DIFFERENCIES BETWEEN LOW-COST MODEL AND FULL-SERVICE MODEL IN AIR INDUSTRY

Abstract

The aim of this paper is to review current state of operational models of airline on the market, based on history and development and the reasons behind them. Article compares Low-Cost operational model with established Full-Service carrier model in form of operational and pricing differences. Historically important events which caused rapid growth of Low-Cost carrier model are mentioned and discussed. For comparison of pricing approach actual data form airline reservation system Amadeus as well as live data provided on air carriers' websites was used. The ongoing development on the air transport market as well as high competition and new customer demands clearly shows that both of the operational models are partly outdated. This resulted in step-by-step product changes in both operational models which are now approaching similar product portfolio often called as hybrid operational model. Result of the review points to possibility for further research of airline hybrid operational model.