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Low Cost Carrier Analysis

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Low Cost Carriers (LCCs) emerged after deregulation and they became a new model of airline carriers in the airline industry. Nowadays, LCCs are popular carriers for travellers because their air fares are cheaper than traditional carriers and LCCs made air travel become common in the world. This essay analyzed the differences between the customer products offered by Network carriers and LCCs based on they have different business models that exist in the industry today, the analysis include low cost carriers products and full service carriers products, and low cost short haul and long haul low cost. Moreover, this essay evaluated how these models are being driven by market trends and global competition. First of all, this essay analyzed …show more content…

Network carriers used major airports due to these airports as the mainly airport in the city, also almost these airports as a hub of the hub and spoke network that offer to carriers operate in the hub and spoke network and assess to other airports through used their airports. For the LCCs, they mainly choose secondary airports to operate their business. This is because secondary airports which can offer a lower charge to carriers such as landing fees etc., so LCCs can though use secondary airports to reduce their operation cost. Also, LCCs can get a short turnaround time in secondary airports due to these airports are not busier than primary airport, so they can turnaround faster that reduce the airport parking fees. Thus, customers select network carriers almost landing at major airports of their products, if they choose LCCs, their products would land at secondary airport. For instance, network carriers and LCCs they would use difference airports when landing in Bangkok, Thailand. Cathay Pacific (CX) which is a full service carrier, they would use Suvarnabhumi Airport due to this airport is a primary airport in Bangkok. But Don Mueang Airport used by AirAsia which is a low cost carrier, AirAsia would use this secondary airport for their …show more content…

This is because they are offering premium services for passengers such as free food and beverage, in-flight services and entertainment etc. Also, full service carrier provides these service to passengers that they need to use more cost, and they expect people to pay a lot of money for the luxury offered, so they have to set a premium price which can cover the cost as well as make profit. For the low cost carriers, they set a low price for their product. This is because they want to attract people who hope to get a low price for their air travel, such as student and price sensitive business travelers etc. As a result, their operations with no frills to passengers such as no free meals, and LCCs offer onboard selling to customers who have to pay for extra services that they can reduce their operation cost for extra services and get the additional revenues. Also, LCCs mainly choose secondary airport for their operations what can reduce their operation cost too. Due to LCCs which reduce cost in many aspects, so they can offer low price for customers. Thus, between their customer products, LCCs' air fares are cheaper than network carriers' air fares, and the low price for LCCs' air fares which are 60% or more below network carriers. For example, between CX and UO, they have flight to Kansai International Airport in Japan from Hong Kong International Airport. Same journey at nearly departure time

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