Low Cost Airlines Essay Example | Topics and Well Written Essays - 1000 words

Low Cost Airlines - Essay ExampleThe emergence of figure airlines is directly attributed to the transmutation of the global business environment. The major pokers which facilitated this trend are the deregulation of the European air expedition sphere the establishment of the European Union the 9/11 tragedy the rapid technological advancement and smorgasbord in customers lifestyle and preferences. It is irrefutable that the deregulation of the European airline industry primarily contributed to the rise of utter live carriers. It can be rec eithered that deregulation has lowered the barrier to entry in the industry as well as enhanced the competitiveness of the players which are previously receiving subsidy from the government. This, in turn, largely contributes to the equal efficiency of airline operators yielding them to charge lower footings to passengers. The establishment of the European Union affects the airline industry has the identical effect like the deregulation o f the sector. This has opened up markets and lowered operating be, encouraging the proliferation of low make up carriers (Sorensen 2006). ... Lastly, technological advancement has significantly enhanced companys efficiency. It can be recalled that the internet technology has lowered the airlines costs in terms of booking and servicing customers by eliminating travel agent costs. This has paved way for spacious costs savings which cut down the cost of airline operations (Sorensen 2006).It can be seen that all of the aforementioned factors which paved the way for the emergence and wide acceptance for low cost air travel have altogether pushed the prices of airline operation down allowing the fast entry of prospective players and allowing industry participants to price more competitively. It can be seen that the business model employed by a typical budget airline is primarily affected by these changes in the external environment of companies. A low cost carrier which competes in the European airline industry typically a business model which offers solely a single passenger class and a single type of airplane which is usually an Airbus320 or Boeing737 which allows the company to cut on training and servicing costs. Budget airlines also typically employ a very simple fare scheme which rewards early reservation by increasing the fare supercharged as the plane fills up. There is usually no reserved seating in order to allow customers to choose their own seats thereby encouraging early and quick boarding. In order to drive down operation costs, technological innovation particularly the internet is used in order to guide the huge commission usually passed on to travel agencies. Budget airlines also prefer flying on secondary and simplified routes as well as having relatively shorter flights and faster turnaround times. Budget airlines, inappropriate