Abstract:
Low cost carriers have changed the competitive dynamics of the short-haul market
forever. They have revolutionised the way of doing business in aviation by adopting a
fresh approach on both strategic and operational issues. Simplicity has become their
universal principle over network airlines and subsequently they have achieved
substantial cost advantages which are passed onto the consumer as lower fares.
Network airlines have found it difficult to reshape their structural barriers and have
been slow to incorporate the components that low cost carriers deemed very
significant in impacting their operating margins. However, a restructuring of their
internal weaknesses should spur initiatives to design long-term strategies to address
those shortcomings. Network airlines rely on producing value-adding and consumerdriven
product differentiation beyond the basics of the low cost carrier product. To
further differentiate themselves network airlines need to focus on: customer
satisfaction; develop long term mutually beneficial relationships with both passengers
and corporations; collaborate with a wide range of bipartisan partners; retain
differentiated flight products that add value; and to incorporate strategies that other
network carriers deemed paradigmatic. Network carriers should resist reducing costs
associated with value-added services and need to become innovative in generating
alternative revenue streams.
