This website uses cookies to ensure you have the best experience. Learn more

Low Cost Carriers Vs Full Service Airlines Essay

1175 words - 5 pages

Research was conducted to understand passengers’ views and attitudes towards Low-Cost Carriers and Full-Service airlines. The research was focused on a group of passengers with one crowd using a Low-Cost Carrier and the other using a Full-service airline. The airlines that will be used in the research are Aer Lingus and Ryanair running in a fully developed European market, and Malaysia Airlines and Air Asia currently functioning on a recent developing domestic market in Asia. After conducting the survey, results show that the younger people are more likely to use Low-Cost service carriers with Ryanair accounting for 24% and Air Asia with 47% who all belong in the age group of under 25 years. 87% of the age group were travelling to visit friends and family and for education purposes of whom these trips were sponsored by their parents. It is apparent in these results that age is a factor in which types of aircraft to use for travelling. Adult passengers favour Full-service carriers because of the extra services they offer unlike Low-Cost carriers. Travelling in a group is also taken into consideration for preferred choice of carriers. As a result, leisure passengers who travels in groups tend to use Low-Service carriers compared to Businessmen who usually travel in alone tend to use Full-Service airlines. Findings show that Ryanair holds 40% of passengers travelling in groups and Air Asia with 31%. In terms of booking flights, 78% of Ryanair’s passengers prefer to use the website compared to Aer Lingus’ passengers with 16% who prefer booking their trips through travel agencies. Additionally, 93% of Ryanair’s passengers who were surveyed booked their tickets online indicating that Ryanair is the fifth most searched website worldwide that clearly determines the significance of its brand recognition (ADD Reference). Similar results were illustrated between Malaysia Airlines and Air Asia where the Low-Cost carrier’s passengers used the website as their method of booking whereas Malaysia Airlines’ passengers do the exact opposite method.
According to Lawton (ADD Reference) the price rates of Low-Cost Carriers would generally cost 50% lower than traditional Full-Service airlines. During 2002, Ryanair would charge its one-way fares at about 50 Euros. The Pricing approach adopted by Ryanair more commonly termed the ‘Ryanair effect’ had become a popular marketing strategy worldwide. Part of the Ryanair’s strategy for increasing market demand is the distributing of free tickets. In the first few months of 2003, Ryanair had distributed 100,000 free seats as a way to celebrate its opening of its new outlet at Bergamo. As a result, Ryanair received 90million passengers in 2004 and consequently offered 900,000 seats at 90 pence. Researchers have accumulated that within 5 years time, Ryanair would plan on giving away 50% of its flight tickets for free. Accordingly passengers’ perception of LCCs will thus expect lower fares from Low-Cost Carriers, especially...

Find Another Essay On Low-Cost Carriers vs Full-Service Airlines

Chaos in the skies – the airline industry pre- and post-9/11

1252 words - 5 pages their customers by eg. reducing on ground services and only offering point to point services. On the other hand there are the traditional Full Service Carriers providing the customer a broader range of services and opportunities. The Low Cost Carriers could win market share because of increasing customer price sensitivity, also business travel declined in 2001 41%. There was a trend of business travellers buying cheaper tickets -and to renounce

Airline Deregulation: Success or Failure? Essay

1284 words - 5 pages driven industry. Finally, the airline industry was in full competition. The results of deregulation were immediate fare decreases, more profits for the airlines, and more competition. New, startup airlines were able to compete without having to follow the same business model of the larger legacy carriers. Low cost carriers were able to introduce their low-frills, low fee offerings to the market. Intrastate carriers, which were once limited to a

Case Study - EasyJet

4803 words - 19 pages paperless operations, LCCs have much more efficient and cost effective distribution of resources that traditional airline companies or FSCsLower Crew Costs This factor is achieved through outsourcing the majority of activities (e.g. maintenance) and having fewer employees per aircraft hence maximizing their productivity*(Please see Appendix 4. - Low Cost Carrier Advantages Vs. Full Service Carriers)4. DRIVERS OF CHANGEIn this section we analyze

Qantas International: Analysis of the External Environment

2163 words - 9 pages -cost carriers (LCC’s) operating as international airlines, which are comparatively new entrants to the market. Because these low cost airlines are young, they do not carry legacy industrial relations constraints, making competitive business practices easier to implement, (The Economist, 2013). Taking this a step further, offshore carriers, whether they be low cost or full service do not have to navigate the complex Australian Employment

avaitionindustry analysis

1684 words - 7 pages government-owned industry, Indian aviation now dominated by privately owned full-service airlines and low cost carriers Private airlines account for around 75% share of domestic airline aviation market Airline business growing at 27% per annum: Ministry of Civil AviationMarket SizeIndia is currently the ninth largest aviation market in the worldIndias domestic air traffic grew at a rate, which is the second highest after Brazil according

Flying on empty - America's airlines

1184 words - 5 pages and refreshments just brings them down to the level of service associated with low-cost carriers. The low-cost merchants, meanwhile, helped by their youthful, enthusiastic staff and their simpler, point-to-point routes, offer a standard of service that frequently outshines the networks, not least in terms of punctuality. As the number of routes offered by no-frills airlines increases, the legacy carriers are forced to retreat even further

Opportunities and Threats facing the U.S Airline Industry

1560 words - 6 pages challenges and threats in the external environment like rising fuel cost, weak travel demand etc. Some airlines like Southwest, JetBlue and AirTran which implemented a low cost structure remain profitable although the margins have suffered. Another factor that contributed to the profitability of these carriers is the higher productivity of their labor force and use of technology to improve operations and management. A recent survey of the

The No-frills airlines

1573 words - 6 pages position which, from the point of view of the traveller, is of interest from the perspective of greater competition on fares proposed by the charter companies.Low-cost scheduled airlines have revolutionised short-haul air travel, particularly in the UK and Western Europe. The rapid growth of low-cost scheduled carriers in Europe is in sharp contrast to the charter airlines who have seen traffic stagnate or even decline. As the no-frills sector

Analysis on AirAsia

1637 words - 7 pages business focused on the full service, while the new business model focuses on using digital technology to make the business becomes more efficient, and thus, leading to cost advantage. Facing the digitalization era, Air Asia has emerged as one of the best performance company in airlines industry. Before I start making this assignment, I have a bit description about the AirAsia. AirAsia was established in 1993 and started operations on 18 November 1996

The Airline Industry

1551 words - 6 pages alliances with other airlines. The growth of low cost carriers (LCCs) in the U.S. and elsewhere is arguably the single most important factor currently shaping the airline industry. Low cost carriers (LCC's) increased their share of the market from 23 percent to 30 percent during this time period, bringing prices down on many origin-destination routes ("city-pairs") to the benefit of air travel consumers.The rapid growth of LCCs has commonly been cited

The Structure of the Airline Industry

2577 words - 10 pages of the network system but eliminate the costs of complexity, offering network services at a premium the consumer is willing to pay. Thus, to counter the threat from low-cost competitors, major airlines will need to create their own budget or regional carriers for the point-to-point routes structure & diversified into related businesses to broaden their customer base, to provide services such as aircraft maintenance & catering to other

Similar Essays

Low Cost Airlines Essay

1851 words - 7 pages challenges for both operators. "The focus exerted by the low-frills carriers on one specific market segment has translated into a loss of control by the traditional carriers over a previously secure traffic base." (Morgan Stanley, 2002)On the other hand, full service traditional scheduled airlines, are widely considered to offer superior standards to Low Cost Airlines or Charter Airlines due to; a larger seat pitch, higher service levels, more

Low Cost Airlines Success Essay

992 words - 4 pages successful innovation which these carriers introduced into Europe was the provision of easily accessible scheduled short-haul services at very low unrestricted fares" .Ryanair and Easyjet are the two most important low-cost airlines in Europe. Both of them dominate two-thirds of the European Low-cost airline market . Their success is not just consequence of their reduction-costs policy, they have implemented new technologies in their operational and

Pricing Strategy Of Low Cost Airlines

5130 words - 21 pages pricing strategies have been used to generate new traffic in a market while winning customers away from traditional carriers.The terrorist attacks of the 11th September 2001 occurred during the collection of the data and therefore the impact of these attacks on the air fares offered will also be considered.3. MethodologyThe low cost carriers chosen for investigation are all distributed directly, without use of travel agents or GDSs. The airlines

Scope For Competitive Advantage: Australian Airline Industry

613 words - 2 pages , they must maintain a sustainable cost advantage.This scope is considered a big threat to competitors. However, full-service carriers can also gain an advantage by minimizing costs. Normally, airlines can reduce costs through three channels.1) lower input costs : By using single aircraft policy to reduce maintaining cost, or using lease aircraft.2) cheaper product design: Operating single class flight, no on-board service such as free meal or