Short Haul vs Long Haul Airlines - Case Study Example

Short Haul V/S Long Haul Airlines” Why is it easier to set up a short haul low cost airline compared with long haul low cost airline? Short hauls are the domestic flights, which have the departure and arrival airport in the same country they cover the distance of approximately 800 km within 1.5 hours. The maximum time limit is of 3 hours. For example, domestic flights within America or Jordon. On the other hand we have long haul flights which cover the journey in more than 6 hours. These are the continuous flights and cover large distances. Wide body aircrafts are used for these flights. For example, flights from Europe to Russia (Stewart & Mueller, 2011). Low cost air lines are those that generally have low fares and fewer facilities. They are also known as low cost carriers, budget or discount airlines. The airlines that offer low cost flights cover up their revenues lost in lower ticket prices with an extra amount charged food, language, seat allocating, boarding, etc. The concept of low cost flights emerged from the airline industry when some of the companies tried to beat the competition by offering lower fares. The low cost flights are different from the regional flights that cover small distances without any facilities. There is another type of flight as well in which the airlines advertise themselves as low cost while maintain the level of standard flights. For instance, they will give you internet services, entertainment and music, extra beverages, etc. this is done just to attract a larger number of customers. In real there is not as such difference in the prices but due to the extra services offered by the airline, customers categorize them as low cost. Hence it proves to be a very good marketing strategy. These low cost airlines do different practices but the main idea remains the same i.e. reduced fares (South Carolina, 2010). These air lines came into the notice of people when in the 21 century they were offered to travel with no frills. The basic idea behind these airlines is very simple and interesting. These flights just simply cut down the extra charges attached to the fare which leaving the selection of certain facilities on the will of consumers. The flights are booked over the internet or through a phone call. The catering and handling costs are minimized. They attract their customers through heavy advertisement and public relations (Beaverstock, 2010). Setting up a short haul low cost airline: Starting with the short haul airline is comparatively easy because they cover less distances and the time duration does not go beyond 3 hours. For such a short time period passengers do not require anything in particular such as entertainment or beverages. To setup a short haul low cost airline following things are considered: Cabin class: in short haul, the economy class is the target which means that it is solely for middle -middle and lower -middle class. Pillows are not offered to the passengers. The seats are somewhat close to each other there is not much space between the rows and columns. The passengers are charged for everything they order (Donelda, Ki, & Marios, 2008). Food and drink: they are available for purchase from the servicing staff. Neither of them is offered for free. Since it is a flight for not more than 3 hours therefore it is assumed that most of the passengers would not be need the food staff. Extra legroom: for passengers who require extra legroom they need to pay for it to utilize the option. Otherwise it is not offered for free. Videos: no videos are shown. To have a good time pass passengers are require bringing books with them otherwise they can have newspapers. Laptop power: at times laptop power supply is available but mostly it is not and in that case passengers need to bring the backup battery. Baggage: on the ground the passengers need to purchase check baggage allowance for up to certain kgs. Access to the lounge: these passengers are usually not given the access to the airport lounge. Changes: name changes on the tickets are not allowed. Flight time and date changes are permitted until 24 hours before the flight after this duration the management does not make any changes. For date and time changes also the passengers are required to pay some amount. Cancellations: the passengers can cancel their flight only up to 24 hours before the departure. Some companies offer the credits in case of cancellation which are to be used within 12 months. No-shows: passengers who do not cancel the flight on time and neither fly get no credit facility. Credits and refunds: passengers who cancel their flights according to the rules and regulations of the company get credits or their payment is refunded. Payments: there is no concept of delayed payments. Passengers are required to make the payments just then and there at the time of booking. Velocity points and status credits: these are based on the economy class and the number of miles to be travelled. Air craft: narrow body air craft is used for these flights. These aircraft have more than 100 seats. Setting up a long haul low cost airline: Starting a long haul low cost airline is comparatively expensive they cover distances beyond 6 hours and require wide body air craft. It is obvious that in 6 hours person need to have proper food as well as complete rest and it is ethical that some of the flight benefits and facilities should be offered to the passengers. Though it is a low cost airline but still some extra amount must be paid by the company to have the customers. To set up a long haul low cost aircraft following thing are considered: Cabin Class: the cabins are according to the need of economy and business class and therefore the seats are placed with a distance between them in the business class cabin whereas in case of economy class there is not much attention paid to the distance between the seats. The pillows are free of any charges and the passengers have a good resting time. Food and drinks: basic food items are served for free where as if the passenger wants some other beverages can they would have to pay for them. Extra legroom: passengers can enjoy extra legroom without bearing any expenses. Videos: business class passengers can enjoy video facility where as economy class passengers would have to pay for it (Boothe-Armstrong, 2010). Laptop power: it is available for the business class passengers only. Economy class rarely has this option. Baggage: the baggage service is not provided free of cost. Passengers have to pay extra charges for this service. Access to the lounge: they do have an access to the lounge where they can sit and rest or wait for their flights. The facilities available in the lounge can also be used by them. Changes: there are fewer relaxations given to these passengers in terms of changes that they want to make either about time or date. Cancellations: if the passengers cancel their flight then their money is either refunded after subtracting some amount or they are offered to adjust the money with another flight sometime later. Services and comfort: satisfying services are provided to the customers by the staff members who are ready to listen to their queries and solve them immediately. Lower cost: though these airlines give all the basic benefits to their passenger still manage to charge them somewhat below the market prices. Payments: they receive on time payments as well. Air craft: the use wide body air craft. They usually have a compartment called bulk in. In which those bags are placed which were stopped at the gate for checking purposes. The over head bins are also present to keep the hand carry. Velocity points and the status credits: these are dependent upon business and economy class and the miles to be travel. Selection: low cost carriers give you the benefit of selecting your own options. They do not burden you with so many things that you do not even want. In this perspective they are more convenient then other airlines which charge you very high with all the useless staff. Connection: these low cost airlines can be used as connecting flights and saves the time and money of the passenger while maintain almost the same standard as other long haul flights. Budget: they help the passengers to keep the track of their budget while enjoying the flight. Locations: low cost airlines fly to many locations and serve the travelers at their best with the minimum cost. Conclusion: It is quite evident from the above discussion that at it is very easy to start short haul low cost airline as compared to long haul low cost airline because although long haul airlines are also available at low cost but due to the flight duration that goes beyond 6 hours it becomes very difficult for the investor to make huge investments at the starting point. Another reason is that the long hauls cover large distances from one country to another but in the case of short hauls there is no such issue as they come under the category of domestic flights. Following reasons will describe the conclusion in more detail: Cost conscious passengers: it is easier to attract the cost conscious passengers for the short haul low cost flights such as, the business class passengers who need to do their jobs within limited budgets and in this scenario low cost flights are a blessing to them. It is seen in the recent times that the business class passengers are now in search of low cost flights as compared to the traditional flights especially those businessmen who are working on the domestic level because they have to travel every now and then for which they cannot allocate much amount. While on the other hand economy class is cost conscious from the day one so the companies can easily target both of them. As far as long haul is concerned people are usually willing to pay more for flights whose duration is more than 6 hours so there are comparatively less chances that they would go for low cost airlines (Seabridge & Morgan, 2010)-. Low investments: short haul low cost airlines require very little investments by the investors because they are not intended to give luxuries to their customers without any payment. And also because they are supposed to fly within the country so the amount that is spent on oversea flights is also saved. Convenience: it is very convenient for the management to arrange all the tangible and intangible assets for starting the short haul low cost airline as they don’t need much stuff at the initial point. From the passengers’ point of view it is easier for them to cut down the irrelevant and unnecessary expenses from the ticket charges and if they require anything on flight then they can offer it then and there which is not at all expensive. In this way passengers remain at ease that they have not spent much on the fare charges. Budget: for people like tourist who have to go all around the world with in the limited budget short hauls proves to be very helpful to them. For instance, if a person has gone to Italy and wants to visit all the cities then he can easily take the advantage of short haul low cost airlines which will take him to all the cities without putting extra pressure on his budget (Williams, 2010). Profitable: these airlines are very profitable for the companies especially for those which are new in this business because by making low investment and simple working staff they can attract a large market. Also they do not need to spend much on customer satisfaction because their customers are already in search of low cost travelling rather than luxuries on flight. So it is much easier to start the airline business with short haul low cost. Advertisement: the advertisement for such airlines is comparatively easier because their strongest point is being the low cost service provider which in itself enough for word-of-mouth marketing. Otherwise they can target directly their customers by checking the records of those business class passengers who operate within the country, that how often do they travel and what are their destinations. They can also target the travel agencies by allocating them some percentage of the profit and asking them to provide customers who want to go for the country tour. Competition: short haul low cost airline do not face much competition at the initial level because their focus is usually on the niche market but it is expected that within some time short haul low cost may become a competitive market as more passengers are shifting towards low cost options. This thing cannot happen in case of long haul low cost because even today there is a large market that does not compromise on services provided on flights no matter if they would have to pay an extra amount with the fare since they cannot take any chance on international flights. Bright future: companies who want to start a aviation business short go for the short haul low cost flights because of the above mentioned reasons and also because if they go towards the long haul low cost airline then there are chances of their instant failure because already there are many companies which are providing great flying experience with somewhat same fares as offered by the low cost airlines (Garrow, 2010). References Top of Form Garrow, L. A. (2010). Discrete choice modelling and air travel demand: Theory and applications. Farnham, Surrey: Ashgate. Bottom of Form Top of Form Willems, M. (2010). Knuffle Bunny free: An unexpected diversion. New York: Balzer + Bray. Bottom of Form Top of Form Seabridge, A. G., & Morgan, S. (2010). Air travel and health: A systems perspective. Chichester, West Sussex, U.K: John Wiley & Sons. Bottom of Form Top of Form Boothe-Armstrong, S. (2010). The savvy consumers guide to air travel. Spring, TX: M&S Publishing. Bottom of Form Top of Form Bottom of Form Top of Form Beaverstock, J. V. (2010). International business travel in the global economy. Farnham, Surrey: Ashgate. Top of Form Bottom of Form Top of Form South Carolina. (2010). State air travel: A review of the use of state aircraft and the purchase of commercial airline tickets. Columbia, S.C: South Carolina General Assembly, Legislative Audit Council. Top of Form Donelda, S. M. K., Jim, G., & Marios, K. (January 01, 2008). Positions and positioning: strategy simply stated. Business Strategy Series, 9, 5, 224-230. Bottom of Form Top of Form Stewart, M. G., & Mueller, J. (June 16, 2011). Cost-Benefit Analysis of Advanced Imaging Technology Full Body Scanners for Airline Passenger Security Screening. Journal of Homeland Security and Emergency Management, 8, 1.) Bottom of Form Bottom of Form Bottom of Form Read More