Low-cost carrier Essays

airlines: secret behind their performance Budget and premium carriers, success is the limit An air carrier requires a strong balance sheet as well as a highly visible brand proposition. It also envisages sound operational strategies, that evolve in a continuously dynamic environment. Although, the list could be exhaustive, operating characteristics like high margin routes, strong network on flight paths, value for money and low-flexible overhead costs are a few significant parameters. Additionally, over

of the three major international strategic alliances, Star alliance, oneworld, skyteam , often called as global airline alliances GALs. These networks of airlines provide their members with a resourceful international route portfolio at a marginal cost that would be very difficult to the reach through independent growth. yet still the provision of cross-border air service is constrained by international regulation. Since the Chicago Convention back in 1944 established the rules of airspace, international

Several experts believe that budget airline has reformed the entire airline industry and created a momentum for it to grow sustainably. Previously, the airline industry was experiencing a downturn in demand and surging production cost, which led to a profit recession. However, the price was regulated rigorously by the government, causing firms were not permitted to reduce price to stimulate customers demand. Such regulation has forced the fare gone high, and, thereby, customers could only select

one of the most iconic industries in the world. Nearing the twenty-first century, the industry displayed signs of deterioration, with carriers constantly entering and leaving the market. Nonetheless, the purpose of this paper is to analyze the fluctuating variable costs and slowing economy that have severely impacted the airline industry,

Operational Overview Southwest Airlines has illustrated resilience in growth over the past 40 years of operations by utilization of cost leadership and differentiation strategies to lure customers and enhance customer loyalty levels. By providing passengers with efficient customer service, low costs, and a point-to-point operational strategy, the entity has been successful in sustaining considerable growth rates. The entity has been known to focus on routes that have relatively high demand, while

however, after that year Kelleher hasn’t had to lay off an employee. The business strategy is “low cost airline provider with frequent service and no frills to customers who drive most of the time instead of flying” (Smith, 2004, p.27). However, there are three main approaches that Southwest follows to create their unique corporate culture and that is from their

reached VND 15,822 billion. 3. LITERATURE REVIEW Cost leadership strategy involves the process through which the company can produce or distribute goods and services at a lower cost than competitors within the industry. Firms pursuing this strategy commonly trade standard products combined with aggressive pricing. It targets a broad customer segment. Besides, cost leadership or "low-cost” strategy put emphasis on organizational efficiency. Attaining cost leadership typically requires aggressive construction

offered by competitors, thus reducing the cost to customers Southwest also reduced cost by focusing on a smaller number of routes and only flying one type of aircraft, the Boeing 737. By the year 1999, in the summer Southwest has now acquired 55 cities and 29 states that they operate out of, they fly more than 2400 flight a day Currently operating more than 500 Boeing planes to over 60 countries Facts: US’s most successful low fare, high frequency carrier Operates more than 3,400 flights a day 35

they employ. Some of them include being a low-cost provider, fuel hedging, maximizing market share at particular airports, etc. These strategies have led Southwest to announce record earnings of $1.1 billion in 2014 (Damaraju, 2015). CEO Gary Kelly, believes this is due to their “air train integration, fleet modernization efforts, and the continued growth of [their] rapid rewards program”. In 2015, southwest was scheduled to save $1.7 billion in fuel costs, which is above the market average (Damaraju

Southwest Airlines Co. is a major U.S. airline and the world's largest low-cost carrier, headquartered in Dallas, Texas. Southwest Airlines is "cheap airline" and famous, civil aviation industry, "cheap airline" business model originator. The airline was established in 1967 and adopted its current name in 1971. Southwest Airlines in June 18, 1971, created by Rollin King and Herb Kelleher. First flight from Dallas to Houston and San Antonio, is a simple and no additional services catering short-haul

Threat of New Entrants. In the airline industry, the arrival of a new airline can be disruptive, particularly since new carriers tend to focus on high-value route corridors and bill themselves as bargain carriers. On the other hand, the cost of entry into the market is fairly high, and that fact together with the industry’s reputation for lim-ited profitability makes such disruptions rather rare. The airline industry needs huge capital investment to enter and even when airlines have to exit the

1.0 Introduction to Strategic Management Strategic management practices the formation; achievement and reaching the major objectives executed by the management of the company, by considering the capital and a task of the internal and external environments in which the company wishes to compete. 1.1 Introduction to Singapore Airlines Singapore Airlines (SIA) is established in year 1972 with remarkable performance among its competitors in the industry throughout its 35-year-long history

those who make spare parts are also suppliers to Virgin Atlantic. With the consideration of the fact that Virgin Atlantic is characterized by their presence as a number of suppliers vying for business, it is no surprise that the suppliers power is low and Virgin Atlantic have the upper hand in their interactions with all the suppliers. However, in cases such as the supply of jet fuel, Virgin Atlantic have a diverse advantage, because of the expensiveness of the fuel and a premium product, “meaning

Operational Cost and Efficiency The work costs for Southwest ordinarily represents around 37% of its working expenses. Maybe the most basic component of the effective low-charge carrier plan of action is accomplishing fundamentally higher work profitability. As indicated by a late HBS Case Study, southwest carriers is the "most intensely unionized" US aircraft (around 81% of its representatives fit in with a union) and its pay rates are thought to be at or above normal contrasted with the US carrier industry

largest, and rapidly expanding cities in Texas. He also wanted to offer “low fares, convenient schedules, and a “no-frills” approach that was completely contrary to the standards of the established airlines” (Flynn, 2010, para. 1). Southwest continues its “no frills” approach and has become a leader in the airline industry. The leadership within the organization has developed and refined the Southwest Low Cost Carrier (LCC) business model (Raynor,

Southwest Airlines is a low-cost carrier. Southwest Airlines is the largest and most profitable low-cost air carrier. It was created in 1967 by Herb Kelleher; it became Southwest Airlines in 1971. It started off with three Boeing 737 aircraft and only served three major cities in Texas, which were Houston, Dallas, and San Antonio. By the end of 1988, Southwest was basically flying nationally throughout the continental United States. In 1989, it transferred into a major airline because it reached

Vision statement should be less than two sentences, the goal that motivates employees, and the future that the company wants to become or achieve. According to article ACSI: Low-Cost Carriers Lead Legacy Airlines for Passenger Satisfaction (2017), the score of ACSI of Southwest Airlines is 80 and this is the second highest score in the industry; the top score is 82 of JetBlue. The phrase “the world’s most loved, most flown” that

Southwest Airlines About Southwest Airlines Southwest Airlines Co. is the largest low-cost carrier in North America, and also the biggest low-cost airline company in the world. Southwest Airlines is an excellent company that has successfully implemented low-cost competition strategy in a highly expensive industry. It began to become the fourth largest airline in the United States from a small airline in the 70s last century in the gap between the big airlines. In 1971, Western Southern Airlines

a combination of several acquisitions and consumer demand for low-cost airlines. Strategy is “the direction and scope of an organization over the long term, which achieves advantage for the organization through its configuration of resources within a changing environment, to meet the needs of markets and to fulfill stakeholder expectations” The main strategy of EasyJet is “to fly between airports people want to fly”. EasyJet has a cost advantage compared to competitor’s airlines allowing it to offer

Southwest Airlines began flight operations with three Boeing 737 aircraft in Texas in 1971 providing affordable flights between major Texas cities. When those routes became popular the airline realized that they could compete with legacy carriers by being an affordable alternative to ground travel. This focus led them to continue growing a network of short point to point routes. What they discovered was that by offering short shuttle type service between cities they could gain a competitive advantage