Low Cost Airline Industry
STRATEGY FORMULATION
NATALIE FELTMAN
Key success factors for the low-cost airline industry
Figure 1 illustrates the process followed to determine the key success factors (KSF) in the low-cost airline industry. It is adapted from the process developed by Grant (2005: 93). The texts highlighted in red are the responses to the questions posed in the model and serves as the inputs to the discussion on the KSFs for the low-cost airline industry.
Figure 1. Identifying key success factors in the low-cost airline industry.
Cost
As consumers become more informed and cost-sensitive a low-cost airline must have the ability to offer its service at a cost not only lower than that of the full-service carriers, but also on par with its rivals within its segment.
Transparency: Although more informed many of the low-cost airline consumers are not familiar with the hidden costs of purchasing a ticket. It is hence important to adopt a “what you are quoted is what you will pay” policy to pricing.
Quality
Professionalism: The conduct of the airline staff (especially front-line) is a major factor in the consumer’s perception of value purchased.
Safety: Air travel impacts in a very personal way on the lives of passengers. Firstly the personal safety and security of the passenger is determined by the airline during consumption of the service. Secondly the safety (security) of the consumer’s personal belongings (luggage) is determined by the airline. Hence it is critical that this aspect is addressed effectively.
Comfort: Passengers need to feel comfortable even though they are not flying in premium liners. With the squeeze on cost it is thus essential for the airlines to strike the balance between trimming excesses from their service offering while still ensuring minimum levels of passenger comfort.
Convenience: Through collaborative agreements with players within the car rental and hospitality industries, the airlines can offer access to these services without
NATALIE FELTMAN
Key success factors for the low-cost airline industry
Figure 1 illustrates the process followed to determine the key success factors (KSF) in the low-cost airline industry. It is adapted from the process developed by Grant (2005: 93). The texts highlighted in red are the responses to the questions posed in the model and serves as the inputs to the discussion on the KSFs for the low-cost airline industry.
Figure 1. Identifying key success factors in the low-cost airline industry.
Cost
As consumers become more informed and cost-sensitive a low-cost airline must have the ability to offer its service at a cost not only lower than that of the full-service carriers, but also on par with its rivals within its segment.
Transparency: Although more informed many of the low-cost airline consumers are not familiar with the hidden costs of purchasing a ticket. It is hence important to adopt a “what you are quoted is what you will pay” policy to pricing.
Quality
Professionalism: The conduct of the airline staff (especially front-line) is a major factor in the consumer’s perception of value purchased.
Safety: Air travel impacts in a very personal way on the lives of passengers. Firstly the personal safety and security of the passenger is determined by the airline during consumption of the service. Secondly the safety (security) of the consumer’s personal belongings (luggage) is determined by the airline. Hence it is critical that this aspect is addressed effectively.
Comfort: Passengers need to feel comfortable even though they are not flying in premium liners. With the squeeze on cost it is thus essential for the airlines to strike the balance between trimming excesses from their service offering while still ensuring minimum levels of passenger comfort.
Convenience: Through collaborative agreements with players within the car rental and hospitality industries, the airlines can offer access to these services without
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