Fundamentally, Legacy Airlines can match what the low-cost airlines do. That means cutting costs and improving efficiency. Or they can differentiate with the product they offer. But above all they must remain competitive on price.
A successful business means a tight operation where every penny counts. Legacy airlines can tighten up by increasing aircraft utilization and reducing turnaround times. That creates the possibility of reducing the workforce in line with reduced manpower need in the area of pilots, cabin crew, ground staff, catering, maintenance and overhaul. They must also consider more outsourcing of functions if it helps reduce costs.
Internet distribution, self check-in for passengers and charges for onboard meals and drinks will all add to the cost-cutting effort. Fares can be simplified to match the competition and stimulate travel. Revenue management systems can be used to compete on fares rather than to simply protect yields, and non-ticket revenues can be generated by selling all kinds of innovative products to the passenger via the Internet site, at check-in, and on board. There should also be scope to close downtown ticket offices, reduce call centre activity and staffing, change the relationship with the travel trade as more and more sales and ticketing switch to direct over internet.
Legacy airlines, in order to compete with the low-cost carriers, have got to make some crucial and urgent business decisions. Most important of these are dealing with costs, increasing staff efficiency, improving asset utilization, differentiating their product. Above all, airlines must learn to compete wisely on a head to head basis and stop complaining.
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