Sample Essay

Low Cost Carriers provide for air travel services at very low costs as compared to traditional airlines, by reducing many of the services offered to the passengers, during the overall lifetime of the service. Benefitting from the current geopolitical scenario worldwide as well as technological advancements, this industry uses any of the following strategies to cut down on the overall costs:

  1. 1.      Brand Extensions – Aviation companies operating in low cost areas are mostly acquisitions and acquisitions by companies operating in the industry for a long time, with an existent brand image. Most new low cost carriers enjoy enhanced brand equity, derived from the parent company’s practices, reputation and involvement.
  2. 2.      Fleet of similar type – Having this strategy allows for a reduced investment, both cost and time-wise for regular maintenance, availability of spare parts, personnel training etc.
  3. 3.      Convenient Fares ­–  LCC[1]s charge one way fares for passengers instead of conventional round trip arrangements, allowing for consumers to be more flexible in choosing their desired airline
  4. 4.      Point-to-Point transfers – This allows for maximum usage of the aircraft, as well as saving up on time of the transfer of baggage, passengers as well as transit. Point-to-point transfers are very quick and efficient as compared to the traditional hub-and-spoke strategy of flight transfers.
  5. 5.      No Passenger Differentiation – Low Cost Carrier airlines use single class status for all passengers’ classification and seating
  6. 6.      Human Capital Utilization – Low Cost Carrier Airlines employ lesser amount of personnel, training them to perform multiple duties, ensuring maximum utilization of resources, in lesser amounts of cost.
  7. 7.      Online Purchase – Through the elimination of travel agents, and support for purchase of tickets using the World Wide Web, allows a large amount of cost saved, in lieu of convenience, availability and ease of access.
  8. 8.      Value Added Services – Virgin also provides for additional services while in flight, such as additional viewing time of its satellite television, on-board meals and other purchases.

[1] Low Cost Carrier

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