Plane Wreck Question # 2- Joe Boulanger

Yes the Budget Airlines are considered in a different strategic group than the major airlines for many reasons. First of all the budget airlines has a strategic posture that gives them a 30 to 50% cost advantage over traditional airlines. The budget airlines all purchase just one type of aircraft, they hire non union labor and cross train employees to perform multiple jobs to keep costs down and ticket prices low. In looking at Southwest which is a budget airline they only need 80 employees to support and fly an aircraft, compared to 115 at one of the bigger airlines like U.S. AIRWAYS. The budget airlines also perfer to fly point to point rather than through hubs, and they often use cheap secondary airports rather than major hubs.