Competition between Asian Network Airlines and Low-Cost Carriers

2015 ◽  
Vol 2501 (1) ◽  
pp. 56-65
Author(s):  
James Pearson ◽  
John F. O'Connell ◽  
David E. Pitfield ◽  
Tim Ryley
Keyword(s):  
South Asia ◽  
Low Cost ◽  
Asia Pacific ◽  
Questionnaire Data ◽  
Value For Money ◽  
Profit Margins ◽  
Low Cost Carriers ◽  
Customer Dissatisfaction ◽  
Level Of Importance ◽  
Strategic Capability

Asia Pacific is increasingly at the forefront of world aviation, and low-cost carriers (LCCs) there now have 26% of all seats. This amount rises to 57% in Southeast Asia and 56% in South Asia. Clearly, Asian network airlines are very exposed to LCCs, and there are many consequences, such as lower financial performance from inadequately meeting the expectations of customers, offering insufficient value for money, and customer dissatisfaction. It is crucial that Asian network airlines respond expeditiously and appropriately to LCCs. This paper looks at the strategic capability of 22 Asian network airlines in competing with LCCs on the basis of analyzing questionnaire data from these airlines with respect to the level of importance and difficulty of 37 competitive responses across six response categories. Fundamentally, this paper concerns only their capability in competing with LCCs and does not consider their overall strength. This paper also identifies the importance and difficulty of all 37 responses and how the response categories vary by airline, while linking strategic capability with profit margins. The results show that strategic capability varies widely, with Vietnam Airlines possessing the strongest strategic capability and SilkAir, the weakest. Of airlines that compete heavily with LCCs, Garuda Indonesia has strong capability, while Thai Airways and Philippine Airlines do not. For all 22 Asian network airlines, quickly introducing changes, leveraging brand strength, and increasing aircraft use are the most important responses, and there is a reasonably strong correlation between strategic capability and margin, suggesting that those airlines with strong capabilities should achieve higher margins.

scholarly journals Cost Economies for an Airline: An Analysis of Airlines’ Operating Costs

2019 ◽  
Vol 12 (3) ◽  
pp. 1856-1859
Author(s):  
Harendra Nishantha Kariyawasam
Keyword(s):  
Economies Of Scale ◽  
Low Cost ◽  
Operating Cost ◽  
Operating Costs ◽  
Asia Pacific ◽  
Profit Margins ◽  
Cost Structures ◽  
Low Cost Carriers ◽  
Average Operating ◽  
The Cost

This study focuses on analyzing the variables affecting the average operating cost per aircraft movement. Since airlines around the world are operated on thin profit margins and with increasing competition from Low Cost Carriers it will be important for an airline to get a complete understanding about their operating cost structure. The aim of this study is to suggest an airline of actions to reduce their operating cost and will differentiate the cost structures of Low Cost Carriers and Full Service Carriers. This study was conducted for 20 airlines which were operating in Asia Pacific region. Published financial and statistical data were used for analysis and a parametric approach was used. The results of this study do not suggest economies of scale for the airline, which is to have higher number of aircraft to reduce cost.

Ailing Kenyan carrier will face more competition

2016 ◽  
Keyword(s):  
Airline Industry ◽  
Low Cost ◽  
Air Travel ◽  
Recovery Strategy ◽  
East African ◽  
Content Type ◽  
Profit Margins ◽  
Low Cost Carriers ◽  
Fuel Costs ◽  
Air Carriers

Significance Despite low fuel costs and the global airline industry running profitable operations, Kenya Airways has recorded multiple years of losses, leading the company to consider a recovery strategy that includes selling aircraft and shedding jobs. Impacts East African air carriers could benefit from industry rationalisation, but domestic political concerns could obstruct regional reforms. Low-cost carriers have emerged in Africa but struggle to make headway against publicly owned airlines. Once Kenya Airways exits fuel-hedging commitments, lower prices should improve profit margins. Without airline liberalisation and local carrier rationalisation, foreign airlines will benefit most from growing African air travel. Government protectionism, high taxes and regulation will restrict competition, especially from low-cost carriers.

scholarly journals The Revenue and Cost of the Airline Company

2018 ◽  
Vol 3 (2) ◽  
pp. 134
Author(s):  
Peng Qin
Keyword(s):  
Airline Industry ◽  
Business Models ◽  
Low Cost ◽  
Asia Pacific ◽  
Service Network ◽  
Fuel Price ◽  
Low Cost Carriers ◽  
Air Pollutions ◽  
Human Cost ◽  
The Government

<p><em>The airline industry is characterized by a number of business models with the most prominent being the Full Service Network Carriers (FSNC) and Low Cost Carriers (LCC) models. The main difference between full service network carriers and low cost carriers is how the airline companies operation their revenue and cost.</em></p><p><em>The advanced developments in telecommunications, air pollutions and the competition of high rail are three new challenges for the airline industry globally while an increasing passengers and the government policies are two big issues for Asia/Pacific regional airline companies. The fuel price and human-related costs are two big issues affecting the company’s cost. Code-sharing and advertising are two possibly ways in increasing company’s revenue, cutting down the fuel cost, advertising costs, controlling the human cost and cooperating with airports are four possibly ways in reducing company’s cost.</em></p>

Efficiency Evaluation of Low-Cost Long-Haul Carriers in the Trans-Atlantic and Asia-Pacific Markets

2016 ◽  
Vol 3 (1) ◽  
pp. 34-48
Author(s):  
Jennifer N. Hunt ◽  
Karlene Petitt ◽  
Dothang Truong
Keyword(s):  
Relative Efficiency ◽  
Low Cost ◽  
Business Environment ◽  
Asia Pacific ◽  
Load Factor ◽  
Data Envelopment ◽  
Efficiency Evaluation ◽  
Total Revenue ◽  
Low Cost Carriers ◽  
Dea Models

There has been a resurgence of interest in low-cost long-haul (LCLH) operations as airlines seek new growth opportunities. However, researchers have yet to evaluate and compare the relative efficiency of LCLH carriers in this competitive business environment. The purpose of this paper was to determine the relative efficiency of LCLH carriers in the Trans-Atlantic and Asia-Pacific markets. Data Envelopment Analysis (DEA) models were developed to compare the efficiency of five low-cost carriers: AirAsia X, Cebu Pacific, Norwegian Air, WestJet, current LCLH carriers, and JetBlue, a prospective LCLH carrier. The key findings from this DEA were that AirAsia X, Norwegian Air, and JetBlue were relatively efficient for all four quarters, whereas, Cebu Pacific was relatively efficient for three out of four quarters, while WestJet was relatively inefficient. Recommendations include suggestions for WestJet to lower its cost structure, and increase load factor, revenue passenger miles, and total revenue to achieve success with LCLH operations.

scholarly journals The strategic capability of Asian network airlines to compete with low-cost carriers

2015 ◽  
Vol 47 ◽  
pp. 1-10 ◽  
Author(s):  
James Pearson ◽  
John F. O'Connell ◽  
David Pitfield ◽  
Tim Ryley
Keyword(s):  
Low Cost ◽  
Low Cost Carriers ◽  
Strategic Capability

KINERJA PROSES PELELANGAN IKAN DI PASAR ARUMBAI KOTA AMBON

2017 ◽  
Vol 1 (2) ◽  
pp. 58-66
Author(s):  
Frendly Matulessy ◽  
Dionisius Bawole
Keyword(s):  
Performance Analysis ◽  
Gap Analysis ◽  
Primary Data ◽  
Satisfaction Level ◽  
Questionnaire Data ◽  
Analysis Method ◽  
Value For Money ◽  
Qualitative Descriptive ◽  
Market Needs ◽  
Descriptive Method

This study aims to measure the performance of fish auction process in Arumbai Market in Ambon. Primary data were collected from 43 respondents through observation and direct interview based on questionnaire. Data was analysed by qualitative descriptive method, importance performance analysis method (IPA) and gap analysis, and value for money method. The results show that: 1). There are three auction process activities namely pre auction, auction, and post auction; 2). Fisherman's satisfaction level is 67% and merchant satisfaction is 81%; and 3). The auction performance of the economic aspect is less economical, with the final value of 83%, while the fish auction performance from the efficiency aspect is less efficient with the value of 76%. For that, it needs additional officers to manage fish auction place (TPI) in Arumbai Market. In addition, the fish auction facilities (TPI) in Arumbai Market needs to be improved.

Sign in / Sign up

Export Citation Format

Share Document