5. Newt, la empatía y la transformación pacífica de conflictos: un modelo a seguir
5.2. Transformación pacífica de los conflictos y el amor como instrumento de paz
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managed to be perceived as good value for money, which allowed them to gain an overall market share of approximately 30% in the European market within only 15 years.65 If the differences in unit costs are compared against effectively sold seats (by looking at the costs per RPK), due to their high load factors, LCCs (e.g. Ryanair) are having a cost base that is up to even 70% lower than selected network carriers (e.g.
Austrian Airlines, cf. Table 5).
Comparison of cost structure (LCC vs. NC)
Austrian Airlines Air Berlin Ryanair Business year
(annual report) 1.1.08 - 31.12.08 1.1.08 - 31.12.08 1.4.07-31.3.08 Cost structure in
Mio.€ in % Cent / RPK
in
Mio.€ in % Cent / RPK
in
Mio.€ in % Cent / RPK Fuel costs 526 20% 2.79 874 26% 1.97 791 36% 1.50 En-route charges 104 4% 0.55 228 7% 0.51 259 12% 0.49 Airport charges 403 15% 2.14 710 21% 1.60 396 18% 0.75 Leasing costs 281 11% 1.49 360 10% 0.81 73 3% 0.14 Maintenance 172 6% 0.91 187 5% 0.42 57 3% 0.11 Depreciation 86 3% 0.45 103 3% 0.23 176 8% 0.33 Marketing & Sales 155 6% 0.82 89 3% 0.20 17 1% 0.03 Staff costs 435 16% 2.30 446 13% 1.01 285 13% 0.54
Catering 102 4% 0.54 124 4% 0.28 - - -
other costs 387 15% 2.05 304 9% 0.69 122 6% 0.23 Total
(operating costs) 2,651 100% 14.03 3,425 100% 7.73 2,177 100% 4.12
RPK (Mio) 18,890 44,310 52,783
Load factor: 75% 78% 82%
ASK (Mio) 25,130 56,480 64,370
Table 5: Comparison of operating costs of selected carriers66
To better understand the different cost levels, it is useful to distinguish between cost differences that are caused by network and operational characteristics that are inherent to the chosen business and network model as well as cost differences that are solely or at least predominantly caused by factors that are not related to the business model (cf.
Table 6).
65 Cf. Destatis (2009a) & Destatis (2009b), http://www.destatis.de; Deutsches Zentrum für Luft- und Raumfahrt (2009), http://www.adv.aero; Mercer MC (2004), p. 3; cf. Blanken (2006), p. 15
66 Based on annual reports by the airlines. Cf. Ryanair (2008), p.3ff; AirBerlin (2009), p. 56ff; Austrian Airlines (2009a), p.32ff; Austrian Airlines (2009b), p.3; Since Ryanair does not publish its average sector length, this value (which is essential to calculate RPK & ASK) was derived from an external source that used flight schedules and official sector lengths: Cf. AnnaAero (2008), http://www.anna.aero.com;
RPK = Revenue Passenger Kilometers, ASK = Available Seat Kilometers.
Origin and sustainability of cost advantages enjoyed by LCC Network Carrier LCC Cause of cost
advantage
in
%
Inherent to business model?
Yes some To extent No Serve mostly international,
primary airports
Fly to (less demanded) regional, secondary
airports
Lower aircraft fees, no congestion (less delays,
faster turnarounds)
6% X
Long turnaround times (due to airport congestion and to allow
passenger transfers)
Short aircraft turnarounds (approx. 25min)67
Better fleet utilization 3% X
Combination of short-, medium- and long-haul flights with opportunities to transfer at
the hub
Only short-haul point-to-point flights, no
transfers
Lower complexity (e.g.
yield management or scheduling), higher load
factors, lower administration costs
2% X
Different aircraft types are required to operate the network
Standardized fleet (usually only one
aircraft type)
Lower maintenance and training costs, easier crew
rostering process, better purchasing conditions
2% X
Two or even three class seating in aircrafts
Single class seating, low seat pitch
Lower costs per seat,
better utilization of aircraft 16% X
Tickets are often sold through indirect channels (e.g. agents)
Tickets are almost exclusively sold via the
internet or call centers
No commissions,
lower complexity 9% X
Pre- & In-Flight service, Frequent Flyer Programs
No 'frills' offered to passengers for free
Low service costs,
additional revenues 6% X
Own ground operations at important destinations
Ground handling is mostly outsourced
Lower fixed costs, quick
network changes possible 10% X
Long-serving staff, traditionally high salaries, low share of salary
is performance based (<10%)
Newly hired staff, lower salaries, large share of salary is performance
based (>40%)
Higher staff productivity, easier crew rostering (more
flexible contracts) 3% X
Total cost advantage in comparison to network carriers: 57%
Table 6: Size, origin and sustainability of LCC cost advantages68
As shown above, the majority of cost saving potentials are not unique to the low-cost carrier model (and the corresponding point-to-point traffic structure) but are rather the consequence of more efficient operations, a reduction in the offered customer service level as well as the employment of cheaper, and more flexibly deployable, staff. In reaction to the market entry of LCC, many NC have successfully adapted their cost base by picking up operational characteristics of LCC. With regard to short-haul aircraft utilization, Dennis, for instance, taking a sample of major European carriers reports an increase in the daily flying time from 7:40 hours to 8:31 hours in the period of 2000 to
67 Due to the fact that low cost airlines often do not assign seats, they do not only shorten the check-in process but also motivate passengers to quickly enter the plane. Furthermore, by not offering passengers to enter the plane directly from the gate by means of jetways, but using busses instead, airlines can already process passengers at the gate and have them wait in the bus in case the plane is not finished. Finally letting passengers aboard while the plane stands on the apron also allows them to use both doors.
68 Own illustration based on European Cockpit Association (2002), p. 9 and European Low Fares Airline Association (2004), p. 5.
2005.69 Other measures taken included a reduction of onboard catering,70 a smaller distance between seat rows (seat pitch),71 the establishment of newly founded subsidiaries with lower staff costs,72 efforts to harmonize aircraft fleets73 and a strong decrease in sales costs (by selling more tickets via the internet and decreasing commissions paid to travel agents).74
On the other hand, many former LCC have evolved their business model by adding components of network carriers to their product, thereby applying a ‘hybrid’ model.
Examples for added components include frequent flyer programs (e.g. AirBerlin or Germanwings), connecting flights (e.g. Southwest or Germanwings), in-flight entertainment (e.g. JetBlue) or the use of GDS-services to sell tickets (e.g. Easyjet).75 Since, based on these developments, NC have been able to narrow the cost difference relative to LCC one could argue that the main difference is constituted by the fact that NC operate a hub & spoke network while LCC operate point-to-point routes.76