LCC of airline industry

 LCC of airline market Essay


Diary of Atmosphere Transport Supervision 11 (2005) 259–272

Passengers' perceptions of low priced airlines and full service carriers: A case study involving Ryanair, Aer Lingus,

Air flow Asia and Malaysia Flight companies

John N. O'ConnellГѓ, George Williams

Air flow Transport Group, College of Aeronautics, Cranfield University, Bedfordshire, MK43 OAL, UK


Direct competition between full service flight companies and no-frills carriers is intensifying across the world. US and European total service airlines have lost a significant amount of their passengers to low cost carriers, the knowledge now becoming repeated in the domestic marketplaces of Asia. This conventional paper attempts to supply answers into a number of critical questions: Exactly what the key motorists of each form of airline's business design? Is there a big difference in passengers' perceptions among low cost companies and total service incumbents in a older European marketplace and in a rapidly expanding Asian economic system? What are the principle explanations why a passenger chooses a certain airline unit? How could a legacy carrier encourage passengers to return therefore regain their particular domestic market share? These concerns are dealt with using data obtained in passenger online surveys that were just lately conducted in Europe and Asia. l 2005 Elsevier Ltd. Every rights arranged.

Keywords: Total service air travel; Low cost company; Passenger perceptions

1 . Introduction

The aim of this paper should be to compare passengers'

selection criteria between a complete service airline and a minimal

cost jar in a mature European market and in a

rapidly growing Asian economy. Online surveys have been

performed to ascertain for what reason passengers are going for

one particular airline over one other. This daily news contributes to the literature by examining right after in passengers' perceptions between two air travel models

in contrasting geographical markets.

The paper commences by reviewing the background of the

selected companies including traffic carried and operating

price performance. It then concentrates primarily on the

research that were carried out in Europe and Asia,

highlighting key п¬Ѓndings just like passenger qualities, journey purpose, booking methods, fares, con-

ГѓCorresponding writer.

E-mail addresses: john. farreneheit. [email protected]п¬Ѓeld. ac. uk (J. F. O'Connell). 0969-6997/$ - see front side matter r 2005 Elsevier Ltd. Almost all rights arranged. doi: 12. 1016/j. jairtraman. 2005. 01. 007

necting traffic, transporter choice conditions and types of trips undertaken in the last 12 months.

installment payments on your Background in the airlines surveyed

Low cost service providers have reshaped the competitive

environment within liberalised marketplaces and have produced

significant affects in the planet's domestic voyager

markets, which usually had recently been mainly controlled

simply by full support network companies. In European countries, 14% of

available couch miles have become provided by inexpensive

airlines, with all the two most significant players easyJet and

Ryanair accounting for almost 9%. These types of carriers have

pursued simplicity, efficiency, efficiency and excessive

utilization of assets to offer low fares. Stand 1 supplies a summary of the main differentiating characteristics

between incumbent network carriers and no-frills

planned airlines.

Prior to 2002, there have been no significant low cost

timetabled carriers within the Asia Pacific rim.



J. Farreneheit. O'Connell, G. Williams as well as Journal of Air Transfer Management eleven (2005) 259–272

Table one particular

Product highlights of low cost and full service carriers

Product features

Inexpensive carrier

Total service company






Cable connections

Class segmentation


Aeroplanes utilisation

Turn-around time


Ancillary income



Customer service

Operational activities

A single brand: low fare

Simplified: fare framework

Online and immediate booking


Secondary (mostly)


1 class (high density)

Spend on amenities


References: Air Transport Intelligence, 2003. Whizz air plans to lease ‘significant

minority' of fleet, Air Transport Intellect news, third November.

Air flow Transport Cleverness, 2004. Air flow Asia to issue RPF for up to 85

new plane, Air Transportation Intelligence media, 11th Summer.

Aviation Strategy, 2003a. Asia's emerging low cost carriers, Aviators

Strategy, May, 2–5.

Aviation Strategy, 2003b. Continental limitations to LCC expansion,

Modern aviation Strategy, January, 2 .

Barrett, S., 1999. Peripheral industry entry, item differentiation,

provider rents and sustainability in the deregulated Western

Doganis, 3rd there’s r., 2001. The Airline Business in the 21st Century.

Gilbert, D., Child, D., Bennett, M., 2001. A qualitative study in the

current methods of ‘no-frills' airlines with the UK

Gillan, D., Lall, A., 2002. The economics of the Internet, the new

economic climate and possibilities for airports

Ionides, D., 2001. Asian evolution, Air travel Business, Drive, 74–75.

Ionides, N., 2004. Man from the Moment, Flight Business, Apr, 27–29.

Lawton, T., 2002. Cleared for Take-Off—Structure and Strategy inside the

Low Fare Airline Business

Mason, K., 2001. Marketing low-cost flight services to business


Mintel, 2000. Visiting friends and relatives—UK, December.

Mintel, 2002. Brief breaks abroad, June.

O'Connell, J. F., Ionides, N., 2004. Space for all? Air travel Business,

Apr, 30–32.

O'Toole, K., Pilling, M., 2003. Marketing Combine, Airline Business,

December, 70–73.

Paci, At the., 1994. Market segments: the international VFR


Proussaloglou, K., Koppleman, F., 95. Air company demand: research

of market share determinants

Norwegian air, 2002. Gross annual Report and Financial Assertion. Ryanair,


Sreenivasan, Sixth is v., 2003. Low-fare dogfight harnesses, The Business Instances,

Singapore, 12 , 11.

Jones, G., the year 2003. In tune with low fares in Malaysia, Air Travel

World, May well, 45–46.

Turner, S., the year 2003. Comparison of traveling profiles and selection

requirements: a study of London—Amsterdam travellers, ATRS

Williams, G., 2001. Will Europe's charter service providers be replaced by ‘‘nofrills'' timetabled Airlines? Log of Atmosphere Transport Supervision 7,



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