Airlines Business Model

Running head: AIRLINES BUSINESS MODEL
Airlines Business Model
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1AIRLINES BUSINESS MODEL
Introduction
Airlines business is a blooming industry in recent time due to the global enhancement
technology. Nowadays, people mainly concentrate on saving their times. As the airlines allow
the people to travel a long distance in a very short time span, the popularity of this business has
increased a lot in last few decades. Therefore due to the global economic recession, the along
with all other industries, the aviation industries has also faced this difficulties. As a result, the
airlines companies have to compromise their existing business models. Most of the airlines
companies generally followed the low cost strategies for combating with these situations. The
existing full service business model followers starts to shift to the low cost business model
strategy due to the economic crisis which affected almost all the sectors worldwide. On the other
hand, the aviation companies who are already using the low cost business model modified their
business strategies to such extent that a hybrid business strategy is discovered and this new
business model created a bridge between this traditional full service business and low cost
business model of the aviation sector (Bieger and Agosti 2017). In this essay, the different type
of airlines business models are highlighted. In addition to this the evaluation of this two types of
model are also discussed. In the later part of this essay, the Long Haul operation with low cost
carrier products is discussed in a brief manner.
Different types of Business model
It can be said without any doubt that, the low cost airlines (LCA) has created a revolution
in the aviation industry and this models are offering an low cost air services to the customers
worldwide. The LCA business model is mainly based on the fundamentally different postulates
which are related to the business model of traditional airlines. The LCA airlines are generally
operating in the medium haul routes. However, in recent years it is very difficult to identify the

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category of airlines due to the occurrence of various other mixed business models. The LCA
models of airlines business model generally concentrates on reducing the costs of services in
order to implement a price strategy in the market in which they are operating their business. For
example, it can be said that, in the world there are many airlines, such as Southwest Airlines, Air
Asia group, who are providing low cost airlines services to the world (Pels, Njegovan and
Behrens 2017).
The full service airlines refers to those airlines services which are providing a lot of
services such as inclusion of multiple classes within a single aircraft cabin, foods, beverages. The
companies which are following this model generally has different type of aircrafts, providing
services in domestic and international regions, a wide range of destinations are covered by them,
large price ranges for the multiple services. In most of the European countries, the national
carriers are the representative of this business model and on the other hand the countries like US
have multiple representatives of full services. For example Air France, British Airways ,
Australian Airlines are providing traditional full services (Taneja 2017).
The hybrid model of airlines refers to the new model of business that is the combination
of the LCA and full service business model. In this new hybrid model, the fare structure is
inspired by the LCA model and simultaneously it also follows the wide range of destinations
offering system of the full service model. In recent market, this new model is mostly followed by
the aviation industries and thus it is accepted by the medium class travelers and also by the
business class travelers. Air Berlin is a common example of hybrid model airlines (Ghorabaee et
al. 2017).
The main reason of the rapid change of the airlines business model is the prices strategy
of LCA model greatly affects the full service model. The LCA model can give an almost same