Asian Low Cost Airlines
A Strategic Management Analysis
Analysis is made from Strategic Alliances between
Batch 20 and Batch 21 of SGU MBA Program
If you get your passengers to their destinations when they want to get there, on time, at the lowest possible fares, and make darn sure they have a good time doing it, people will fly your airline.
Rollin King and Herb Kelleher, founder of Southwest Airlines in 1971
SECTION 1 – Budget and Low Cost Airlines
1.1. Budget Airlines
The original concept of budget airlines is basically outsourced business. It puts together other businesses into and integrates ...view middle of the document...
Also called no-frills airline”. Wikipedia defines it as “an airline which tries to keep its prices and fares lower than competitors. It usually does this by not offering services like free food and drink on a flight and keeping fines from airports low by keeping on time. They also usually only use one type of aircraft”
In this business model, airline companies are trying to squeeze cost structure and create an affordable ticket price. It minimizes services, uses budget terminal, reduces allowable luggage, less leg room, no in-flight entertainment and meals. Secondary airport will be the first choice, and the each airplane will only have approximately 25 minutes between flights for refueling, cleaning, onboarding passengers, etc.
SECTION 2 –Low Cost Airlines in Asia
2.1. Air Asia
A Malaysian-based low-cost airline owned by Tony Fernandez.AirAsia is Asia's largest low-fare, no-frills airline and a pioneer of low-cost travel in Asia. AirAsia group operates scheduled domestic and international flights to over 400 destinations spanning 25 countries. Its main hub is the Low-Cost Carrier Terminal (LCCT) at Kuala Lumpur International Airport (KLIA) in Malaysia. AirAsia's registered office is in Petaling Jaya, Selangor while its head office is at Kuala Lumpur International Airport.
2.2. Tiger Airways
Tiger Airways is headquartered in Singapore. It operates scheduled flights to regional destinations in Southeast Asia, Australia, China and India from its main base at Singapore Changi Airport. Its head office is in the Honeywell Building in Changi Business Park Central. Tiger Airways won the CAPA Low Cost Airline of the Year Award for 2006 and 2010
2.3. Lion Air
Indonesia’s largest privately run airline, capturing the largest share of the domestic market share. Headquartered in Jakarta, Lion Air flies to cities within Indonesia and to Singapore, Vietnam, Malaysia and Saudi Arabia. Its main base is Soekarno-Hatta International Airport. As of July 2010, it operates scheduled passenger services on an extensive network from Jakarta to 56 destinations. Along with most other Indonesian carriers, Lion Air (including its Wings Air subsidiary) is on the list of air carriers banned in the European Union due to safety concerns as of February 2012
2.4. Jet Star
Jetstar is an Australian budget airline established originally as a local subsidiary of Qantas. It first served domestic routes and New Zealand destinations. In subsequent years it expanded its network to South East Asia, China and Japan.
The sister company Jetstar Asia Airways operates routes out of Singapore. Combined they serve almost all major destinations in Asia. Valuair was acquired in 2005 and fully integrated into the network.
SECTION 3 – Airline Trends
It is obvious that the airline industry is a rapidly growing, and it is now much more affordable to fly. Years ago, fly was a luxurious thing and airline industry was one of most wanted industry to work. The existence of low cost...