Analysis And Selection On Low Cost Strategy Of X Airlines

Low cost carriers have emerged all around the world since Southwest Airlines mode was firstly appeared in the United States in the 1970 s.Major Airlines either build their own subsidiary low cost carrier or try to transform themselves to a brand new low cost carrier in order to occupy the aviation market,such as Southwest Airlines,Jet Blue from US,Ryan and Easy Jet from Europe,Jet Star from Australia and Air Asia from Malaysia.The success of these low cost carriers has indicated the future development direction for Chinese airline companies.As the competition of aviation transportation market become fierce,the first Chinese low cost carrier Spring Airlines was founded at 2004,which was a milestone of the Chinese low cost carrier’s development.Since 2010,a new bunch of Chinese low cost carriers have been established as the government launched a series of policies to support the development of low cost carrier.For example,9 Air,West Air,and China United Airlines and X airlines which is researched in this thesis.X airlines is a purely state-owned enterprise,which has been executing the low-cost strategy since May 2014,How is the progress of the LCC strategy implementation? What kind of difficulties appeared? Is LCC strategy still suitable for the changing environment? How to improve the strategy? Thinking on these questions is the main purpose of the essay;meanwhile,the study result of this article hopefully could provide some helpful information to the potential airlines which are willing to do the cost control.Firstly,the article evaluates X airlines’ performance on LCC strategy execution in the past 4 years,and sums up the current condition and problems.The article points out it is necessary to reassess whether the LCC strategy still suits X airlines as outer environment and inner resource changing.Subsequently,the article analyses the macro and competitive environment by PEST,Mike Porter’s five forces methodology and other dimensions such as basic economic feature,critical success factor,industry driving force to identify the opportunities and threats of the macro-environment and aviation industry which X airlines faces.With the strength and weakness found in the overview of X airlines’ inner resource and capability,the article combines all the aspects above to build the SWOT matrix.Afterwards,the article consolidates all the strategies for X airlines in each quadrant on the matrix in terms of the SWOT methodology.Based on the strategy theoretical framework,the article identifies the strategic position by studying the strategic basis,strategic direction,strategic strength and strategic path.With all the details above,the article is going to explain the necessity of X airlines’ low cost strategy and assess the consistency of the LCC strategy.Finally,the article will provide the solution to improve the low cost strategy implementation of X Airlines according to the current condition and issues found in the execution of its low cost strategy.Most low-cost carrier studies recently are either on western famous companies such as Ryan,Southwest Airlines,or on domestic Spring air,but this article selects X airlines as study objective,which would provide important and valuable point of view on how Chinese state-owned airline companies transform themselves into low cost carriers,and what kind of issues would the companies encounter.