Ekonomiczne Problemy Usług

Previously: Zeszyty Naukowe Uniwersytetu Szczecińskiego. Ekonomiczne Problemy Usług

ISSN: 1896-382X     eISSN: 2353-2866    OAI    DOI: 10.18276/epu.2016.124-12
CC BY-SA   Open Access   DOAJ

Issue archive / nr 124 2016
Long-haul low-cost air services: revealing key competitive features of airline within airline strategy

Authors: Matus Materna
University of Żilina Faculty of Operation and Economics of Transport and Communications

Anna Tomova
Faculty of Operation and Economics of Transport and Communications
Keywords: business model competitiveness hybridisation long-haul air service low-cost operation
Data publikacji całości:2016
Page range:12 (151-162)
Cited-by (Crossref) ?:

Abstract

In this paper, we reveal which elements of business models typical for low-cost carriers and full-service network carriers were used by Norwegian and AirAsia X to enter markets with long-haul services. Our findings show that the long-haul low-cost operation which was realized as "airline within airline" strategy can be sustainable if an efficient mix of elements belonging to both low-cost and traditional airline business models is implemented. According to our analysis, traditional airlines will cope with the competition of low-cost carriers on long-haul markets mainly in the segments of less price-sensitive leisure passengers and more price-sensitive business pas­sengers in the higher fare classes. Such long-haul low-cost innovation can also generate a new demand for long-haul services supplying the market with an unbundled product for passengers in a very price-sensitive segment.
Download file

Article file

Bibliography

1.Belobaba, P., Odoni, A., Barnhart, C. (2009). The Global Airline Industry. Wiltshire: John Wiley & Sons.
2.Daft, J., Albers, S. (2012). A profitability analysis of low-cost long-haul flight operations. Journal of Air Transport Management, 19, 49–54.
3.Francis, G., Dennis, N., Ison, S., Humphreys, I. (2007). The transferability of the low-cost model to long-haul airline operations. Tourism Management, 28 (2), 391–398.
4.Graf, L. (2005). Incompatibilities of the low-cost and network carrier business models within the same airline grouping. Journal of Air Transport Management, 11, 313–327.
5.Hugon-Duprat, C., O´Connell, J.F. (2015). The rationale for implementing a premium economy class in the long haul markets: Evidence from the transatlantic market. Journal of Air Transport Management, 47, 11–19.
6.Jiang, H. (2013). Service quality of low-cost long-haul airlines – The case of Jetstar Airways and AirAsia X. Journal of Air Transport Management, 26, 20–24.
7.Lin, M.H. (2012). Airlines-within-airlines strategies and existence of low-cost carriers. Transportation Research part E, 48, 637–651.
8.Morrel, P. (2008). Can long-haul low-cost airlines be successful? Research in Transportation Economics, 24, 61–67.
9.Pearson, J., Ryley, T., Pitfield, D. (2015). Intangible resources of competitive advantage: Analysis of 49 Asian airlines across three business models. Journal of Air Transport Management, 47, 179–189.
10.Tomová, A., Haluška, I. (2016). Vernostné programy novej generácie a rozvoj leteckej dopravy. Ekonomické Rozhľady, 45, 98‒11.
11.Wensveen, J.G., Leick, E. (2009). The long-haul low-cost carrier: A unique business model. Journal of Air Transport Management, 15, 127–133.
12.Whyte, R., Lohmann, G. (2015). Low-cost long-haul carriers: A hypothetical analysis of a ´Kangaroo route´. Case Studies on Transport Policy, 3, 159–165.