manpower. Another major barrier to entry is the brand name of existing airlines and it is really difficult to lure customers out of their existing brands.…

    • 342 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    An Airlines route planning emerges from the company’s vision and mission it has given itself. Whether airlines will serve long haul intercontinental routes, medium or short haul routes, primary routes within a region or a country, or feeder level sector, is determined directly from the owner’s or the management’s set of goals and purpose of business. Each of the above business segments has its own characteristics in terms of investments revenues potential, costs, as well as production requirements. The new airline 's pricing strategy will also set it apart from the pack and will form a key aspect of its overall marketing strategy.…

    • 1366 Words
    • 6 Pages
    Good Essays
  • Good Essays

    South West Airline is an example of a Low cost carrier they are known to be the largest in the world (Brightside.me, 2017). Their customer means everything to them, so they make it there mission to make their travel experience a great one. Some of the services or facilities they offer are as follows:…

    • 1089 Words
    • 5 Pages
    Good Essays
  • Better Essays

    Classic Airlines

    • 1119 Words
    • 5 Pages

    The first step for Classic Airlines is to define the problem. Classic Airlines is facing high…

    • 1119 Words
    • 5 Pages
    Better Essays
  • Satisfactory Essays

    This analysis aims to advise the executive on various points that need to be considered before a decision to enter the low…

    • 506 Words
    • 3 Pages
    Satisfactory Essays
  • Better Essays

    Full service airline is defined as an airline that focuses on providing a wide range of pre-flight and onboard services, including different service classes, and connecting flights that are also operating a hub-and-spoke model (Reichmuth, 2008). According to Cento (2009), the core business of full-service carriers including passenger, cargo and maintenance.…

    • 1106 Words
    • 4 Pages
    Better Essays
  • Best Essays

    Competition in airlines industry is getting competitive nowadays. With the uncertainty global economy environment, high operations cost and the rival of low cost airlines (LCCs). Full service airlines (FSCs) have to work out its unique strategy to survival in the market in order to maintain the market share and profit margin. This paper analysis service orientated airlines in different FSCs where successfully influence its customers behavior and improve customer satisfaction by focusing on its service strategic better than LCCs. In the meanwhile, it also highlights the impact of FSCs use service marketing to maintain and establishing long-term relationship with customers.…

    • 2895 Words
    • 10 Pages
    Best Essays