The Rise of Low-Cost Carriers: Empowering Success with a Digital Transformation

Low-Cost Carrier

Following the significant decrease in air travel as a result of the COVID-19 pandemic, many in the industry wondered what the road to recovery would look like. While there is still a long way to go, recent innovations have allowed airlines and airports to create safer, cleaner environments ready for the return of travelers. In the midst of all this change, low-cost carriers have emerged and have adapted to the new normal exceptionally well.

Low-cost carriers (LCCs), simply put, provide a low-cost option for air travelers. Lower costs in any business typically require cost-saving somewhere in the operational pipeline, which is passed down as a discount to the passenger. The recent success of these LCCs comes from the ongoing digital transformation innovations within airlines and airports. This transformation has brought lower costs as more physical infrastructures can be replaced with cloud-based systems.

In this latest roundup, Connected Aviation Today compiled some of the most compelling stories about the LCCs successes on the road to recovery:

Low-Cost Airlines to Lead Post-COVID Recovery

S&P Global reported on the unique success of low-cost carriers, noting that these “no-frill airlines cut costs quickly,” and they “absorbed pent-up demand” for air travel. This success comes from these airlines’ ability to bring already low costs lower, allowing “cash-strapped consumers” to feel comfortable flying for leisure.

According to the report created by GlobalData, this success is in large part due to a decrease in operating costs. Operations can add considerable amounts to an airline’s expenses, especially if most of the equipment required to run an airline is stored physically and occupying space. The advent of the connected airport powered by cloud-based solutions has presented many new opportunities for airlines to further bring down their costs.

Read the full piece here.

AirAsia Boss Wants to Be the ‘Best Delivery Guy in Town’

When it comes to embracing digital transformation, a strong example can be seen in AirAsia. The Malaysian air carrier embraced new and innovative technologies to not only survive the pandemic but to create a foundation for future success. According to co-Founder and Group CEO Tan Sri Tony Fernandes, “The main thrust [of this digital transformation] is logistics.”

Logistics, in the sense that Fernandes is referring to, are used to create opportunities for low-cost carriers to upend the current hub-and-spoke model and instead, embrace a point-to-point model. This direct connectivity is thanks in large part to the decentralized nature of a digital airline as a hub and spoke model loses dominance when most of an airline’s infrastructure is not physically located at any main airport location. AirAsia is using this to its advantage to tap into other industries besides passenger and cargo carrying and laying the groundwork for a new brand of LLC.

Read the full piece here.

IndiGo Achieves Real-Time Travel Data Integration with Red Hat Fuse

India’s largest passenger airline depends on hundreds of applications a day. Like any other company or service, the backend work being done to manage its processes and functions are immense. However, thanks to new tech, the low-cost carrier has succeeded in simplifying its operations and achieving tangible reductions in operating costs.

Utilizing Red Hat Fuse, IndiGo has been able to condense many of its processes into a single interface which has seamlessly merged into the airline’s integration platform. The platform itself was created to embrace the ongoing digital transformation of the aviation industry. In this particular instance, IndiGo was able to “reduce fuel costs and improve employee and passenger experience.” As the passenger experience in the post-COVID world remains uncertain, IndiGo’s embracing of the digital transformation and the resulting success highlights another reason behind LCC’s continuing success on the road to recovery.

Read the full piece here.