The focused low cost strategy purposed to create a price advantage for the company. Usually, a company that use this kind of strategy more focus on a specific market niche, offering products to a narrow market segment instead of a broad one. The company then aims to be the cheapest supplier in the particular niche but not necessarily in the overall market.
There are two types of organization, which are the profit seeking company and the non-profit seeking company. A profit seeking company is a company that seeks profit as its primary objective, which is a complete opposite of a non-profit company that focuses a goal such as helping the community and that money is only a concern to keep the company operating. Most companies considered business to be profit seeking, which includes the restaurant, retail stores, insurance company and many more.
This is because AirAsia consists of different background of executive management members team from different kinds of industry professionals. Meanwhile, AirAsia is the low cost leader in Asia. The slogan “Now everyone can fly” make more and more people start to familiar with the brand of AirAsia. This low cost leadership can let all various income customers to have enjoyed the affordable flight fees. At the same time AirAsia provides comfortable seats, secure safety and a cleanliness environment for the customer so those customers feel comfortable during their fly times with the low price. Finally, AirAsia also has a strong promoter and advertising team to make more and more people start enjoy the flight of AirAsia and the culture of
Air Asia is the founder of low cost airlines in the Asia region since the advent of deregulation by Malaysian Government in late 90’s which in itself is a very important economic factor, without deregulation a low cost Airline cannot enter the market. For the reason that of Air Asia’s lower price, the factors affected are the
The airline industry in the Philippines started in 1941 when the Philippine Airlines was founded. PAL then operated as a monopoly in domestic travel. Then other airline companies emerged in the industry (Reference: PAL History, PAL Website). The airline industry is very dynamic. It changes from time to time. An airline company closes and another one opens. The changes are very drastic making it very interesting to study about. One thing that proves this fast changing pace is that PAL used to be the largest airline company in Asia. And currently, it is not doing well on its finances forcing them to lay off employees and downsize the company (Reference: Philippine Airlines Income Forces Cost Cuts
The airline industry has always been a fiercely competitive sector. Since the invention of low-cost carriers, also known as no-frills or
Air Asia leading airline was established with the dream of making flying possible for everyone. Since 2001, Air Asia has swiftly broken travel norms around the globe and has risen to become the world’s best. With a route network that spans through to over 20 countries, Air Asia continues to pave the way for low-cost aviation through our innovative solutions, efficient processes and a passionate approach to business. Together with our associate companies, Air Asia X, Thai Air Asia, Indonesia Air Asia, Philippines Air Asia and Japan Air Asia.
Low quality, no frills, lowest price base fare are features of the economy pricing model. Since Spirit Airline adopts 'the a la carte pricing model,' the basic fare paid buys only the flight itself and frills are charged separately. Furthermore, the airline asserts that customers should only pay for the services they request and should not subsidize other customers’ needs.More so, Spirit assumes that lower fares will stimulate the demand for air travel by attracting customers who would otherwise use other means of transportation. Hidden fees and questionable policies are dubious distinctions of Spirit Airlines.
Air has become the most preferred method of transportation for many people around the world and more travelers are looking for affordable ways to travel between destinations. Consequently, the increase in customer’s demand for cheaper fares has created an excellent business opportunity for low cost airlines to emerge. Low cost carriers have been successful satisfying customer’s demand for cheaper fares and reducing labor cost. “A high quality low-price entry strategy may seem very attractive at first glance. Obviously, an airline, or any startup firm for that matter, is likely to win a market if it can indeed provide a better product for a
Remember that all airlines have the same price of air tickets. Major airlines often charge smaller companies. I suggest you go and check the prices of smaller airlines and can get a cheap airline, with more or less the same quality of service.
American Airlines is one of the major American airlines who serves nearly 50 countries globally and also a member of the one world global alliance. The airline corporate headquarters are in Fort Worth, Texas. Over the years the airline expanded through the union or merger of 85 companies. Robertson Aircraft Corporation and Colonial Air Transport were the core of the foundation of this company. In 1921, Robert Aircraft organized first in Missouri as a general manufacturer and flying service who flew its first mail route on April 15, 1926 between Chicago and St. Louis, Missouri. The first flight flown by pilot Charles A. Lindbergh. A charter, Colonial Air called Bee Line formed in 1923, flew mail between New York City and Boston which began on
The airlines do not focus on the combination of quality and good service at a fair price; its focus is instead only on providing ultra low cost. It also charges customers for value added features and services. Thus the pricing is value added pricing. When compared to the competitors of Spirit for operating costs per seat mile; it is lower compared to other major airlines. The important points like encouragement to demand stimulation and preference for its low-cost model makes it successful for its low-cost pricing strategy.
A low-cost carrier (also known as a no-frills or discount carrier) is an airline that offers low fares but eliminates all “non-essential” services. The typical low-cost carrier business model is based on: – –
Over the years, company sustained low operation costs and tickets prices following well-developed strategy. Among other measures, it was able to keep prices low by flying only one airplane type, minimizing service and maintenance expenses, and convincing employees to cut gate turn-around times and make the airline more efficient (Fitzpatrick, 2005).
Flight Centre offers a very competitive price. The prices are usually are lower than its competitors when it comes to domestic and international flights. It provides the option of different prices ranges. These price ranges depend on the services that a customer requests. It provides economy class, business class, premium class, and first class price ranges. Due to its affordable prices and good services, it has grown to become a 13.5$ billion business comprising of more than 30 brands. It works had to keep up with the competition by providing best possible prices while ensuring customer loyalty (Flight Centre the Airfare Expert).