Low Cost vs. Traditional Carriers
- Distribution: Promote direct distribution bypassing the intermediaries, GDS. This is hard for full service traditional airlines as their main distribution channel is GDS and travel agencies
- No full content agreements with the GDS, so they do not have to maintain price parity and can promote airline's own direct channels with price differentiation
- Unbundled offers and add-ons; ability to offer a very basic product with no frills.
- Simplified revenue management and RO strategies
- Ticketless and ease of fulfilment; no ET and EMDs
Traditional Carriers will need to win in these areas:
- Lower ticket prices to a profitable amount that would continue to entice middle tier spending customers to spend the extra money to fly with their carrier over a budget carrier.
- Continue to provide or improve upon services, benefits progreams, amenaties and the experience for flyers. These items will help sway middle tier spending customer to fly with their carrier, because they opt to have a better / easier flight experience with their airline.
- Reduce costs where possible in order to invest in services, the fleet and anything that could assist in helping the airline stand out over budget carriers.
Have some input?