can long haul low cost airlines be successful

While Frontier and Delta are both popular choices of airlines for Americans, Delta has become more of a household name because of their friendlier service, more comfortable cabins, and their limited extras fees. Frontier airline still is a worthy competitor by being cheaper, but they also have many added on fees for things that are free with Delta. Overall, Delta knows how to take better care of their customers and make sure everyone is satisfied.

As a result the cost-per-seat mile is expected to be 10% lower than for any other aircraft and has 30 percent lower airframe maintenance costs than any comparable product and is available for revenue service.

pilots, and new next generation aircraft acquisitions to carry the airline proudly into the next 75

In preparation of this report, the core focus would be placed on the generic discussion on Air New Zealand short and long-haul operations. This report assumes that all information collected reflects the current market position of Air New Zealand and

Hard to compete against the large airlines not only for customers but space at the airports for their airplanes.

• Propensity of buyer to switch to other alternatives is low because cost like - pilot training cost + mechanics + engineers +maintenance cost are also high.

Although the full-service airline cannot provide cheap fares as the low cost airline, they are still remaining their competitive advantages. The good quality of service such as entertaining facilities provided by the full-service is their largest competitive advantage that cannot be replaced by the low cost airlines. Cento (2009) writes that the major objective of the hub-and-spoke network in full service airline is to provide full coverage of as many demand categories as possible. Therefore, the full service airline is still occupying the market in premium travels. In order to

Every company go through challenges. It is part of the game. The key to this situation though, is to know how to turn a weakness in to a strength, or a threat in to an opportunity, and gain all the positives that a company can get. Most of the times people do not understand that a company needs these challenges to develop in a better corporation. It is impossible for a business to grow and improve without difficulties. That being said, Southwest Airlines has multiple challenges, but the company is whilling to change these weaknesses in to strengths.

Another emerging trend in the past five years has involved the progress made on open skies agreements between the United States and other countries. Open skies agreements serve to liberalize Orlando International Airport transport markets between the two signing countries or parties in the agreement. These agreements remove government restrictions, such as limits to the number of flights any one airline is allowed to operate per week between countries. The removal of these limitations has opened some routes up to increased competition, by allowing Orlando International Airport to fly more frequently and making these routes more accessible. Orlando International Airport could not previously justify the capital expense of operating on routes with limited flights are now able to profit on routes with high demand.

The opening of new markets within the EU exposed many national carriers to strong competition. This trend has been furthered by the continuous liberalization of the global aviation industry and specifically the recent OpenSkies agreement between EU and the US which allows the national carriers to arrange the Atlantic flights from the airports that are not airlines’ ports of origin. (BATA, 2010).

The saturation of many of their markets by other competitors (both air and land – particularly AWE along the eastern seaboard of the United States), as well as previous mergers and acquisitions, forced the market to become an oligopoly; where one competitor makes a

The main reason for the low-cost subsidiaries’ failure is the airlines’ corporate strategy. By launching a LCC as a unit inside the same corporate structure (e.g., single scheduling and pricing centre for United Airlines’ and Shuttle’s low–cost flights), traditional airlines limited the LCC’s flexibility and independence. By building a low-cost carrier on top of a traditional carrier cost-structure, the parent company was also tempted to think low-cost when setting ticket prices, but not trying (or being able) to reduce traditionally high costs: the airline had now two unsustainable business models instead of one!

Reduced the comparison sample size had to include only low-cost airlines with positive earnings. The average P/E ratio is skewed towards Frontier’s outlying performance. By using the median P/E ratio of comparable companies seem to provide a more accurate estimate. With predicted earnings per share in 2002 of $1.20, JetBlue’s price per share would be $34.2.

Operations in international and/or foreign countries will create significant operational challenges. Differences in governing laws and regulations for the airlines industry, business, and employee relations will become challenging. Interpretation and intent for various laws can and will provide ambiguity that must be dealt with. Research shows that various international airlines continue to be plagued by high costs and poor service (Ramamurti & Sarathy, 2007).

A low cost airline generally has many features that differentiate it from the traditional carriers. These features include ticketless travel, online ticket sales, no international offices, no frequent flyer points, no free food and beverages, no inflight magazines, no club lounges, use of secondary city airports.