Low-Cost Long-Haul Carriers in the Middle East

This assignment examines the potential success of implementing a low-cost long-haul carrier business model in the Middle East. The research will gather primary data through questionnaires and interviews with airline employees and managers, complemented by secondary sources like academic journals and reputable websites. The study aims to determine if this model is successful and analyze methods for effective implementation in the region. Ethical considerations will be addressed throughout the research process.

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Table of Contents
Project background..................................................................................................................................2
Aims.........................................................................................................................................................3
Objectives................................................................................................................................................3
Project deliverables..................................................................................................................................3
Research questions...................................................................................................................................3
Literature scope........................................................................................................................................4
Methodology............................................................................................................................................6
Data..........................................................................................................................................................7
Discussion................................................................................................................................................8
References................................................................................................................................................9
List of figure
Figure 1: Top 15 airlines low cost long haul carriers Abeyratne, (2013)................................................6
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Project background
The term low cost long haul is not new for the aviation industry. In the past few decades,
various organisation attempted to implement this business model for attaining higher
revenues and profitability. The idea of low cost long haul carriers is to provide attractive
offers to the customers to enhance the market size of the airline company (Wittmer et al.,
2011). In addition, the low cost long haul carriers has provided the cost advantage and
competitive advantage to the various airline organisations such as Norwegian Air Shuttle and
AirAsia X in the Middle East (Morrell, 2016). Along with this, the various organisations in
the United Kingdom such as British Airways and Virgin Atlantic have been including this
new business model in the firm’s strategy for attaining higher revenues and customer loyalty
around the world.
The notion of low cost long haul carriers has become very popular among the aviation
industry. The Laker Airways of the United Kingdom has stated to implement the low cost
long haul carriers for gaining higher revenues. However, due to several reasons such as
shortage of seats and no advance booking services, the airline company has to bear a lot of
decrement in the revenues (Morrell, 2016). Therefore, this case of Laker Airways becomes an
example of unsuccessfulness of low cost long haul carrier services for the aviation industry.
Apart from this, the development of technology and increment in the resources has become
some of the factors, which has provided success to the low cost long haul business model.
The effectives of this business model can be observed from the increasing profitability of
Ryanair, Spirit, Cebu Pacific and many other firms that has implemented low cost long haul
carrier services for their customers.
In addition, various researchers have depicted that the airline organisations could attain
only 20% of cost advantage over the network coverage (Papatheodorou, 2016). However, the
low cost long haul are provided by the organisations to improve their market share and attract
more customers towards the services of the company.On the other hand, various scholars has
claimed that the business model of low cost long haul carriers failed in the previous years due
to lack of management and necessary financial resources. Therefore, it is analysed that the
previous researches on the successfulness of low cost long haul carriers fails to analyse the
effectiveness of this business model. Hence, this research proposal aims to evaluate the
successfulness of low cost long haul carriers (Morrell, 2016). In addition, this research
proposal aims to identify methods, which could aid in implementing this business model in
the Middle East.
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Along with this, the research proposal aims to analyse the literature provided by various
reputed scholars, researchers and authors. In addition, the effective methodology, which
would aid the researcher in collecting the relevant data will be analysed. Further, the methods
of data collections such as primary method and secondary method will be discussed in this
research proposal.
Aims
The main aim of the research is to conduct a comprehensive case study on how to utilise the
successful experience of long haul low cost in Europe to implement it in the Middle East.
Objectives
 To analyse the effectiveness of low cost long haul carriers
 To evaluate the influence of low cost on the long haul carriers
 To analyse the performance of low cost long haul carriers in the airline industry
 To identify the measures, which could aid in the success of low cost long haul carriers
 To analyse the airline market of the Middle East
 To analyse the success of long haul carriers in the Middle East
 To identify the methods for implementing low cost long haul carriers in the Middle
East
 To recommend some of the methods, which could aid in the successful
implementation of low cost long haul carriers in the Middle East.
Project deliverables
 For analysing theeffectiveness of the low-cost long-haul carriers, the data from the
past five years will be analysed.
 Theinformation about influence of low-cost long-haul carriers on the airline industry
will be gathered from the business reports of the airline organisations and the journals
of reputed scholars.
 The airline industry of the Middle East will be analysed by computing the competition
in the aviation industry within the region.
 For collecting the data of the Middle East, the studies of market experts will be
analysed
 The recommendations managers and executives will be used for evaluation of
strategies of implementing low-cost long-haul carriers in an effective manner
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Research questions
1- How did the low cost carries such as Norwegian and Air Asia X airline have succeed
in long haul destinations while many other airlines have failed?
2- Will this kind of business model be successful if implemented in the Middle East, if
not what are the solutions?
3- Will the low cost long haul carrier services will attract the customers in the Middle
East?
Literature scope
Clark, (2016) mentioned that low cost long haul carrier services have been gaining higher
profitability for the organisations along with aiding them in satisfying the needs of the
customers in an effective manner and achieving cost advantage. The researcher stated that the
aviation company AirAsia X, which was established in 2007 by the share capital of 20-20%
from AirAisa and Virgin Group has incorporated the low cost long haul(Clark, 2016). The
company operated two long haul routes with the help of a leased A330 aircraft from Kuala
Lumpur. These two destinations were Gold Coast in Australia and Hangzhou in China. In
addition, AirAsia X provided two classes for the passengers that are economy and XL with
32” and 58” seat pitch respectively. Further, the researcher stated that the aircraft of the
company was configured with 295 seats(Clark, 2016).
Moreover, the AirAsia X has gained effective profit and brand recognition from the
business model of low cost long haul carrier. In addition to this, Lee and Carter, (2012)
claimed that the success of AirAsia X in implementing the low cost long haul carriers was a
result of effective strategy and planning. The researchers cited that the company has selected
Kuala Lumpur as the hub or base for the long haul carriers, which is least competitive as
compared to other locations such as Hong Kong. The researcher stated that the ease in
connectivity for the customers was another major reason for the success of low cost long haul
carriers in AirAisa X.
Apart from this, Abeyratne, (2013) stated that the successfulness of low cost long haul
carriers depends on the effective adaptation of technology along with internal and external
resources. The researcher mentioned that the low cost long haul carrier is a major business
model, which is responsible for both the increment and decrement of the profitability. The
airline organisations have to deal with reduction in revenues and market share if the top
managers of the company fails to analyse the risks associated with the business model.
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In addition, Gossling and Upham, (2012) cited that selection of the location for hub along
with offering effective and necessary services to the customers is the prime requirement for
the success of low cost long haul carrier. The researchers also highlighted that low cost for
long haul carriers could be very risky business model if not executed in an effective manner.
The researcher stated that, it is the responsibility of the senior managers accompanied by the
market researchers of the company to analyse the requirements of the customers and
identifying the needs that could aid the company to sustain in the robust competitive
environment.
Further, Iatrou and Oretti (2016) presented long haul routes as the most attractive among the
customers. The researcher stated that the customers travels long haul for various purposes
such as to spend vacations with their family, for business meetings and many more. Thus,
providing low cost on long haul carriers could enhance the profitability and brand recognition
of the company. In addition, the researcher cited that the airline organisation in the Middle
East could provide attractive offers to the customers, which can fascinate them to use the long
haul services of the particular company. In contrast, the researcher also mentioned that there
are various limitations associated with the low cost long haul carriers, which could affect the
success of this business model in the Middle East market. Further, the researcher stated that
various organisation in the aviation industry has been using the low cost long haul carrier due
to which the level of competition has increased in the market. Thus, implementing the low
cost long haul carrier could not benefit the company in a successful manner.
Further, Schwenker and Wulf, (2013) mentioned that the low cost is the most effective
method for attracting the customers and the aviation industry could attain high cost advantage
by implementing this business model to long haul carrier in a successful manner. The
researchers highlighted the services of Norwegian, which enabled the company in attaining
high cost advantage along with competitive advantage over the core competitors. The
researchers stated that the company has become successful in acquiring higher market share
by overtaking the business of AirAisa X in past years. In addition, the researchers stated that
Norwegian has increased the long haul carriers by 34% in the year 2016. The reason behind
the success of the company is the accessibility of the airports in different countries such as
the United States, Barcelona, London Gatwick and many others.
In contrast, Iatrou and Oretti (2016) stated that AirAsia X has also gained effective success
by implementing the low cost long haul carrier for attracting customers towards the services
of the company. The researcher mentioned that AirAsia X have only one base that is Kuala
Lumpur due to which the profit margin of the company is less than that of Norwegian.
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However, the researcher cited that AirAsia X is also intended to increase the long haul
carriers by around 10%, which could attain effective success for the company.
Figure 1: Top 15 airlines low cost long haul carriersAbeyratne, (2013)
The above figure represents the successfulness of top 15 airlines, which has adopted low
cost long haul carriers as the business model. As per the data represented in the figure,
Norwegian is at the top in attaining profitability due to the successful implementation of the
new business model. Along with this, AirAsia X, Jetstar Airways, Scoot andEurowingsarethe
other companies that hold second third, fourth and fifth position respectively. Therefore, from
the above data,this can be interpreted that effective use of resources and adaptation of
efficient technological tools could aid the airlines companies in implementing low cost long
haul carriers in a successful manner.
Along with this, Abeyratne, (2013) mentioned that the airline companies that offers long
haul carriers to the customers in the Middle East could use low cost business model. The
researcher stated that the population of the Middle East are concern about spending their
money, hence providing them low cost on long haul carriers could increase the profitability
and brand value of the company in the region. In addition, the researcher mentioned that the
airline organisation in the Middle East could acquire high brand loyalty by providing low cost
long haul carriers for the customers.
Methodology
Methodology is the essential part of a research, which aid the researcher in identifying
effective methods for collecting data from different sources. This research proposal will use
the qualitative research approach for analysing the successfulness of low-cost long-haul
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carriers and their effective implementation in the Middle East(Wittmer et al., 2011). In
addition, this research will also analyse the practices for successful implementation of low-
cost long-haul carrier in the Middle East region. Thus, this research study will use
competitive research for identifying the effective methods and strategies for successfulness of
low-cost long-haul carriers.
Interpretive research philosophy will be adopted for estimating the successfulness of low-
cost long-haul carriers and the effective implementation of this business model in the Middle
East. In addition, the researcher will evaluate the different sources to ensure the quality of the
research, which will help in predicting the effective outcomes for the research study(Clark,
2016). Along with this, the data gathered from different sources will help the researcher in
concluding the likelihood and nature of the results extracted from the research. Moreover, the
conclusion of the research will be based on the predictions, which are identified from the
information gathered from different sources.
However, there could be various limitations associated with the research methodology, such
as lack of authentic sources and many more. The researcher could find difficulties in
collecting information from the books, websites along with from the primary sources. The
data gathered by the questionnaire could also serve as the limitation for the research, which
will affect the outcomes of the research study. Moreover, the researcher will distribute the
questionnaire among the respondents only after receiving their consent, which is very
important from the ethical point of view. In addition, the researcher will provide credibility to
the researchers and scholars while using secondary data for the research study.
Data
The researcher will use primary and secondary data for analysing the successfulness of the
low-cost long-haul carriers and their implementation in the Middle East. The primary data
will be collected from the employees and managers functioning at the airline
companies(Wittmer et al., 2011). The researcher will distribute questionnaire among the
employees of the company along with conducting personal interviews with the managers of
that company. In addition, the research will send consent and ask for the permission of the
employees and managers of the company before issuing questionnaire to them.
Apart from this, the researcher will also gather information from the secondary sources,
which will include the books, journals and online websites of the reputed authors, scholars,
and researchers to ensure the authenticity of the collected data(Clark, 2016). In addition, the
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researcher will analyse all the aspect of the research in an effective manner so that desired
results could be attained. Moreover, for identifying the successfulness of low-cost long-haul
carriers and their implementation in the Middle East, the researcher will ensure all the ethical
considerations, which could influence the outcomes of this research study.
Discussion
The hypothesis of this research study is:
Ha: The low-cost long-haul carrier is a successful business model, which could be effectively
implemented in the Middle East.
H0:The low-cost long-haul carrier is not a successful business model, which is difficult to be
implemented in the Middle East.
The above hypothesis will aid the researcher in analysing the successfulness of low-cost
long-haul carriers. In addition, these hypothesis will also support the researcher inidentifying
methods that could aid in effective implementation of this business model in the Middle East.
Moreover, the research will provide the answers for each research question in an effectual
manner. The research study will support the researcher in evaluating all the essential aspects
of the low-cost long-haul carriers, which is considered as an effective business model in the
present era for the aviation industry of the Middle East.
The research is also intends to meet all the objectives for determining the successfulness of
the low-cost long-haul carriers. The research study will also aid inanalysing the alternative
methods for implementing low-cost long-haul carriers in the Middle East. Along with this,
this research will also discuss the successfulness of low-cost long-haul carriers in other
countries for determining the effectiveness of this business model.
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References
Wittmer, A, Bieger, T. and Müller, R. (2011) Aviation Systems: Management of the
Integrated Aviation Value Chain, US, Springer Science & Business Media.
Morrell, P. S. (2016) Moving Boxes by Air: The Economics of International Air Cargo, UK,
Routledge.
Papatheodorou, A. (2016), Aviation and Tourism: Implications for Leisure Travel, UK,
Routledge
Clark, P. (2016), Stormy Skies: Airlines in Crisis, UK, Routledge
Lee, K. and Carter, S. (2012), Global Marketing Management, UK, OUP Oxford
Abeyratne, R. (2013), Regulation of Air Transport: The Slumbering Sentinels, US, Springer
Science & Business Media.
Gossling, S and Upham, P. (2012), Climate Change and Aviation: Issues, Challenges and
Solutions, UK, Routledge.
Iatrou, K. and Oretti M. (2016) Airline Choices for the Future: From Alliances to Mergers,
UK, Routledge.
Schwenker, B and Wulf, T (2013), Scenario-based Strategic Planning: Developing Strategies
in an Uncertain World, USA, Springer Science & Business Media.
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