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9. LCC (Biz Model & Target market demand segmentation framework (2.…
9. LCC
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Challenges faced by LCC
:pencil2: From LT 10: LCC
- Must achieve cost economics & benefits of large size & spread
- Pace of expansion, 15% - 20% growth annually
- Market stimulation via increasing frequency, new destinations, linking served airports (joining the dots)
- Growth cannot outpace ability to generate new traffic
- Increased size & complexity ≠ increase unit costs
- Overcapacity
- Decline in yield/avg fare
- Controlling costs
- How LCCs should develop their model