Service businesses : The Airline Industry

Overview
- Airlines provide air transport for passengers and cargo, domestically and internationally. As competition has intensified, the market has segmented into traditional and low-cost airlines.
- The business strategies of low-cost airlines differ from those of traditional airlines in that, to keep costs as low as possible, they provide only the very minimum in passenger services. Passengers pay extra for additional services and conveniences such as, for example, food and beverages, advance seat selection and changing flights.
- The airlines are vital to the Thai economy in that they provide the links simplifying domestic and international travel. Compared to other modes of transport, air transport is much quicker and is the bridge over which tourists and investors come from abroad.
- The airline industry is related to a wide range of businesses, such as, for example, airports, air/ground management, tourism, hotels and restaurants, and land transport.
- There are about 100 airlines using Thai airports, 86 carrying both passengers and cargo and 14 carrying only cargo. Domestic flights account for approximately 43 percent and international flights 57 percent of all flights. Suvarnabhumi International Airport serves approximately 66 percent of all flights, followed by Don Muang International Airport with 13 percent and Phuket International Airport with 10 percent.
- Typically an airline offers three classes of passenger service, economy, business and first class. In response to intensifying competition, many airlines are also offering a new class called premium economy. Different services are offered in different classes, such as, for example, personal televisions, food and beverages, flight attendant services, seat widths, airport-to-hotel transportation, and airport lounges.
- Ticket prices include the cost of airfare, insurance, airport fees, fuel surcharges and taxes. Airfare is determined by market mechanisms and business strategies, while fuel surcharges are dependent on global oil prices but also on the way the airline manages its stock of fuel.