Impact on tourism development: Low-cost airlines is conducive to generating new tourism demand; In China, most of Low-cost airlines are developing in the secondary airport, while expanding existing route network. It is developing independent travel let passengers freely. Competition in the short-haul routes, low-cost airlines to make people have more opportunities to travel (Print edition, 2014). Low-cost airlines have greatly influenced both domestic and international tourism demand. Low-cost airlines not only have local routes, it needs to be developed to international routes, it will bring more profit for the local tourism industry.
Ancillary fees exclude cost for extra service from the unit ticket price thus leading to a lower price for consumers in a price sensitive market, while customers can choose extra service they want by paying extra. For instance, in 2010 the US airline Spirit introduced an overhead bin fees as an effort to unbundle every aspect of an air tour, so customers can decide which service they want to pay for and become satisfied. Spirit has the historically highest growth rate of revenue in ancillary that year. Embrace wifi The world population are getting more used to technology. People will be appreciated if they can use on board WIFI.
The availability of cheaper tickets stimulated new demand for air services and since their launch the low cost carriers have expanded tremendously their market share. Their successful philosophy has been also recognized and implemented in other industries such as rail and coach operators, hotels or car rental providers (Budd & Ison, 2014). 3.2. Characteristics of low cost carriers Even though a universally accepted definition of low cost carriers doesn´t exist, they generally can be distinguished by the other airlines because of the fact that they have a common cost-reduction strategy on these elements: • Single aircraft fleet: using only one type of aircraft they can reduce the costs of maintenance, training, spare parts and also negotiate discounts with the
So, if prices are too high, there will be a large number of seats that are left open on flights, but if prices are too low, Southwest Airlines will have full flights, which could create aggravation among travelers as well so low profit levels for the company. So, identifying these aspects when setting their seat prices will be a huge advantage for the company. Southwest Airlines also needs to recognize the atmosphere of their flights. Having friendly flight attendants, creating a “comfy” design, and offering a number of on flight amenities will allow the atmosphere of a Southwest Airlines flight to be a positive one. Comparing these aspects to other rival companies and ensuring that they are at the forefront will give the company a high level of competitive over their rivals.
As British Airways have marketed itself from low price economy up to first class – higher priced tickets they have been able to reach a larger variety of people traveling with diverse needs. "The Economy pricing strategy is for people who want low priced tickets. The medium-value pricing strategy is for people who require some of the fringe benefits and the Premium pricing strategy is for people who like to travel with all the high-class benefits provided by the airlines" (Bhasin). By offering many different onboard classes, BA appeal to all different social classes and with hundreds of destinations on offer they aren't leaving anyone
Also, some airport hubs cannot consolidate traffic bound for many itineraries. Having this limitation and knowing the fact that some passengers prefer non-stop flights, consideration of both hub-stop and non-stop routing strategies can be more cost-efficient than a pure hub-and-spoke network (Jeng 1987). In other words, non-stop flights are always the most desirable in terms of convenience but on the other hand less desirable in terms of price for price sensitive customers. Moreover, the stops at the hub airports increase the expenses for the airline companies due to the facility charges and landing fees. Therefore, the airlines can generate more revenue by considering these key parameters and applying best network routing
This would shorten the turnaround times and enhance equipment use – SWA’s flights can spend 3 hours more in the air per day than the industrial average. By having more frequent flights and increasing the capacity, these would allow SWA to enhance cost-efficiency despite its low fares. SWA also adopts multiple approaches to save cost. From the hardware part, it only flies a single model of aircrafts, Boeing 737s, which is fuel-efficient. This
How to Reduce Small Business Travel Costs Do you think you can’t reduce the costs of small business travel? Do you think only big companies do it? If you are wrong, studies have shown that the rate of spending by small companies on travel is greater than the rate of spending of large companies, because of the lack of small companies to a simplified system of travel expenses, travel is the best way for companies, especially small companies to get new customers and investors, so we find Large companies are well equipped to travel. They have a clear travel system and sufficient money to support their employees while traveling. So if you want to reduce the costs of small business travel in a few simple steps, follow these steps: Reducing air
fierce between 2 LCCs or when a LCC plans to enter a full service airlines sector. This is also true the other way around. Bargaining Power of Buyers can be ranked as moderate with LCC’s coming into the picture since the deregulation of the industry and internet making it easy to book and fly. Customers tend to stick to known companies which have a strong presence in the market. Thus, it is safe to say that there is low-to-moderate bargaining power of buyers in this sector Bargaining Power of Suppliers The three main costs for the airlines are fuel, labour and Airport charges.
The simple task of booking flight tickets has become a science in its own right. People, these days, prefer booking tickets themselves instead of buying from the travel agents in order to save more on their flight tickets. The travelers have a myriad of variables to take into account when plotting air travel – from the distance of journey or the type of services offered – but the other side of the story is that the airlines companies try their best to ensure maximum revenue while ensuring offering best prices on tickets. The airlines companies use the most sophistic software to adjust fares dynamically that consider the performances of its routes and services around the world. Understanding the factors that affect your flight ticket prices used to a confusing process in itself, but not anymore as the codes have been decoded by the experts and we’d like to share with you some of the top factors.