Thesis (MBA)--Stellenbosch University, 2003. / ENGLISH ABSTRACT: The emergence of low cost airlines (LCAs) has attracted attention from
passengers, competitors, the public, and researchers alike. It seems prodigious that
LCAs prosper in today's time of economic downturn and are therefore able to counter
the industry's trend. lATA's member airlines have accumulated losses of $31 billion
since the beginning of the new millennium. Furthermore, industry icons such as
American Airlines and British Airways are fighting for survival while some, namely Air
Canada, are on the edge of bankruptcy: a fate which others, like Sabena, have not
been able to escape.
However, the low cost business model has triumphantly entered the aviation
market since the deregulation of the markets in the U.S. in 1978. Low cost airlines
like Southwest Airlines and Ryanair not only achieve double-digit profit margins, but
also have the highest market capitalisation of the industry. This thesis examines the
reason for the success of LCAs in the U.S. and EU. LCAs operate with a much lower
cost base than most carriers, especially the major hut-and-spoke (H&S) airlines. The
low cost business model aims at increasing both aircraft and staff productivity. It also
simplifies the sequence of operations workflow and pricing structure. The thesis gives
special consideration to the cost structure of LCAs. The advantages of LCAs lie
within the areas such as labour, seat density, and distribution.
The second objective of this thesis is to evaluate the development of LCAs
and consider the implications for the European transport industry. Whereas American
LCAs have operated for more than twenty-five years, the boom of their European
counterparts did not commence until the end of the 1990s. Ryanair and easyJet have
growth rates of more than thirty percent. The author agrees with the expectations of
aviation experts that LCAs will grow until they serve approximately a quarter of the
market; hence, the business model of low cost is sustainable. However, only three to
four low cost airlines will survive the fierce competition in Europe. / AFRIKAANSE OPSOMMING: Die dringendheid van lae koste lugrederye (LKL'e) het die aandag getrek van
passasiers, mededingers, die publiek en navorsers. Dit is vreemd dat LKL'e floreer in
die huidige ekonomiese afswaai en gevolglik die tendens van die industrie teenwerk.
Lugrederye, wat lid is van "lATA" , het sedert die begin van die eeu verliese gelei van
31 biljoen dollar. Daar teenoor is industriele ikone soos die Amerikaanse en Britse
lugdienste (American Airlines and British Airways) besig om te veg vir oorlewing,
terwyl ander soos die Kanadese lugdiens (Air Canada) op die grens van bankrotskap
is: 'n ramp wat sommige soos Sabena nie kon vryspring nie.
Sedert die deregulering van die lugvaart in die VSA in 1978 het die lae koste
besigheidsmodel egter die mark triomfanlik betree. Lae koste lugrederye soos SuidWes
lugdiens en Ryanair ervaar nie alleen dubbel-syfer wins-marges nie, maar het
ook die hoogste mark-kapitalisasie in die industrie. Hierdie verhandeling ondersoek
die redes vir die sukses van LKL'e in die V.SA en E.U. LKL'e werk teen 'n baie laer
koste basis as die meeste vervoerders, veral die belangrikste "hub-and-spoke"
lugrederye. Die doel van die lae koste besigheidsmodel is om beide die vliegtuie en
die personeel se produktiwiteit te verhoog. Dit vereenvoudig ook die volgorde van
prosedures, werkvloei en prysstruktuur. Hierdie verhandeling gee spesiale aandag
aan die kostestruktuur van LKL'e. Die voordele van LKL'e lê op die gebied van
arbeid, sitplekplasing en verspreiding.
Die tweede doel van hierdie verhandeling is om die ontwikkeling van LKL'e te
evalueer en te kyk na die invloed op die Europese vervoer-industrie. Die
Amerikaanse LKL'e word reeds vir meer as vyf-en-twintig jaar bedryf terwyl hulle
Europese eweknie nie 'n opswaai voor die einde van die 1990's ervaar het nie.
Ryanair en easy Jet het 'n groei getoon van meer as 30%. Die argument is dat
volgens lugvaartkundiges die LKL'e sal groei totdat dit ongeveer 'n kwart van die
mark bedien; daarom sal die lae koste model die beste oorleef. Nogtans sal slegs
drie of vier van die lae koste lugrederye egter die hewige kompetisie in Europa
oorleef.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:sun/oai:scholar.sun.ac.za:10019.1/53686 |
| Date | 12 1900 |
| Creators | Riedel, Henrik G. A. H |
| Contributors | Flouris, Traint G., Stellenbosch University. Faculty of Economic and Management Sciences. Graduate School of Business. |
| Publisher | Stellenbosch : Stellenbosch University |
| Source Sets | South African National ETD Portal |
| Language | en_ZA |
| Detected Language | Unknown |
| Type | Thesis |
| Format | 170 p. : ill. |
| Rights | Stellenbosch University |
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