Management of low-cost airlines

There are frequent reports about low-cost airlines, such as the expansion of China aviation network of Asian airlines in 2009 and the innovation of European low-cost airlines' turnover, which makes the industry pay attention to low-cost airlines again, and the discussion on whether China should vigorously develop low-cost airlines is also heating up. As the first low-cost airline operating in China, Spring Airlines can be said to survive in the cracks. In the context of the global financial crisis in 2008, the civil aviation transportation industry seems to be the most affected industry. World-renowned large airlines have embarked on the road of joint reorganization, bankruptcy protection, layoffs and other self-protection, and China civil aviation is no exception, especially the relatively weak private airlines have encountered unprecedented difficulties, such as the bankruptcy of East Star Airlines, the change of ownership of Eagle United Airlines, and the dilemma of Northeast Airlines. Their fleet size is small, their operating funds are small, and their flight schedules are poor, which makes their life much more difficult than that of the three major state-owned airlines. What is even more incomparable is that the three major airlines and SASAC all injected capital to help them in time. Private aviation is in a weak position in China's economic system. Without the "catfish" of civil aviation, China's aviation market will only repeat the mistakes of national super carriers before the reform and opening up. By then, consumers will have to buy low-level aviation services at high prices.

"It's not easy to live in a low-cost airline." Let's take Spring Airlines as an example to give you a deeper understanding of the management of low-cost airlines in China.

Spring Airlines Co., Ltd. was established by Shanghai Spring International Travel Service Co., Ltd. and Shanghai Spring Charter Travel Service Co., Ltd. on May 29, 2005, with a registered capital of 80 million yuan, and its base is located in Shanghai Hongqiao Airport. As of March 6, 20 10, Spring Airlines * * * has been put into operation 15 Airbus 320, and it is expected that two more will arrive in February 20 13. When Spring Airlines was founded, its goal was to build a successful localized low-cost airline in China, so that ordinary consumers can also enjoy safe and low-cost aviation services. Its 1 yuan air ticket marketing strategy aims to release the concept of "low price" to the public and make clear to consumers its image of promoting low-cost air tickets. It is true that the ultimate goal of any company is to make a profit. The premise of providing consumers with cheap air tickets is to use scientific management to reduce operating costs as much as possible under the condition of ensuring normal and safe operation, and to obtain profit space by reducing profit rate per kilometer and improving seat utilization rate. The operation mode of Spring Airlines follows the following three characteristics:

1 and the theoretical support and practical reference of low-cost aviation operation mode

Spring Airlines is a low-cost airline aiming at "safety, low price, convenience and high quality". Its theoretical support is that Professor Porter of Harvard University put forward three business strategies of enterprises: cost leading strategy, difference strategy and gap strategy. Different from large state-owned airlines, Spring Airlines has taken a different approach and theoretically explored and selected a low-cost model that state-owned airlines have never set foot in. Throughout the world, many countries in America, Europe and Asia have established low-cost airlines, such as Southwest Airlines in the United States, Ryanair in the United Kingdom and AirAsia in Malaysia, all of which are examples of successful operation of low-cost airlines.

Southwest Airlines is the founder of low-cost airline operation mode and one of the largest and most successful passenger airlines in the world. The company plans to make its maiden voyage at 1967 and 197 1. The southwest of the United States accounts for about 25% of the domestic market share, and the routes below 500 kilometers account for about 65%. Short-haul routes, low fares, high-density flights and point-to-point services are its main operating modes. At the same time, Southwest Airlines became the only airline in the United States that won the title of "Triple Crown" five times (including the punctuality rate evaluation of aviation flight safety aircraft and passenger complaints).

2. Guarantee of low-cost aviation profitability: "double high" and "double low"

"Double high" means maintaining a high passenger load factor of more than 85% and a high daily utilization rate of 1 1 and 12 hours. Low-cost airlines, because of the implementation of low-cost marketing strategy, mean that the hourly income of aircraft is lower than that of ordinary airlines. In order to make up the gap, they need to improve the daily utilization of aircraft. In the first three months of Spring Airlines' operation, 436 flights were carried out and 74,552 passengers were transported, with an average passenger load factor of 95%, exceeding the pre-operation set of 85%. At that time, the average passenger load factor of state-owned airlines was generally 65%. On the basis of ensuring safety, the daily flight hours of aircraft are kept at 1 1 to 12 hours, while the daily flight hours of traditional airlines are only about 9 hours.

"Double low" means low sales expenses and low management expenses. Spring Airlines has greatly optimized its marketing system, giving full play to the advantages of its 32 domestic subsidiaries, 7 overseas branches and nearly 3,000 network agents, and at the same time vigorously developing aviation business models such as online direct sales. Self-owned sales system sells 70%, and the other 30% is sold through internet e-tickets and call centers. This is the same as the low-cost airlines in the world, all based on their own online sales model. Wang Zhenghua, CEO of Spring Airlines, once said, "Big Brother's cost in this respect accounts for almost 8% ~ 10% of the total cost, while Spring and Autumn only accounts for 1 0.5%, saving about1100 million yuan every year."

In order to reduce management costs, Spring Airlines has been cultivating IT technical teams with core technology development strength, and developing its own network system for Spring Group, including Spring International Travel Service and Spring Airlines, thus saving huge system procurement costs. The IT technical team developed the departure system, independent check-in system, e-ticket system, FOC (Operation Control System), MS, asset management system and other operation management systems for Spring Airlines. In this way, the sales, operation and guarantee of Spring Airlines do not need to enter China Airlines, saving 654.38 billion yuan for Spring Airlines every year. The man-machine ratio of traditional airlines is above 100: 1. For example, the man-machine ratio of China Eastern Airlines is even 163: 1. Spring Airlines integrated management resources to improve productivity. The man-machine ratio was controlled at 90: 1, the personnel cost was reduced by 40%, and the management cost was controlled at about 2%. The management cost of traditional airlines accounts for about 4% of the total cost on average.

3. Cost control of low-cost airlines: "double order" and "double control"

"Double order" refers to a single model and a single cabin. Spring Airlines only uses a single Airbus 320 model, which is conducive to reducing spare parts of aviation materials, reducing maintenance costs, personnel training, especially pilot training costs, and helping flight attendants to familiarize themselves with equipment. The cabin layout is only single economy class, without business class and first class, with *** 180 economy class. Under the same seating distance, it is beneficial to increase the number of seats in the plane. The passenger's carry-on baggage is reduced from the general 20KG to 15KG, which makes way for passengers. On the premise of ensuring flight safety, the number of passengers is increased and the single machine capacity is increased.

"Two controls" means controlling controllable costs and controlling daily management expenses. Self-service check-in counters are widely used in Spring Airlines. After purchasing e-tickets online, passengers enter their personal ID numbers and booking numbers into the computer at the airport, then choose their own seat numbers and print their boarding passes. There is no need to pay the airport service fee when using the self-service check-in counter, but the ordinary check-in counter needs to pay. The price of a self-service check-in counter is more than 6,543,800 yuan, and its cost is much lower than that of manual check-in, which can save the cost of check-in personnel and ordinary check-in counters and reduce the service cost. Spring Airlines doesn't have its own air material warehouse, so it signed a contract with Singapore Airlines to purchase air materials directly from Singapore Airlines' air material warehouse in Shanghai if necessary, which saves the air material storage cost and is conducive to the operation of cash flow.

To sum up, we know how domestic low-cost airlines try their best to reduce costs and provide cheap air tickets to consumers while ensuring their normal operation and profitability, thus increasing consumer welfare. We can't expect airlines to be philanthropists and do good deeds through cheap air tickets. If we want to buy cheap air tickets provided by low-cost airlines in the future, we must understand that it is only possible and only in this way can we ensure the long-term maximization of our consumers' welfare. Admittedly, the author is not trying to make excuses for the mistakes of low-cost airlines. They lack the public relations management skills to deal with the incident, and should step up publicity to let consumers know their right to demand high reliability when buying cheap air tickets. The author thinks that under the situation that 20 13 private airlines are in trouble one after another, China's civil aviation transportation market needs low-cost airlines, and the aviation market without its participation can only move towards a more monopolistic situation, and the ultimate victim of the monopoly market will always be consumers themselves. Please give China low-cost airlines more understanding, give them time and reasonable suggestions, so that they can do better and make due contributions to social development.