The contemporary approach to a low cost carrier’s business model : through a value network.

• Main Authors: Chong, Sue Lin., Ong, Jia Yun., Tan, Kenneth Wei Jie.
• Other Authors: Li Zhi-Feng, Michael
• Format: Final Year Project
• Language: English
• Published: 2013
• Subjects: DRNTU::Business
• Online Access: http://hdl.handle.net/10356/51503
• Institution: Nanyang Technological University

The growing trend of the Low Cost Carrier business model has set the tone for what is to come in the near future in the aviation scene. Consistent with changing consumer sentiments, ancillaries are slowly but surely becoming a significant source of revenue for airlines; as compared to ticket sales. With the shift in focus of revenue source, it is also time for low cost airlines to consider an alternative business model that is more suited to their requirements. Consequently, the report takes a contemporary approach to the business model of Low Cost Carriers. Using the Low Cost Carrier as a business platform, together with the concept of a Value Network, we explore a new conceptual business model that focuses on Commission-based ancillaries as the main drivers of profit. By using a Value Network, Low Cost Carriers would be able to reach out further into the travel industry and capture a larger piece of the tourism dollar. The report also looks into a complementary Information Technology system that is able to support the functions of the network – mainly in maintaining relationships in the network. Ultimately, the report hopes to achieve a more sustainable business model for Low Cost Carriers that would be in step with the changing aviation landscape. Other themes in the report include, Coopetition, Value chain, Leveraging on network partners, Prosumers, Low hanging fruits, À la Carte and Complementary service providers.