There is little doubt that living standards for the majority of people around the world have improved steadily in recent decades. One consequence of this improvement in living standards is that products and services that were previously the province of the rich or upper-middle-class are now available to the middle class too.
In this regard, no industry better exemplifies the democratization of a previously-exclusive service than the airline sector, driven primarily by the rise of the low-cost carriers (LCC).
Read on for my analysis of how operating the newly revived Uganda Airlines as a LCC airline works.
The low-cost model focuses on business and operational practices that reduce airline costs. That means using secondary airports (with lower taxes) and charging for services like seat reservation and checked-in baggage.
Today, however, Low-cost airlines are increasingly flying from major airports to attract customers from the traditional scheduled airlines, with a case in point being Ryanair. Meanwhile, traditional scheduled carriers are increasingly unbundling their offers like low-cost: selling food, seat choice and checked baggage separately.
In the "old days," when airlines primarily catered to affluent and business travelers, flying was an experience in itself. Airline travelers were a pampered lot, plied with food and wine on flights that were seldom full, which frequently allowed one to stretch out on the adjacent empty seat.
While some of those benefits are still available to the relatively few who travel business or first-class, such amenities and service quality are a pipe dream for the vast majority of travelers who go economy.
For these travelers, flying has become an experience that has to be endured, like boarding an overloaded taxi, for you have no choice. Air travel nowadays is characterized by overcrowded flights, inevitable delays, lengthy security procedures, noisy cabins and few freebies in the food and entertainment category.
But while many bemoan the deterioration in the quality of air travel, the number of complaints is not especially high in relation to the greater number of people who are now regular air travelers.
This is because air fares have dropped very substantially and consumers are well aware that you get what you pay for. The tradeoff for "Luxury" in air travel in exchange for cheap fares is one that has been widely accepted by the majority of air travelers.
So what is it that Uganda airlines can learn from the other Low Cost Carriers to be more successful?
1. Use newer planes and Fleet uniformity. Using newer planes will ensure that planes are more fuel efficient, and the customers feel better and safer in air too. LCCs can also use a single fleet type, since they may not have much variability in passenger demand. This fleet uniformity also leads to lower training and maintenance costs.
2. Employ smart fuel cost-saving techniques. With fuel becoming a significant component of the cost, Uganda airlines should pro-actively think of ways to save costs in this regard. Techniques such as fuel hedging are very popular. Many airlines are now slowing down in the air, as well as making “gentle” landings to save fuel related costs.
3. Charge only for value added items. Customers can be very disgruntled when they are charged for items they weren’t expecting to pay for. Unfortunately, a number of budget airlines have become very good at extracting every single penny possible from the customer. On the other hand, customers don’t mind paying more for extra legroom in the exit row. Similarly, there can be services such as priority boarding, or even a budget business class which can be sold for an extra charge. A number of Asian budget carriers are doing this already.
4. Compete on experience and service. In most cases, good service at most customer touchpoints doesn’t cost a dime. Be it smiling check-in staff (Ugandans are well known for hospitality) or compassionate stewards who care about the passengers like their own family. It is this that has got Southwest Airlines to where it is today. Airlines are leading the service industry, and should be setting exemplary standards too.
In conclusion, LCCs have become dominant players in the airline sector globally as consumers embrace a Cost-friendly approach, and can be expected to continue grabbing market share in the airline industry in the years ahead.
OVER TO YOU, UGANDA AIRLINES MANAGEMENT.