Business strategy of low-cost airline

Business dodging of affordable flight path show window summaryAllegiant flight path, a leadership US caller-out has implemented several tactics in night club to be a emit salute airline. It provides low fees for checking baggages, boarding and stinkpot assignment which enable Allegiant childs play to compete with separate affordable airlines. Even if Allegiant would provided armed works in Europe, it would be a supreme low constitute airline and would easily overtake Ryan air in statuss of lower prices. Regarding a comparison with different low-cost airlines, youthful statistics show that Allegiant Air in-flight fees rose to 22.7% extra income from ancillary and on board purchases, which takes return over Ryan air with 19.23% income from ancillary. Such extra charges during the in-flight service may be an inconvenience for the passengers, but they help keep the company aloft during the economic crisis.Allegiant Air is a low cost airline which occupies 80 aircraft s. The companys strategy also int culminations to achieve another(prenominal) ccc routes which include flights to Mexico and the Caribbean. Although the airline leases small air planes in battle array to notwithstanding cost and to generate more profits, Allegiant avoids the main airdromes due to the detail that it is more economically beneficial and since they are not in arguing with the big companies. Mr Gallagher, the chief exclusive describes how his company already partners with other trading and provides packages, 30% of which are sold to customers. Article Ian Wylie. (2009) Tactics of low-cost airlineFinancial multiplication Published October 18 2009 http//www.ft.com/cms/s/0/c031e712-baa1-11de-9dd7-00144feab49a.htmlCase commentaryThis article describes Allegiant Air tactics low pretty service and explains how the company adjust to keep free-enterprise(a) with other low-cost airlines and ahead of. One of its goals is to sell flights from other airlines on Allegiants s ite in order to increase customer awareness and keep their dominance as a low fare service. Regarding to Mr Gallagher speech Shortly, we should be identifiable to 100m muckle throughout the US. At that point, we understructure leverage the brand bring in and arrange all your travel(Wylie, 2009).Gallagher is the CEO (managing director) of Allegiant Air and understands that because of the quoin some changes were necessary. Which required analysis of their macro-environment. For case they consider utilize infestation analysis tool in order to scan the general and the belligerent environment. To improve these general environment factors required constant and structured examine and monitoring. (Understanding Strategic Management, Henry 2008).Using an uninflected tool such as porters five forces, one is able to not only look into their international environment, but they are allowed the chance to exploit the powers of the Porters five forces by modify them to basically unders tand what is needed to be changed in order to have strategic advantages.The business method which companies such as Allegiant Air would have most probably used is Porters five forces. This is because they have to fully analyse their food market segment of being a low cost airline and they also have set specific targets in order to gain competitive advantage over its rivals (Understanding Strategic Management, Henry 200869). For example if a cutting airline would have tried to enter into the market service, it would have been in truth difficult to go away unless the new airline had the business leader to compete with the existing grater airlines such as Allegiant. Therefore, if a new airline tries to provide and offer their run, it will face the threat of entry and whether if enters to the market it will depend of the barriers to entry and the reaction of the existing competitors. It would be very difficult to survive because Alliance has an organized business plan and offers low prices tickets for its specific routes, as resulting, this will act the new airline to admonish its services from entering the market because it will be difficult to survive and compete. In terms of generic competitive strategy, Allegiant business strategy ensures a fit between its strategy and the (CSFs) Critical Success Factors of the industry and also strives for competitive advantage over its rivals. (Pathfinder 2006 119) Allegiant Air has identify the fact that in order to sustain their competitive advantage, it now offers another 300 routes and intends to fly to Mexico and the Caribbean. Their business strategy is to advertise their services on others companies and selling flights from other airlines on the allegiant site. Also, allegiant has signed up to a pays short term contract basis and use airport employers on monthly leases. In case any specific service failing, due to short-term contract which Allegiant posses they have the ability to end it before making great losses. This will allows Allegiant to gain competitive advantage over its rivals since they can cut most of their costs in a short amount of time. Because of the competitive pricing scheme used by Allegiant, they have made it a difficult task for new and upcoming businesses to enter their market. However the case study which I have chose to assess its purely based on the US market. Therefore the outcomes of the strategies and analytical models which they chose to achieve their targets would most probably differ if they were to evaluate or asses other markets such as the EU, Asia. It could be considered a good example because what can be derived from the above article in the organization can cope and keep low costs for its flights by gaining a competitive advantage against its rivals. Also, the short term contacts that are signed by the Airline stand to business strategy and allow the company to immediately stop its services in case profits begin to decrease. It is evident that th is airline is undecided of providing low cost tickets and also the airlines business strategy is effective lavish to remain dominant and provides its services at low cost in order to survive and compete with rival companies. Weblinkhttp//www.ft.com/cms/s/0/c031e712-baa1-11de-9dd7-00144feab49a.htmlAccess 21/10/2009References* cause Anthony (2008) Henry Understanding Strategic Management* rootage Robert M. Grant (2008) Contemporary Strategy Analysis6th edition.* Article Author By Ian Wylie (October 18 2009) Tactics of low-cost airline Financial Times http//www.ft.com/cms/s/0/c031e712-baa1-11de-9dd7-00144feab49a.htmlKey WordsTake advantage, short term contracts, competitive advantage, business strategy, well define business plans, keep aloft in downturn, profitable business model, eventual goal sell flights from other airlines on the Allegiant site.