Innovation and daring, low-cost airline has changed the aviation industry across the Atlantic
Commercial aviation industry since the inception of a century ago, has been up and down volatility. Changes in aircraft technology, the substantial capital investment and force the airlines to change government priorities constantly struggling to survive. However, these changes have not yet made a thorough upgrade the competitiveness of the aviation industry, new industry entrants and significant price cuts have swept the whole Europe and the United States aviation industry. New low-cost airlines is the impact of the existing large network airlines, may of them have closed down some enterprises can not escape fate. This will impact the aviation industry is unclear, but one thing is certain: the passengers have more choice and more favorable prices.
1997 liberalization of the European internal aviation market, after achieving, low-cost airline Ryanair and easyJet as the pioneer of the operation appear. The key elements of its business model are: a single fleet type, rapid homing to prepare, using cheap second-hand aircraft, not decorative, attractive low-cost - only in the capacity only when the price increases tension.
But today the United States and European low-cost airline industry somewhat separate ways. This partly reflects this concept in the U.S. market is relatively mature market in Europe is relatively young. But in fact, that these differences far. U.S. low-cost airline service quality gradually towards the high end, low-cost airline in Europe is toward the low end. They stressed the extreme low fares and expanding the scale of trying to stop the fledgling competitors. At the same time two of Europe's leading low-cost airlines have gradually forgotten their original counterparts from the United States had learned the business model.
U.S. airlines experienced an abnormal phase in 1978, the low cost airlines control of the domestic market. But it was not always the case. In this unusual phase, 34 new companies, 32 of which quickly went out of business. At that time such as the United States Air powerful enterprise came in the low-cost airlines compete for market, with a slight drop about prices, these small companies barely holding on, and anti-trust organizations and even have no time to do anything.
Low-cost airline in the U.S. may have a mature concept, but the market is still constantly changing. 911 has been considered for survival, six big network airlines to slash costs and slashing the 1 / 5 of capacity. In fact, before the terrorist attacks, low-cost airline has already occurred. Since 2000, low-cost airline's capacity expanded by 44%. Now, low-cost airlines have 400 new aircraft orders, while the network airlines prior to only 150 aircraft orders.
Most of the expansion from JetBlue, Frontier and AirTran. As the general downturn in the airline industry, Southwest Airlines had to re-examine its expansion strategy, its growth rate has now returned to the original 10%. From the number of passengers on Southwest Airlines is the fourth largest U.S. airline, so must face the emerging impact of low-cost airline.
Behind the current recovery of the aviation industry, with the network airlines silent difficulties. Although the number of passengers they rose, but income did not rise. Because they can not raise prices. Jet fuel prices soaring this spring, some network airlines attempt to compensate by raising fares, but usually only last a few days. Because of low cost airlines control the market price.
Airlines try to imitate some of the large low-cost airline business model. Song, and Ted were the two low-cost airline belonging to Delta Airlines and United Airlines. Or even a restaurant called Hooters has the same name created a low-cost airlines. But so far, only a low-cost airline operations more successful, is JetBlue.
Low-cost airline business model is growing increasingly diverse. Song and Ted was previously employed by the failure of a branch network airline model, such as United Airlines flight (United Airlines in the West Coast market 90 years in the 20th century were defeated by Southwest Airlines), Continental Airlines, continental light frequency. Song is still used when the opening of its parent company's employees and the burden of existing debt; and Ted is the main business during the holidays when the aviation hub of United Airlines flights between the specific, such as Chicago.
Benefits of the charter business
Meanwhile, the European market is also switching to low-cost charter business operating model. Traditional charter market is simply the amount determined by the destination, but now is a low-cost airlines and online booking customers the ability to decide. 99% of the cost in Europe are scheduled online, and the United States is 75%.
In the U.S., the other a low-cost airline is changing from regional airlines, usually when the expansion of its business transformation. The best example is the western border and U.S. Airways airlines. As a result, almost no lack of low-cost aviation market in a region competitors. It is estimated that 70% of U.S. low-cost airline routes exist competitors. Low-cost airlines in the U.S. market share in recent years has risen to 30%. Competition between low cost airlines are also escalating.
Therefore, the leading low-cost airlines have changed their image. Southwest Airlines and JetBlue to establish a strong brand, providing not only low prices, a more comprehensive service. They are attracting business passengers, and sometimes they even provide an independent business class. JetBlue will focus on providing skilled and stylish service and good on time record.
However, as more and more of these low-cost airlines grow, they provide more and more such services to the network with no great distinction between the airlines. Southwest Airlines is very broad coverage of the country, it is actually 20% of the customers in its own transit between flights, JetBlue also has a similar transfer of 10%.
Can see that the U.S. low-cost airlines is another factor in the changing role of hub airports. Low-cost airlines are beginning to have more and more characteristics of the network services of airlines, hub airports also increasingly included in the low-cost airline business model. AirTran and Frontier in their respective bases in Atlanta and Denver operations hub-based services. Point to point routes on low-cost airlines in the development of deeper, the more they tend to hub airport, although few such companies.
For example, JetBlue is now from the Brazilian aircraft manufacturer Embraer to purchase has a 100-seat regional aircraft to expand its A320 fleet. So that it can be in smaller markets opening a new route, the larger the market to increase flights. But the large aircraft and small aircraft mix, may result in such a situation: JetBlue's aircraft rushed larger airports, and passengers from the small area off the plane, multiplied by Airbus for its transfer.
Independence Air is used the most basic way - it is always the plane took off from Washington Dulles airport. From September onwards, the company has 300 flights each day, bound for 35 destinations. This is a new mode of operation of low-cost airline, took off from a hub airport, rather than a series of point to point across the country on the route. Although this mode of operation of the industry was skeptical, but some people think that way because it may be very focused on success.
But the biggest change in business model may be, some American low-cost airlines into the high-end market. In the process, they are being besieged from the network airlines. Network airlines are increasingly taking to the low-end market, because they have hard to reduce costs. For several years, the domestic network airlines poor food packaging machine, flight attendants push these foods cloudy with a straight face. Low-cost airlines such as Southwest Airlines, JetBlue, there is no such, they provide food, if so, then these foods are fashionable food, and enjoy a smile.
In any case, the U.S. low-cost airlines in the process of growing up certainly, inevitably, encountered some problems. Southwest Airlines has good labor relations, pleasant family-style corporate culture, and the company often organize various activities enhance this relationship. But recently, the cabin attendants of Southwest Airlines is seeking to sign a new contract, if agreed, they will be peer network airlines have some of the conditions.
If the share of these workers began to demand more of this piece of cake, then what will happen? The rapid expansion of low-cost airline was dizzying. Such as JetBlue, 2002 doubled since last year, an increase of 66% growth this year will be about 1 / 3. AirTran's growth for several years more than 20%. So this situation will not continue any longer.