Airline Operations



Table of Contents

Introduction3

Business Model of the Short-Haul Low-Cost Airline4

Low Cost Short-Haul Airlines in Different Parts of the World5

Europe5

North America6

Asia6

Low Cost Short-Haul Airline's Intercontinental Flights7

Low Cost Short-Haul Airlines versus Traditional Airlines7

Reasons for the Effectiveness of Short-Haul Low-Cost Airline10

Conclusion11

References13

Airline Operations

Introduction

The purpose of this coursework is to discuss that why is it easier to set up a short-haul low-cost airline compared with a long-haul low-cost airline?. Various researches have shown that it is cost effective to set up a short-haul airline as compare to the long-haul airline. Many international airlines across the globe have adopted to set up a low cost short-haul airline in order to reduce the high operating costs and losses. The high oil prices and high rates of global inflation had restricted the investment patterns towards the low cost long-haul airlines. Low cost competition takes even long-haul flights. Low-cost short-haul carrier is the airline that charges a very low travel fee in exchange for giving up most of the traditional passenger services. Birthplace of the concept of low-cost airline is the United States from where it spread to Europe in the early 1990s and subsequently in many other countries. The main philosophy behind the low cost short-haul airlines is that they have a cost effective structures as compare to their competitors. Therefore, the term low cost short-haul carrier is donated to any airline with a lower ticket prices and limited services (Peter, Amedeo & Cynthia, 2009).

In 2004, a wave of creation of low-cost airlines in South East Asia and Australia as Air Asia and Virgin Blue has once again shown that the low cost model was applied almost everywhere, although deregulated areas are more conducive to its development. Beyond this scope, Air France will expand its business to low-cost Transavia (known to operate 22 aircraft by 2015) on destinations called "leisure", and bring under one roof the regional subsidiaries Brit Air, Regional and Airliner. This new entity will include specialized flights from point-to-point (Williams, 2002).

Business Model of the Short-Haul Low-Cost Airline

The business model of low-cost short-haul airline is based on the fact that it charges generally low fares in exchange for eliminating many traditional services to passengers. Through the mass media, its meaning has changed and now it defines any airline that requires little money and gives limited services. The first low-cost carrier was the U.S. Pacific Southwest Airlines, which began flights on 6 May 1949. With the process of deregulation lived for aviation in the early 90s, the model spread to Europe to succeed, as in the case of the Irish Ryanair or British easy Jet (Cohn, 2004).

With the widespread use of the term "low cost", a significant change and insidious models appears to emerge across the air transport market. In turn, the airlines adopt policies that approximate this scheme in vogue. So in recent years low-cost airlines have gradually imposed on the French lines, Air France to re-conquer its domestic market. The company announced in fall 2011 to launch 13 new routes from ...