Low-Cost Carriers Motivational Factors - Paper Example

Published: 2021-08-17 09:20:48
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University of Richmond
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Literature review
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Undoubtedly, transportation has in the recent past played an integral role in the tourism industry. Air transport, in particular, has been a necessity whereby people travel to different parts of the world for leisure in addition to business reasons. One of the key branches of air transportation is the airline industry which mainly involves the movement of people and cargo from one point to another by air. The airline industry is categorized into various key sections including Charter Carriers (CCs), Full-Service Carriers (FSCs) and Low-Cost Carriers (LCCs) (Buaphiban 2015). Recently, the Low-Cost Carriers section of the global airline industry has experienced dramatic growth hence becoming prosperous and competitive while expanding its market shares. Based on this observation the following review of the literature looks at the motivational factors of Low-Cost Carriers that could be the reason behind the sectors rapid growth. To achieve this, an examination of previous studies on Low-Cost Carriers motivational factors will be done in order to identify what has already been done by other researchers in terms of findings and other key theoretical concepts. Also, the strengths and weaknesses of previous studies will be explored to help in preparing a clear roadmap for the current study. Finally, from the controversies identified in this review, recommendations for further research will be made.

According to the definition given by Kuosuwan (2015), Low-Cost Carriers are airlines whose plan does not involve free drinks, food, movies or music and has one price, limited baggage and no refund. Also, this type of carriers does not have VIP lounge at the airport, uses an electronic ticket, experiences point to point traffic with no connecting flights and mainly uses secondary airports (Kuosuwan, 2015). Therefore, as suggested by the title, this type of carriers concentrates on low-cost strategy through efficient and cost-effective management to ensure that passengers access air-travel services at a low cost (Guo 2015). Some of the low-cost strategies as provided by Buaphiban (2015) include the use of medium-sized aircraft and a medium-range homogeneous fleet. In Sriworrarats (2016) view, LCC can be described as a new business model that originates from the general airline business model, FSC. The author points out some of the aspects in which LCC differs from FSC including their distribution channel, fare structure, service levels as well as passengers and flight aircraft types. LCC has grown in popularity over the years and has proven to strongly compete against FSC. This is due to the motivational factors that have been linked to LCC as a business model. Some of the Low-Cost Carriers motivation factors identified in this review include price, service quality, airline safety record, brand image, and punctuality. There are also other factors such as responsiveness and reliability but these are surrounded by controversies.

Since the motivational factors related to LCC encourage the purchase and use of LCC services, they can be interpreted in terms of consumer decision and buying behavior. According to Buaphiban (2015), two theories can be used to gain an understanding of consumer decision and buying behavior. These are the consumer decision and buying behavior model and the Theory of Planned Behavior (TPB) (ibid). The TPB helps to gain insights into the process of decision making in consumers (Ajzen, cited in Buaphiban 2015). As explained by Bray (cited in Buaphiban 2015), the consumer decision and buying behavior model helps to explain the decision type to be made while the TPB provides an explanation of the process used by consumers in decision making. The consumer decision model explains the consumers decision on the purchase of a ticket and the airline to purchase from as well. This is because the buying of an airline ticket is similar to any other consumer decision and may be interpreted to be a high-involvement decision as the activity is potentially risky and can be expensive hence one that requires pre-planning and some research. These characteristics are in line with those of a high-involvement decision as given by Gross and Schroder (2007). Unless a consumer is a frequent user of airline services, it is highly likely that they will follow the five stages of the consumer decision model which include problem recognition, solution search, alternative evaluation, purchase and post-purchase behavior. This demonstrates the factors that shape a customers decision which also helps in understanding consumer decision in relation to LCCs.

When it comes to the Theory of Planned Behavior, it provides a perfect theoretical ground for gaining an understanding of the consumers decision for Low-Cost Carriers. This is because the model has its key purpose as the prediction of behavior based on existing consumer perceptions and attitudes (Buaphiban 2015). Attitudes are said to have a substantial impact on the consumers intention to purchase an airline ticket which explains why the Low-Cost Carriers motivational factors lead to an increased usage of the LCC service as a result of the positive attitude brought about by these factors. The following section discusses the motivational factors for LCC based on previously conducted studies.

Price

Price is one of the critical motivational factors for LCC. According to Kuosuwan (2015), the price of LCCs and FSCs may have a variance of as much as 50 %. This implies that price is a key LCC motivational factor that would encourage more people to use purchase LCC tickets. The role of price as a motivational factor is underpinned by various empirical studies. For instance, a study by Dolnicar, Grabler, Grun, and Kulnig (cited in Sriworrarat 2016), that involved airline passengers established that price is a key contributor to the development of passenger loyalty to a given airline brand. In another study by Loo (cited in Buaphiban 2015), it was revealed that ticket price is a key factor in consumer decision. Based on research on Thai passengers Kuosuwan (2015) notes that a majority of airline service consumers prefer purchasing the service with a spend-less attitude which implies that the low cost associated with LCCs will allow them to save some money and hence motivating the use of Low-Cost Carriers.

Brand image and airline reputation

Airline reputation refers to the customers perception of a given airlines safety, operation and other factors (Guo 2015). Similarly, the brand image refers to the perception of a consumer about a given brand. A study by Sokolovskyy (2012) found that brand image and airline reputation significantly influence purchase behavior of consumers. Thus, an excellent reputation serves as a key motivational factor for LCCs. The authors add that brand image is dependent on factors such as financial performance, age, and size of the airline, safety record as well as safety endorsements. Of these factors, airline safety record is a key determinant of the brand image as stated by (Buaphiban 2015). In line with this, Sriworrarat (2016) claims that safety record is the second most important factor when considering the corporate dimension of an airline. To illustrate this claim, the author gives Air Asia as an example. The airline has been able to position its brand by offering the best prices and using the slogan of now everyone can fly which exceptionally distinguishes the carrier as the only LCC offering a one-price policy to all destinations (Sriworrarat 2016, p. 53).

Sokolovskyy (2012) emphasizes the need for a positive brand image as this is critical to the development and enhancement of customer brand loyalty. The findings of a study by Anuwichanont (cited in Guo 2015) show that a positive brand image strongly influences the decision made by a customer regarding the purchase of a certain product or service. It, therefore, follows that a Low-Cost Carriers positive brand image will influence the decision of passengers to use the LCC by motivating them to purchase tickets from the LCC.

Availability and convenience

Availability and convenience are also key LCC motivational factors and play a critical role in consumer decision-making process. This has been proved by various studies which have described the combination as an obvious factor (Gross & Luck 2016). Availability has been cited by many scholars as one of the key reasons behind the success of LCCs in the airline industry (Gross & Luck 2016; Buaphiban 2015) many. According to Theis et al. (cited in Sokolovskyy 2012), LCCs provide a non-stop flight option which highly motivates passengers to use the services as they are protected from possible transfers and connects. This assures the passengers of convenience when using LCCs. LCCs provide direct flights from one point to another without transferring flights and the availability can be said to contribute to the continuous growth of LCC (Sokolovskyy 2012). This author adds that certain routes have experienced an increase in the frequency of LCCs which helps the Low-Cost Carriers to generate the maximum capacity and yields while adequately meeting passenger expectations. The significance of availability and convenience of airline services is stressed by Gross & Luck (2016) who claim that they are essential mainly to the tourism industry as passengers from this category are leisure travelers who require readily available transportation means to their destinations.

Promotion and Advertising

Promotion and advertising refer to the range of activities carried out with the aim of persuading potential customers to buy a service or product (Gross & Luck 2016). By communicating the available services to consumers through various distribution channels, the attitude of passengers toward a given LCC can be changed for the better. This implies that promotion and advertising can be considered paramount to motivating customers to use LCCs. According to Guo (2015), Low-Cost Carriers can promote and advertise their services through websites, magazines, newspapers, billboards and social network sites. However, in Gross and Schroders (2007) view, the website is the best when it comes to the marketing of LCCs. This is in accordance with what Sokolovskyy (2012) states that a majority of LCC uses sale promotion to reach out to their customers with regard to discounted ticket fares which motivates more customers to pay for the service made available at a reduced cost. Again, Air Asia is listed as a Low-Cost Carrier that offers ticket promotion on a continuous basis in what is referred to as the big sale campaign (Sriworrarat 2016, p. 54). The promotion activities are said to attract passengers who are price-sensitive while creating the element of loyalty in them.

Punctuality

As argued by Sriworrarat (2016) the factor with a lot of influence under the service quality category is punctuality which has been found to motivate consumers to use LCCs. Punctuality refers to the management of things at the designated time which is a crucial motivational factor as it creates passenger satisfaction (Gross & Schroders 2007). on the other hand, service quality can be defined as a measure of the extent to which the delivered services match the customers expectation (Buaphiban 2015). According to Gross & Luck (2016) punctuality is the paramount when it comes to customer satisfaction and hence in the building of brand loyalty. It is said that LCCs make it possible to lessen congestion at airports as compared to the FSCs because LCCs are able to bring down the average delay incidents and flight times (Kuosuwan, 2015). In support of this Daraban (cited in Gross & Schroder, 2007) suggests that travelers who value punctuality should take advantage of the LCCs. The punct...

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