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Effect of Deregulation on Airline Industry

In: Business and Management

Submitted By Reese303
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Since deregulation, the number of low cost carriers (also known as LCCs) has steadily increased to a point in which they have become a major component in the air transportation industry. There are many attributes that make a carrier a low cost carrier and allows them to operate cheaply and efficiently. Two important ones are having employees working multiple roles and fast turnaround times. With employees working multiple roles, there is less of a need for specialized staff and training. If a flight attendant can also work as the cleaning crew, there is not a need for two different employees on the company payroll. This consolidation leads to greater efficiency and lowered cost to the company.

Indirectly these multi-purpose employees also contribute to faster turnaround times. In the example of flight attendants that also assist in cleaning the cabin, at the end of a flight, instead of having the flight attendants get off the aircraft have the cleaning crew come and clean, the present staff can do the task reducing time on the ground. Like in many businesses, airlines equate time to money. The more time an aircraft is on the ground the less money these carriers are going to make. Faster turnarounds means more legs are able to be flown in a day and a better perception of customer service (because customers are not sitting around waiting to board). One article that looks closely at Southwest Airlines (a now popular low cost carrier) reported that Southwest airlines has “the average turnaround time for a plane--unloading, reboarding, and departing the gate--is about 15 minutes, or one-third the industry average,” (Jaffe, 1991). In the end, all of the methods that these low cost carriers implement to save money add up very quickly to translate savings to the customer and increase profit.

Jaffe, C. (1991). Moving fast by standing still - herbert d. kelleher,...

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