The Strategy of Low-Cost Airlines in ASEAN Economic Community

Abstract

 This study aims to explore rationale for the establishment of low-cost airlines as well as successful competitive strategy of low-cost airlines in the ASEAN Economic Community to enhance understandings of proper strategy for low-cost airlines. The research is qualitative and an in-depth unstructured interview is used to gather data. The analyses are of two kinds 1) business approach which include SWOT (Strengths, Weaknesses Opportunities, Threats) analysis and five forces model and 2) cultural approach. The scope of study is four low-cost airlines: Southwest Airlines, Jetstar Airways, Thai Air Asia, and Nok Air.

               The results show that the reason to establish low-cost airlines include 1) As an alternative for the travel of the public. 2) To expand the business base of the major airlines. 3) In response to tourism and business in the era of globalization. 4) Travel Culture that demands speed and economy. The successful competitive strategies of low-cost airlines in the ASEAN Economic Community include 1) Low price fixing to attract passengers to continuously use the services. 2) Purchasing new aircraft of a single type in large numbers to lower operation costs. 3) Opening routes that are competitive to serve an expanded customer base. 4) Partnering of low-cost airlines with investors abroad. 5) Adding value to customers in terms of safety, punctuality, and convenient services. 6) Creating relationships between different cultures in organizations to achieve the same goals.