LCCS impact
“What has been the biggest impact that low cost carriers have had on the aviation industry in the 21st century?”
Low cost carriers (LCCs) are airlines that provides no frills services that are at a lower cost. They provide limited services to make up for the lost in revenue dut to the decreased ticketing prices. LCCs became popular in Asia after the 1997 financial crisis where people were looking to travel at a cheaper cost due to the bad economic situation. Since then, LCCs have been growing in the airline industry and has increasing market dominance at the moment. With a change in market demand for airlines, there are bond to be impacts on the aviation industry that can be seen in south-east asia. The biggest impact would be on the pricing, followed by the increase in passengers and the market dominance of the aviation industry.
Firstly, with an increase in LCCs, commercial airlines have felt the pressure of pricing as more and more consumers have chosen to travel but LCCs instead due to the competitive pricing it offers. As LCCs do not provide the choice of seats as well as meals, they are able to cut their cost by a substancial amount, sometimes, almost half of the price to fly by a commercial airline. This has a great impact within south east asia, in particularly where passengers fly within asia itself due to the short journey associated with the flight, passengers are not as particular for services as compared to long journey as they are able to go without food and to sit beside a stranger, coupling with limited inflight entertainment. Take for example, Asiatime reported in 2004, that the new Singapore-based airlines, Valuair Ltd (established in May 2004), forces Cathay Pacific and Singapore Airlines to cut fares almost by half. Valuair began using Airbus A320s, carrying 162 passengers a trip from Singapore 's Changi airport to Bangkok, with return tickets costing US$80 under a short-term promotional rate (Asiatime, 2004). To counter such
Low cost carriers (LCCs) are airlines that provides no frills services that are at a lower cost. They provide limited services to make up for the lost in revenue dut to the decreased ticketing prices. LCCs became popular in Asia after the 1997 financial crisis where people were looking to travel at a cheaper cost due to the bad economic situation. Since then, LCCs have been growing in the airline industry and has increasing market dominance at the moment. With a change in market demand for airlines, there are bond to be impacts on the aviation industry that can be seen in south-east asia. The biggest impact would be on the pricing, followed by the increase in passengers and the market dominance of the aviation industry.
Firstly, with an increase in LCCs, commercial airlines have felt the pressure of pricing as more and more consumers have chosen to travel but LCCs instead due to the competitive pricing it offers. As LCCs do not provide the choice of seats as well as meals, they are able to cut their cost by a substancial amount, sometimes, almost half of the price to fly by a commercial airline. This has a great impact within south east asia, in particularly where passengers fly within asia itself due to the short journey associated with the flight, passengers are not as particular for services as compared to long journey as they are able to go without food and to sit beside a stranger, coupling with limited inflight entertainment. Take for example, Asiatime reported in 2004, that the new Singapore-based airlines, Valuair Ltd (established in May 2004), forces Cathay Pacific and Singapore Airlines to cut fares almost by half. Valuair began using Airbus A320s, carrying 162 passengers a trip from Singapore 's Changi airport to Bangkok, with return tickets costing US$80 under a short-term promotional rate (Asiatime, 2004). To counter such
References: Asiatime new straits times (http://www.ktmb.com.my/) tiger airways official site) http://www.bloomberg.com/video/86707742-southeast-asia-aviation-industry-booming-ge-says.html). http://eflightlevel.blogspot.com/2012/02/narrowbodies-make-mark-in-southeast.html)