Ecological scientists suggest the closing of a national marine park for one year for restoration purposes. It is owned by the county, which allows…
September 3, 2020
Effects of Fiscal Policy Think about how fiscal policy can effect your firm (Microsoft Corporation). Please address the following questions in a 3…
September 3, 2020

Choose one element of an archetypal low-cost-carrier business model from the list below. Explain how it reduces cost compared with a large international network airline. Why do global network carriers not incorporate this element into their business model?

Low-cost carrier business model characteristics (IATA, 2006):

  • Primarily point-to-point operations.
  • Serving short-haul routes, often to/from regional or secondary airports.
  • A strong focus on price sensitive traffic, mostly leisure passengers.
  • Typically one service class only, with no (or limited) customer loyalty programs.
  • Limited passenger services, with additional charges for some services (e.g. onboard catering).
  • Low average fares, with a strong focus on price competition.
  • Different fares offered, related to aircraft load factors and/or length of time before departure.
  • A very high proportion of bookings made through the Internet.
  • High aircraft utilization rates, with short turnaround times between operations.
  • A fleet consisting of just one or two types of aircraft.
  • Private-sector companies.
  • A simple management and overhead structure with a lean strategic decision-making process.
KM
Place Order