Budget Airlines: Added value for a smaller travel budget

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Written by Linda Hohnholz

Low cost airlines opened up the Skies over Asia and other parts of the world for millions.

Low cost airlines opened up the Skies over Asia and other parts of the world for millions. All the sudden flying is no more luxury and affordable also for smaller size tourism and travel wallets and budgets.

In Indonesia, low-cost carriers provide convenience with more added-value, but still affordable, services.

The view of low-cost airlines for some is of packed-to-the-ceiling buses in the sky, their advent serving as the final death knell for the romantic age of flight in the 21st century.

Low-cost airlines were stereotyped as uncomfortable and cramped spaces, where tired and frustrated passengers jostled for arm room and everything on board came at a price, despite their reputation for ensuring more people could fly.

It did not help that several high-profile cases of poorly operated airlines here in Indonesia involved budget carriers.

Fast forward to the present, and the negative image has shifted. The budget airline has a new attitude, and there is growing respect for what they offer the public.

The Jakarta Post lays it out:
โ€œNowadays, people are smart enough to acknowledge that low-cost is not equal to low safety or low quality,โ€ said Audrey Petriny, AirAsia Indonesia communications manager.

Nevertheless, education on the low-cost business model remains necessary, she added. This includes raising public awareness of the fact that affordable fares on budget airlines do not translate into compromising quality and safety in the bargain.

Apart from educating the public about what they have to offer, Rio Hascaryo, head of marketing at Tigerair Mandala, believes low-cost airlines must keep the lines of communication open with their passengers.

โ€œIt is advisable that a low-cost carrier maintain good interaction with its passengers through several modes of communication. This will ensure all the complaints and feedback are received and responded to.โ€

In a famous case in the US in 2010, Hollywood writer-director Kevin Smith took to Twitter to vent his anger at Southwest Airlines after he said he was deemed too large to fit in his seat.

The airline heard his complaint, and offered him compensation in return.

Audrey said that listening to customers, be it through guestsโ€™ feedback or other means such as social media platforms, could potentially lead to favorable business outcomes. โ€œAt AirAsia, we leverage information to provide valuable new products and services.โ€

In spite of todayโ€™s improved services by budget airlines, the rising price of aviation fuel resulting in higher operational costs is the main challenge facing budget airlines.

AirAsia has offset the increase in costs by generating sales of ancillary products and services, such as in-flight meals and drinks, travel insurance and its Red Carpet Service.

โ€œCurrently, our ancillary products contribute approximately 20 percent to our total revenue,โ€ Audrey said. โ€œThe key is to continuously innovate in the services with reasonable rates in order to stay ahead of the game in this increasingly competitive market.โ€

She cited the Red Carpet Service as an example of AirAsiaโ€™s ancillary products. This new service includes a dedicated check-in area, priority baggage tagging and loading, access to the lounge, fast-track immigration and security clearance, a dedicated car for boarding, as well as priority baggage delivery upon arrival.

To achieve greater customer satisfaction, AirAsia will collaborate with the Blue Bird Group to introduce an airport-transfer service.

The service will be available soon to passengers landing in Jakartaโ€™s Soekarno-Hatta International Airport, with other cities following.

Meanwhile, Tigerair Mandala is striving to provide more added-value services to improve its comfort. โ€œI would say a key to success for a budget airline is the ability to offer a worry-free flying experience to passengers,โ€ Rio said. โ€œAnd yet, providing the best low-cost flying experience with comfort is what a budget airline should put at the fore of its priorities to win market share.โ€

Just like AirAsia, Tigerair Mandala also offers added-value services at affordable prices. One example is the Weekly Tiger Flash. With this service, customers can find low-priced tickets for different routes every Thursday.

In 2013, Tigerair Mandala was awarded โ€œThe Most On-time Indonesian LCCโ€ by the Ministry of Transportation. With safety and OTP intact, the airline wishes nothing more than to set higher targets for 2014.

โ€œAs part of Tigerair Group, which flies to more than 50 destinations in 13 countries, our target this year is to connect Indonesian passengers to more destinations,โ€ Rio said.

More destinations mean more services that need to be enhanced. The inclusion of added-value services along with safety and flight convenience is indeed advisable in winning over customers. It takes innovation to create great services.

AirAsia and Tigerair Mandala are some of the budget players in the aviation market that use innovation as a strategy to enhance customer services. It is the strategy they use to generate higher numbers of passengers seeking to fly in comfort but still affordably.

About the author

Avatar of Linda Hohnholz

Linda Hohnholz

Editor in chief for eTurboNews based in the eTN HQ.

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