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Low-Cost Airlines

Low Cost Airlines Business Strategies

As the number of low-cost carriers has grown, these airlines have begun to compete with one another in addition to the traditional carriers. In the US, airlines have responded by introducing variations to the model. The low-cost carriers profit today because they are competing against high-cost carriers.
Cost leadership business strategies are core of their business success.
The price policy of the low cost carriers is usually very dynamic, with discounts and tickets in promotion.

The principal area of competition tends to be the full-coach or "walk-up" fare. Two of the major airlines in low cost business are Southwest Airlines and Jet Blue. They both use cost leadership and focus business strategies.
Jet Blue and Southwest airlines tries to achieve a low cost market position by offering a relatively simple product which is provided at the lowest possible operating costs.

Both airlines provide product (Ticket) at a low price in order to gain market share which is cost leadership business strategies. Also part of their focus business strategies is to provide services from less congested secondary airports (smaller airport) were traditional airlines doesn’t provide services. They compete with the major legacy airlines like American, United, Delta and US Airways. Budget traveler gets low price ticket from those low-cost airlines.
Traditional perceptions of the "low-cost carrier" as a stripped-down, no-frills airline, as seen on Southwest Airlines, have been changing as new entrants to the market adapt the business model in new ways. Jet Blue offer live in-flight television, sometimes for an extra fee. Jet Blue, use assigned seating.

Typical low-cost carrier business model practices often include:

• a single passenger class
• a single type of aero plane , reducing training and servicing costs.
• a simple fare scheme, such as charging one-way tickets half that of round-trips (typically fares increase as...