Low cost or budget airlines have revolutionised travel for both holiday makers and business people. Companies such as Easyjet, Jet Blue, Southwest Airlines and Air Asia have grown substantially and, in many cases, have overtaken traditional “flag carriers”. However, many have also failed. Your task is to produce a report that critically reviews the low-cost airline business concept using appropriate strategic models and theory. Your report should consider: 1) The theoretical basis for low cost airlines and how the business environment in some jurisdictions has aided this process. 2) How lost-cost airlines differ from the more differentiated “flag carriers” and the theoretical basis behind this. 3) How low-cost airlines add value and the strategies they adopt to achieve this 4) A review of the challenges and opportunities facing low cost airlines both now and in the future. Please note: A key aspect of this assignment is for the student to apply strategy and theory and models to the critical review. Suitable examples from the low-cost airline industry are also expected to illustrate the arguments. Indicative Content and grading – Summative Assessment • A critical review of the low-cost airline model using appropriate strategy models. (40 marks) • An analysis of the strengths and weaknesses of the model using theory and examples. (40 marks) • An assessment of the key opportunities and threats facing the model in the future. (20 marks)
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