Low-Cost Carriers and Airport Congestion

The assignment examines the relationship between low-cost carriers (LCCs) and airport congestion. It argues that chartered flights contribute to congestion, hindering the growth of LCCs. The document proposes removing chartered flights from airports to create space for LCC operations, ultimately benefiting passengers with more affordable travel options.

Running head: TOURISM TRANSPORT
Tourism Transport
Name of the University
Name of the Student
Author Note

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Executive Summary
This report deals with the low cost airlines that are present in Singapore. It provides a brief
outline of the tourism product along with the current shape and size of the operations of low cost
airlines in the Singaporean market. The report also provides a discussion regarding the impact
that happens from development of tourism activities. It also contains the development that is
done regarding the operations of the low cost carriers in the airports along with the future of
operation for these carriers.

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Table of Contents
Tourism product...............................................................................................................................3
The current size and shape of the low cost airline sector in Singapore...........................................3
Operators......................................................................................................................................4
Impact on tourism development......................................................................................................5
Impact on airport operations............................................................................................................7
Future of low cost operations..........................................................................................................8
Conclusion.......................................................................................................................................8
Reference List................................................................................................................................10

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Tourism product
The tourism package that helps in meeting the expectations of the clients is known as
tourism product. It is inclusive of the entertainment that is provided to the tourists along with the
accommodation, meals and transportation facilities for them. The tourism product can be
classified as local so that it can help in encouraging the participation of the citizens and
international as well, which helps in the generation of revenues (Benur and Bramwell 2015). The
passengers of Tigerair enjoy many offers that ranges from entertainment, dining and travelling to
favorite destinations. The boarding pass that is present with the passengers provides them a 10
percent discount in the ala carte menu in MOMMA KONG’S, which is a restaurant that
specializes in crab recipes. The tourists also enjoy a tour of the Universal Studios along with the
Aquarium and Adventure Cove Waterpark at a discount of 10 percent. The tourists are also
provided with a one-way transfer to the Suntec City by bus, which helps them in enjoying the
city in a better manner (Pyke et al. 2016).
The current size and shape of the low cost airline sector in Singapore
The Southeastern Asia has continued to see the rapid expansion in the low cost carriers
even though the other markets are becoming saturated. In Singapore, there has been a 20 percent
growth of the low cost carriers by the end of 2013, which has assured that they are being
established in the market for a long-term manner. The market in Singapore has seen a rise in the
low cost fleets by the early 2012 and its margin of profit has increased to a great extent (Lee and
Worthington 2014). The improvement has taken place due to the huge capacity that is in demand
by the passengers, which has led Tigerair to expand its fleet so that it can serve the huge capacity

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in a better way. The Tigerair Company holds about 10 percent of the seating capacity that is
present in Singapore and offers medium and long haul for the tourists (Fu et al. 2015).
Operators
Tigerair has merged with a company called Scoot that helps in the long-haul flights for
the company. It has helped the students and the backpackers to enjoy the flights at a lower cost
along with better deals so that the tourists can book more number of tickets. This has helped the
tourists in avoiding the confusion and they can purchase the packages that are inclusive of the
meals as well in all the platforms (Wang et al. 2016). It has also led to the fall n the prices of the
airfares, as the operations have become more streamlined and efficient in nature. This has led to
in keeping the prices low so that the customers can enjoy the flights to their destination. The
merger of Scoot with Tigerair has led to the increase in the number of flights to more number of
destinations. The company has started to expand in places like Kuantan, Palembang, Kuching,
Harbin and Honolulu, which is its first expansion in the United States (Akamavi et al. 2015).
Most of the Tigerair flights that take place are within the Singapore region but they also
let the passengers use the flight to take it abroad as well. Places like Australia and the United
States are some of the countries where the company is operating and has helped many of the
passengers to fly to these destinations. The domestic flights take place helps the tourists to scout
some of the famous destinations such as Krabi islands and other destinations as well that helps in
attracting the tourists. The flights also allow the tourists to visit the destinations like Malaysia
and Kuala Lumpur, which helps in boosting the number of tourists in that area (Tribe 2015).
They even operate on an international manner and has been ferrying the tourists to
destinations like Australia, the United States and has also launched a plan to operate in India as

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well. This has helped the company in expanding their business and operates on a larger scale so
that maximum profit can be earned and provides the passengers with the other benefits as well
(Page 2014).
The company mainly operated from Changi Airport Group (CAG) from the Budget
Terminal but the airport authorities announced the closure of the Tigerair flights from the airport.
The company then shifted its movement to the other airports that were available in the country
such as Seletar airport, Paya Lebar airport, Sembawang and Tengah. These airports helped the
company in carrying on with its operations so that it can cater to the needs of the tourists
(Fageda, Suau-Sanchez and Mason 2015).
The company since 2012 has been ferrying a large number of passengers. It was seen that
in the year 2012 the company had ferried around 39, 00,000 passengers and in the following year
it rose to 43, 90,000 passengers, which saw an increment of around 12.6 percent. The year 2014
saw the company transfers around 50, 68,000 passengers that were around 15.5 percent rise than
the previous year. This shows that the most of the tourists were comfortable in the flight that was
arranged by the company, as the increase in the number of passengers meant more profits for the
company (Wang, Xia and Zhang 2016).
Impact on tourism development
The major characteristics of the low cost carriers are that it focuses mainly on minimizing
the cost by increasing the level of efficiency. The decrease in the cost structure helps in
providing competitive prices to the customers as well, which has helped the companies in
maintaining better profit margin. These flights are usually direct and have a destination where it

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travels continuously without changing its path. These flights mostly operate between the regional
and the secondary airports (Cho, Windle and Dresner 2015).
The air transport has become liberalized, which has led to the development of the cheaper
airlines that is offering greater level of competition to the other airline companies. The rise in the
level of competition has led to the development of new products so that it can help in attracting
the potential customers available in the market. One of the major impacts that these airlines have
on the tourists is the factor of price. The prices of the tickets of these airlines are minimal, which
has helped the passengers in booking more number of flights (Bendinelli, Bettini and Oliviera
2016).
These airlines also offer other benefits to the passengers as well such as the factor of
entertainment and other complimentaries that are provided along with the tickets. These extra
benefits are included in the prices of the tickets that are being charged from the customers. These
products have helped the low-cost carrier companies in attracting majority of the customers than
the commercial flights (Clewlow, Sussman and Balakrishnan 2014).
The negative impact that these companies have created on the development of tourism is
that it does not help the people in flying to other destinations apart from their chosen flight paths.
It has also increased the popularity of certain destinations, as these flights ferry the passengers to
these destinations. The passengers mostly prefer visiting friends and relatives (VFR), which has
led to these companies in attracting the particular consumers present in the market. Most of the
consumers who avail these airlines are students and the backpackers who are comfortable with
the prices of the tickets, as their level of income is restricted to a certain extent (Bubalo and
Gaggero 2015).

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Most of the low cost carriers use the strategy of market penetration, which helps them in
setting the prices at a lower cost that attracts most of the customers towards them. This strategy
has helped the airlines in providing cheaper ticket prices to the customers so that they can fly to
their destinations in a convenient manner (Cho, Windle and Dresner 2015).
The availability of low cost flights urge the customers in buying houses overseas, as the
cost of the flights are cheap and the customers can visit the houses on a regular basis. These
airlines travel on a fixed path of flight, which helps them in increasing their revenues as well.
There has a been a rise in the level of ownership of second homes among the customers due to
the cheaper air tickets that are being provided by the low cost carriers (Clewlow, Sussman and
Balakrishnan 2014).
Impact on airport operations
The low cost carriers have taken up a major share of the operations in the airports, as it
has been operating on a global manner. These companies have taken up almost 24 percent of the
shares with respect to the seating capacity that is present globally. These flight carriers are
efficient and achieve their goal of thirty minutes turnarounds on an average. The airports that
offer singly runways are optimum for these carriers, as it minimizes the waiting time before or
after the landing has taken place (Tribe 2015). These aircrafts position themselves near the
walking distance of the gate so that extra costs can be avoided for the customers and help in
faster movements of the carriers as well. The airports provide large areas to these aircrafts, as it
helps them in making greater profits due to the increase in the number of flights (Page 2014).
The impact that has been created due to the presence of low cost carriers on the airports
can be divided in to two mechanisms. Firstly, the volume of traffic has been intensified, which

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will have a direct effect on the revenues of the airport. Secondly, the competitive environment
that is new in the market will be faced by the airports, which will put direct pressure on the
charges of airlines (Fu et al. 2015).
Most of the chartered airplanes are being abandoned by the customers, as they find it
difficult in paying the amount of fare that is charged by them. Moreover, the number of
customers who would like to prefer travelling at cheaper air fare are more than the executive
class. Government policies have helped these airlines, as it has seen that most of the customers
have preferred in using this mode of transport (Akamavi et al. 2015).
Future of low cost operations
The low cost carriers are performing in a better way in the consumer market, as the level
of profit of these companies has gone up for instance Tigerair that is operating in Singapore.
Most of the packages that are being offered by the company are attractive and helps in increasing
the number of capacity as well for the organization. The future of these companies can be seen as
bright but they need to increase their number of flights so that more number of customers can be
attracted towards the product (Fageda, Suau-Sanchez and Mason 2015). These companies are
providing stiff competition to the chartered airlines, as they are changing their pricing strategies
on a constant manner. The low cost carriers need to monitor the cost of their items so that they
can effective manage their operations and have a better feedback from the customers. The major
airports of the world have to react in a positive manner to these companies so that they can
operate from the airports and help the customers who have a low amount of budget (Bubalo and
Gaggero 2015).

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Conclusion
Therefore it can be concluded that the low cost carrier that is operating in the
Singaporean market has been carrying with its operations in an efficient manner, which has
helped them in attracting a major chunk of customers towards them that are present in the
market. Most of the customers want a nice experience during their flight, which is being
provided by these companies at a cheaper price. The airports are congested due to the chartered
flights, which needs to be removed from there so that it can help in paving the way for low cost
carriers.

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Reference List
Akamavi, R.K., Mohamed, E., Pellmann, K. and Xu, Y., 2015. Key determinants of passenger
loyalty in the low-cost airline business. Tourism management, 46, pp.528-545.
Bendinelli, W.E., Bettini, H.F. and Oliveira, A.V., 2016. Airline delays, congestion
internalization and non-price spillover effects of low cost carrier entry. Transportation Research
Part A: Policy and Practice, 85, pp.39-52.
Benur, A.M. and Bramwell, B., 2015. Tourism product development and product diversification
in destinations. Tourism Management, 50, pp.213-224.
Bubalo, B. and Gaggero, A.A., 2015. Low-cost carrier competition and airline service quality in
Europe. Transport Policy, 43, pp.23-31.
Cho, W., Windle, R.J. and Dresner, M.E., 2015. The impact of low-cost carriers on airport
choice in the US: A case study of the Washington–Baltimore region. Transportation Research
Part E: Logistics and Transportation Review, 81, pp.141-157.
Clewlow, R.R., Sussman, J.M. and Balakrishnan, H., 2014. The impact of high-speed rail and
low-cost carriers on European air passenger traffic. Transport Policy, 33, pp.136-143.
Fageda, X., Suau-Sanchez, P. and Mason, K.J., 2015. The evolving low-cost business model:
Network implications of fare bundling and connecting flights in Europe. Journal of Air
Transport Management, 42, pp.289-296.

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Fu, X., Lei, Z., Wang, K. and Yan, J., 2015. Low cost carrier competition and route entry in an
emerging but regulated aviation market–The case of China. Transportation Research Part A:
Policy and Practice, 79, pp.3-16.
Lee, B.L. and Worthington, A.C., 2014. Technical efficiency of mainstream airlines and low-cost
carriers: New evidence using bootstrap data envelopment analysis truncated regression. Journal
of Air Transport Management, 38, pp.15-20.
Page, S.J., 2014. Tourism management. Routledge.
Pyke, S., Hartwell, H., Blake, A. and Hemingway, A., 2016. Exploring well-being as a tourism
product resource. Tourism Management, 55, pp.94-105.
Tribe, J., 2015. The economics of recreation, leisure and tourism. Routledge.
Wang, K., Tsui, K.W.H., Liang, L. and Fu, X., 2016. Entry patterns of low-cost carriers in Hong
Kong and implications to the regional market. Journal of Air Transport Management.
WANG, K., Xia, W. and Zhang, A., 2016. Benefits Assessment of Large Scale High-Speed Rail
Network in China: The Effect on Low-Cost Carriers.