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Analysis and Evaluation of Low-Cost Carriers:
Case Study of Oasis Hong Kong Airlines and AirAsia
Introduction
This paper explores the industry of Low-Cost Carriers (LCCs) by making reference to two Asia Low-cost airlines – Oasis Hong Kong Airlines and AirAsia. More in depth on the bankruptcy of Oasis Hong Kong Airlines as well as the successfulness of AirAsia are assessed. Specifically, the study analyses and evaluates both airlines by using PEST analysis and Five Forces Model in the strategic management perspective. Recommendations are suggested to low-cost carriers to sustain and continue to growth with this business model.
History of Low-Cost Carriers
The term Low-Cost Carriers (LCCs) refers to airlines that operate in a lower operating cost structure than their competitors (traditional airlines). The concept of low-cost carriers or low-cost airlines was originated in the United States with the starter airline Southwest Airlines in the 1970’s and then to Europe in the early 1990’s and subsequently to the rest of the world. In the early 1990’s, low-cost airlines becomes more and more popular in the world, more and more low-cost airlines were opening up one by one, even big traditional airlines also followed the trend and opened up subsides in low-cost lines in order to gain more market shares. Regardless of their operating models, low-cost carriers often apply with low-ticket prices and limited services that however should not to be confused with the regional airlines that operate short flights without services or with full-service airlines offering some fares reduction.
Generally, low-cost carriers are different from traditiona ...