Plane Wreck- Question # 3 -Karli Mae Ferris

Question #3 Compare and contrast the different strategic approaches of the network and budget airlines. What are the strengths and weaknesses of each approach?

Network airlines strategic approaches:

The network airlines have used a couple of successful strategic approaches over the last couple of years. This includes using a "hub and spoke" system. This means that the network airlines route their flights through major hubs, usually dominating hubs in major cities around the world.

The network airlines do suffer from a couple different weaknesses in their strategic approaches, such as they have a higher cost structure due to unionized work forces and superior in-flight services and high gas prices have generated higher operating costs, which raises the prices for their customers.

Budget airlines strategic approaches:

Some positive, succesful strategic approaches that budget airlines have used are they hire nonunion workers and corss-train employees to perform multiple jobs. This cuts the amount of people budget airlines need to support and fly an aircraft. They also use cheaper secondary airports rather than major hubs and they offer no in-flight food or complementary dirnks. All of these factors help cut operating costs to keep their ticket prices down for their customers.

A weakness for the budget airlines may be exactly what their cost-reducing tactics are. For example, no in-flight food or drinks, not operating out of many major airports, and they offer no other plane then the Boeing 737. This may be a turn off for some consumers who are looking for luxery and convience and are willing to go to network airlines and pay higher prices for them.