The Analysis of the Problem to Create “Low-Cost” Airline
|1.||Marketing research on passengers traffic||10|
|1.1.||History of aviation market in Europe||10|
|1.2.||Passenger traffic recession||13|
|1.3.||Situation after September 11th 2001||16|
|1.4.||Causes of the passenger traffic increase||19|
|2.||The analysis of «low-cost» companies, their mission and activity||25|
|2.1.||The history of «low-cost» airlines||25|
|2.2.||Typical «low-cost» carrier business model||33|
|2.3.||Main operations of the airlines with the airports and air traffic control service activity for flights support||37|
|2.4.||Cutting costs policy airlines charges||44|
|3.||Business model development of the «low-cost» Dream Airways||51|
|3.1.||Goals and objectives of the company||51|
|3.2.||Airline company structure||54|
|3.3.||The SWOT analyses||68|
|3.4.||Ways of raising effectiveness of company’s mission||69|
|4.||Estimating the regular flights expenses||74|
|4.1.||Development of the flight model (the flight profile)||74|
|4.2.||Choice of a base type airplane and calculation of airlines for Dream Airways||78|
|4.3.||Development of the «low-cost» flight model||82|
|CONCLUSION and RECOMMENDATIONS||88|
Despite all the hardships and difficulties in the private business sector, a lot of people are making money there. Starting up the business is not the work for one moment.
Speaking about opening of Airline we should mention a huge number of milestones and difficulties which we will face up before even starting our first flight. In that business it is essential to have great investments, not to be eaten from the beginning. As we all know, no one can give any guarantee on the success. The level of “mortality” among the new enterprises is very high, about 50 % of all are going bankrupt after one year working. In this diploma work we are going to speak about the airline industry, where everything is a little bit different then in ordinary business. It has its own advantages and disadvantages and where the big investments starts, the big per cent of risk also is close on the heels.
The new term of «low-cost» is introduced by the airlines, but there is no straight definition about what it is and how to make it. The phenomenon of «low-cost» is already explained, but not all the companies are able to become like them. In the second section of this work, we will show the ways by which the «low-cost» companies are reducing their costs. We will also look through the marketing researches in order to understand to situation in the airline industry.
Marketing researches are now showing slow grow in the passengers traffic, but the prognoses are that in 2025 the number will grow steadily and become three times higher . In case the number of passengers increases, we may supposed that if the new airline enter the market with the good strategy, low prices and a little bit better service than in Irish company Ryanair, the customers will pay attention to so called new-born company. To obtain success, the company have to maintain a good structure and to scrutinize closely all the problems which will be examined in this paper. The aim of this paper is to find the ways of cutting the expenses on the routes, solve the list of problems, which may become the milestone in the airlines work, develop the company’s structure which will help airline to become «low-cost» company and elaborate «low-cost» model for the “Dream Airways”. In the third part of this paper we will concentrate our attention on the business model to the “Dream Airways” which will be developed in order to make the profitable airline.
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