Low Cost / Full Service Case Study

Excerpt from Case Study :

blogspot.com/2009/03/air-asia-flight-cancellations.html> [28 July 2010].

This source discusses a common situation that is occurring with some Air Asian flights, cancelations. This is problematic, because many are occurring because the planes are not full; leaving their passengers stranded at airports or forced to find other accommodations. This is significant, because this information can be used to show how some Thai's, were flying Air Asia based upon their low cost fares. However, once their flight has been continuously cancelled, is when many are becoming unhappy with the low cost service. This is important, because this information can be used to show another factor; that could be affecting someone's decision to fly on an LCC or FSC. Where, the lower fares and fewer frills are an advantage that they have over FSC's. Yet, when you factor in issues such as unexpected cancelations; these lack of services and sudden changes could be a turn off for many consumers.

Questions / Hypothesis

Given the obvious disparities between the overall advantages and disadvantages that both airlines are offering (in one way or another), means that consumer will pick a particular carrier based on a number of different factors. These could be based on a single factor or a combination of variables such as: low air fares, lots of services, on time flights / departures and helpful customer services. This leads to the hypothesis, that customers will fly with a particular carrier based upon: any previous experiences with an airline, affordability and comfort. To determine the accuracy of the hypothesis a number of different questions will be answered including: what factors will affect Thai customer tastes about what airline they choose? Are there any negative or positive experiences that are affecting this decision? Are there specific levels of service or amenities that customers require? Are there any issues that could affect customer perceptions of either airline?

Methodology

The methodology that will be utilized is sampling. This is when you are selecting a small sample of the population and surveying their opinions, to make a larger evaluation of the underlying trends that are occurring. (Sampling 2010) The way that the sample will be collected for the dissertation is through focus groups and online questionnaires. These two methods will establish two independent procedures for collecting the data. This will allow for greater accuracy, by collecting the information from more than one type of sampling method.

Clearly, both Thai Air Asia and Thai Airways represent two different models that have emerged in airline industry, LCC's and FSC's. Where, both are trying to offer customers the lowest fares. The difference is how various services are provided, with Thai Air Asia offering: fee-based services that will go above and beyond what some of the FSC's currently have. When you combine this with the low cost airfares, it appears as if the LCC's are offering the most value. However, there have been complaints of frequent cancelations, because the plane is not full, which leaves many customers in an awkward position. While Thai Airways; offers a variety of different services to customers. At the same time, they are offering competitive fares, in comparison with some of the LCC's or they have formed strategic alliances with other LCC's. In the case of Thai Airways, this approach has meant that they have received numerous customer services awards, for the services that they offer and the competitive fares. This is important because, it could highlight possible factors that could cause Thai consumers, to use another airline. Where, the perceived values from LCC's could cause a negative shift, because of the poor service. At the same time, the lower fares and larger amounts of services could affect customer perceptions in viewing FSC's favorably. This is significant, because this information can be used to help focus the research and methodology, on understanding what factors will cause consumers to choose a particular airline. Where, the samples would help to provide a greater understanding of what factors could be affecting perceptions. In any business perceptions are the reality, as customers will use these negative or positive views, to influence their buying decisions well into the future. Therefore, the dissertation will take this focus, to see the true impact of both types of carriers on industry.

Bibliography

Air Asia, (2009) Academic [online] available from: . [ 28 July 2010].

Air Asia Company Strategic Management (2009) Air Asia [online] available from . [28 July 2010].

Air Asia Flight Cancelations (2009) Air Asia Reviews [online] available from: [28 July 2010].

Airline Review (2009) Knowledge Oman [online] available from [28 July 2010].

Development and Advancement of Thai ( 2010) Thai Airways [online] available from [28 July 2010].

Sampling (2010) Free Dictionary [online] available from: [28 July 2010].

SWOT Analysis for Air Asia (2008) Kulo Hunkan [online] available from . [28 July 2010].

TAT and Thai Welcome Overseas Delegates (2010) Travel Daily News [online] available from [28 July 2010].

Thai Receives Awards (2007) Thai Airways [online] available from [28 July 2010].

Chadha, R (2004). The Real Brand Ambassador Business Line [online] available from: [28 July 2010].

Cheng, Y, 2004, 'Analyzing the Strategies of LCC's and FSC's,' Aerlines, [online] 36, 1 -- 6. available from [29 July 2010].

Delfman, W, 2005, 'Low Cost Air Carriers in Southeast Asia,' Strategic Management in the Aviation Industry, Ashgate, Aldershot, pg. 145.

O'Connell, J, 2005, 'Passengers Perceptions of Low Cost Airlines and Full Service Carriers,' Journal of Air Transport Management, vol. 11, pp. 259 -- 272.

Organization for Economic Cooperation and Development, 2005, 'Pressures for Change in International Air Transport Arrangements,' Regional Integration in the Asia Pacific, OECD, Paris, pg. 148.

Tamasy, C, 2008, 'The Origin of Low Cost Air Transport,' Globalizing Worlds and New Economic Configurations, Austin Publishing, Burlington, pp. 224 -- 229.

Harvard Style http://libguides.library.uwa.edu.au/data/files2/49275/Harvard%20LibGuide%20-%20All%20Examples%20PDF.pdf

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