CAPA Outlook: Overview Of LCC Development In Different Global Markets
As LCCs move up the yield curve, even as far as seeking corporate travel contracts, they move further away from the bare bones low cost operation and begin to resemble their FSC counterparts. Many now offer network connectivity, targeting business travellers and going long haul, adding to cost and complexity. Meanwhile FSCs are taking on many of the characteristics of LCCs, notably through product unbundling and discount pricing strategies, especially on short to medium haul routes, thus increasingly challenging the hybrid LCCs.
- What characterises a “pure” LCC? Are there any left?
- Aircraft type and configuration
- Aircraft and crew utilisation
- Pricing and distribution
- How do experiences of the LCC business model vary in emerging vs established markets?
- Can traditional “ultra” low cost short haul point to point operations still guarantee success, where full service airlines are reducing costs and maintaining high yields?
- Is it inevitable that LCCs move upstream as they become older and as new competition emerges?