LOW COST AIRLINES

Does it worth it?

LOW COST AIRLINES STRATEGY

The « low cost »: a cost domination strategy

Various sectors: Design

AutomobileHairdressers

Food

Objective: minimize the cost to decrease the price

Low price

Manufactu-ring costs

Conception costs

Marketing

costs

Distribution costs

Financial costs

Administrative costs

Air low cost: definition

Price •The lowest competitive price

Product •No services

Place •Direct sales - Internet

Promotion •A minimalist communication

The rule: deletion of all wich is superfluous

Air low cost: caracteristics Single type of plane No booked seats Secondary terminals short flights and fast

stopovers Simplified routes paying meals

Direct sales of tickets via internet Reduction of the staff and employees “multi functions” More seats on the plane: reductions of the space between rows,

deletion of toilet, single class on board "Subsidies" delivers by "secondary" cities Little or no marketing budget

Low cost airlines: the competition

The leaders: Low-cost subsidiary

(segmentation of the market)

Air france: TransaviaBritish airways: GO

Lufthansa:GermanwingzDelta: Song

Quantas: JetstarAir canada: Tango airlines

LOW COST AIRLINES IS NOT WORTH

IT !!!

Humoristic video

Economic disadvantages

Comfort and services in cabin are reduced

Secondary airport, supplementary deadlines

The correspondances and the frequency of the connections

No particular treatments for the traverllers

Additional costs for on-line payments and luggage in hold

Difficult management of the unforeseen (delay or deletion of flights)

Quality of services Even if some services are paying they are so

bad.

If a plane have an injury it’s impossible to have an other plane

Impossible to book a seat

When the travelers have to change plane they must register again their luggage, even if they stay on the same company and in certain case pay again the recording.

Tickets are as expensive as an other company if you wait the last moment

Tickets are not refundable or exchangeable Few round-trip tickets

Booking only by internet – discrimination

Security in low cost company Planes have a time of fly from 11 hours by days

Stopover lasts only 25 min - little for check of the plane

Device can stolen no more than 4 hours thus obligation for traveler to change device for a big travel.

Ecological point of view Plane steals much more that on normal

company

Remote airport which obliges the passengers to take taxis - more pollution

Low price which allows people to travel more by plane.

THE FUTURLOW COST AIRLINES

In july, Ryanair hopes to develop a space which the passengers travel up.

The place would be proposed in less 50% of normal price

The idea is at a stadium of development

The Rayanair’s boss discusses at present with the aircraft manufacturer in order to fit out his places in a particularly original way.

The goal of Ryanair

break the price for passengers

Increase the profitability

Increase the number passenger on every flight

The flight in position standing would allow:○ to embark until 40% of supplementary passenger ○ to come along with a 20% cost cutting for the

company.

Debate Ryanair’s boss had already distinguished himself by

suggesting: ○ to tax the persons in overweight○ to charge the access to toilet.

Ryanair proposes numerous ideas to reduce its costs for example:

○ To charge the toilet paper○ To tax the break fast brought from one○ Still make paying their web site

What are the limits of a downsize political cost?