How Modelling Airline Business Helps in Providing Cheap Flights to Passengers?

 


Do you think that providing the best air fares on tickets is just a matter of timing (book early or in the last minute) or demand and supply or due to any other tactical reason? This is certainly not the case. A lot depends on the business modelling of the airline business which is a larger part of the overall strategy with the ultimate objective of being a successful airline by cutting through the existing competition. So, if the low cost carriers have been successful, it is not just because of the fact that they started offereing cheap flights to passengers to gain more customers and to fill more seats. The fact is that this was very carefully built into the overall strategy of the business model, starting right from the time of drawing up plans.

Technical, operational, marketing  and financial feasibility studies are some of the many that form the initial edifice of offering cheap air tickets to the passengers. Basically, there are two routes to go for a scheduled airliner. One is to be a low cost carrier and the other is to be a full-service carrier. There is a whole lot of difference between these two models. The LCC model is the one which came later than the full-service one. Instead of having just one type of cabin class, along with the others, why not have a full plane providing only economy tickets? And, if it is going to be a full plane with economy tickets, and the aim is solely to provide the cheapest possible fares, the flights could not be a long route ones since the passengers will feel hungry and the LCC model best avoids offering that for free. Same goes with maintenance expenses and operational expenses. The aim is to maximize efficiencies and remove wastages in such a way that expenses are reduced and revenue is maximized.

On the other hand, the full-service carriers go on the model of maximizing revenues based on complex mathematical formulae. These do offer all possible luxuries you can imagine, depending on your cabin class of travel. The ticket price generally includes the services being offered during the flight which is unlike the LCC model in which the service prices are charged separately.

So, why LCC are able to offer better fares than full service carriers is essentially because of the careful business modelling which is responsible for it to a large extent. 

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