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Essay / Characteristics of Low Cost Carriers - 1874
The idea of entering the world of full cost carriers through low prices is not new. Already in 1977, Laker Airways founded the “Sky Train” between London and New York. Although this service was never successful, more and more low-cost airlines were founded during deregulation and the development of its own low-cost strategy began. When we look at the home pages of low-cost airlines today, we can only see that almost all of them are operating successfully despite the problems of September 11, 2001, SARS in 2002 and the Iraq war in 2003. Southwest, for example, showed a positive net profit for the period 1990 to 2002 (Appendix A) and is not in the lead. . 5 of America's Most Admired Companies of 2005 (home page). Ryan Air was also able to increase the number of passengers carried from 5,000 in 1985 to 24,635,000 in 2004 (Appendix B). The success of the low-cost airlines had major competitive effects on the major full-fare airlines, many of which responded to the new competitor. by founding their own “low cost airline”, namely Shuttle by United, Continental Lite, Delta Express, Germanwings, etc. But what makes low-cost airlines so undefeated? In this essay, I would like to demonstrate some of the key success factors that have made carriers like easyJet, Ryan Air and Southwest successful. First of all, it should be mentioned that there is no single low-cost strategy; own concept, so the service offered varies between No Frills-Airlines and “quality airlines with lower prices”. Additionally, the idea of differentiation has also entered the low-cost carrier market as competition in this market increases. Nevertheless, there are some basic characteristics that every low-cost carrier has: destinations similar to full-cost airlines cost structures similar to charter airlines a new product and service concept a focus on factor pricing (Pompl, 2002) The main objective of low-cost carriers with these characteristics is to obtain a significant cost advantage to be able to reduce the ticket prices of full-cost carriers by almost 50%. It is therefore necessary to introduce several new concepts in road management, operations, distribution and service management. Let's take a closer look at the concepts and therefore the key success factors of low-cost airlines: Flight plan: low-cost airlines mainly fly on the short-haul market.