Low cost airline attacks due to more sustainable business models

Low cost airlines have made progress on every continent. But larger airlines with wider networks still carry the majority of passengers and drive most of the world’s aviation stories. Low-cost airlines are often thought of as bare bones or lack futures-focused features, with JetBlue changing that dramatically in the early 2000s and the South West becoming customers despite being stressed at first because of the things they don’t deliver.

As the global pandemic has affected air travel in unprecedented ways, it is becoming clear that being the largest does not always translate into being so sustainable. Low-cost carriers are becoming more aggressive, growing to previously unavailable locations, and treating the pandemic with greater relative potential. That’s because their business model is better than the big legacy airlines, and the advantages of low-cost business models offer the best flexibility from external chips.

Not everything is for everyone

Large airlines often spend too much time trying to sue customers who pay something more than the lowest price. But they also talk a lot about circulation with low-cost carriers and how those customers who are more price-conscious are important to their business. This attitude of “everyone who flies on our customer’s plane” means that the major airlines are not particularly good at serving any of them. Delta Airlines is very special – they have clearly built their airline to serve corporate business customers and spend less time worrying about the customer paying more low and price conscious. Because they are more focused than their two biggest competitors, America and United, they are traditionally performing better than both. Low cost carriers recognize that they can serve part of the population well and largely avoid the rest. This will allow them to adapt their business to be great for one set and not so good for others, rather than gradual for all. This actually works in another industry. Why else does Chick-fil-a not sell hamburgers or pizza?

Problems = Costs

This access to everything for all complicates large airlines, and these problems create costs that cannot be fully covered by lower fares. Flights of different sizes for markets of different sizes certainly make sense, so large airlines have complex fleet types to serve everywhere. Low cost airlines limit their fleet and simply do not serve the markets that they cannot reach profitably with their limited fleet types. Complex fleets create multiple training cycles for pilots, and will require more additional parts and mechanics. If two types of aircraft visit one station on a day, the airline needs support for both types. Some people pay for bags, but others are cheap? That creates more training and different technology. Large airlines consider this a cost to doing business. Low cost airlines sweat every detail.

Identify the “intermediate good” side of the business

“Good Intermediate” as defined by economists is one that will be used in creating a final product. Very few people are on planes because that is their goal. The end result is the vacation, business meeting, homecoming, etc. As a result, people see air travel as the cost of their journey, not part of it. Waiting online at Disney is hard, but you’re still on vacation. Stay in line at the airport and you will be kept further away from your holiday. Because of this, even those who are able to pay more often are not willing, because they see this part of the journey as a necessary evil. Look at where buyers coming from low cost airlines will go. You will be surprised how many hits at the local Ritz Carlton. Recognizing this, low cost airlines achieve what large airlines cannot – meet the real need of most (low cost) passengers if they can be reliable and friendly at the same time. Interestingly, reliability is cheaper than constant temptation, and laughter is free.

Conflict creates opportunity

Since the outbreak has been with us, Southwest has announced a service to Chicago’s O’Hare and Houston’s Bush Intercontinental airports. Spirit Airlines has serviced Orange County Airport, a major airport in Southern California. Explaining this trend, CEO Ted Christie said, “So we’ve looked around the country and in Latin America and tried to find out if there are areas where we want to be. that we may have a chance to get in. “The new airports for these two carriers are not because they did not know that the airports existed before. This is because the disease is spreading has regained previously inaccessible airport buildings The major airlines withdraw, and the low-cost airlines move in. The contract announced by JetBlue recently with American Airlines being a different kind but as the only aggressive one.JetBlue has created the ability to bring more low fares to limited northeastern airports simply because America recognized that JetBlue serves these routes more efficiently. If America could have supported a loss, this opportunity might not have been possible for JetBlue.

In 1996, a board game called Air Baron was published. In this game, each round player has to decide whether or not they should be in a fare war. The advantage of a fare war is that it makes it easier to grow, expand, and get a share from competitors. However, when in a fare war no money can be made, and you win the game by getting the most money at the end. Low-cost airlines have changed this game by making it possible to make money while creating a fare war, making them the real Air Barrels of today.