Greetings Karolina,
Good topic for the dissertation. All the best in exploring the subject with us on the blog, and then with reaching your findings for the end product, or the dissertation.
I see four questions in your opening remarks, I'll take a stab at those in order. First you are wondering, how has the appearance of LCCs (Low Cost Carriers) influenced the scheduled, or as you put it the "Proper Airlines?"
Perhaps the most obvious result of an LCC entering a market is the INCREASED COMPETITION in a given market. Increased competition at the outset could be a good thing for the customers. It could provide more service (increased flights), and could lower the price of tickets in that market. Negative impact of increased competition could be crowding out (by predatory pricing) of the financially uncompetitive, or the weaker companies, which then could bring us to square one as in limited, or no competition in a given market.
Your second question is that "what has changed" (since the introduction of LCCs)? Well, for one the data shows that introduction of an LCC in a market (between the two city pairs) increases the number of passengers in that market, or in simple, it STIMULATES the DEMAND for AIR TRAVEL. Whether "the supply creates it's own demand," or "demand creates it's own supply," which of the two theories is at work here, I think would depend on which side of the life long economic debate is one on.
Third question is, why do people choose cheap(er) flights? Besides the obvious that you yourself have alluded to, that well, who does not want to keep more money in their wallet, I think there is another dimension at work here which is psychological in nature. People it seems don't like to pay for an airline ticket (if the travel is discretionary) if the price of that ticket is more then a certain perceived value. LCCs, and "Proper Airlines," as well now get around this customer behavior by tagging along extra fees, and charges for checked bags, priority boarding, and extra leg-room, etc., to boost their revenues.
Finally, "do we not care about the standards of service... ?" This is my favorite among the four questions. I think what you really mean is "quality of service." Standards are easy to perhaps define. I think you, and the most here on the blog would agree, that if an airline is SAFE, it's flights are 95% of the time ON TIME, and it's aircraft are CLEAN, the standard/s has/have been met. For standards alone, it would not matter if you, or I, or anyone else was flying on a LCC, or a Proper Airline. Ah, quality on the other hand is a tougher proverbial nut to crack, or define. Robert Pirsig's book, Zen and the Art of Motorcycle Maintenance does a great job in tackling the subject of quality. As Pirsig says in his book, quality is there in an object, you can see it, you can feel it, and you can touch it, but it is hard to define. Not to be deductive of Pirsig's book, in business I would say, quality is how a business values its customers, or how a business treats its guests. Even for quality then I would conclude, it does not matter if an airline is low cost or not; if the airline treats it's passengers right, the customers will satisfactorily value that they got what they paid for.
Really good points in that! I think he is right. If the airline is safe, on time and reliable then everything is less important.
ReplyDeleteGuess the low cost carriers are generally short/medium haul but if they were long haul I would not want to fly on them because I think you need a bit more comfort when you are stuck on the plane for 11 hours!