Introduction
The transformations in the aviation industry have been massive, especially after COVID-19, when the world was forced to stay at home. The Full-Service Carriers (FSC) began introducing new strategies to overcome challenges (Whyte & Lohmann, 2020). Therefore, the Airline business was developed. This paper will examine the primary causes of changes and explain why FSCs struggle to compete with LCCs. Furthermore, it will show the key features of AwA models and state their potential in the post-pandemic era.
Challenges Faced by Full-Service Carriers
One of the main problems is the cost structure, which is typically high due to the inclusion of extra services on board. For instance, entertainment in the form of seat screens is becoming more expensive as developers and IT assistants require increased salaries (Rindri et al., 2019). Moreover, meal preparation and staff training require ongoing improvements every year, and the cost structure in this case is also changing.
LCCs have a streamlined pricing strategy, which enables them to reduce ticket costs and improve their financial flow. When the prices are too high, the number of sensitive passengers increases (Herjanto et al., 2021). During the COVID-19 pandemic, many people lost their jobs, and the resulting financial crisis has affected families worldwide (Albulescu, 2020). Therefore, travelers have become more budget-friendly in purchasing flight tickets.
In this case, LCCs aim to focus on pure flights rather than additional perks to avoid high prices. Low-cost carriers also have an agile model that is quickly adaptable to the market (Lim & Lee, 2020). It becomes easier to adapt to routes, the number of flights, and the number of passengers. The adaptability and rapid response to changes enable LCCs to stand out in the competition compared to FSCs.
The Role of Airlines-within-Airlines (AwA)
AwA models enable FSCs to establish a distinctive structure that remains favorable to clients and continues to thrive. In this case, it becomes easier for full-service carriers to compete with low-cost airlines (Kiraci, 2019). These entities help promote low-cost tickets in the same way as premium services(Prentice et al., 2019).
Many companies allow passengers to avoid high prices and pay only for the basic service. However, if they want an upgrade, it is always available and can be added for an extra fee (Hassan et al., 2021). For instance, an airline such as Lufthansa offers this option, and the company continues to be one of the most popular in the world, despite its association with the FSCs models (Lufthansa, n.d.). AwA helps to ensure that people with different incomes can afford travel by offering fares from basic to premium.
Airlines-within-Airlines strategies can identify the most common places in the world where the target audience is price-sensitive. Therefore, by offering budget options, airlines can attract different segments and target audiences based on their specific needs (Khan et al., 2022). By meeting the diverse needs of customers and staying current with the latest trends, the airline can attract more people and enhance its diversification, thereby improving its market position.
The AwA is designed to develop substitutes for traditional LCCs and to develop unique strategies for further industry growth (Klophaus et al., 2021). Therefore, it is considered to be lean and the most efficient (Raynes & Tsui, 2019). By creating a simple process and lowering overheads, the prices can become more competitive and meet the needs and wants of travelers who have suffered during the COVID-19 pandemic.
The Importance of AwA After COVID-19
When people were confined to their homes, the demand for leisure travel increased. According to Rahman et al. (2021), the traveling pattern changed in general, forcing people to spend more time abroad. AwA boosted the affordability of travel options and started paying attention to the demographics. Consequently, it allows more people to save enough money for traveling. The economy has decreased during the pandemic, and airline services should implement new solutions to ensure recovery (Gupta et al., 2020).
Cost-effective travel options have become a key factor stimulating economic recovery, tourism, and the global economy (Kaye et al., 2021). Traveling and the economy have a strong connection, and it is essential to consider both factors to ensure a stable life balance for nations. In the post-COVID-19 era, AwA provides a stable competitive advantage for many airline companies. In this case, FSCs remain effective in a fast-changing market where money plays a crucial role (Ciotti et al., 2020). Furthermore, the brand image remains protected, and premium services continue to maintain a high value.
Sustainability
During the COVID-19 pandemic, many flights were canceled, but the environmental situation has since improved and changed for the better. Consequently, clients began to demand more environmentally friendly flights to mitigate further global warming problems (Rume & Islam, 2020). AwA has recently introduced fuel-efficient planes that reduce their carbon footprint, allowing FSCs to take a more proactive stance on the issue (Gudmundsson, 2023). Travelers may become more loyal to airlines that prioritize the environment and ensure their brand image is aligned with eco-trends.
The COVID-19 experience has made businesses more prepared for future environmental or economic issues (Pearce, 2020). The revenue streams can be boosted, making the economy and the airline business more sustainable (Aygun & Turan, 2020). During the challenging pandemic times, the combination of premium and basic protection helped many companies weather the crisis and subsequent fluctuations (Moreno et al., 2020). When people have a choice, fewer complaints arise, and everyone is treated fairly.
Digital Transformation
AwA enables advancements in the airline industry. For example, according to Almeida et al. (2020), the customer experience can be significantly enhanced by allowing passengers to use mobile apps to book tickets and streamline their travel preparation. Personalized experience has also been developed to make all operations more user-friendly (Balaji et al., 2019).
During the COVID-19 pandemic, the production of artificial intelligence increased, and users could find the cheapest flight options with its help (Vaishya et al., 2020). Additionally, the maintenance of services using the Internet of Things (IoT) was enhanced to optimize airline workflow (Singh et al., 2020). Ultimately, the digital revolution within the airline industry enabled the industry to cope with the problems that arose during the COVID-19 pandemic.
Conclusion
The global pandemic has significantly changed the airline industry, enabling FSC models to thrive in a rapidly evolving environment. With the help of AwA, the sphere has managed to protect its competitive advantage and maintain clients’ loyalty. The provision of budget-friendly and premium services helped clients choose the most favorable option within their abilities. Therefore, the AwA business is one of the most critical aspects of aviation that shifts the performance and makes it more flexible.
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