Budget Airlines

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Task Three: Budget Airlines

CONTENTS
• Who and what are budget airlines
• Marketing environment
- Micro environment
- Macro environment
• Sources of information
• Segmentation
• Targeting
• Positioning
• Marketing mix – price
• Questions

Budget Airline Definition

 Budget airlines don’t have free meals and entertainment
• Budget airlines don’t issue tickets
• Budget airlines have only one class – budget class
• Budget airlines use secondary airports to cut the cost
• Budget airlines sell directly to the public – no sale commissions
• Budget airlines promote journey ‘legs’ separately
• Budget airlines don’t reward frequent travellers with air
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However some operators have reversed this, and are paid by local governments to land at some airports, as they expect to gain economic benefits from this.

Media has a great impact on customer’s choices. Budget airlines have recently been mentioned by the Media as the least environmentally friendly way to travel. In society concern with ‘green issues’ budget airlines may need to switch in close future their marketing focus from rock bottom fares to environmental responsibility.

Key microenvironmental issues likely to occur in next 3 years:

Continuation…

The success of budget airlines forced traditional operators to lower their prices by adapting internet sales and yield management techniques. However they still struggle to compete with low prices offered by the LCCs. Further reductions in traditional airline ticket prices are expected.

The railways are likely to remain dominant for short journeys as most of the LCCs use small airports, which are often difficult to reach without a car. Rail operators are also improving offered services and cutting down their ticket prices by selling through the internet and allowing passengers to find lower fares when booking in advance.

The LCCs are a serious threat to regular airlines. British Midlands responded to the competition by launching its own budget airline ‘bmi baby’. Following its success more traditional carriers may decide in future to launch their own ‘no frills’ airlines.
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