Literature Review on "Low Cost / Full Service Airlines"

Literature Review 16 pages (4640 words) Sources: 10

[EXCERPT] . . . .

Low Cost / Full Service Airlines in Thailand

The Role of Various Governments

The Business Models of LCCs

How FSCs are Adjusting to these New Trends

The Challenges Facing LCCs

Research Philosophy

Sampling

Data Analysis Process

Ethical Issues of the Research

Chapter 4 Data Analysis, Results and Discussion

Profile of Population Sample for the Survey

Survey Findings

Implications for the Practice

Recommendations for Future Research

List of Tables / Figures

Thai customers' perception and determinant of selection of low cost airline and full service airlines in Thailand.

Over the last several decades deregulation and globalization have been having a profound impact upon the air passenger industry in Asia. Where, a variety of low cost carriers have quickly emerged, in providing travelers with affordable options, for going to different destinations throughout the region. This chapter provides a basic background of: the situation, it identifies the problem, it provides aims / objectives of the study, there's an overall structure of the dissertation and a hypothesis is presented.

A.2: Literature Review

In this chapter, previous research on the subject will be examined in the form of a literature review. Where, there is an emphasis on the following points: past / current trends in the industry, the role of various governments, the business model of LCCs, how FSCs are adjusting to the new trends, and the challenges facing LCCs. These different pieces of research will provide a basic background, as to what possible issues could be affecting the industry.

A.3: Methodology

This chapter discusses the methodology that will be utilized as a part of the survey sample that is being taken. With there being an emphasis on the following areas: research philosophy, research design, sampling, data collection, data analysis process and ethical issues of research. This is important, because it provides a basic foundation as to how the survey will be conducted.

A.4: Data Analysis, Results and Discussion

This chapter talks about how the surveys were conducted, by examining the results and then discussing the findings. The different areas that are covered in this chapter would include: a profile of the sample population, research findings and a research discussion. These different findings from the surveys are then, corroborated with the research from chapter two, to identify what specific factors are affecting customer perceptions.

Chapter 1

1.1: Introduction

This chapter provides a basic history and background, as to how the airline industry evolved in Asia. The way that this is accomplished is: by comparing the full service carriers (such as Thai Airways) to the low cost carriers (i.e. Thai Air Asia).This is followed by: a statement of the problem, the aims / objectives of the study and (at the end of the chapter) a hypothesis.

1.2: Background

Over the last 25-year Asia has underwent a massive transformation, as globalization is causing many countries to experiences above average rates of growth. This is because, the reduced trade barriers and the principals of free trade; have transformed the region's economies from: mainly an agricultural focus to one that has become the manufacturing hub for the world. One of the effects of these changes is: an increase in air passenger and freight traffic. This has caused the demand for a variety of air transportation services to rise dramatically. In the case air passenger traffic, these events have placed the industry at unique cross roads. Where, a number of different features have begun, to have a profound impact upon the demand for these services. Evidence of this can be seen by looking no further than June 2010 passenger traffic totals. Where, the Association of Asia Pacific Airlines found that passenger traffic rose to total of 15.1 million people, up 25.2% from the same time last year. (Asia Pacific Airline Passenger Traffic, 2010) This is significant, because it highlights a shift that is occurring in the airline industry as passenger traffic has been rising dramatically in response to the increased, business activity throughout the region. However, when you look at the issue a little closer, it is clear that there are many other factors that are helping to increase demand for air passenger service. The most notable would include: rising levels of per capita income, the vast distance between many cities, the development of tourism in different areas and the lack of infrastructure in various countries. These elements are important, because they highlight how despite volatility in the economic cycle or increases in energy prices, demand continues to increase. An example as to how this trend has affected the industry can be seen by looking no further than the dominance of Asian air passenger traffic in 1972, with it comprising just 13% of the total market shares. By the early 2000's this number has increased dramatically to 33.3%. In the case of Thailand, they were affected by the different factors mentioned above and because they are strategically located in heart of Southeast Asia. This would result in the dramatic expansion of full service airlines such as Thai Airways. Where, they would focus on providing the customer with that unique experience of the full service carrier (FSC). At the same time, these carriers were seeing pricing pressure and competition from the low cost carriers (LCCs). Their objective was to offer less service, with lower ticket prices. As a result, this has caused a shift within the air transportation industry, with the total number of LCCs rising dramatically. (Doganis, 2006)

To see the full effects of this shift; means that you must examine how these changes have occurred in: the perceptions of Thai customers, the factors that have influenced their decisions and analyze these results. This will be accomplished by: introducing a hypothesis, conducting a literature review, conducting a survey, analyzing the results and making possible recommendations / introducing theories as to why the trend is occurring. Together, these different elements will provide the greatest insights, as to what factors are affecting the buying decisions of customers, when it comes to airline travel in the region.

1.3: Statement of the Problem

Since the 1990's the demand for international air travel in Asia has been growing at twice the rate of North America. (Organization for Economic Cooperation and Development, 2005) This is in response to deregulation from many governments throughout the region, as they would reduce regulations in flying new routes and would begin spinning off, some of the large national carriers such as: Cathy Pacific. At the same time, various air transportation agreements were signed by a variety of countries throughout the region. This would lead to a shift within the industry, as a new deregulated pricing model would emerge. At which point, many LLC's began to play a dominant role in the industry. Where, they would offer less frills with one low price to include: one single passenger class, one type of airplane, an innovative fare scheme, unreserved seating, short flights and they fly to less congested airports. (Organization for Economic Cooperation and Development, 2005) These different elements are important because they would highlight a major shift in the industry, as consumer wanted less frills and cheaper fares. The research that will be conducted will examine: if changes in customer perceptions are occurring, to what extent and what factors are affecting the buying decisions of consumers.

1.4: Research Aims and Objectives

The aims of this paper are to find out the perception of Thai customers towards the low cost carriers and full service airlines. At the same time, it will find out about what factors are affecting their decisions, to use one particular type of airline over the other. The surveys have been established to determine the answers of these perceptions towards: both types of airlines and the reasons why they are selecting one particular carrier over another.

The objectives of the research include the following:

1. To investigate Thai customers' perceptions of full service airlines and low cost carriers.

2. To examine the major factors that have influenced and impacted buying decisions. While simultaneously, determining how these factors has affected the publics' decisions, to utilize one particular carrier over another.

3. The impact that these perceptions and buying decisions are having on the entire industry.

4. What will the future of the air transportation look like based upon these results?

1.5: Dissertation Structure

The dissertation will be structured in a way that will provide specific and general overviews of the airline industry to include:

1. Introduction: This chapter will provide a background of: the changes occurring in the industry, the statement of the problem, research aims / objectives and a hypothesis.

2. Literature Review: This chapter looks at the changes that are taking place with airline sector and how they are affecting the views of customers.

3. Methodology: This chapter will define the variables of the independent survey and will examine the different aspects, as to how the sample will be taken.

4. Results and Analysis: This chapter will conduct, compare and then analyze the results from the survey with the research.

5. Conclusions and Recommendations: This chapter will provide… READ MORE

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