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.
After the deregulations in the airline industry, the revenue management techniques have become inevitable for airline seat inventory control. Revenue management is the process of selling the limited perishable capacity to the right customers at the right prices so as to optimize the total revenue. Classic examples of RM can be found in the airline and hotel industry where there are finite number of seats and hotel rooms, respectively (Mou and Wang 2014). The main problem in airline revenue management is to determine booking control strategies. Airlines seldom charge the same fare for each seat on a flight, but instead price seats based on customer’s willingness-to-pay.
Ryanair also use the best current low strategies to provide them bigger profit by extensive use of ancillary fees to balance their low ticket prices. It allow Ryanair to make up the revenues lost through lower ticket prices by emphasis on ancillary revenues from the sale of a ticket and include sales of related items such as hotel reservation or car rental as well as charges for food, checked baggage, priority boarding, and other items. The other strength for Ryanair is it use new aircraft model, the Boeing 737-800 that allows minimization of training and maintenance costs. This model aircraft also provide efficient management of spare parts inventory and more flexible scheduling of flight crews. Ryanair has the advantage to negotiate on the price concession for this aircraft model as they purchase a large number of aircraft from Boeing.
Charter flights are offered by low fare as well as offer schedule services that might be a big competitor to Ryanair. Even though Ryanair has lowest fares but in the survey by The Telegraph, it is shown that cost of a flight on a low-cost carrier can escalate when all fees added. Thus, it makes the price of the traditional flight such as British Airways become more
If Ryanair fails to fulfill the criteria of the security system, Ryanair may fail to get a Certificate of Airworthiness so they can 't run their business. This will give an advantage to their competitor due when Ryanair did not operate that 's means they can reduce their competitor in the airline industry. Besides, the Department of Transportation (DOT) was enacted legislation in response to European Union legislation requiring compensation and assistance to passengers in cases of delays or cancelled flights. Ryanair claims this matter is beyond the control of the airline. In addition, the European Union might increase the emission fees.
SUPPORT ACTIVITIES The support activities Air Asia followed in order to keep their business expanding are Firm Infrastructure Air Asia has a strong form infrastructure they have evolved from a basic LCC business into a global service provider, their complete focus is on the goals, providing cheap fares, exploring new markets and making the process simple. Human resource management Air Asia is an employee friendly firm they hire capable and multi skill workers so that they can over come the price in terms of human resource and can compensate for the low price airline, they also trainee their employees for better performance. Technology Development Air Asia uses different types of technology to minimize the cost and make the business easy and efficient. Yield management system (YMS) which is used to analyze the operating cost and expected revenue to the company. Computer reservation system (CRS) is a web based reservation and inventory system that helps as a direct sales
As Will Horton, a H.K. based analyst for CAPA Centre for Aviation agreed that Cathay Pacific will move to the much disliked 10-abreast economy seating from the standard, but 9-abreast will most likely reveal its plan in the near future said by the airline/s chief executive. Although the quality of server from the airport decreased due to the increased amount of seats, the prices of every air-ticket are cheaper than before. Date: Sunday, 22 December, 2013 Source: SCMP In 2013, Cathay Pacific Airways, Asia 's biggest international carrier ordered 21 Boeing 777X-9X jets valued at US$7.5
According to Airbus' John Leahy, the Boeing 787 Dreamliner battery problems will not cause customers to switch airplane suppliers. Aircraft prices Airbus and Boeing publish list prices for their aircraft but the actual prices charged to airlines vary; they can be difficult to determine and tend to be much lower than the list prices. Both manufacturers are engaged in a price competition to defend their market
Landing discounts encourage new routes/direct routes, new frequencies or additional capacity and to base an aircraft in the airport. Passenger discounts encourage passenger grow, transfer passenger grow and development of new routes and frequencies while avoiding congestion and night noise. Not all discounts are applicable to all airlines. For example some discounts from table..... are not always applicable for low cost carriers( discount for landing with a larger aircraft / transfer passenger discount). Low cost carriers usually operate single type aircraft fleet and operate a network
One of the impacts which is quite obvious is that Air Asia has expanded its services. Not only can people book flight tickets online, now they can also book their hotel and rented car at the same time. This will then impact Air Asia’s dominance over other markets slowly for instance the land transportation market and also the hospitality market thus bringing in more profit. Next is how the online booking system has impacted the reach of Air Asia. Without the online booking system, tickets can only be checked or bought at the counters in the airport or some travel agency but now, it can be done from anywhere in the