the rise of the low cost airlines
Filed in archive Venture Capital by tj on April 27, 2004
"Another factor behind the rush of start-ups is the availability of off-the-shelf software that runs the internet-based bookings systems crucial to a low-cost carrier. The software also handles the demand-management system that jacks up prices as a flight fills up. A budget carrier will typically multiply some fares tenfold in the run-up to a holiday such as Easter."The low-cost airline model is much too crowded as so many entrepreneurs have realized their dream to have their own airline...it is easy to predict that consolidation is close.
"Perhaps the most basic push behind the flock of new little airlines is the availability of a simple and proven business model---though exactly how many carriers can profitably use it may soon become clearer. Most of the new carriers are low-cost airlines based on the model developed in America by Southwest Airlines and copied first in Europe by Ryanair and easyJet. Asia---where the leader is AsianAir---and eastern Europe are the latest places to get the budget airlinebug, with half a dozen start-ups each in recent months."
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