Answer to Question #225811 in Management for Priyanka

Question

How do the strategies of LCC and full service carries differ

Answer 1

FSCs and LCCs' business structures and passenger service philosophies are growing increasingly similar, to the point that some airlines are morphing into hybrids. It was practically inconceivable not long ago for FSCs to charge for on-board food and drinks, checked luggage, seat selection, and other services. FSC's basic economy rate, which excludes perks such as checked luggage and advanced seat allocations, is now a viable competitor against discounters. With more intricate passenger services and processes, hubs, a diverse fleet, and complex networks, a traditional FSC's everyday business operations are more personnel- and time-intensive. Nonetheless, their services are required and will continue to be so in the future. There will be FSCs as long as there are connecting flights from all over the world, long-haul flights, business seats, and business lounges. They will, however, have to keep up with LCCs' basic structures and low expenses.

Many large FSC groups will continue to build their own LCC brands as part of their group in order to do this. Another option is to have a full-service operation that is followed by a lower-cost mainline division. As a result of this transformation, the “hybrid” company model has emerged. This model combines the cost-cutting strategies of a pure LCC with a full-service carrier's service, flexibility, and route structure. As a result of this hybridization, airlines, particularly FSCs, are now targeting a bigger client base with a greater competitive scope.

As a result, LCCs begin to change their business models, focusing on areas such as merchandising, multi-channel strategies, and expanding collaborations. If this trend continues, airlines will face even tighter margins, increased competition, and increased air traffic. Increased passenger numbers do not always imply increased profit; in order to establish additional revenue streams in the future, airlines will need to be even more efficient and inventive.