In the last three decades low-cost carriers (hence forward referred to as LCCs) have
captivated travellers by making the world smaller through cheap short-haul flights.
Travellers in the United States have benefited from this concept since the 1970s;
whereas, the development in Europe has been much more recent. Lately, LCCs have
been quite a hot topic especially since the terrorist attacks on September 11, 2001.
Many LCCs have amazed investors with their financial performance, as they
successfully earned profits in a time when most conventional carriers reported major
losses. In Europe, LCCs have entered the market in order to gain market share and to
take part in the success of the business. In Germany, the LCC market has taken off with
the emergence of two new carriers in the end of 2002.
To best understand the low-cost concept, the evolution of LCCs in the United States and
in Europe is examined in the second chapter. Furthermore, the background of the most
successful LCC Southwest, still being the role model for other LCCs, is presented. In
the third chapter the competition theory of Michael Porter is discussed in order to be
able to analyse the competitive strategies followed by the LCCs in the chapter four.
The fifth chapter gives a brief outline on the most striving marketing strategies among
LCCs. Marketing strategies are examined in the fifth chapter. The performance of LCCs
is analysed in the sixth chapter, and a comparison to the performance of conventional
carriers is conducted. An outlook for the future can be found in chapter seven.
Inhaltsverzeichnis (Table of Contents)
- 1. INTRODUCTION
- 2. EVOLUTION OF THE LOW-COST CARRIERS
- 2.1. Southwest - the "role model" for all low-cost carriers.
- 2.2. Other LCCs in the United States...
- 2.3. Evolution of LCCs in Europe.......
- 3. COMPETITION THEORY BY PORTER.
- 3.1. Cost Leadership..
- 3.2. Differentiation.
- 3.3. Focus........
- 4. APPLICATION OF PORTER'S THEORY ON THE
LOW-COST CARRIER BUSINESS…..\
- 4.1. Cost Leadership....
- 4.2. Differentiation.
- 4.3. Focus.........
- 5. MARKETING STRATEGIES..........\
- 6. PERFORMANCE OF MAJOR LOW-COST CARRIERS.
- 6.1. Growth and volumes in terms of sales and passengers
- 6.2. Profitability in terms of operating and net margin.
- 6.3. Shareholder value measured with stock price performance
- 6.4. Performance of low-cost carriers versus full-service carriers..\li>
- 6.5. Future outlook of the aviation sector..\li>
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This paper aims to provide a comprehensive analysis of the low-cost carrier (LCC) business model, examining its evolution, competitive strategies, and performance. The study focuses on the key factors that have contributed to the success of LCCs, particularly in the United States and Europe.
- Evolution of Low-Cost Carriers
- Application of Porter's Competitive Theory to LCCs
- Marketing Strategies of LCCs
- Performance Analysis of LCCs
- Comparison of LCC and Full-Service Carrier Performance
Zusammenfassung der Kapitel (Chapter Summaries)
The second chapter explores the development of LCCs, highlighting the history of Southwest Airlines as the prominent role model for other LCCs. It delves into the emergence and growth of LCCs in the United States and Europe, providing context for the LCC phenomenon. Chapter three introduces Porter's competitive theory, outlining the concepts of cost leadership, differentiation, and focus, providing a framework for analyzing the competitive strategies of LCCs.
Chapter four applies Porter's theory to the LCC business, examining how LCCs leverage cost leadership, differentiation, and focus strategies to achieve success in the aviation industry. The fifth chapter examines key marketing strategies employed by LCCs, highlighting the factors that contribute to their customer appeal and market penetration. The sixth chapter analyzes the performance of major LCCs across various metrics, including growth, profitability, shareholder value, and a comparison to the performance of conventional carriers.
Schlüsselwörter (Keywords)
The primary focus of this study is on the low-cost carrier (LCC) business model within the aviation industry. Key themes include competitive strategies, cost leadership, differentiation, focus, marketing strategies, performance analysis, and comparisons between LCCs and full-service carriers.
- Quote paper
- Vanessa Blaha (Author), 2003, Low Cost Carriers - Evolution, Strategies and Performance, Munich, GRIN Verlag, https://www.grin.com/document/15350
