The airline sector has evolved in recent years, with low-cost airline companies offering tickets at unbeatable prices. Many traditional companies are thus forced to compete with these prices in order to remain competitive in the market. These low cost tariffs are offered by the low cost airlines such as EasyJet and Ryanair
Low-cost airlines have been designed to operate with maximum efficiency and are capable of providing short-haul flights. They can therefore be expected to compete with traditional companies; these companies are more likely to attract a huge customer base lured by the relatively slashed down prices offered by these LCCs.
Through this study, I therefore want to analyze the marketing strategies of low and high cost airlines and the modes of operation of two separate companies, that are:
-Air France (French international airline, a traditional airline company)
-Easyjet (low cost airline, largest in Europe)
This research will allow me to find a plausible answer to my hypothesis: "Do low cost airlines represent a threat to traditional companies?"
There are three main types of aerial models: the scheduled flights, the low-cost carriers and air charters. These low-cost airlines have grown rapidly over the years and are even capable of providing medium-haul flights.
The flights are operated by traditional companies of which the main ones are Air France, KLM, British Airways, Swiss, Lufthansa, Iberia, Alitalia and SAS.
With respect to low cost airlines, companies such as Ryanair (the leader), EasyJet, Germanwings and Virgin Express, Air Berlin and many others are present as well.
Four international organizations regulate and manage the organization of air transport:
ICAO (International Civil Aviation Organization): ICAO, an organ of the United Nations, is headquartered in Montreal. This organization has been set up to resolve technical problems of aviation and set global standards in this area.
France is a member of ICAO, through the Directorate General of Civil Aviation (DGCA). ICAO's role is to prepare and implement the state policy on civil aviation, in the technical, statutory and economic domains. With 12,000 agents, it has access to a budget of about 2 billion EUR to accomplish its missions.
IATA (International Air Transport Association): IATA is an international trade organization which was formed in Havana, Cuba, in April 1945.In 2006, it consisted of 280 companies representing nearly 95% of total global air traffic.IATA's aim is to ensure cooperation and coordination between air carriers, promote and provide safe and secure air services that are reliable and affordable to its passengers.
One of the main activities of IATA is to establish the pricing policy for international flights and highlight the advantages of open markets to consumers and companies. While consumers benefit from lower fares, companies can avail of more effective networks in relation to open markets.
ELFAA (European Low Fares Airline Association): ELFAA, formed in January 2004, has been put in place " to ensure that European policy and legislation promote free and equal competition to enable growth and development of low fares in the future, allowing a greater number of people to travel by air."
Tags: ICAO, EasyJet and Ryanair, low cost airlines
[...] The pricing of airline tickets is decided by an effective yield management system (Any traditional company will constantly seek to optimize its revenue. For example, a certain amounte is charged for changing or canceling tickets which can be of great advantage to the company). Increase in the growth of services for certain segments (e.g. Serve champagne for "first" and the "business” class passengers - Air France: Strategies The French aviation industry is heavily dominated by Air France which serves the main French airports. [...]
[...] The price In the face of stiff competition from low cost carriers, the scheduled airlines have modified their pricing plans to remain competitive in the market, despite soaring oil prices. That is why many airlines such as Air France must review their pricing policies mainly through yield management. Yield management (also referred to as "Revenue Management") is a technique that calculates, in real time, the best price to maximize the profit generated by the sale of a product or service. [...]
[...] Through this study, I therefore want to analyze the marketing strategies of low and high cost airlines and the modes of operation of two separate companies, that are: - Air France (French international airline, a traditional airline company) - Easyjet (low cost airline, largest in Europe) This research will allow me to find a plausible answer to my hypothesis: "Do low cost airlines represent a threat to traditional companies?” I. The air transport market This chapter is essential to understand the overall structure of the airline industry in detail before discussing the analysis of different strategies adopted by each company The different aerial models There are three main types of aerial models: the scheduled flights, the low- cost carriers and air charters. [...]
[...] Air France serves about 189 stopovers in 83 countries, including 99 in Europe, which is its main destination - The image of low-cost and traditional airlines Are low-cost airlines unreliable? What do you think of passengers who travel often in Air France? What characteristic features are people looking for in an airline? This survey was conducted at an airport in Paris to analyze the customers' satisfaction and the image that they carry in their minds of such massive airlines? I chose to study two main routes, Paris - Nice and Paris - London with both Air France and EasyJet. [...]
[...] Moreover, according to Philippe Vignon, spokesman of Easyjet , "there will be a process of concentration in the low cost airlines on a long term where large companies absorb the smaller ones”. In fact, we see quite clearly that in recent times, many low-cost airlines were "born" but survived only for a short period of time Note in the chart below that there are still many opportunities for development on intra-European routes such as those from Frankfurt, Paris, Munich and Amsterdam. [...]
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