Examining the current air travel industry in US, it has been identified that the industry has become the important contributor in US economy (Borenstein, 2017). It is true that with increasing technological innovation, numbers of new carriers have been increased. On the other hand, with changing customer consumption trend, the air travel industry has got influenced. The purpose of this study is to shed light on the Air transportation market share in US. By highlighting the role of markets and marketing from the point of the Full Service and Low Cost Carrier approaches, the study has discussed these impacts on the market. Different buying behavior of the customers in this industry have been discussed. At the end of the study, measurable recommendations have been provided for developing new carrier.
It cannot be denied that the US has extensive air transportation network. In case of analyzing the air transportation statistical growth in US market, it can be said that the domestic market share is being driven by the airline industry (Li, Granados & Netessine, 2014). With 18% market share the American airlines leading the US market. Depending on the sales rate, American airline industry is being considered as the biggest airline in the globe. In the year 2017, the sales rate reached 43 billion (Statista.com, 2018). In order to maintaining its sustainability in the market, the airline industry has standardized its comfort and security level. In the year 2017, In North America Delta and Alaslka Airlines have become the best traditional carriers for customer satisfactions (Statista.com, 2018). On the other hand, due to low cost airline services in southwest American airlines, it has gained the top position for Low-cost carriers. Comparing the domestic share in the airline industry in US, it has been identified that the southwest airlines are in the top position for domestic market share. However, it cannot be denied that increasing passenger traffic in the airline industry has become the major concern for the authority. The US Airlines have fleet in near about 238 domestic destinations in 60 different countries. George Bush international airport is being considered as the busiest international airport with 40 million passenger in every year (Statista.com, 2018).
Analyzing the business type in US airline market, it has been identified that the oligopoly types of market. In the market, the audience wants to develop the relationship with the brand. Due to this reason, the marketing has become necessary for the industry (Kim, Kim & Hyun, 2016). The aim of the marketers to to solidify the reputation for implementing the airline strategies in an effective manner. The network strategies used by the airline industry have higher level of impact on its growth as well as developing customer relationship. Analyzing the current market situation, it has been identified that the influences of low cost carriers have been increased in the aviation industry. Low coat carriers are characterized by fewer frills and lower fares, which has helped to attract the large numbers of passengers. In case of full service airlines, the loyalty programs, complimentary meals and different facilities are being provide. On the other hand, in case of low-cost-carriers, the quintessential luxuries are being provided. In the current scenario, it has been identified that due to increase preference of low-cost carriers the corporate travel budget is getting affected. Most of the cases, the business travelers are preferring the low cost carriers that is influencing the current situation in the industry (Jung, Han & Oh, 2016). It cannot be denied that due to increasing changes in the airline industry, development in the performance structure in the industry has been changed. After the low-cost- service revolution in US air transport industry, the growing numbers of passengers has impacted on its business revenue. Due to co-existence of the low-cost carriers and full service carriers in the airline industry, substantial additional charges for the full service carriers have become necessary, which has made the competitive environment between the low-cost and full service carriers.
It cannot be denied that after the introduction of low-cost carriers in the market, the 13% market share has been increased in 1997. Within 2009, the percentage has reached 28%. After the constant analysis of the US airline industry. it is true that depending on the Us airline industry growth, it can be said that merge between Trans world Airline and US airways, market share has been increased. In the productivity analysis of full time and low cost carriers, it can be said that depending on the current situation, the cost has been reduced 10% in the full service carriers and increased 8.5% in the Low cost carriers in between 1993 to 2014. Due to technological innovation and rapid growth in the airline industry, the rate of the nontrivial productivity has been influenced. It cannot be denied that due to unexplained technological changes, the cost has been increased in Low-Cost carriers, where the productivity has also been increased due to changing contribution of the passengers in the industry. Therefore, it can be said that the competitive pressure from the Low cost carriers have increased the efficiency as well as the threat from the insolvency of full service carriers. it cannot be denied that from the past 13 years, the full service carriers have delayed , which influenced the customer satisfactions. On the other hand, it cannot be denied that the cost different between the full service carriers and low cost carriers has not been converged in the recent years. With cost adjustment for the average flight distance, the cost difference increased 40% between the full service carriers and Low cost carriers. It has become challenging situation for the marketers to understand the cost movement between full service and low cost carriers in the past few years. Due to the cost changes, the identity of productivity has been changed for increasing numbers of technological changes, movement characteristics and changes in density.
It is true that in case of providing the services for wide variety of destinations, the traditional full time carriers are important. By providing the one stop air transportation facilities the full service carriers serve to the community. By introducing thee large numbers of destination pairs, the full service carriers has developed hub-and-spoke syste (Holloway, 2017)m. However, it can be denied that regulation restricted entries and routes create challenges for the marketers to provide the uninterrupted service. The US air industry follows the Hub-and-Spoke networking system, in which the carrier gets the chance to generate more traffic and higher density route. In case of analyzing the customer benefits from the full service carriers, it has been identified that the frequent services and the increasing numbers of destinations have increased the market power of full service carriers.
Aviation is being considered as the biggest industry in UK with more than 235 million passengers. It cannot be denied that the airline sector is dramatically growing after introducing attractive facilities to thee passengers. Discuss how Full Service and Low Cost Carriers target specific air travel consumers based on their buying behaviors and how buying behaviors influence their marketing communications. It has been identified that due to diversified lifestyle trends, the social changes have influenced the behavior of the consumers in airline industry. Due to increasing technological advanced, consumers have become aware of new safety features in the aviation industry. The air travel behavior and attitudes are totally different from the environmental behavior. The transport sector is contributing in the environmental degradation. In that case, it has become necessary for understanding the behavioral response of the consumers for understanding their travel attitudes. Analyzing the air travel behavior of the US people, it has been identified that depending on the well documented websites developed by the airline organizations, attention of the customers can be driven.
In case of airline industry, the numbers of online customers are higher than the off line customers. It cannot be denied that in case of maintaining the relationship with the customers, various initiatives have been adopted by the airline organizations. Due to increasing competition in the market, the airline industry has brought tremendous changes in order to advance its communication and information system for revolutionizing the customer behavior. With this initiatives the organization aim to enhance the information capabilities so that the booking process can be simplified. The customer perception in airline industry is being influenced depending on different factors. In today’s era, it has become important to determine the service quality for systematically evaluation the performance of airline industry. Depending on the current customer preferences in airline industry, it can be said that depending on the service quality in the airline industry, the customer satisfaction and behavioral intention can be analyzed. With increasing innovation and facilities in the airline industry, preferences of customers in case of services have been changed. In case of US airline industry, it has been identified that the depending on the superior services, the customer behavior can be encouraged. Analyzing the dependency between service quality and behavioral consequences, the perception of the customers to abele the service can be changed (Fageda, Suau-Sanchez & Mason, 2015). On the other hand, it is true that feelings of the customers can get changed in case getting same quality of services from different service providers.
In case of meeting the customer expectation, thee service qualities are being extended. In order to gain sustainable position in the market, the US airline organizations need to focus on introducing unique service quality in the industry so that number of happy and loyal customers can be increased. In the SERVQUAL model, it is mentioned that rate of passengers is the tangible dimension that is important for analyzing the service quality dimension in the airline industry. In case of analyzing the service quality and customers engagement, various independent dominations have been discussed, those play an important role for driving the customer satisfaction rate in the airline industry. In the competitive business environment in US, the customers have become brand and quality conscious. In this situation, brand image plays an effective role for driving their attention (Fageda, Suau-Sanchez & Mason, 2015). With increasing technological innovation, technological error has become the common phenomena in the airline industry. In that situation security has become the major concern for the customers. Analyzing the changing behavioral trend of airline customers, it has been identified that people have become highly concern about the security providing by the organizations. Analyzing the behavioral trend of the airline customers, it can be said that in the current scenario, dependency of people towards internet has been increased. Therefore, E-ticketing has become popular among the customers. Depending on the punctual schedule of flights, the customer satisfaction rate can be influenced. The money which is being invested against the service, if it not be able to satisfy the needs of the customers, in that case dissatisfaction and brand switching tendency can be increased. On the other hand, if the price of the service will meet the expectation of the customers, in that case the customer loyalty can be increased.
Analyzing the different target market, it has been identified that the low-cost carrier preferring customers are price sensitive. The air travel industry target market can be segmented in different parts such as urgent travels, business travels, loyalty programs and budget conscious. It is true that due to increasing passenger is in the low cost carriers, the market share has been increased in the air transport industry (Leong et al., 2015). It is also true that the budget flights are 30-50% cheaper than the normal airline costs. Therefore analyzing the target market of full service and low cost carriers, it can be said that mostly budget sensitive customers are being targeted by the low cost carriers. The low cost carriers are cheap as these do not offer the high cost luxury to the passengers. Therefore, depending on the psychographic segmentation, it can be said that people who prefer simple lifestyle and journey, mostly being targeted by the low cost carriers. Analyzing the customer behavior, it can be said that the people who have an allergy to luxury, are being targeted by the budget flights. People who follow the savvy spending strategy, are mostly travels in the budget flights. With the typical behavior of budget the passengers fleet by saving the money. In case of low-cost carriers, the staffs are being recruited with the minimum wages, here the staffs are being encouraged for ding the multi tasks. On the other hand, it is true that in case of low cost carriers, online purchasing is being done in frequent manner. Mostly the business passengers are being targeted by the low cost carriers for its frequent services.
Brand image is another important key influencing factors in the air travel industry. The brand perception large network, lower fares, high advertising awareness campaigns and the facility of 24hrs booking via Internet can play an influential role for pushing the market of air travel industry (Jung, Han & Oh, 2017). Depending on the [psychographic segment, it can be said that the customers who prefer the luxurious services, mostly prefers the full service carriers. it cannot be denied that in case of low cost carriers crews are the not being paid properly, which influence the service quality. The service concern passengers, who have experienced the service quality of the full service carrier, will never get satisfied with the service of low cost carriers. Therefore, it can be said that depending on the service quality, the customer perception can get changed. Low cost and hidden fees are the major challenge in case of LCCs, which influence customer preferences. Depending on the loyalty segment, it can be said that in case of increasing passenger retention, the turnover rate is also high in this case. However, in case of full service carrier, the numbers of loyal customers are high.
The term marketing communication is being developed for helping to develop the effective relationship with the customers. The marketing communication gets highly influenced depending on behavioral characteristics of the customers. In case of air travel industry, it can be said that the website graphics in the airline organizations are important for attracting the visitors. By adding images, videos and information, the transparency between the marketers and the passengers can be maintained (Bolton & Chapman, 2015). By providing the information in website, regarding flight schedule and on air facilities, the marketing communication can be developed. On the other hand, relevancy is another important factor for driving the marketing communication. A true airline passenger pay attention to the communication if the messages and information which are being provided to them will be relevant. On the other hand, depending on the credibility, buying behavior of the passengers can be influenced. Marketing communication can get influenced if the money, which is being paid by the customers against service, will satisfy the expectation. It cannot be denied that with technological opportunities in the market, the security has become the major concern for the customers. In that case, the customer who believe that the large organizations can be able give the security assurance, in that case depending on the brand fascination of the customers, the marketing communication can get affected.
Conclusion
Analyzing different perspectives of the passengers as well as benefits and challenges in the low-cost carriers and full service carriers, it can be said that in case of serving the in the larger aspects, the low-cost carrier is beneficial. Due to its cost effectiveness, the large numbers of passengers have got the chance to abele its services. On the other hand, in case of full service carriers, the target market is basically being developed depending on the upper class people. by recruiting thee efficient crew members and providing the luxurious services, the full service carriers provide excellent experience to the passengers. It is true that due to its expensive facilities, it becomes harder for large numbers of people to abele the services. in terms of facilities and well as the security assurance, the full service carrier is more beneficial for the passengers. In the economic perspective, low cost carrier is suitable for US air transport industry. It cannot be denied that after the introduction of low cost carriers the market share rate of the air transport industry has been increased. As per my understanding, in terms of service quality, the full service carriers are far better than the low-cost carriers. However, by continuing this I can also say that the in terms of economic benefits, the low-cost carrier is far better than the full service benefits. In case of developing a new carrier, it can be suggested that in order to enter in the market, the organization should prefer the low-cost –carrier service as it is very much cost effective. With this initiative, it will be easier for the new carrier to increase its market share. By continuing this, it can be said that understanding the loop holes of low cost carriers, the staffs should be trained so that the service quality can be improved. On the other hand, low wages is the major problem in low-cost carrier, therefore motivation the employees, the wages structure needs to be improved so that it will be easier for increasing employee engagement. It can be assumed that with this initiative, the customer loyalty can be increased, which can be beneficial for achieving long term goals.
References and bibliography
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