low cost carrier

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  • The concept originated in the United States before spreading to Europe in the early 1990s and subsequently to much of the rest of the world.
  • He has to check out his bag and then check in to take the connecting flight.==Point to Point A Point to Point network is a typical route network where an airline focuses mainly on its Origin and Destination ( O&D ) traffic. This means that the airline is more interested in transportation of passengers originating from one city ( A ) to another ( B ) and vice versa, but not in connecting passengers between C and B via A. Low Cost Carriers are considered to be pioneers of this paradigm with a classic example being Southwest Airlines of US. Hub and Spoke A Hub and Spoke network is a route network where an airline will not only plan on transporting passengers between two points, but also to connect passengers between two distant cities via its hub.
  • low cost carrier

    1. 1. Low Cost Carriers By Nitish Kankal Roll no:145 8/31/2012 1
    2. 2.  Low-cost airline (also known as nofrills, discount or budget carrier or airline) is an airline that offers generally low fares in exchange for eliminating many traditional passenger services. Origin United States then spread to Europe in the early 1990s and then in rest of the world. Refers to airlines with a lower operating cost structure than their competitors. 8/31/2012 2
    3. 3. World Scenario - Low Cost Airlines The successful low cost airlines are more profitable than established carriers Ryanair has a market capitalisation of about £3 billion Globally, the largest and most successful low cost airline is Southwest in the US Operating Margins of different international airlines: 8/31/2012 3
    4. 4.  A low-cost airline offers a point to point service model Full service airlines follows hub and spoke model The aircraft flies out from the airport only when all the connecting flights come in. While in the point-to-point model a passenger travelling on two separate connecting flights is issued two separate tickets. 8/31/2012 4
    5. 5. LIST OF LOW COST AIRLINES KINGFISHER AIRLINE (Air Deccan) INDIGO JETLITE SPICE JET GOAIR 8/31/2012 5
    6. 6. Market Share in LCC Segment 8/31/2012 6
    7. 7.  Main Factors : Political Economic Socio-cultural Technological Other Factors : Demographic Natural Environment 7
    8. 8. Political : Deregulations in different spheres Open Sky Policy Low entry barriers 8/31/2012 8
    9. 9. Socio-cultural : Growing middle class : 1993-1999 : 39.5 m to 56.7households 2005 : 300 m 2010 : 400 m (Estimated) Increase in leisure travel by tourists Foreign tourists in 2006 : 3.2 million Status symbol to travel in plane 8/31/2012 9
    10. 10.  Growing middle class income Consistent GDP growth Hikein average salary 14%(highest) in the world Tourism industry growth 8/31/2012 10
    11. 11.  Modernization & Privatization of Airports Modern Technology for efficient handling of aircraft, passenger and cargo. Developing Greenfield Airports with Private Sector Example : Bangalore Airport Corporation Ltd. 8/31/2012 11
    12. 12. Demographic and Natural Environment Changing pattern of consumers Highest percentage people of age group 20-25 Educational environment Shift towards Nuclear family concept High energy cost 8/31/2012 12
    13. 13. A single Passenger classA single type of airplane reducing training and service cost No frills such as free food/drinks, lounges etc Direct sale of ticket through Internet avoiding fee and commission paid to travel agents Employees working in multiple roles 8/31/2012 13
    14. 14. SERVICE PRICE 8/31/2012 14
    15. 15.  The projection for Indian Aviation for 2020 is estimated at: o400 million passengers oIncluding 180 million domestic passengers o1,000 aircraft in the civil aviation sectorLikely to follow of International Low Price Carriers e.g. Air Arabia, Southwest Airlines etc.More emphasis will be on Arabian and South-East Asian circuits. 8/31/2012 15
    16. 16.  Constraints : Infrastructure constraints Shortage of airport facilities Parking bays Air traffic control facilities Takeoff and landing slots. Less than 100 airports having more than one daily service. 8/31/2012 16
    17. 17. Article of Mr. S Sharma, Oct 2007Business News from Hindustan Times DailyReport on ‘Study of the Indian Aviation Industry’ onwww.foolonahill.comwww.findarticles.comEconomic servey, 2008Remote Access Aviation System – RAAS 8/31/2012 17

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