Low Cost Carriers

[mstyson]

Some time back I was scolded on this site for daring to criticise the poor service provided by the low-cost carriers. My predictions that LCCs would eventually succumb to the pressures of a savvy Australian public by either changing their ways or getting out altogether have come true. Jetstar has made a real effort to offer a friendly and less-aggressive public face and manages to survive. Tiger however, is reducing its services by pulling out of Launceston and Adelaide (no doubt more to come). I adhere to my original philosophy that regardless of cost, service is the only means of surviving in any business in Australia. I am glad that my predictions have come true!

 

[drron]

Just to be clear.I avoid LCCs if at all possible.However I do not subscribe to your theory.Proven maybe for Tassie but even just within Australia certainly not true.Although TT have withdrawn from Launceston they are expanding services elsewhere,say they have reached breakeven financially and have plans to increase the number of aircraft.
I am obviously a pessimist-my fear is that LCCs will eventually terminally harm the Legacy airlines forcing me to travel with them.:shock:

 

[anat0l]

I can't find the original posts the OP made in relation to being "scolded" about views expressed - probably a legacy post that can't be found on the forum.

I don't quite understand the premise of creating this topic (it feels like a big "told you so"). And the claims seem more or less a truism or using specious reasoning. For example,

regardless of cost, service is the only means of surviving in any business in Australia

seems too obvious.

We all know Tiger has a low regard in this country, but putting them aside the other LCCs in this country - JQ and DJ - are doing quite fine even though we still hear complaints about them here and there (as well as the incumbent full cost carrier QF, but they are all still in satisfactory shape).

The real debates range around how much service should one expect as a minimum from an airline for a certain fare. This is where some people will chime in and say, "You will get what you paid for".

I am obviously a pessimist-my fear is that LCCs will eventually terminally harm the Legacy airlines forcing me to travel with them.

We can't exactly blame LCCs for putting pressure on the legacy carriers. Someone had a new business model, tried it and now it has proliferated in the age of airline deregulation.

Some elements of LCCs are making their way into the legacy carriers, such as increased component pricing (e.g. charging for base checked baggage) and higher penalties. Whether this is legacy carriers clutching at straws to find more profits or giving into customer demands (e.g. a customer who travels mainly carry-on only wants to be "valued" more for not having to check in luggage and thus not adding to the weight of the plane; or simply a legacy carrier trying to keep up with the LCCs who make decent ancillary revenue from component charges), it doesn't necessarily mean you'll be pushed onto LCCs.

 

[docjames]

I'm no LCC defender (I avoid wherever possible) but.........

If TT are now breaking even and continuing to expand, then withdrawing from Launceston (quelle metropolis!) is hardly "failing". It's more they are rationally using their aircraft where the better profits are to be made. They have no room in their business plan to sustain poorly performing routes.

JQ and DJ are going well enough too, so dont agree that the OP's "predictions have come true". :-|

And service can never be "regardless of cost" - do you believe a high end carrier would last long in Australia? Where all seats are F and you have porters carrying luggage for you etc etc. That's be service "regardless of cost".

Agree with other sentiments about service vs cost being the real issue. And finding the right balance IS critical to being sustainable as a business.

 

[harvyk]

To put it bluntly, they don't provide any more service than what you pay for...

In terms of what I can buy with my money, I could either buy a $2000 rust bucket of a car, or a $250,000 luxury car. They both do the same thing, get me from A to B, however is it unreasonable to expect that the $2000 rust bucket will have a CD player and aircon? Where as if I brought a $250,000 luxury car I would expect it would have a CD player and aircon as standard.

It's the same thing with the LCC's. The sell you a seat on a plane, nothing more and they never promised anything more. It's just thanks to years of full service airlines being the norm, we have come to expect that we'd get dinner and drinks thrown in.

I expect all airlines adopting a variation of the LCC model for all but the longest of flights for at least some of it's seats on every plane...

As some have mentioned, some people feel ripped off when they travel carry-on only and yet see someone else being able to take everything including the kitchen sink for the same price.

 

[Harry G]

you hit it in one buddy......
people do want the silver service at a copper spend - thats human nature however, when the travlleing public is treated with contempt by airlines thinking that what they get away with in other countries they can get away with in australia - well let the travelling public vote
secondly - profitable routes is what it is all about
lets go to darwin - 2 years ago it was not profitability when TT pulled out we where told - it was landing charges/airport fees being too expensive....
what has changed 2 years later????????????????????? maybe JQ/QF/DJ getting some custom???
its called continuity............ if I book today and these cheap cough airlines want you to pay months in advance, so if i book then have other conenctions reliant on me getting to my destination on the day I am supposed to.....only to be told....... sorry route not profitable - we are pulling out.......
pull your head in!!!!!!!!! you dope!!!!!!!!

I'm no LCC defender (I avoid wherever possible) but.........

If TT are now breaking even and continuing to expand, then withdrawing from Launceston (quelle metropolis!) is hardly "failing". It's more they are rationally using their aircraft where the better profits are to be made. They have no room in their business plan to sustain poorly performing routes.

JQ and DJ are going well enough too, so dont agree that the OP's "predictions have come true". :-|

And service can never be "regardless of cost" - do you believe a high end carrier would last long in Australia? Where all seats are F and you have porters carrying luggage for you etc etc. That's be service "regardless of cost".

Agree with other sentiments about service vs cost being the real issue. And finding the right balance IS critical to being sustainable as a business.

 

[harvyk]

And service can never be "regardless of cost" - do you believe a high end carrier would last long in Australia? Where all seats are F and you have porters carrying luggage for you etc etc. That's be service "regardless of cost".

Aka - OzJet...

They tried for J only flights around Australia

OzJet - Wikipedia, the free encyclopedia

They where a failure, they often had more crew than pax on their flights...

 

[Dave Noble]

Aka - OzJet...

They tried for J only flights around Australia

OzJet - Wikipedia, the free encyclopedia

They where a failure, they often had more crew than pax on their flights...

Which was a shame. I used them on several occasions; the fares were priced at around the Qantas K fare or slightly lower but gave 2-2 configuration 40" pitch on a 737 and service better than QF Business. They were a great way to travel during their short existence on the SYD-MEL run

Dave

 

[ozbeachbabe]

lets go to darwin - 2 years ago it was not profitability when TT pulled out we where told - it was landing charges/airport fees being too expensive....what has changed 2 years later????????????????????? maybe JQ/QF/DJ getting some custom???

It was more a case of TT had a subsidy from the NT Govt for 3 years to fly into/out of DRW then when the three years was up they had their hand out again, Govt said no, TT threw their toys out of the cot & up and left.

TT are really just the same as a fair weather friend - are only around during the good times ie the dry season April to October. Why are they back? The NT Govt caved in, there were nods & winks behind the speakers chair and they got more money again - how much I don't know because it's all hush hush.

I guess they don't want NT airline Airnorth to find out lest they ask for a subsidy too when it's already been knocked on the head. Seems as though the NT Govt would much rather support a foreign company than a local one. There is absolutely zero benefit to Territorians, Australians or Australia if TT makes a profit as we don't see a single cent of it. They should've just made the cheque out to the Singapore Govt.

Even the Govt subsidy given to JQ to have a crew base in DRW ie pilots and flight attendants was not conditional that they maintain that base here. So having taken the money JQ could close the DRW base and use SIN based flight attendants for the DPS & SGN flights as they currently do for the SIN flights. Pilots would just be from other Australian bases & accommodated in DRW before or after flights as necessary.

 

[jsd]

They have no room in their business plan to sustain poorly performing routes.

That, or its costing them too much for fuel to fly the plane back out of the hole (LST in general)


Josh

 

[drron]

That, or its costing them too much for fuel to fly the plane back out of the hole (LST in general)


Josh

I do love the way people in Hobart and Launceston get on so well.Sure beats Sydney/Melbourne.