Low Cost Airlines Strategy - 7730 Words

| Airlines Low Cost Industry | | | | | | Situation It’s a chilly winter evening in Bangalore and Vijay Mallya looks out of the window with a Kingfisher Beer pint in his hand. He looks out at the reddish horizon and contemplates the future of his airlines - The Kingfisher Airlines. He has recently bought the first low cost carrier in India, Air Deccan. With the sale of Air Deccan, the industry has seen a correction of sorts, in terms of the cost of travel. With increasing oil rates and the turmoil that the airlines’ industry is currently in, Mallya needs to come up with a strategy to make best of the low cost carrier. He also needs to†¦show more content†¦Kingfisher airlines ranks second with 20% market share. NACIL (National Aviation Company Limited) which, was formed in 2007 with the merger of two national carriers Air India and Indian Airlines, captures 18.3% share. The airline with the largest fleet in the domestic market is Air India, but its market share of the number of passengers is low, and therefore results in a low fleet hare to passenger share ratio of 0.62. Kingfisher leads the full service carrier segment with a fleet to market share ratio of 0.95, but this also includes figures from their low cost Kingfisher Red service. Passenger market share leader Jet Airways is at 0.82 and this includes their low fare service Jet Konnect. For a better comparison between Jet and Kingfisher, if we add-up the numbers of Jets other low fare subsidiary JetLite, the total group ratio of Jet at 0.865 still remains well behind Kingfishers 0.95, suggesting a far more aggressive fleet utilisation strategy by Kingfisher. Expectedly, the low fare carrier side shows much higher ratios, due to their higher usage of aircraft and also the higher number of seats offered per flight due to an all-economy configuration. The laggard is JetLite with a ratio of 1 while SpiceJet and IndiGo are neck and neck at 1.75 and 1.76.However, GoAir, has an industry leading, fleet to passenger share ratio of 2.04. Clearly the airline has shaken off the demons ofShow MoreRelatedJetblue Airlines : The Low Cost Strategy1522 Words   |  7 Pages To begin with, jetBlue is known as the low cost airline which has low operating costs and also which makes effective use of technology and advertising. The airline tends to focus on serving those markets which have been underserved and markets which have average fares that are on the high side. 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