High volume of sales through travel agencies. Full-service airlines will behave differently depending on whether they are operating at or away from their hub airport(s). Any operation at the hub will have more schedule flexibility, and will rarely consider alternative destinations. Away from the hub, the airline will be less flexible regarding schedule. (b) Low-cost carriers A low-cost carrier (LCC), or airline is determined by its target market. Aiming at a ‘low-fare’ ‘budget’ certain market segment determines a wide set of differentiating characteristics with respect to or regional carriers. The LCC primary target market is passengers sensitive to price, offering the basic product, transportation, at the lowest possible fare. To compensate for the loss of revenue by tight ticket pricing, LCCs may charge for extras like food, priority boarding and seat selection, luggage, etc. These are the main LCC characteristics: Low fares, fewer traditional passenger services; Low yield, high volume; Low overhead cost (outsourcing); Bypass global distribution systems (e.g. Amadeus, Sabre, etc.) through internet distribution; Simplified ticket categories; Bundled and unbundled services; Short average flight lengths, high frequency; Congested hub airports avoided, preferring less congested airports. Low-cost carriers compete on prices and frequencies on short- and medium-range routes, with traffic, offering very few different ticket prices, sold mainly by telephone or internet, giving a minimal service for a low price. The reduction of the unit cost is obtained not only by offering fewer services to the passenger, but also through a better utilisation of their productive means, minimising the diversity of aircraft they use (generally all their aircraft belong to the same model) and achieving greater flying hours per day (by reducing greatly the turnaround times). (c) Regional Airlines These companies specialise in passenger transport in, generally, short-range routes, and for this reason, very often on domestic or intra-EU flights. They operate fleets of aircraft of the so-called models, with planes of fewer than 100 seats. Some of them operate in an independent ‘regional’ way, but the majority operate as franchisees or with some type of agreement with a full-service airline. (d) Charter
High volume of sales through travel agencies. Full-service airlines will behave differently depending on whether they are operating at or away from their hub airport(s). Any operation at the hub will have more schedule flexibility, and will rarely consider alternative destinations. Away from the hub, the airline will be less flexible regarding schedule. (b) Low-cost carriers A low-cost carrier (LCC), ‘low-fare’ or ‘budget’ airline is determined by its target market. Aiming at a certain market segment determines a wide set of differentiating characteristics with respect to or regional carriers. The LCC primary target market is passengers sensitive to price, offering the basic product, transportation, at the lowest possible fare. To compensate for the loss of revenue by tight ticket pricing, LCCs may charge for extras like food, priority boarding and seat selection, luggage, etc. These are the main LCC characteristics: Low fares, fewer traditional passenger services; Low yield, high volume; Low overhead cost (outsourcing); Bypass global distribution systems (e.g. Amadeus, Sabre, etc.) through internet distribution; Simplified ticket categories; Bundled and unbundled services; Short average flight lengths, high frequency; Congested hub airports avoided, preferring less congested airports. Low-cost carriers compete on prices and frequencies on short- and medium-range routes, with traffic, offering very few different ticket prices, sold mainly by telephone or internet, giving a minimal service for a low price. The reduction of the unit cost is obtained not only by offering fewer services to the passenger, but also through a better utilisation of their productive means, minimising the diversity of aircraft they use (generally all their aircraft belong to the same model) and achieving greater flying hours per day (by reducing greatly the turnaround times). (c) Regional Airlines These companies specialise in passenger transport in, generally, short-range routes, and for this reason, very often on domestic or intra-EU flights. They operate fleets of aircraft of the so-called ‘regional’ models, with planes of fewer than 100 seats. Some of them operate in an independent way, but the majority operate as franchisees or with some type of agreement with a full-service airline. (d) Charter
Vista-D4.1-Initial-framework-definition.docx