Budget Airlines Research Articles

Analysis of Digitalization Transformation in AirAsia

Digitalization transformation has been allowing airlines to vastly increase their productivity and profitability, and pioneer airlines have demonstrated a strong interest in applying digitalization to their booking system, membership management, and business operations. It is then necessary to analyze how those technologies can benefit budget airlines and how they can be better facilitated to enhance the competitiveness of the airlines. This paper studies the application of digitalization transformation adopted by budget airline AirAsia and how it influences and impacts its performance financially and operationally. The analysis was conducted to understand how AirAsia has done to transform its business into digitalization, including the aspects of both customers perspectives and internal operations and its corresponding performance based on those techniques. The result shows that digitalization is necessary and vital to enhancing its profitability, competitiveness, and innovation, and we propose that AirAsia could further utilize digitalization by enhancing the ticketing and booking system, customer experience, and working process.

Analyzing The Influence of Social Media and Offline Factors on Consumer Behaviour: A Study of the Low-Cost Airlines

This study delves into the ramifications of social media and real-life interactions on the purchasing behaviors and recommendation tendencies of consumers utilizing budget airline services. Employing the Theory of Reasoned Action, the research explores how offline social dynamics (like interpersonal relationships and external influences) influence customer attitudes towards online purchases. It suggests that these factors amplify intentions for repeat online purchases and positive word-of-mouth communication, both conventional and electronic, within the realm of budget services. Through structural equation modeling, the study evaluates a conceptual model using a cohort of Internet users who have engaged with budget airline services. Results indicate that interpersonal offline influences, such as those from friends, relatives, and family, significantly influence intentions for repeat online purchases and traditional word-of-mouth but not electronic word-of-mouth. Conversely, external offline influences, like media or expert opinions, only impact consumer intentions to recommend future purchases through social networking travel sites, without affecting intentions for repeat online purchases or traditional word-of-mouth communication. Additionally, the study underscores the impact of Consumer-to-Consumer (C2C) information exchanges on attitude, subsequently shaping intentions for repeating purchases and both forms of word-of-mouth communication.

Route Competition In Hong Kong

Open sky policies have been implemented for decades, giving birth to many airline newcomers from diverse backgrounds lifting off into liberalized skies. EasyJet, Ryanair, Wizz Air, and Southwest Airlines are examples of independent budget airlines, branding the outcome of aviation liberalization and contributing to interoute competition through their networks. However, Hong Kong International Airport, which aspires to be a better and greater air hub, is crowded with local carriers, and the airport flight timetables rarely show the presence of non-local budget airlines or competing routes. This Article examines the importance of interoute competition and the role that budget airlines play in it. Upon citing the data and traffic schedule to and from HKIA, this Article looks to the HK-Japan and HK-Australia routes as examples of the lack of interoute competition in HK’s internal aviation market. Finally, this Article discusses the reasons leading to such a problem and recommends ways for policymakers to address it.

Глобальні економічні тренди авіаційних пасажирських перевезень

The relevance of the chosen issue is due to the fact that the rapid development of large-scale processes of transport globalization has led, on the one hand, to another restructuring of the aviation sector of national economies, but on the other hand, to the emergence of significant global risks (COVID-19, terrorism, territorial seizures, increased competition among major aviation companies, unprecedented consequences of air pollution, etc.). These and some other preconditions (including the rise in fuel prices) have contributed to the bankruptcy of individual airlines, both among large companies and those with only 3-4 aircraft at their disposal. In today's conditions, the positioning of the world's leading airlines within the three dominant aviation alliances, Sky Team, Star Alliance, and One World, has become increasingly important. The author has demonstrated that they have divided the global aviation space into three unequal parts and have taken dominant positions in world. The article substantiates the phenomenon of the rapid development of aviation transport leaders, particularly passenger airlines: American Airlines (USA), Delta Airlines (USA), Ryanair Group (Ireland), United Airlines (USA), Southwest Airlines (USA), Lufthansa Group (Germany). The article examines the systemic nature and features of the development of budget airlines (low-cost carriers), as well as leading Chinese and Arab airlines. The leading role and development prospects of aviation infrastructure (including global airports) in improving the quality, safety, reliability, and efficiency of passenger air transport are substantiated. The central role of airlines in organizing the tourism business and forming on this basis new forms of economic activity is determined. A graphic model of the development of air passenger transport for the period 2020–2040 has been developed. The important role of global and national institutions in regulating air transport (harmonization of the regulatory framework, networking of aviation space, global hybridization of transportation, etc.) is emphasized.

COMPETITIVE STRATEGIES OF ENTERPRISES IN CRISIS PERIOD: THE MARKETING ASPECT OF AIRLINES

Goal. The article is devoted to the study of the modification essence of competitive strategies as a result of the impact of crisis phenomena on the example of the activities of airlines. Methodology. Research methods include methods of scientific abstraction, observation, synthesis, generalization to highlight the key features of airlines competitive strategies, system-structural analysis of the market. The classification system of Porter's general strategies was applied in the airline sector. Results. Functional-level strategies in different areas of the firm, such as marketing, operations, finance, can only be properly developed when there is clear understanding of the overall business strategy. The article discusses general strategies that are available to all firms regardless of the sector, in accordance with Porter's view of activities differentiation and low cost, taking into account the breadth of operational goals. The focus was on airline operations, indicating the competitive strategies of full-service network carriers, low-cost carriers, integrated cargo carriers, regional airlines, charter airlines, and carrier-within-a-carrier airlines. These business models form the spectrum of strategic choices that will mix and function in hybrid forms as airlines continue to add nuance to their diverse approaches. The impact of crisis phenomena is direct factor in the hybridization of competitive strategies, although budget airlines have proven to be the most stable business models in terms of staff reduction. Scientific novelty. The competitive strategies of enterprises for the aviation sector and the business models of airlines, which respond to the global crisis challenges to varying degrees, are adapted, among which the budget business model is the most stable due to low operating costs. It was established that the business models of airlines are characterized by the approach of hybridization and mixing of business model features. Practical significance. The obtained results contribute the further development of theoretical approaches to the marketing research of airline activities, the analysis of the functioning of the air transport market. The materials reflect the generalization of competitive strategies of airlines.

Changes in strategic responses of selected low budget airlines from different continents in response to the global Covid-19 pandemic

Purpose: The aim of this paper is to indicate changes in strategy, financial, hygienic and service behaviour in relation to customers and aviation personnel. These changes are a response to the global COVID-19 pandemic. Design/methodology/approach: The paper uses the desk research method of analysis. The analysis of publicly available values from the annual reports of selected low-cost airlines from six continents, i.e. Europe, Asia, North America, Australia, Africa and New Zealand and the examples described in the work made it possible to establish facts, verify data and present results. The research concerns not only the situation before and during the COVID-19 pandemic, but also predicts the future of individual companies. Findings: The considerations presented in the paper indicate that low-cost airlines representing individual regions of the world had utmost difficulties in adapting to the changing conditions which resulted from the COVID-19 pandemic. They needed government support. A third of the air fleet was grounded, many employees in the aviation sector lost their jobs or received only 50% of their wages; furthermore, international travel decreased significantly. Only the cargo sector, which had been unprofitable for years, benefited from the pandemic due to the transport of global cargo. Practical implications: Several types of support for the aviation sector are recommended, i.e. rebuilding passenger confidence in air transport, introducing a uniform and globally recognized digital COVID certification, and quick and affordable access to tests. Social implications: Social needs should always come first and implemented solutions should be adapted accordingly. Originality/value: The article is an original approach to finding solutions in crisis situations that could improve the situation of the aviation industry and its passengers. Keywords: airlines, world travel, airline staff during the pandemic, COVID-19, crisis management. Category of the paper: research paper.

Efficiency in Thailand’s air transport industry in the era of air liberalisation policies

Air liberalisation and open skies policies have benefited countries by generating economic growth. However, as the sky has become overcrowded, the increasing competition has pressured airlines to control costs in order to maintain profitability. Efficient use of resources is an important topic for the airlines. Thailand’s air transport industry is unique compared with that in its neighbouring countries. The number of low cost airlines operating in the country has made Thailand a major aviation hub in the region. The developments and changes in Thailand’s air transport industry have raised questions as to whether these have brought any significant changes to airline productivity and efficiency. This study adopted the data envelopment analysis model to examine the efficiency of five airlines in Thailand for the nine years from 2011 to 2019. The airlines, of various fleet sizes, pattern of ownership and business models were examined. The study investigated both the technical and scale efficiency of the airlines and concluded that budget airlines are not necessarily more efficient than full service carriers, private airlines are more efficient than state-owned airlines, and small to medium size airlines are more efficient than large airlines.

Theoretical foundations for building a route network of european budget airlines

Theoretical foundations for building a route network of european budget airlines

Cockpit crew pairing Pareto optimisation in a budget airline

Crew pairing is the primary cost checkpoint in airline crew scheduling. Because the crew cost comes second after the fuel cost, a substantial cost saving can be gained from effective crew pairing. In this paper, the cockpit crew pairing problem (CCPP) of a budget airline was studied. Unlike the conventional CCPP that focuses solely on the cost component, many more objectives deemed to be no less important than cost minimisation were also taken into consideration. The adaptive non-dominated sorting differential algorithm III (ANSDE III) was proposed to optimise the CCPP against many objectives simultaneously. The performance of ANSDE III was compared against the NSGA III, MOEA/D, and MODE algorithms under several Pareto optimal measurements, where ANSDE III outperformed the others in every metric.

Policy silences and the formation of advocacy coalitions in East European sex tourism

ABSTRACT The widening of the European Union and the emergence of budget airlines have brought a host of challenges to member states like Latvia. A result of the economic polarization and its disproportionate effect on women is the explosion of sex tourism. East European destinations such as Rīga have become more prevalent and accessible for sex tourists particularly from Western Europe. Despite this influx of sex tourists, the Latvian government has not formulated a policy response to manage sex tourism. Using the Advocacy Coalition Framework from the public policy literature, this article examines how coalitions formed around Latvian sex tourism, a women’s advocacy coalition and a business advocacy coalition despite a policy silence. I find that women’s coalitions are key players in the policy subsystem that share beliefs and coordinate activities related to the victimization of women, while the business coalition prioritized creating a positive image of Latvia and generating tourism revenue over trying to regulate the tourism industry. This case study also reveals how a policy subsystem tried to emerge, but when sex tourism dissipated, coalitions pivoted to other sexual regulatory policy areas dependent on their deep core and policy core beliefs.

Перспективы посткризисного развития рынка пассажирских авиаперевозок Республики Азербайджан

The purpose of the study is to present a model of the prospective development of the passenger air transportation market of the Republic of Azerbaijan in the conditions of overcoming the crisis caused by the negative impact of the COVID-19 pandemic. Based on the analysis of the activities of the national airlines «AZAL» and «Buta Airways», taking into account the statistical data of the passenger traffic growth of the Heydar Aliyev International Airport (Baku), as well as data on the development of the national tourism industry, a model of promising development of directions in the structure of the route network of the Heydar Aliyev International Airport is presented. The result of the research is the construction of a model for the prospective development of new directions in the structure of the route network of the Heydar Aliyev International Airport. The main principles of the post-crisis model of the development of the national market, according to the author, is the need to develop the segment of low-cost air transportation. The presented model of the route network development includes the development of the directions of the national budget airline «Buta Airways», as well as the expansion of cooperation with foreign budget airlines «Fly Arystan» (Republic of Kazakhstan), «Wizz Air» (Hungary), and in addition, the development of cooperation with Russian regional airlines, and first of all with the airline «Azimut» as one of the dynamically developing regional airlines of the Russian Federation.

Prospects for Creating a Regional Budget Airline in the Republic of Crimea

The 2020 crisis caused by the negative impact of the COVID-19 pandemic had a positive influence on the development of regional air travel. Against the background of an overall drop in passenger traffic exceeding 40%, a number of airports in the Southern Federal District have demonstrated positive development dynamics. With the opening of regular flights to cities in the Southern Federal District and the Republic of Crimea, a number of airports in the Central Federal District and the Volga Federal District by the end of 2020 increased passenger traffic due to the development of the domestic route network. The Russian air passenger market demonstrated high growth and development rates during the period of 2009–2019. The underlying factors of growth and development were the implementation of the subsidizing regional air routes program, the development of competition and the increase in the growth rate of production of the regional jet “SSJ-100”. According to the results of activities at the end of 2020, the Russian regional airline (a mono-operator of the “SSJ-100” jet) demonstrated the lowest rate of passenger traffic reduction. The airline also increased its aircraft fleet by 2 units and expanded its regional route network. The Republic of Crimea is a strategically important region of the Russian Federation. Modernization of the regional logistics complex, which includes the development of regular flights to the regions of the Russian Federation, is a priority task of domestic policy. Based on the structural analysis of the air passenger market and the regional logistics system, a model for creating a regional budget airline for the Republic of Crimea is proposed. The result of overcoming the 2008 crisis on the European air passenger market was the strengthening of the role and influence of the budget airlines (increase in market share from 15% to 50% from 2009 to 2019). The low-cost air transportation segment of the Russian market demonstrates high potential for development due to growing demand. The development of regional air transportation is one of the key factors in the development of the national aircraft construction system. The results of the study can be used in developing a strategy for the aviation logistics system of the Republic of Crimea, as well as in developing strategies for the development of regional airports on the island and peninsular territories.

ANALYSIS OF ECONOMIC ACTIVITY OF REGIONAL AIRPORTS OF FRANCE AND REGIONAL AIRPORTS OF THE CENTRAL FEDERAL DISTRICT: DEVELOPMENT OF LOW-COST AIRLINES DESTINATIONS AS A KEY FACTOR IN THE PASSENGER TRAFFIC GROWTH

The article presents an analysis of the activities of regional airports in France in 2019. The growth of passenger traffic was observed in those airports that actively developed cooperation with budget airlines, increasing the number of destinations in the route network. Regional airports in France, whose route network structure did not expand in 2019, showed a slight decrease in passenger traffic (from –0.1% to –3%). The first and only experimental regional airport in France (city of Beziers), handling flights of only one budget airline, Ryanair, showed an increase in passenger traffic by 14.5% in 2019. The share of routes of budget airlines in the structure of the route network of regional airports in France is quite high. The key problems of regional airports in Russia are the low passenger traffic and the underdeveloped route network. Due to the presence of the only national budget airline "Pobeda" on the market and the minimal impact on the segment of budget air transportation of foreign airlines, the share of budget air transportation destinations in the structure of regional airports of the Russian Federation continues to remain at an extremely low level. 2019 showed a record growth in passenger traffic at regional airports in the Central Federal District (an increase from +2.8% to +262%, with the exception of Tambov Airport, whose passenger traffic fell by 57.4%), which indicates an increase in demand and the need to expand the route network of regional airports. On the example of the Voronezh airport, a model for the development of low-cost airline destinations is presented.

Crisis on Human Resources: Airline Companies in Thailand

A year has gone by and the COVID pandemic is still affecting many industries, with thousands of people getting laid off from work due to lockdowns all across the world. The Airline Industry in Thailand is no different. With many budget airlines closing down permanently and big players in the industry such as Thai airways, filing for bankruptcy just to stay alive. Although the current situation has improved since the beginning of the year, the industry still faces many problems in terms of Human Resources. With the gradual lift of travel restrictions, the industry is slowly trying to bounce back but recovering what the industry lost will be a very slow process in the current situation. Unlike other industries, work from home is not an option in the airline industry, as the industry depends on employees to be physically present, it is evident that safety protocols need to be heavily implemented for the well-being of their employee and their customers. To foresee the possible changes in the industry in regard to Human Resources, the author focus on five main aspects of Human Resource Management: Recruitment, Training, Motivation, Healthy Environment, and Retainment of Employment. In each part, the author states the importance and provides strategies to cope with the current situation. In conclusion, the author ends on an optimistic note for the industry and emphasizes the need to adapt in order to survive in the current situation.

KEY INFLUENCING FACTORS ON FLIGHT TICKET PURCHASE INTENTION AND PURCHASE DECISION: A COMPARISON STUDY OF MALAYSIA VS. TAIWAN

This study aims to study the factors that affect purchase intention and purchase decision of flight ticket buyers in Malaysia and Taiwan. We examined perceived value, service quality, purchase intention, price, and customer satisfaction that influence on the budget airline ticket purchase intention and purchase decision. Structural equation modeling was used to analyse the data from a total of 635 respondents in Malaysia and Taiwan. The findings indicate that, in the case of acquiring budget airline ticket in Malaysia, service quality, perceived value and price, are more appealing, while only perceived value was preferred by Taiwanese. This study’s result will give an insight into industries related to air transportation services theoretically and practically on how to attract and retain customers of different nationalities to purchase flight tickets. This will allow airline companies, tourism agencies and ticket resellers to perform better marketing activities to attract Malaysian and Taiwanese travellers to purchase their flight tickets. 
 
 <p> </p><p><strong> Article visualizations:</strong></p><p><img src="/-counters-/edu_01/0785/a.php" alt="Hit counter" /></p>

The impact of Corporate Social Responsibility on Corporate Image: Evidence of budget airlines in Europe

AbstractThere is growing scientific debate on the impact of Corporate Social Responsibility (CSR) or Corporate Hypocrisy (CH) on Corporate Reputation (CR). The aim of the study is to analyse the influence of CSR on CR based on literature review and results of conducted empirical studies and to test this relationship in growing budget airlines sector. Environmental responsibility of airlines was highlighted in this study. The empirical study conducted in Lithuania employed quantitative survey. And 400 adults were surveyed. The results indicated that CSR and CR in the budget airline sector are important for the Lithuanian customers. However, the study did not find the link between agreeing to pay a higher price for flight operated by socially responsible companies and the importance of airlines' CR in making a purchase decision. There was also no link found between the more frequent choice of flights operated by airlines conducting CSR activities and the importance of the airlines' CR in the purchasing decision. The relationship between airlines ‘past actions that determine their CR and the predictability of airlines' future actions were also found to be weak.

Prospects for the Development of Kurumoch International Airport (Samara) in the Context of Macroeconomic Instability

The fundamental goal of the research is to analyze the route network of the Kurumoch airport (Samara) and determine the percentage of flights of classic and budget airlines. Analysis of the structure of the route network of Kurumoch airport allowed us to conclude that the share of budget airlines remains at an extremely low level. Low-cost airlines operate only two international flights from the airport. There are no low-cost airlines in the structure of the domestic route network. Analysis of the route network of the airport in Voronezh, which is comparable to Samara airport in terms of passenger traffic, proved that the number of low-cost airline destinations is only 6,67 %. The data from the analysis of the route network of airports in the North Caucasus Federal district, where the share of destinations of budget airlines is from 6,67 % to 62,50 %, served as evidence of the growth of passenger traffic at airports that actively develop cooperation with budget airlines. A significant number of airports in the North Caucasus Federal district, based on the results of operations in 2018, showed high passenger growth rates. The hypothesis of the research is the assumption that the development of low-cost air carriers in the structure of Kurumoch airport (Samara), in the conditions of overcoming the crisis caused by the COVID-19 pandemic, can serve as the main factor of growth and development. The author of the study presents the data from the analysis of the route network of the two largest budget airlines in Europe: «Ryanair» and «EasyJet» in the structure of the airport of Bordeaux (France). The share of European budget airlines in the structure of the route network of regional airports in France ranges from 30 % to 80 %, which allows regional airports to demonstrate high passenger traffic. A significant share of low-cost airlines flights is made up of short-and medium-length flights (from 500 to 1 000 km), which allows us to achieve high performance indicators of the aircraft fleet, which is a fundamental factor in the strategy of low-cost airlines. The result of the study is the conclusion that the development of low-cost airline destinations can become a key driver for the development of regional airports in Russia. As a justification for the conclusion, the author presents a model for the development of promising destinations for budget airlines and provides data on the possible growth of annual passenger traffic at Kurumoch airport (Samara) when opening destinations for low-cost airlines.

A Consumption Model of Foreign Visitors in Japan: Identifying the Beneficiary Area of International Flights

This paper presents a model for the consumption patterns of foreign visitors in Japan. My study more specifically uses our model to analyze data about the passenger flow of Chinese tourists to Japan. I verified the accuracy of the model, using the total number of foreign visitors in each prefecture as listed in Japanese statistics about travel accommodations. The model identifies the beneficiary area of a Chinese budget airline that services an international airport, exploring this question through the impact of the airline’s service on tourist consumption in three metropolitan regions. My study evidences that 1) tourists arriving at Narita Airport or Haneda Airport on Chinese budget airlines primarily consume in the Tokyo metropolitan region and 2) tourists arriving at Kansai Airport or Chubu Airport on Chinese budget airlines primarily consume in the Osaka metropolitan region, the central region, and the Tokyo metropolitan region.

Analysis of the Status and Potential of the Passenger Transport Market in China and Central Asia Inspiration for the Initiative «One Belt One Way»

Central Asia, being an important zone in the Silk Road Economic Belt of the China Road «One Belt-One Way», is an important economic channel for China, connecting European countries by land. Transport communication is the basis of the work of the initiative «One belt-one path», therefore it is important and priority. Although the development of land connections (railways, highways) between China and Central Asia has made significant progress, passenger services, especially air passenger services, are still underdeveloped. The paper explains the state of development and existing problems of the bilateral air passenger transport market between China and Central Asia through the data analysis and policy studies of the «Bilateral Air Agreement». Three policy recommendations are put forward within the framework of the «One Belt-One Way» initiative. First, China and five Central Asian countries should use the platform created by the initiative «One Belt-One Way» to actively negotiate new bilateral air agreement between governments in the field of law, airports of general aviation, capacity and airline access to further ease regulations. Considering concerns that five Central Asian countries may have regarding the protection of their national airlines, the negotiation of an aviation agreement between China and Central Asia may use a model of negotiations between US and Canada on bilateral aviation agreement. Second, given the capacity of airports and rapid economic development of China’s second and third level cities, Governments’ preferential airport policies in China’s second- and third-tier cities could be extended to attract Chinese and Central Asian airlines to operate direct flights between these cities and Central Asia. Third, to allow and encourage private and budget airlines to enter China-Central Asia airline market. These airlines can use their own price advantages to open up new markets that are not sufficiently attractive to traditional airlines.

Перспективы развития рынка бюджетных пассажирских авиаперевозок в Республике Казахстан

The article analyzes the activities of the budget airline Fly Arystan of the Republic 
 of Kazakhstan at the market of passenger air transportation in the low-cost segment. The pricing policies of Fly Arystan airline and the largest European low-cost airline EasyJet (Great Britain) are considered. The data of government support for the development of the budget passenger air transportation market are provided. Based on the Fly Arystan development concept and plans to expand the aircraft fleet there are presented the possible options for expanding the domestic and international route network. The experience of the Russian low-cost airline Pobeda (Aeroflot Group) related to the expansion of the route network is presented. The key factors of the development efficiency of the segment of budgetary passenger air transportation in the Republic of Kazakhstan are measures of state support for updating and expanding the aircraft fleet (subsidizing leasing), modernizing the ground air transport infrastructure, energy self-sufficiency due to the regional production and refining petroleum products, and a favorable geographical position. With the successful 
 of the development of the national system of passenger air transportation the Republic of Kazakhstan may become a leading regional market player. The development priority direction should be the concept of connecting flights through the main hubs (Nur-Sultan, Almaty) in the following areas: the Russian Federation (Southern Federal District, Volga Federal District, Ural Federal District, Siberian Federal District) – the Kyrgyz Republic, the Republic of Uzbekistan , The Republic of Tajikistan. Developing the geography of the budget passenger air transportation, the Republic of Kazakhstan creates favorable conditions for the competition. The development of a network of regional and international destinations supports the system of national and international tourism, the participants of which are enterprises of the small and medium-sized business segment, which contributes to an increase in tax payments to the regional and republican budgets.