Low Cost Carriers creating no-frills model of consumerism
where competition isn’t just restricted to fares but also for the discretionary
dollar of consumers, says an aviation expert
model where competition isn’t just restricted to fares but also for the discretionary
dollar of consumers, says an aviation expert.
tonight or buy a new mobile phone or travel. It’s really getting down to that
consumer market," said Peter Harbison (right), managing director, Centre for Asia
lot of other discretionary expenditure issues a low-cost carrier has to compete
with when it gets to those low prices."
frequently over the weekend or travel "last minute".
the migration to online booking, consumers are increasingly buying non-travel
non-airline sales because its website is attractive to consumers and they have
the option to buy accommodation or car rental besides air fares.
will be bypassed as consumers would do their own packaging and "do not need somebody
else to add that value".
those systems still don’t work all that well".
revolutions as even full-service carriers are matching the "no-frills" prices.
in the market, the airline seat particularly on short-haul is becoming very much
a commodity," he said.
for a two to three-hour sector compared to the low-cost airline.
are always issues when you travel with airlines."
the other carriers, provides pretty much the same sort of seats, uses new aircraft,
all this type of factors do tend to make it a commodity."
obviously value for money. They are producing pretty much the same product for
a lower price. They can make money as their costs are always lower."
interesting in terms of reaction or impact it has had on the incumbents in Asia/Pacific,
as quickly as they can because they see the cost issue is critical. They see that
the coming down of yields so they have to kill costs."
the short-haul point-to-point in longer-haul low-cost operations.
that the whole yield issue is in transition.
entry. With this ongoing development, passengers will demand lower prices and
there will be a greater variety of airlines catering to different segments of
the market, he predicted. Harbison also highlighted that LCCs are pushing fare
compression. This is evident on short-haul routes as it is difficult for airlines
to differentiate their product and consumers lose that ability to discriminate.
price control difficult.
yield management across the board. Hence this strikes at the heart of network
airlines’ basic philosophy of focusing on yields.