When Is A LCC No Longer A LCC?

[airsupport]

Someone said on another thread that VB no longer consider themselves a LCC.

They certainly began Life as one, so IF they consider they are no longer one, what exactly constitutes a LCC, and where does the changeover point occur?

From what I understand, a LCC as the name implies tries to operate at as low a cost as possible supposedly passing on these savings to their Customers in the form of cheaper flights.

These cost savings would include paying Employees less for maybe more duty time, lack of (or reduced) catering, some flights operating at less popular hours and maybe into different Airports, (although legal) less Engineering, lack of frequent flyer schemes and lounges etc?

So what does it then take for one of these LCCs to "upgrade"?

[Skystar320]

Just to name a few and get the ball rolling: My views DJ has moved away from the LCC role for the following

- Frequent Flyers
- Premium Economy seats
- Lounges

and to lesser extent

- 2 different fleets Boeing / EMB

[Shazz-zaam]

VB is trying to capture a larger market share, it is slowly trying to move away from the LCC model by introducing airport lounges in the main traffic route hubs, also it's about to introduce more legroom and service for premium Y/C, still on a user pay system. QF currently have a monopoly in business travel, with many dissatisfied customers just waiting to go over.

Godfrey realises that J/C travel and corporate accounts is an area with huge potential for additional revenue, and is slowly modifying VB away from LCC, I doubt whether the wages and conditions will change, as they must be kept under control to maintain profit margins


With Tiger, Jetstar, the domestic market is becoming saturated, with only a small population, LCC is unsustainable with more than 2 primary carriers.

Remember what happened to Compass 1 & 2, Ansett.

Tiger are willing to sustain a operating loss in order to capture market share, they are backed by Singapore Airlines and therefore their government. While jet* are financially backed by Qantas.

[Icarus53]

To a degree, this is a natural progression. With VB doing well in the LCC market, it was almost inevitable that they would try to elbow in on other markets (Regional and International).

Unfortunately, the introduction of additional aircraft types has to push up costs in terms of maintenance, training and administration - therefore how do you recoup those costs?

To an extent, you increase load factors by freeing up 737 capacity for higher yield routes using EMBs.

But you still have to increase market share too, hence the higher revenue business market becomes a prime candidate.

Voila - you are no longer "Low Cost" - you are "High Value"!

Still interested to see how they market the Jungle Jets - your average punter has little to no idea they are coming! Not sure cost savings are going to be enough to lower seat prices on short sectors substantially below QL etc. - suspect they're going to be in the red for a while!

[airsupport]

All of that is true, however as I was asking what is the criteria for a LCC, where is the line in the sand?

Virgin Blue certainly started out as a LCC, and despite all the changes mentioned, are they not still a LCC as compared to say Qantas?

They are now more up market than say Jetstar or Tiger, but compared to Qantas are they still a LCC?

And why on Earth has someone moved this thread to GA??? There are not many LCCs in GA???

[Skystar320]

Dont worry Air Support my threads dissapear sometimes I think you will find its to do with

Aviation & Questions

[Mr. Hat]

Don't think there is a true line in the sand but if you look into it far enough you may find some answers. A good place to start is to ask about the LCC of the year awards and criteria that might help. There is another one, i think its OAG..

VB isn't a LCC anymore. A "New World" carrier is what its now tagged. It one where the LCC "user pays" system is still in place but also has higher levels of luxury available should someone chose so.

The biggest factor really are government contracts which are roughly 90 odd percent QF - these are worth big money to airlines and the tax payer for that matter.

[airsupport]

Skystar 320,

Yes I realise I posed it as a question, however there are two D and G Forums, and it doesn't take a genius to work out which Forum this thread belongs in...... :rolleyes:

D & G Reporting Points (129 Viewing)

Airline and RPT issues in Australia and enZed.

D & G General Aviation & Questions (108 Viewing)

The place for students, instructors and charter guys.

Make it multi choice................

A thread about Low Cost AIRLINES in Austrlia, belongs in:-

(A) Airline and RPT issues in Australia and enZed.

(B) The place for students, instructors and charter guys.

:confused:

[Dan Winterland]

Quote airsupport: "From what I understand, a LCC as the name implies tries to operate at as low a cost as possible supposedly passing on these savings to their Customers in the form of cheaper flights."

Yes, that's what the marketing people would have you believe. It's cheap for he first few people to bok, but try booking lose to the fight. It's often cheaper to fly with the full service carriers in those circumstances in Europe.

What low cost really means is 'Low overheads' and bigger profits.

US$30,000 for an A320 rating anyone?

(Speaking as an overhead!)

[Skystar320]

Airsupport,

I agree this should be in the other forum, I dont understand Mod's thats all

[airsupport]

Neither do I.............. ;)

The term LCC is really a misnomer, I mean I have never heard of any Airline that sets out to be a HIGH cost carrier, I am sure even Qantas TRY to keep their costs as low as possible.

Probably a better term is "no frills carrier" for the likes of Tiger and Jetstar, and "full service carrier" for the likes of Qantas. The likes of Virgin Blue would be somewhere in between, maybe a "we cannot decide carrier". :rolleyes: