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Sun 1 Oct 2006 04:00 AM

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Hybrid airlines target savvy consumer market

A unique breed of airline is hitting the market, using a hybrid of business models from low-cost and traditional carriers, according to Aviation Consulting Services.

The emergence of the value focused carrier (VFC) could attract a significant share of the market for cost-conscious business travellers, said Nejib Ben-Kheder, president of Aviation Consulting Services, part of Sabre Airline Solutions.

“VFCs are identified by their focused route networks, simple fare structures, relatively cheap distribution arrangements and streamlined ground operations,” said Ben-Kheder.

“Examples would include Flybe in the UK, JetBlue in the US, and Kingfisher in India. It’s important to note that valuefocused is not the same as no-frills, neither do they match the profile of traditional carriers, such as British Airways, Qantas or Singapore Airlines.”

Speaking at the recent GCC Low Cost Airlines Conference in Dubai, Ben-Kheder said the growth of VFCs resulted from a market where consumers are increasingly savvy about travel and make decisions based on price transparency, spurred by the internet’s ability to make different travel options easily accessible.

“These airlines need tools that enable them to be highly flexible and adaptable to changing market conditions,” he said. “The ability to easily deploy aircraft and crews on more profi table or emerging routes is crucial to this business model, along with the ability to quickly adjust fares depending on market changes and alter schedules to take advantage of prevailing flight conditions.”

Such companies are looking for modular technology that can operate effi ciently without locking them into inflexible software platforms. “Sales and marketing tools, in particular, should be able to link with each other and embrace the entire spectrum of operations, from booking, ticketing and fulfilment, through to settlement, accounting and customer relationship management,” said Ben-Kheder.

“VFCs are identified by their focused route networks, simple fare structures, relatively cheap distribution arrangements and streamlined ground operations”

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