knaym

I started to have an interest in low-cost airline business after I read few articles about low-cost airlines in Korea. There are three low cost airlines that fulfill qualifications of low cost airline but they are still in the early stage and I thought there is a room for growth . Low cost airlines’ basic business strategies are low-margin and high-volume. By keeping their margin low they could achieve price competitiveness. In order to keep the low level of margin they reduce airline service to most basic such as providing snacks and drinks but no meals during flights and providing self check-in and ticketing system but no check-in and ticketing station. By eliminating cost generative factors low cost airlines can offer low price. Normally, the price is lower than other full-service airlines by 40 – 70%. However, in Korea low cost airlines are not completely following western low cost airline models. The main reason is the high expectation on airline service of people in Korea. Travelling by airline in Korea is generally accepted as luxurious service and therefore their expectation and demand on the service is high. People in Korea demand decent level of service from airline even if the price is low. Korean low cost airlines therefore have to face the limitation on just copying western low cost airlines.