Aviation Strategy: Low Cost Carriers vs. Full Service Carriers, Boeing vs. Airbus, Gulf Cooperation Council vs. Asia Pacific & Europe

This report analyzes the low cost carrier and full service carrier strategy, product positioning of Boeing and Airbus, and compares the performance and growth of airlines in Gulf Cooperation Council and Asia Pacific & Europe regions.

Running Head: Aviation Strategy
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Aviation Strategy
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Student Name
3/4/2019

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Low Cost Carriers vs. Full Service Carriers
The objective of the study is to analyze the low cost carrier and full service carrier strategy,
finding out their long term effect and choosing the most appropriate strategy for future growth
and gaining the market segment.
Low Cost Carriers
The airlines which provide point to point transportation without including any frills such as
meals and luggage charges are considered as low cost carriers (Papatheodorou, et al., 2010).
There are many benefits in adopting this strategy as it captures the price conscious customers
so market share will increase, low operating cost and more scope of expansion by increasing
number of flights for short routes. Some of the weakness faces by the airline are low quality
services, low cost flight infrastructure and non-targeted business professionals segment in the
market.
In long term, low cost airlines will capture more target market but also face problem like
customer dissatisfaction, safety issues and low profitability. Low cot carriers are in growth
nowadays and attracting large number of middle class people towards air traffic but companies
operating in this strategy will face problems in near future related to profitability and
satisfaction of the customers it only makes air transport cheaper but not comfortable and safer
(Akamavi, et al., 2015).
By operating low cost airlines the key indicators which help in measuring the performance are
Average fuel consumption, Average revenue per passenger, Price of ticket, cost per flight and
staff cost per passengers. All these parameters should be considered while going for low cost
carrier strategy.
Full Service Carriers
When all the services without being charged such as baggage, meals and on time hassle free
flights are provided to passengers in ticket fare is considered as full service carriers. It is a kind
of strategy by which consumer get higher level of services and more features Full services
airlines mainly fly to primary airports in major cities rather than serving secondary airports with
lower cost and accessibility (O'Connell & Williams, 2011).
The comfort level for long haul in full service airlines is the biggest advantage as they offer
proper and bigger plane infrastructure with additional things to the passengers to make them
experience the luxury of the air transportation (Koklic, et al., 2017). High Fuel cost, taxes and

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airport charges are some of the challenges faced by Full Service Carriers as they offer long run
haul and frill benefits to customers which increases their operating cost.
In conclusion, most of the customers preferred to pay extra charges by not compromising with
the facilities provided by full service carriers. The strategy opted by the company for long term
growth should be the full service carriers because it captures the upper market segment and
result to higher satisfaction of the consumers which reduces the chances of any conflicts in
future. Another reason to opt for this strategy is that it gives high profitability to the business in
long run without compromising with the standards that they already delivered. Full service
airline is most suitable for business class people who want to make their trip memorable and
comfortable for long haul. The main advantage of it is that the connectivity to primary and
bigger airports which attract large traffic than secondary airports.
Boeing vs. Airbus
The objective of the study is to know about the product positioning of both the companies and
to choose which will give long term benefits to the customers with durability, reliability, safety,
technology advancement and innovation.
Boeing
Boeing is the leading aerospace manufacturing company, operates and support airlines in more
than 150 countries globally by offering customized products. Boeing offer wide range of
products to its customers for long haul, short haul, domestic routes, international route and
satellite network services which helps the company in taking competitive advantage in the
market. Another strategy followed by the company is its existence in capital services for
keeping and financing the customer purchases as well as leasing option makes the business
model of Boeing sustainable and competitive (Banham, 2015).
The key performance indicators that should be keep in mind while buying a new plane from
Boeing includes two criteria; capacity and distance. The customers who provide full service
carrier mainly choose this company to buy aircrafts because of Boeing 777 families product that
have both advanced fuel loads for a very long distance travel and greater capacity than other
planes in the market (Petrescu, 2017).
Airbus
Airbus is the aircraft maker and designer, supplying to the nations globally with 11 production
sites across the globe and become a leading player in the aviation industry making air
transportation automated and less costly (Simons, 2014).

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Airbus offers large innovative range of products with fully automated aircrafts and higher
production capacity based on the needs of customers. The main targeted market of the
company is low cost airline who want constant innovation on its product and the airbus strong
innovation and research development gives a competitive advantage to the company. Some of
the challenges or weaknesses are also faced by the company such as failure in technical
assistance and tough competition from Boeing in all the products (Kantha & Kantha, 2019).
For long term sustainability in the market the company adopts a pull strategy because the
demands comes from customers by offering quality in product design, tailored customization
and value added services.
In conclusion, airbus and Boeing both are leading manufacturers in aviation industry and both
have some advantages. Boeing aircrafts is being the most preferred one because of its many
years of experience in manufacturing aircrafts and past records of offering safety, good
infrastructure, comfort, efficiency and pilot based aircrafts rather than automated aircrafts. The
major benefit of choosing the Boeing is its support to customer purchases they provide renting
or leasing option for buying the aircrafts. There are two aspects to be considered in purchasing
an aircraft that is its longevity and durability, Boeing aircrafts tend to be durable and hardy;
anything that breaks can usually repaired or replaced but in case of airbus there is no chances
or any repair and the option left is to throwaway an aircraft. All these features and advantages
differs Boeing from airbus and proved to be most preferred aircrafts from the point of view of
customers in near future.
Gulf Cooperation Council vs. Asia Pacific & Europe
The objective of making comparison between these two regions is to know the performance
and growth of airlines in both the segments and to understand which region attract most of the
business in a year.
Gulf Cooperation Council (GCC)
The gulf region activity has resulted in excellent national airlines such as Emirates Airline, Etihad
Airways, and Qatar Airways. The growth in air passengers and cargo traffic is increasing because
of the fact that gulf is a central aviation hub and key link between the eastern and western
world (Stephenson & Hamarneh, 2017).
The governments of the gulf countries are investing huge amount in improvement and
expansion of their airport infrastructure, it proves to be an advantage to the gulf countries for
attracting high number of passengers.

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The growth of GCC region is mainly depending on the UAE and Saudi Arabia aviation market,
they collectively cover 73% of the total size in the GCC aviation sector and remaining share is
covered by Air Arabia, fly Dubai and Jazeera airlines are the low cost airlines of the region. The
Dubai International airport is the largest airport of the GCC and one of the busiest airports by
passenger traffic (Ulrichsen, 2017).
Asia Pacific and Europe
Europe and Asia Pacific airlines are the two most developing market globally in aviation sector.
Many of these airlines grow beyond their home markets and internationalized their operations.
In Europe region some of them are Swiss International Airlines, Turkish Airlines and Austrian
Airlines whereas in Asia Pacific region some are Singapore, Asiana, China, Japan Korean and
Thai airlines (Fu & Peoples, 2018).
The long term growth of the region is generally because of the development regional economy,
new technological aircrafts, increasing foreign investment and successful growth of business
models. Association of Asia Pacific Airlines stated that the airlines of these regions carry 1,214
million passengers which signify one third of world air passenger traffic and it is expected that
in next 20 years the market of Asia Pacific region will capture 40% of international passenger
traffic. (Law, et al., 2018).
The key indicators in aviation industry in the region are air traffic management, air
transportation infrastructure and aviation safety. The performance of the region is measured
using many factors such as active pilots, new flight deliveries, number of airports, health of the
economy, technology disruption, price of fuel and regulatory standard. Asia Pacific region
contribute in larger manner to air traffic growth and the regions aviation development because
it covers 60% of the world’s population and attracting the growing middle classes in China and
India (Duval, 2016).
In conclusion, Asia pacific regions have potential and infrastructure to operate large number of
operations during the year in compare to gulf region airports. Number of air passenger traffic
and number of airlines and airports are more in Asia pacific region that gives a profitable
situation to the investors who choose to operate in this region. Some airlines are doing very
well in these regions such as Turkish, Swiss International, China, Thai airlines for both as a low
cost carriers and full service carriers for the customers. In near future this region will attract
most of the investors due to its regulatory standard and increasing foreign investment.

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References
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