Low-Cost Carriers – Business Model Development

Groß, S./Schröder, A. (Eds.): Handbook of Low Cost Airlines – Strategies, Business Processes and Market Environment, Berlin, pp. 31-50, 2007

The chapter gives a comprehensive overview of the particularities of the business model of low cost airlines in contrast to established airlines. For this purpose, safety aspects and the different cost structures of established and low cost airlines are demonstrated and a general business model is developed. On this basis, the different com-ponents of the low cost airlines’ business model are categorized and analyzed with the fo-cus on procurement and process management as well as on the marketing mix approach including price, product, distribution and communication policy.

2012

The article examines the sustainability of the low-cost, or no-frills, airline business model. It looks at the background to the development of this managerial approach within the context of some prevailing business theories and considers variations on the basic low-cost airline model. It assesses, drawing from the experiences of a number of markets, whether the model in itself is likely to be enduring, or whether it is simply a transient way for some airlines to recover their full costs.

Choosing a business model when starting a business is a stage that needs cautious thought, when beginning a business your business model helps you choose how you need to increase the value of your organization, it is the means how you want to make profit. Building creative items doesn't always bring prosperity to your organization, it requires a business model that expands income additional time and maintaining a strategic distance from cost increment, a business model that has the accurate pricing, the accurate delivery channel to the exact right targeted customer to keep your business developing. It takes more than one to assemble a successful business, with one concentrating on details and the other building a reasonable business model remembering that both of these mission should be in paralleled.

Journal of Aviation, 2018

The civil aviation industry which began to develop in the deregulation period in 1978 became the dominant mode of air transport in the early 1990's, with the use of hub (centre airport of a flag carrier airline) and spoke (connection destinations from flag carrier airlines' centre airport) concepts. With this development phase, low cost transportation strategy has been effective and airlines that implement the traditional transportation strategy have accelerated. In the 9/11 Twin Tower Attack, confidence for the civil aviation industry has declined and there has been a 7% depreciation across the globe. In the same period, numerous small and large scale airlines had to finish their activities. At the beginning of the 1990's low cost carrier airlines which played a major role in the growth of the civil aviation industry dropped ticket prices, allowing people from all trips about the stages to embark on the aircraft, taking the industry out of luxury transportation and thus these carriers ended the loss of confidence process. This research examines airline business models that provide industry growth in the 21st century, apart from the main trend of low cost transportation in the 1990's.

International Journal of Enterprise Information Systems

In recent decades, low-cost airlines have proliferated in the European market offering cheap tickets and increasing popularity. This business model, characterised by cost leadership, has been studied on numerous occasions. The case of the Irish airline Ryanair has presented different challenges over the last few years in relation to its stakeholders, who are shaping the sustainability of the current era of air travel. This business model should be adapted to the current demands of the market, such as corporate social responsibility or care for the environment. The functioning of low-cost airlines regarding the use they make of ERP management systems is also analysed. They aim to balance their cost strategy with the development of internal resources and capabilities for the company's long-term strategy. A major current challenge for low-cost airlines is the implementation of ERP management systems to make strategies oriented to the customer, sustainability, and corporate social r...

2013

The paper examines the passenger airline industry on the premise that there is now a continuum of different business models in play rather than a simple categorization by discrete groups. We allocate the airlines within a spectrum of different business models, taking particular cognizance of the subtleties of hybrid and regional airlines that tends to mix the characteristics of low-cost and full service providers. Data from nine major US carriers are used to map and summarize their business models in terms of revenue, connectivity, convenience, comfort, aircraft and labor use. While airline business models can be delineated to a certain extent, our results also highlight a high degree of variation within each carrier with respect to the factors examined, and particularly so for hybrid airlines.

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International Journal of Innovation

The business models innovation in airlines can contribute to the creation of value, competitive advantage and profitability with new possibilities of action. The proposed paper aimed to identify the business models adopted by airlines and identify how the innovation occurs at these organizations. The methodology adopted is characterized as empirical, exploratory and descriptive research by multiple case study with three major Brazilian airlines. The results demonstrate that the search for paradigm breaks, related to the dichotomic traditional models of low-cost and full-service, toward hybrid business models occur linearly, as examples highlighted by companies, in which internal changes in business models are considered major organizational innovations.

Airlines define their business models: a content analysis, 2017

Business model is not a new concept; however, it has been recently studied in business management literature. On the other hand, business model concept has not been studied in terms of its components in airline business. The purpose of this study is to see how airlines define their business models based on business model components. In this study business model concept is introduced and business model components are discussed as they have been explained in literature. Research part aims to explore how airlines describe their business models. To clarify this, a content analysis has been done in the strategic statements and in 'about us' parts of the websites of 50 biggest airlines worldwide. Our study shows that there are four components that airlines mention in their strategic statements and in 'about us' parts of their websites. These components are: 1) the value proposition; 2) the market segmentation; 3) the value chain; 4) the profit structure.