Low Cost Carriers

Topics: Airline, Low-cost carrier, Southwest Airlines Pages: 7 (2229 words) Published: May 1, 2013
Concepts First Article
The major concept addressed in this article is the study of the operating cost performance and traffic carried by the LLC’s and the incumbent. The article suggests various marketing strategies of both types of carriers. Brand reputation is a theme that is consistent throughout the report. A study is undertaken in the article on LLC’s and incumbent carrier in the European market and in the Asian market. Practices First Article

Branding, as suggested by Egan, is a ‘halo’ that surrounds the product. Beneath the halo at its centre is the core and augmented aspects that are associated with the product (Egan, 2007). Low cost carriers (LLC) have created a brand perception of lower fares in the mind of price conscious customers. According to the research conducted in article 1 majority of the people surveyed who chose a budget airline did not look at any other airline when booking their tickets. This seems to indicate that the brand reputation of LLC’s has become embedded into the minds of consumers. The LLC’s have also created large network connections which are local and external Medias. The reason for this is because LLC’s uses these networks to aggressively promote their advertising campaign, these promotions allow customers to go from a stage of being aware of the product to taking action and purchasing it. Furthermore LLC’s pioneered the notion of eliminating the role of a travel agent by providing around the clock online booking services. In addition, services such as holiday packages are provided on the carrier’s website. These packages generally provide ancillary revenue for the airline as income is generated through the advertisements that are found on the carrier’s website. Another form of ancillary revenue is the service charges on in flight amenities such as food and beverages. LLC’s are able to provide their consumers with low cost tickets because they have pursued simplicity, efficiency, productivity and high utilization of assets which helps them to keep their cost per unit to a minimum. Along with this, the above mentioned ancillary revenue helps them to maintain profit margin. Research in article 1 indicates that LLC’s attract a younger age group of people because this age group generally tends to have less disposable income. People who travel in groups, that is, not singularly are also more likely to use an LLC. The European travel trade has often suggested that passengers who travel on a LLC tend to use the savings that were derived from the lower fares in staying at more luxurious accommodation, such as a hotel. On the other hand article 1 also talks about the incumbent airlines. The research shows that incumbent airlines tend to attract a older age group with higher disposable income. These are usually business travelers that travel by themselves, it also noted that these business’ where medium to large size not small, indicating that small business cannot afford to have their employees travel on incumbent airlines. Incumbent are also effected by factor other than fare such as service reliability, service quality, programs, comfort, safety and company policies. High reliability, as opposed to price, is said to be the principle reason behind consumer choosing an incumbent airline. Concepts Second Articles

The major concept of this article is the airport choice factors that LLC’s take into consideration to lower their overall cost and increase their revenue. Rapid check-in facilities, good passenger facilities and easy accessibility will increase the demand for the air carrier thereby the revenue and simple terminal and airport charges will decrease the cost. LLC’s generally tend to attract first time flyer as the low price appeals to them. Scheers suggest that, however, this does not apply to all LCC’s therefore it is important that an airport has either a high demand for LCC traffic or a positive economic forecast to increase demand for point-to-point traffic (Scheers, 2001)....
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Low cost Carrier Essay
  • Low Cost Carriers Essay
  • Essay about Ryanair Low Fare Airline
  • Case Study- “Ryanair: the Low Fares Airline- Future Destinations?” Essay
  • Low Cost Carrier Characteristics Essay
  • Is Low Cost Carriers Safe Essay
  • Essay about The Impact Of Low Cost Carrier On The F
  • Low-cost Carrier and Air Asia Essay

Become a StudyMode Member

Sign Up - It's Free