Discount Airlines Taking off

Major airlines are expected to fare better than before because they have employed newer strategies that will attract more customers than before. For example, low fares can attract many people to have a desire of travelling while using air means. Besides this, customers are attracted by low costs where they move from the high cost airlines to low cost airlines. Increased revenues because of low costs also helped in keeping other costs of the airlines down. In addition, these airlines started using the current technology like the internet with a lot of aggression. In general, internet costs help in reducing other costs such as telephone costs and the use of travel agents.

Cost reduction also helped customers in shifting from discount airlines to fare airlines. In turn, the fare airlines obtained more customers thus increasing their market share. Fare airlines also have an advantage of operating in many secondary airports as compared with discount airlines that operate in few many airports. They are able to obtain passengers from the secondary airports who would otherwise have been attended to by the major airlines. Through this, they are able to cut their operating costs when compared with others, who if they cut their costs may lose a lot of income. By using the internet in their operations, they could also get more travelers in diverse areas; as opposed to the use of agents who are restricted because they are only capable of being at a place in one time. This is because the use of internet helps in networking with various people from all over the world from a centralized location.

Discount airlines were aware of the customer losses and the loss of market share associated with low fares. They came up with a new strategy that could outsmart the fare airlines. They came up with coast-to-coast flying and decided to charge less for a round trip that had a price of $2,000. The only limitation to this was that discount airlines could use secondary routes when lying. However, this can be advantageous if secondary routes were not in complete usage before the upcoming competition. The airlines have also started using jets to fly their passengers in regional areas because the jests are cheaper to operate compared to big aircrafts.

The majors are in this situation because they undermined the fact that fare airlines can make it to a higher level than them. Besides this, they did not lower their prices to counter the effect of the minors since their prices are rigid. This rigidity may be because of the fact that they have higher operating costs, which may not be easily covered once they lower their prices. Major airlines have not matched with the strategy of using the internet for their operations like the fare airlines. In addition, discount airlines do not use secondary airports in most of their activities leaving the passengers in these airports at the service of fare airlines.