Low Cost Carrier and Full Service Airline Competition, Globally and in Asia
Transportation & Logistics
First 15-20 minutes is for networking Sandwiches and Beverages included Hosted by the Transportation & Logistics Committee In the early era of Low Cost Carriers ('LCCs"), new entrants sought to stimulate new travel demand through the introduction of lower fares, leaving Full Service Airlines ('FSAs") to focus on business travelers while LCCs captured leisure travelers. However, over time the distinction between the two segments around the world has grown increasingly blurry. LCCs are now offering connecting services, forging partnerships, and engaging in other behavior that drives higher costs and puts them closer to FSAs. As LCCs have matured and costs have risen, some LCC service offerings have eclipsed those of the FSAs, and FSAs have attempted a range of strategic responses with varying degrees of success. The choice to defend, attack, or exit altogether in response to an LCC threat is a key strategic decision many FSAs around the world are now grappling with.
In Asia, as the LCC market has matured a number of relatively unique and remarkable developments have emerged, including: a greater degree of experimentation with long-haul LCCs; highly localized LCC service characteristics; and general acceptance of the LCC multi-national franchise model. With the convergence of business models, the future will likely bring an increasingly competitive environment where LCCs and FSAs are competing more vigorously, particularly in short-haul markets which may become fully commoditized.
The American Chamber of Commerce in HK 1904 Bank of America Tower 12 Harcourt Road Central, Hong Kong